EUROPEAN COMMISSION

Brussels, 4.10.2021

COM(2021) 624 final

2021/0317(NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

on the approval of the assessment of the recovery and resilience plan for Finland

{SWD(2021) 284 final}

2021/0317 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

on the approval of the assessment of the recovery and resilience plan for Finland

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility 1 and in particular Article 20 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The COVID-19 outbreak has had a disruptive impact on the economy of Finland. In 2019, the gross domestic product (GDP) per capita of Finland was 139% of the Union average. According to the Commission’s summer 2021 forecast, the real GDP of Finland declined by 2,8% in 2020 and is expected to decline by 0,1% cumulatively in 2020 and 2021. Long standing aspects with an impact on medium-term economic performance include slow productivity growth, high investment needs in the green transition and in research and development, rising levels of household debt and the performance of the social and healthcare system.

(2)On 9 July 2019 and on 20 July 2020, the Council addressed recommendations to Finland in the context of the European Semester. In particular, the Council recommended Finland to improve the cost-effectiveness of and equal access to social and healthcare services, address shortages of health workers, improve incentives to work, enhance skills and active inclusion, support employment and bolster active labour market policies, focus investment-related policy on research and innovation, green and digital transition, strengthen the monitoring of household debt and ensure effective supervision and enforcement of the anti-money laundering framework. Having assessed progress in the implementation of these country-specific recommendations at the time of submission of the recovery and resilience plan ('RRP'), the Commission finds that the recommendations on taking all necessary measures, in line with the general escape clause of the Stability and Growth Pact, to effectively address the pandemic, sustain the economy and support the ensuing recovery has been fully implemented. Substantial progress has been achieved with respect to the recommendation on taking measures to provide liquidity to the real economy, in particular to small and medium-sized enterprises.

(3)The Council Recommendation on the economic policy of the euro area recommended to euro area Member States to take action, including through their RRPs, to, inter alia, ensure a policy stance which supports the recovery and to further improve convergence, resilience and sustainable and inclusive growth. The Council Recommendation also recommended euro-area Member States to strengthen national institutional frameworks, to ensure macro-financial stability, to complete the economic and monetary union and to strengthen the international role of the euro.

(4)On 27 May 2021, Finland submitted its national RRP to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. That submission followed a consultation process, conducted in accordance with the national legal framework, involving local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders. National ownership of the RRPs underpins their successful implementation and lasting impact at national level and credibility at European level. Pursuant to Article 19 of Regulation (EU) 2021/241, the Commission has assessed the relevance, effectiveness, efficiency and coherence of the RRP, in accordance with the assessment guidelines set out in Annex V to that Regulation.

(5)The RRPs should pursue the general objectives of the Recovery and Resilience Facility established by Regulation (EU) 2021/241 (the 'Facility') and of the European Union Recovery Instrument set up by Council Regulation (EU) 2020/2094 2 in order to support the recovery in the aftermath of the COVID-19 crisis. They should promote the Union's economic, social and territorial cohesion by contributing to the six pillars referred to in Article 3 of Regulation (EU) 2021/241.

(6)The implementation of the Member States' RRPs will constitute a coordinated effort involving reforms and investments across the Union. Through coordinated and simultaneous implementation and the implementation of cross-border and multi-country projects, such reforms and investments will mutually reinforce each other and generate positive spillovers across the Union. Therefore, about one third of the impact of the Facility on Member States' growth and job creation will come from spillovers from other Member States.

Balanced response contributing to the six pillars

(7)In accordance with Article 19(3), point (a), of and Annex V, criterion 2.1, to Regulation (EU) 2021/241, the RRP represents to a large extent (Rating A) a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all of the six pillars referred to in Article 3 of that Regulation, taking the specific challenges faced by and the financial allocation for the Member State concerned into account.

(8)The RRP includes measures that contribute to all the six pillars, with a significant number of the RRP’s components addressing multiple pillars simultaneously. Such an approach helps to ensure that each pillar is comprehensively addressed in a coherent manner. Furthermore, given Finland's specific challenges, the particular focus on the green transition as well as on smart, sustainable and inclusive growth, along with the overall weighting across pillars, the RRP provides to a large extent a comprehensive and adequately balanced response to the economic and social situation.

(9)With respect to the green transition pillar, a large number of measures throughout the RRP contribute to Finland’s objective of becoming carbon neutral by 2035. Such measures include notably reforms and investments boosting the share of renewables in the energy mix, decarbonisation of industry, reducing emissions of public and private buildings and promoting low-emission forms of transport.

(10)To promote smart, sustainable and inclusive growth, the RRP provides for measures to raise the employment rate, to attract international talent and to increase productivity. To mitigate adverse shocks and better respond to crises, the RRP contains actions to tackle the long standing issues of equal access to and cost-effectiveness of the social and healthcare system. The RRP comprehensively covers the digital transformation pillar in its different dimensions, with several components targeting the digital transformation directly or indirectly. While Finland is a world leader in the digital domain, the RRP is expected to address remaining gaps in digital infrastructure by improving and extending high-speed broadband networks. Moreover, reforms and investments are expected to support the digitalisation of businesses and the public sector, including in the area of social and health care, to enhance digital skills, foster research and innovation in digital technologies, support the development of cyber and information security, and invest in the digitalisation of rail services.

(11)The RRP is expected to positively contribute to cohesion and convergence by addressing existing regional differences in the provision of public services as well as remaining gaps in broadband access. Regarding the policies for the next generation, reforms and investments aim at supporting continuous learning, including through more integrated digital platforms and online services, and increasing higher education study places related to sectors affected by labour shortages.

Addressing all or a significant subset of challenges identified in country-specific recommendations

(12)In accordance with Article 19(3), point (b), of and Annex V, criterion 2.2, to Regulation (EU) 2021/241, the RRP is expected to contribute to effectively addressing all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations addressed to Finland, including fiscal aspects thereof, or challenges identified in other relevant documents officially adopted by the Commission in the context of the European Semester.

(13)The RRP includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Finland by the Council in the European Semester in 2019 and in 2020, notably in the areas of skills, active inclusion, integrated services for the unemployed and the inactive, research and innovation, low carbon and energy transition and monitoring of household debt. The reforms and investments in the RRP also aim to contribute to the cost-effectiveness of and equal access to social and healthcare services. Moreover, measures to strengthen effective supervision and enforcement of the anti-money laundering framework are included.

(14)The RRP contains several targeted reforms and investments to support employment and increase the employment rate by improving integrated services for the unemployed and the inactive as well as active labour market policies focused specifically on youth and people with partial work capacity. Measures are included to enhance skills for the labour market, especially in the context of the digital and green transition, including for those in under-represented groups with low skills.

(15)The RRP is expected to contribute to the resilience of the social and healthcare system. The structural reform addressing the care guarantee as part of the social and health care reform coupled with substantial investments are expected to improve the equal access to and cost-effectiveness of social and healthcare services. The focus is primarily on changing patterns of health care, the provision of new, in particular digital, solutions, early problem identification, and the development of low-threshold social and health services. This is coupled with measures to improve cost-effectiveness through targeted digitalisation efforts, including enhanced data availability and evidence-based decision-making, as well as the use of e-health solutions. The RRP also aims to increase the number of higher education study places related to sectors affected by labour shortages. This is expected to contribute to addressing the shortage of health workers in the medium-term.

(16)The RRP has a robust focus on investments in research and innovation, the green and digital transition, the low carbon and energy transition, and sustainable and efficient infrastructure. Subsidy schemes aim at boosting investments in new clean energy technologies, promoting the use of low and zero emissions vehicles and decarbonising industry. Targeted measures support digital investments, including in digital infrastructure, microelectronics, 6G, artificial intelligence and quantum computing.

(17)The recommendations related to the immediate fiscal policy response to the pandemic can be considered to fall outside the scope of Finland's RRP, notwithstanding the fact that Finland has generally responded adequately and sufficiently to the immediate need to support the economy through fiscal means in 2020 and 2021, in line with the general escape clause of the Stability and Growth Pact. Moreover, the recommendation to make sufficient progress towards the medium-term budgetary objective in 2020 is no longer relevant, due both to the lapsing of the corresponding budgetary period and the activation in March 2020 of the general escape clause of the Stability and Growth Pact in the context of the COVID-19 crisis.

Contribution to growth potential, job creation and economic, social and institutional resilience

(18)In accordance with Article 19(3), point (c), of and Annex V, criterion 2.3, to Regulation (EU) 2021/241, the RRP is expected to have a high impact (Rating A) on strengthening the growth potential, job creation, and economic, social and institutional resilience of Finland, contributing to the implementation of the European Pillar of Social Rights, including through the promotion of policies for children and youth, and on mitigating the economic and social impact of the COVID-19 crisis, thereby enhancing the economic, social and territorial cohesion and convergence within the Union.

(19)Simulations by the Commission services show that the RRP, together with the rest of measures of the European Union Recovery Instrument, has the potential to increase the GDP of Finland by 0,4% to 0,6% by 2026, not including the possible positive impact of structural reforms, which can be substantial. The RRP includes a significant number of reforms and investments that are expected to promote smart and sustainable growth, in line with the European Industrial Strategy, to support the green and digital transitions, and to address the impact of the crisis whilst increasing Finland’s competitiveness and growth potential. The measures are also expected to tackle the shortage of skilled labour, address structural unemployment and support private investment and growth of SMEs. The substantial focus of the RRP on digitalisation should boost productivity growth and investment in innovation.

(20)The RRP contributes to the implementation of the European Pillar of Social Rights, including the principles on gender equality, equal opportunities, active support to employment, inclusion of persons with disabilities, and education, training and life-long learning, as well as other EU initiatives, such as the EU Skills Agenda, the EU’s flagship initiative Reskill and upskill, the Council Recommendation on Vocational Education and Training (VET) and Upskilling Pathways, and the Effective Active Support to Employment (EASE) Recommendation. The RRP is in line with the Youth Guarantee. In particular, the envisaged support of integrated employment, health, social and education services for young people is expected to help prevent social exclusion of young people and improve their employment prospects.

(21)The RRP also aims to mitigate the backlog of care services caused by the COVID‑19 pandemic and to improve resilience of the social and healthcare system, hence strengthening institutional resilience, reducing vulnerabilities to shocks and contributing to the implementation of the European Pillar of Social Rights.

(22)The RRP is expected to positively contribute to cohesion and convergence by addressing existing regional differences in provision of services. Improved cohesion shall be achieved mainly through more integrated public employment services, extension of the integrated work capacity and mental health services to new regions, and strengthening of the integrated one-stop-shop youth services in municipalities.

Do no significant harm

(23)In accordance with Article 19(3), point (d), of and Annex V, criterion 2.4, to Regulation (EU) 2021/241, the RRP is expected to ensure that no measure (Rating A) for the implementation of reforms and investments projects included in the RRP does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council 3 (the principle of 'do no significant harm').

(24)The RRP ensures for each reform and investment that no significant harm is done to any of the six environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, namely climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. Finland provided justifications in accordance with the 'do no significant harm' technical guidance of the European Commission (2021/C 58/01) for all measures included in the RRP. Where needed, Finland has proposed mitigating measures or included specific elements in the design of the measures to avoid significant harm, which should be ensured through relevant milestones.

(25)Particular attention has been paid to measures whose impact on environmental objectives warrants close scrutiny. Finland’s RRP includes several broad investment schemes, whose compliance with the principle of ‘do no significant harm’ cannot be established prior to their implementation phase. This is particularly the case for strategic support schemes covering installations under the EU Emissions Trading System as well as other broad support schemes including energy infrastructure investments, support to hydrogen and carbon capture and utilisation, and the R&D&I investments in support of the green transition. The eligibility criteria for upcoming calls for projects should exclude harmful activities and require that only activities that comply with EU and national environmental legislation can be selected. The verification of the ‘do no significant harm’ compliance of the investments should be made binding through a milestone linked to the launch of each call for projects.

Contribution to the green transition including biodiversity

(26)In accordance with Article 19(3), point (e), of and Annex V, criterion 2.5, to Regulation (EU) 2021/241, the RRP contains measures that contribute to a large extent (Rating A) to the green transition, including biodiversity, or to addressing the challenges resulting therefrom. The measures supporting climate objectives account for an amount which represents 50,1% of the RRP's total allocation calculated in accordance with the methodology set out in Annex VI of that Regulation. In accordance with Article 17 of that Regulation, the RRP is consistent with the information included in the National Energy and Climate Plan 2021-2030.

(27)Reforms and investments are expected to make a significant contribution to advance the decarbonisation and energy transition objectives of Finland as set out in the National Energy and Climate Plan 2030 (NECP 2030), thereby contributing to the Union’s climate target. A significant number of measures included in the RRP support the climate objective while a large number of measures also aim to contribute to the environmental objective, including biodiversity. Furthermore, some of the measures contributing to climate change mitigation may also be beneficial to the preservation of biodiversity, as climate change is one of the main threats to biodiversity. The implementation of these measures is expected to have a lasting impact, notably by contributing to the green transition, the enhancement of biodiversity, and environmental protection.

(28)Investment in renewable energy technologies constitutes a large part of the measures supporting the climate objectives. Other significant measures that support climate or environmental objectives are provided by investments in decarbonising industry, reducing emissions of the building stock, reducing emissions in the transport sector and increasing recycling and reuse rates. A package of R&D&I investments to support the green transition is also included in the RRP.

Contribution to the digital transition

(29)In accordance with Article 19(3), point (f), of and Annex V, criterion 2.6, to Regulation (EU) 2021/241, the RRP contains measures that contribute to a large extent (Rating A) to the digital transition or to addressing the challenges resulting from it. The measures supporting digital objectives account for an amount which represents 27,0% of the RRP’s total allocation calculated in accordance with the methodology set out in Annex VII of that Regulation.

(30)The measures in the RRP contribute to addressing Finland's challenges related to the digital transition. In particular, while Finland's digital connectivity is overall well-advanced, digital infrastructure is lacking in rural areas. The support for high-speed broadband connectivity should help improve access to high-speed connections in sparsely populated areas, with benefits for productivity and maintaining economic activity in those regions. To address the shortage of skilled workers in the Information and Communication Technology (ICT) sector, despite the overall high level of digital skills among the Finnish population, the RRP contains measures to increase the availability of study places in areas relevant to the ICT sector and to reform the continuous learning framework, as well as strengthening the promotion of digital skills.

(31)The reforms and investments in the RRP are expected to contribute to the digital transition in Finland in many areas, by supporting the digitalisation of businesses, in particular SMEs, and of the public sector, fostering cyber and information security, and supporting research and innovation in key technologies, including semi-conductors, artificial intelligence and 6G. Digitalisation is also addressed as a cross-cutting theme by using digital solutions as part of other measures to help reach climate and environmental objectives, including the digitalisation of transport and energy infrastructure. Likewise, there is a strong emphasis on digital health solutions, ranging from the use of data analytics to improve diagnostics to investments in e-health to ensure continuity of care.

Lasting impact

(32)In accordance with Article 19(3), point (g), of and Annex V, criterion 2.7, to Regulation (EU) 2021/241, the RRP is expected to have a lasting impact on Finland to a large extent (Rating A).

(33)The implementation of the measures included in the RRP is expected to bring about structural changes to the public administration that should improve its effectiveness and efficiency. A reform of energy taxation is expected to contribute to a structural greening of tax policy in Finland. Reforms in active labour market policies, in accordance with the Nordic model of employment services should contribute to raising labour supply and improving the employability of jobseekers and under-represented groups in the labour market. The reform of social and healthcare services is expected to increase Finland's resilience in the long term.

(34)The strong investment support included in the RRP for the green transition should further boost new and innovative low-carbon solutions for the economy. This should accelerate the growth of emerging sectors, further creating opportunities for economic growth. The plan's focus on investments in digitalisation across many sectors is expected to raise productivity in the long term. The lasting impact of the RRP can also be enhanced through synergies between the RRP and other programmes, including those financed by cohesion policy funds, in particular by addressing territorial challenges in a substantive manner and promoting a balanced development.

Monitoring and implementation

(35)In accordance with Article 19(3), point (h), of and Annex V, criterion 2.8, to Regulation (EU) 2021/241, the arrangements proposed in the RRP are adequate (Rating A) to ensure effective monitoring and implementation of the RRP, including the envisaged timetable, milestones and targets, and the related indicators.

(36)The Ministry of Finance of the Republic of Finland will be responsible for coordinating the implementation and monitoring of the plan. It has clearly assigned responsibilities and an adequate structure for the implementation of the plan, the monitoring of the progress and reporting.

(37)The milestones and targets defined in Finland’s RRP are realistic and the proposed indicators for the milestones and targets are relevant, acceptable and robust. They are sufficiently clear and comprehensive to ensure that their completion can be traced and verified. Moreover, the sequencing of milestones and targets allows for appropriate monitoring of progress in achieving the plan’s objectives and for scheduling of payments. Milestones and targets are also relevant for measures already completed which are eligible under Article 17(2) of Regulation (EU) 2021/241. The satisfactory fulfilment of these milestones and targets over time is required to justify a disbursement request.

(38)Member States should ensure that financial support under the Facility is communicated and acknowledged in line with Article 34 of Regulation (EU) 2021/241. Technical support may be requested under the Technical Support Instrument established by Regulation (EU) 2021/240 of the European Parliament and of the Council 4 to assist Member States in the implementation of their RRPs.

Costing

(39)In accordance with Article 19(3), point (i), of and Annex V, criterion 2.9, to Regulation (EU) 2021/241, the justification provided in the RRP on the amount of the estimated total costs of the RRP is to a medium extent (Rating B) reasonable and plausible, is in line with the principle of cost efficiency and is commensurate to the expected national economic and social impact.

(40)Finland has provided individual cost estimates for all components of the RRP, relying on a number of sources to justify the costs of investments and reforms. These include past calls for projects in similar sectors or with similar characteristics, procurement contracts referring to similar services or past investments of similar nature, government impact assessments, academic studies and other external references, including on sectorial investment needs, provided by international organisations. On the basis of the provided documentation, the methodologies used to calculate the costs of most of the measures in the plan are deemed reliable and constitute sufficient grounds for a positive assessment of their reasonability and plausibility. However, the evidence submitted to underpin the methodologies could in some cases be more granular and provide more comprehensive costing information, in particular as regards some horizontal investment schemes. Finally, the estimated total cost of the RRP is in line with the principle of cost-efficiency and is commensurate to the expected national economic and social impact.

Protection of the financial interests of the Union

(41)In accordance with Article 19(3), point (j), of and Annex V, criterion 2.10, to Regulation (EU) 2021/241, the arrangements proposed in the RRP and the additional measures contained in this Decision are adequate (Rating A) to prevent, detect and correct corruption, fraud and conflicts of interests when using the funds provided under that Regulation, and the arrangements are expected to effectively avoid double funding under that Regulation and other Union programmes. This is without prejudice to the application of other instruments and tools to promote and enforce compliance with Union law, including for preventing, detecting and correcting corruption, fraud and conflicts of interest, and for protecting the Union budget in line with Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council 5 .

(42)The plan describes, in an appropriate way, the system put in place for its implementation, control and audit. The control and audit system is based on robust processes and structures. Part of the structure is newly established. The Ministry of Finance should have the overall responsibility for the implementation of the plan and should rely on other implementing ministries and bodies for operational and administrative aspects. The Ministry of Finance should be supported by the Technical Secretariat charged with ensuring the monitoring of the plan’s implementation. The division of tasks between the Ministry of Finance and other relevant ministries is clear and their roles and responsibilities are adequately delineated. A milestone should require the entry into force of a national law establishing the legal mandates for the bodies involved in the coordination, monitoring, control and audit of the implementation of the Finnish RRP. The milestone should be fulfilled before the first payment request is submitted to the Commission.

(43)The Ministry of Finance should ensure the fulfilment of the control and audit obligations stemming from Regulation (EU) 2021/241. The control and audit function includes a clear and appropriate segregation of tasks within the Ministry. The actors responsible for controls should have the legal empowerment and administrative capacity to exercise their foreseen roles and tasks. Overall, the control system and other relevant arrangements, including the set-up of a new repository system for collecting, storing and making available data on final recipients, are assessed as adequate with respect to preventing, detecting and correcting corruption, fraud, conflict of interest when using the funds under the Facility and to avoid double funding with other Union programmes.

(44)A milestone should ensure that a repository system for monitoring the implementation of the plan is in place and operational before the submission of the first payment request to the Commission. The system should include, as a minimum, the following functionalities: (a) collection of data and monitoring of the achievement of milestones and targets; (b) collect, store and ensure access to the data required by Article 22(2), point (d) of Regulation (EU) 2021/241. A dedicated audit report on the system should be undertaken to confirm the functionalities of the repository system.

Coherence of the RRP

(45)In accordance with Article 19(3), point (k), of and Annex V, criterion 2.11, to Regulation (EU) 2021/241, the RRP includes to a high extent (Rating A) measures for the implementation of reforms and public investment projects that represent coherent actions.

(46)The RRP of Finland presents a comprehensive and balanced package of reforms and investments. Measures within components are mutually reinforcing, with all components including a set of well-balanced reforms and investments. Furthermore, the link between reforms and investments is well established and measures reinforce and complement each other and help address the identified challenges. Measures are consistent with the relevant national policy frameworks and strategies, such as the government programme and the National Energy and Climate Plan. Measures proposed within components do not contradict or undermine each other’s effectiveness, nor have any inconsistencies or contradictions between different components been identified.

Equality

(47)The plan contains a series of measures that are expected to contribute to addressing the challenges in the area of gender equality and equal opportunities for all. These include employment and labour market reforms dedicated to developing more integrated services, which are available and accessible to all and address the needs of disadvantaged groups, including people with partial work capacity, people who are difficult to employ and migrants. Provisions are also made for vulnerable groups in the context of the reform of the social and health care system. Measures that address partial work capacity, especially measures to support mental well-being, are expected to contribute to gender equality. Other measures, including the acceleration of digitalisation and improving regional availability of high-speed broadband connections, aim at facilitating location-independent work making it easier for women and men to reconcile work and family life.

Security self-assessment

(48)In accordance with Article 18(4), point (g), of Regulation (EU) 2021/241, for investments in connectivity infrastructure, development environments for 6G, artificial intelligence and quantum computing, as well as investments in cyber security exercises and trainings, the plan indicates that a risk assessment and risk management plan are prepared for each project and that security risks are addressed throughout the project’s life cycle. The plan also indicates that the realisation of cyber security requirements will be ensured for the products and services associated with the project, and that possible certification systems will be used, if necessary. Security requirements will be ensured in public procurement procedures and, where necessary, personnel and company security clearance procedures will be applied. For connectivity investments, the plan describes the national legislative framework, which takes into account the EU’s toolbox for secure 5G networks. For instance, devices that may endanger national security may not be used in critical parts of the communication networks.

Cross-border and multi-country projects

(49)The RRP includes measures to enable Finnish companies to participate in potential Important Projects of Common European Interest (IPCEI) in the areas of micro-electronics and renewable hydrogen. The objective of the investment in cyber security research is to create a multilingual platform for developing and teaching cybersecurity skills that can be used across all Member States.

Consultation process

(50)In order to increase the national ownership of the plan, Finland has consulted a wide range of stakeholders and other interest groups during the preparatory phase of the RRP. The consultations were conducted in various formats, including regional and thematic events to inform the participants about the preparation of the plan and to gather stakeholder views regarding the required funding priorities and the content of the plan. A wide range of actors were invited to the events, including representatives of regional councils, cities, social partners, industry and business organisations, non-governmental organisations and educational institutions.

(51)To ensure ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders concerned, including social partners, throughout the implementation of the investments and reforms included in the RRP.

Positive assessment

(52)Following the positive assessment of the Commission concerning the Finnish RRP with the finding that the RRP satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241, in accordance with Article 20(2) of and Annex V to that Regulation, this Decision should set out the reforms and investment projects necessary for the implementation of the RRP, the relevant milestones, targets and indicators, and the amount made available from the Union for the implementation of the RRP in the form of non-repayable financial support.

Financial contribution

(53)The estimated total cost of the RRP of Finland is EUR 2 094 687 000. As the RRP satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241 and, furthermore, as the amount of the estimated total costs of the RRP is higher than the maximum financial contribution available for Finland, the financial contribution allocated for Finland's RRP should be equal to the total amount of the financial contribution available for Finland.

(54)In accordance with Article 11(2) of Regulation (EU) 2021/241, the calculation of the maximum financial contribution for Finland is to be updated by 30 June 2022. As such, in accordance with Article 23(1) of that Regulation, an amount for Finland not exceeding the maximum financial contribution referred to in Article 11(1), point (a), of that Regulation should be made available now for a legal commitment by 31 December 2022. Where necessary following the update of the maximum financial contribution, the Council, on a proposal from the Commission, should amend this Decision to include the updated maximum financial contribution, calculated in accordance with Article 11(2) of that Regulation, without undue delay.

(55)The support to be provided is to be financed from the borrowing by the Commission on behalf of the Union on the basis of Article 5 of Council Decision (EU, Euratom) 2020/2053 6 . The support should be paid in instalments once Finland has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the RRP.

(56)Finland has requested pre-financing of 13% of the financial contribution. That amount should be made available to Finland subject to the entry into force of, and in accordance with the agreement provided for in Article 23(1) of Regulation (EU) 2021/241 (the 'financing agreement').

(57)This Decision should be without prejudice to the outcome of any procedures relating to the award of Union funds under any Union programme other than the Facility or to procedures relating to distortions of the operation of the internal market that may be undertaken, in particular under Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty,

HAS ADOPTED THIS DECISION:

Article 1
Approval of the assessment of the RRP

The assessment of the RRP of Finland on the basis of the criteria provided for in Article 19(3) of Regulation (EU) 2021/241 is approved. The reforms and investment projects under the RRP, the arrangements and timetable for the monitoring and implementation of the RRP, including the relevant milestones and targets, the relevant indicators relating to the fulfilment of the envisaged milestones and targets, and the arrangements for providing full access by the Commission to the underlying relevant data are set out in the Annex to this Decision.

Article 2
Financial contribution

1.The Union shall make available to Finland a financial contribution in the form of non-repayable support amounting to EUR 2 085 341 084 7 . An amount of EUR 1 660 743 618 shall be available to be legally committed by 31 December 2022. If the update provided for in Article 11(2) of Regulation (EU) 2021/241 results in an updated maximum financial contribution for Finland that is equal to or more than EUR 2 085 341 084, a further amount of EUR 424 597 466 shall be available to be legally committed from 1 January 2023 until 31 December 2023. If the update provided for in Article 11(2) of Regulation (EU) 2021/241 results in an updated maximum financial contribution for Finland that is less than EUR 2 085 341 084, the difference between the updated maximum financial contribution and the amount of EUR 1 660 743 618 shall be available to be legally committed in accordance with the procedure set out in Article 20(8) of Regulation (EU) 2021/241 from 1 January 2023 until 31 December 2023.

2.The Union financial contribution shall be made available by the Commission to Finland in instalments in accordance with the Annex. An amount of EUR 271 094 341 shall be made available as a pre-financing payment, equal to 13 % of the financial contribution. The pre-financing and instalments may be disbursed by the Commission in one or several tranches. The size of the tranches shall be subject to the availability of funding.

3.The pre-financing shall be released subject to the entry into force of, and in accordance with the financing agreement. Pre-financing shall be cleared by being proportionally deducted against the payment of the instalments.

4.The release of instalments in accordance with the financing agreement shall be conditional on available funding and a decision by the Commission, taken in accordance with Article 24 of Regulation (EU) 2021/241, that Finland has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the RRP. In order to be eligible for payment, Finland shall complete the milestones and targets no later than 31 August 2026, subject to the entry into force of the legal commitments referred to in paragraph 1.

Article 3
Addressee

This Decision is addressed to the Republic of Finland.

Done at Brussels,

(1)    OJ L 57, 18.2.2021, p. 17-75

(2)    Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis (OJ L 433I, 22.12.2020, p. 23).

(3)    Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

(4)    Regulation (EU) 2021/240 of the European Parliament and of the Council of 10 February 2021 establishing a Technical Support Instrument (OJ L 57, 18.2.2021, p. 1).

(5)    Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433 I, 22.12.2020, p. 1).

(6)    OJ L 424, 15.12.2020, p. 1.

(7)    This amount corresponds to the financial allocation after deduction of Finland’s proportional share of the expenses of Article 6(2) of Regulation (EU) 2021/241, calculated in accordance with the methodology of Article 11 of that Regulation.

EUROPEAN COMMISSION

Brussels, 4.10.2021

COM(2021) 624 final

ANNEX

to the

Proposal for a Council Implementing Decision

on the approval of the assessment of the recovery and resilience plan for Finland

{SWD(2021) 284 final}

ANNEX

SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN

1.Description of Reforms and Investments

PILLAR 1: Green transition supports economic restructuring and a carbon-neutral welfare society

A. COMPONENT P1C1: TRANSFORMATION OF THE ENERGY SYSTEM

Finland has set a target to become the world’s first fossil-free welfare society, reaching carbon neutrality by 2035. The overall goal of this component of the Finnish recovery and resilience plan is to contribute to achieving the carbon-neutrality objective by promoting the use of clean energy technologies.

This component of the Finnish recovery and resilience plan includes investments covering the infrastructure required for the distribution of renewable energy, as well as the production of clean energy. Those investments shall be accompanied by reforms of the energy sector focusing on phasing out the use of coal for energy generation as well as a reform of energy taxation to promote the use of clean energy. A separate investment is included to support renewable energy in the autonomous Åland region.

The component contributes to addressing Country Specific Recommendations on focusing investment on the green transition, in particular on clean and efficient production and use of energy (Country Specific Recommendation 3 2020), as well as on promoting investment in low carbon and energy transition (Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

A.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P1C1R1): Significant reduction in the use of coal for energy by 2026

The Act on the Prohibition of the Use of Energy of Coal (406/2019) was adopted by the Finnish Parliament in 2019. This Act bans the use of coal as from 2029. Finland shall make efforts to promote the elimination of the use of coal within a shorter timeframe and shall aim for a reduction of the use of coal in energy generation between 40% and 80% by 2026 compared to 2019. Actions taken by Finland to support phasing out the use of coal in the energy sector include the integration of new electricity and heat production solutions into the energy system, energy transmission, and the availability of technologies to replace coal.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (P1C1R2): Reform of energy taxation to take account of technological developments

The objective of the reform is to change the existing taxation of different sources of energy. The amendment of energy taxation legislation (Act on Excise Duty on Electricity and Certain Fuels) shall contribute to the phasing out of fossil fuels by promoting electrification of industry and encouraging investment in low-carbon technologies. The reform shall also reduce the electricity tax for industry, mines, agriculture and data centres of more than 5 MW to 0,05 cent/kWh, i.e. the EU minimum, from 0,69 cent/kWh. The reform shall also phase out energy tax refund for energy-intensive industries by 2025 and increase the taxation of fossil heating fuels, including peat, from 1 January 2021 by EUR 2,7 per MWh.

A study on the energy taxation of non-combustion heat production is ongoing. The study is expected to provide the basis for decisions on further measures for the taxation of the energy sector. Finland is expected to present legislative amendments to ensure that the changes are in force on 1 January 2022.

The implementation of the reform was to be completed by 30 June 2021.

Investment 1 (P1C1I1): Energy infrastructure investments

The objective of the investment is to enhance the framework conditions for attracting investment in clean energy, with a focus on energy system integration, energy storage and transport. The investment shall support projects that promote the construction of energy infrastructure with the following focus:

I)electricity grids and electricity transmission capacity;

II)investments to integrate energy systems and produce, transmit and utilise surplus and waste heat in district heating networks;

III)transport of low-carbon gases, including hydrogen, biogas and biomethane.

The selection shall be made according to various criteria such as their contribution to the decarbonisation of the energy sector and their feasibility in accordance with the set time frame.

The support shall be granted under a new Government Decree to be adopted by 31 December 2021. It shall take the form of competitive calls under the responsibility of the Ministry of Economic Affairs and Employment and Business Finland, to be organised in several stages, with the aim of frontloading large investments.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 1 ; (ii) activities under the EU Emissions Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 2 ; (iii) activities related to waste landfills, incinerators 3 and mechanical biological treatment plants 4 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant Union and national environmental legislation can be selected.

Selection criteria shall ensure that all projects contribute to the climate change objectives linked to intervention field 033 that has a 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility 5 .

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (P1C1I2): Investments in new energy technology

The objective of the investment is to contribute to Finland’s goal to achieve carbon neutrality by 2035 by stimulating the introduction of new clean technologies for energy production and use. The support shall prioritise sectors where emission reductions are difficult and costly (‘hard-to-decarbonise sectors’). The investment shall provide support for large-scale projects in the demonstration phase with a priority on technical feasibility, with a particular focus on:

I)offshore wind energy production;

II)renewable fuels in transport (electric fuels and biofuels);

III)non-combustion heat production such as geo-energy to replace the use of coal; and

IV)other renewable energy projects such as large biogas transport projects using low-used inputs, large-scale solar energy projects and projects that promote energy storage.

The selection shall be made according to various criteria including their contribution to the increase in the share of renewable energy and their potential contribution to the long term development and commercialisation of relevant technologies. Support shall be granted under a new Government Decree to be adopted by 31 December 2021. It shall take the form of competitive calls under the responsibility of the Ministry of Economic Affairs and Employment and Business Finland, to be organised in several stages with the aim of frontloading large investments. Under this measure, temporary staff may be hired to accelerate the environmental permitting and processing from 1 January 2021 to 31 December 2023.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in the terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 6 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 7 ; (iii) activities related to waste landfills, incinerators 8 and mechanical biological treatment plants 9 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Selection criteria shall ensure that all projects contribute to the climate change objectives linked to the intervention fields 032, 034bis0, 028 and 029 and 030bis that have a 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility.

The calls for tender shall be launched once the legislative framework for granting the support is in place. A first call for applications is expected to be organised during 2021.

The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (P1C1I3): Investment and reform package in Åland

The objective of the investment is to promote the production of renewable energy in the Åland autonomous region. The investment consists of support to the preparatory phase of an offshore wind power project and to solar energy production.

The Åland government estimates that it shall take ten to fifteen years to complete the offshore wind power project as a whole. It is expected that the energy produced shall be mainly transferred to mainland Finland and/or Sweden, and thus to national distribution networks. The investment shall support the planning and preparation phase, which is expected to last until 2024.

In its energy and climate strategy, Åland has set the target to build solar power capacity of 17 MW by 2030. The investment shall grant support for solar energy production projects promoted by companies, municipalities or communities. The projects shall be implemented between 2021 and 2025.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 10 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 11 ; (iii) activities related to waste landfills, incinerators 12 and mechanical biological treatment plants 13 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant Union and national environmental legislation can be selected.

Selection criteria shall ensure that all projects contribute to the climate change objectives are linked to the intervention fields 028 and 029 that have a 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility.

The implementation of the investment shall be completed by 30 June 2026.

A.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

B. COMPONENT P1C2: INDUSTRIAL REFORMS AND INVESTMENTS IN SUPPORT OF THE GREEN AND DIGITAL TRANSITION

Finland has set a target to become the world’s first fossil-free welfare society, reaching carbon neutrality by 2035. Major challenges in reaching this goal include reducing emissions from industry and increasing the recycling rate. New low-emissions technology is often not yet competitive and its development needs to be accelerated. Finland needs to boost the circular economy to increase the sustainable use of resources and reduce pollution.

The overall goal of this component of the Finnish recovery and resilience plan is to contribute to achieving the carbon-neutrality objective by supporting investment in technologies to reduce carbon emissions from industry, creating green jobs, investing in clean technologies and boosting recycling and reuse.

The component includes investments focusing on the promotion of low-carbon technologies such as the generation of hydrogen, carbon capture and utilisation, replacing fossil fuels by electricity in industrial processes, and the promotion of re-use and recycling of key materials and industrial by-products. Those investments shall be accompanied by reforms of climate and waste legislation, including the necessary amendments to the Climate Act and to the Waste Act to provide a legal basis for the 2035 carbon-neutrality target and recycling objectives.

The component contributes to addressing Country Specific Recommendations on focusing investment on the green transition, in particular on clean and efficient production and use of energy (Country Specific Recommendation 3 2020), as well as on promoting investment in low carbon and energy transition (Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

B.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P1C2R1): Reform of the Climate Act and low-carbon industrialisation

Finland has committed to updating the Climate Act to ensure the achievement of its carbon neutrality objective by 2035. The reform shall include the corresponding emission reduction targets for 2030, 2040 and 2050. The reformed Climate Act shall enable the use of climate plans to achieve the mitigation and adaptation obligations set out in the Act. The Finnish government shall submit its proposal for a revised Climate Act to Parliament by 31 January 2022, with entry into force expected by 30 June 2022. Finland has adopted thirteen industry-specific low-carbon roadmaps in autumn 2020. The road maps identify electrification of industrial processes, decoupling from fossil fuels and emission reduction measures based on low-emission solutions. Finland is expected to continue working with the industry to update the remaining road maps setting out sector-specific opportunities for industrial emission reduction. This shall include at least the four key energy intensive industries, namely the energy, chemical, forest and technology industries.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (P1C2R2): Strategic promotion of the circular economy and reform of the Waste Act

This measure consists of two reform elements. First, Finland shall implement the reformed Waste Act (646/2011), which is central to the regulation of the circular economy environment and the national waste plan. The reform shall include separate collection obligations for packaging and biowaste from households and businesses, packaging producers’ responsibility for the costs of packaging waste management, implementation of the Single-Use Plastics Directive and the obligation to separate collection of textile waste at regional reception points. The recycling rate of municipal waste shall be increased from the current 41% to 55% in 2025 and 60% in 2030. The recycling rate of plastic packaging shall be increased by 31%.

Second, Finland shall promote the circular economy by means of a strategic programme for 2035, which sets concrete targets for the consumption of non-renewable natural resources, resource productivity and circular material use rate. This shall comprise a national framework programme, complemented by the promotion of voluntary sectoral agreements between municipalities, business and other stakeholders. The target is to have at least 2 key industry associations as well as at least 20 municipalities and cities join the agreement and commit to implementing measures that promote the objectives of the strategic Circular Economy Programme: to reduce the use of natural resources, increase the use of recycled materials and promote a low-carbon circular economy society. It shall also include the publication of “support scenarios” that shall assist in the identification of stakeholders’ most relevant measures to be taken under such agreements, in cooperation with relevant research institutes.

The implementation of the reform shall be completed by 31 December 2024.

Investment 1 (P1C2I1): Low carbon hydrogen and carbon capture and utilisation

This investment aims to promote the development of the production and storage of clean hydrogen on a commercial scale. The investment contributes to Finland’s goal of achieving carbon neutrality by 2035. Finland has joined the potential Important Project of Common European interest (IPCEI) “European Clean Hydrogen Alliance”, which is currently under construction and has not yet been notified to the Commission. This enables Finnish companies to benefit from economic, research and industrial cross-border cooperation. The funding shall be allocated to support investments along the hydrogen value chain as well as in carbon capture, storage and recovery. Finland is expected to contribute through support to (i) producing low carbon 'green’ hydrogen, replacing the use of fossil fuels in heavy industries, (ii) capturing, storing and utilising CO2 and (iii) research related to hydrogen. In addition to the potential IPCEI, projects linked to European cooperation networks, such as Eureka, may be supported. No funding shall be allocated to production of hydrogen from natural gas. Under this measure temporary staff may be hired to accelerate the environmental permitting and processing from 1 January 2021 to 31 December 2023.

In addition, support for certain domestic low carbon 'green’ hydrogen investments shall be granted under a new Government Decree to be adopted in 2021 (Energy Aid Regulation). It shall take the form of competitive calls under the responsibility of the Ministry of Economic Affairs and Employment and Business Finland, to be organised in one or several stages.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 14 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 15 ; (iii) activities related to waste landfills, incinerators 16 and mechanical biological treatment plants 17 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Selection criteria shall ensure that all projects contribute to the climate change objectives linked to the intervention field 032 that has 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility. The first call for proposals shall be opened in 2021 and published on Business Finland website.

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (P1C2I2): Direct electrification and decarbonisation of industrial processes

The measure shall promote the direct electrification and low-carbon industrial processes to reduce CO2 emissions in the industrial sector. The measure shall:

I)improve energy efficiency by electrifying heat consumption and processes; and

II)introduce hybrid solutions and utilise heat pump technology and surplus heat.

The measure aims to support preparing the industry for the end of energy use of coal in 2029 and for at least half of the energy use of peat by 2030 by stimulating the replacement of the use of fossil fuels in industrial applications by electricity.

Support shall be granted under a new Government Decree to be adopted by 31 December 2021.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in the terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 18 ; (ii) activities under the EU Emissions Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 19 ; (iii) activities related to waste landfills, incinerators 20 and mechanical biological treatment plants 21 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Selection criteria shall also ensure that all projects contribute to the climate change objectives are linked to the intervention field 024ter that has a 100% climate coefficient in accordance with Annex VI of the Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility. To this end, selected projects shall achieve, on average, at least a 30% reduction of direct and indirect greenhouse gas emissions compared to the ex-ante emissions. The first call for projects shall be opened as soon as the legislation is in place.

The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (P1C2I3): Re-use and recycling of key materials and industrial side streams

The measure aims at promoting a circular economy that re-uses and recycles industrial side and waste streams and other key materials such as battery materials, plastics, textiles, packaging, electrical and electronic equipment, construction and demolition materials.

Support shall be provided for:

I)first commercial plants, pilot and demonstration plants;

II)the introduction of new technologies in existing processes;

III)digital platforms and service investments promoting re-use and recycling.

At least EUR 30 000 000 of the envelope shall be directed to the promotion of the circular bioeconomy and at least EUR 30 000 000 of the envelope shall be directed to the promotion of circular economy solutions in the battery value chain.

Competitive calls shall be organised by Business Finland in several stages in 2021.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 22 ; (ii) activities under the EU Emissions Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 23 ; (iii) activities related to waste landfills, incinerators 24 and mechanical biological treatment plants 25 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Selection criteria shall also ensure that all projects contribute to the climate change objectives linked to the following intervention field 045bis that has 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility. To this end, selected projects shall enable at least 50%, in terms of weight, of the processed separately collected non-hazardous waste into secondary raw material.

The implementation of the investment shall be completed by 30 June 2026.

B.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

C. COMPONENT P1C3: REDUCING THE CLIMATE AND ENVIRONMENTAL IMPACTS OF THE BUILDING STOCK

Finland has set a target to become the world’s first fossil-free welfare society, reaching carbon neutrality by 2035. The overall goal of this component of the Finnish recovery and resilience plan is to contribute to achieving the carbon-neutrality objective by reducing the emissions of buildings over their lifecycle, with a particular focus on construction and on heating.

The component includes investments to stimulate the replacement of oil-based heating systems in private and public buildings by heating systems based on low- or zero-carbon technology, and to promote the use of low-carbon methods in the construction sector. These investments shall be complemented by reforms that aim to reduce emissions in the construction of buildings and that phase out heating systems fuelled by fossil oil in public buildings by 2024 and completely by the beginning of the 2030s.

The component contributes to addressing Country Specific Recommendations on focusing investment on the green transition, in particular on clean and efficient production and use of energy (Country Specific Recommendation 3 2020), as well as on promoting investment in low carbon and energy transition (Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

C.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P1C3R1): Reform of the Land Use and Building Act

Finland shall adopt legislation to reform the existing Land Use and Building Act (132/1999) whose one aim shall be to reduce emissions from the entire life span of buildings, including construction, use, repair and demolition. The reform targets building developers, owners, designers, contractors, the material industry and authorities.

The reform shall be implemented gradually starting in 2023, while the last regulations shall be adopted by 30 June 2026. After the reform comes into force, new construction shall be low carbon and renovations shall be carried out with low-carbon solutions.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (P1C3R2): Action plan to phase out fossil oil heating

Finlandhas adopted a target of phasing out the use of fossil oil heating in 2030. This reform measure shall enable Finland to establish an overview of buildings with fossil oil heating and their owners, emissions and energy consumption. Finland shall adopt an action plan with the aim to reach the target for phasing out oil heating by 2030. The action plan shall include instruments such as subsidies and grants, taxes and tax subsidies, information steering, regulatory steering, energy efficiency agreements, public procurement and financial instruments to achieve this target. Decisions on the use of new instruments or improvement of the existing ones are expected to be taken separately.

The implementation of the reform shall be completed by 31 December 2025.

Investment 1 (P1C3I1): Replacement of heating systems in buildings from fossil oil to low-carbon forms of heating

The measure aims at supporting the phasing out of fossil oil based heating in Finland by the early 2030s. It thereby significantly contributes to achieving the EU’s 2030 climate targets at the national level. Two existing programmes that are in place since autumn 2020 shall be extended: first, grants for replacing oil heating in detached housing that are directed at replacing fossil oil based heating in detached residential houses and, second, grants for replacing fossil oil heating in buildings owned by municipalities, parishes and associations. The aid is targeted at owners of detached residential houses, municipalities, parishes and associations.

For the scheme directed at replacing fossil oil based heating in detached residential houses, funding shall be provided in the order of application. Houses must be permanently occupied. The level of aid varies depending on the type of heating installed.

For the scheme directed at replacing fossil oil based heating in buildings owned by municipalities, parishes and associations, the planned support ranges from 20% to 25% of the incurred investment costs.

It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). In particular, the heating systems replacing oil boilers shall not use fossil fuels as a heat source but rely on technologies such as air-water heat pumps, geothermal heat pumps and district heating. The renovation programme shall lead to a reduction on average of 1) at least 30 % in primary energy demand in detached residential houses and 2) at least 30 % in GHG emissions in buildings owned by municipalities, parishes and associations. Selection criteria shall ensure that all projects contribute to the climate change objectives are linked to the intervention fields 1) 025bis and 2) 024ter that have 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility.

The implementation of the investment shall be completed by 31 December 2023.

Investment 2 (P1C3I2): Low-carbon built environment programme

This measure consists primarily of a research, development and innovation programme that aims at accelerating the development and adoption of low-carbon solutions (such as operating models, products, materials) in the built environment. The measure contributes to climate change mitigation and promotes a low-carbon and circular economy, focussing on research and innovation, technology transfer and cooperation between research, business and local government. The following actions shall be supported:

I)a grant support scheme for research, development and innovation to stimulate investment (at least EUR 32 million);

II)procurement of knowledge base and assessment tools that support climate-friendly and low-carbon solutions in the built environment, including the possibility for investment support under the scope of the programme (at least EUR 4 million); and

III) support to the development and coordination of joint business projects that aim to export low-carbon solutions in the built environment (at least EUR 2 million).

Support shall be granted under Business Finland support programmes (i and iii above) (act 1146/2017, decree 1147/2017 and 1444/2014) and the Ministry of the Environment decree 1286/2015 and 688/2001 (ii above). Competitive calls shall be organised by Business Finland in several stages starting in 2021. The scheme builds on a pilot project (Kira-Digi programme, which was carried out from 2016 to 2019). The calls shall primarily target small and medium-sized enterprises, local authorities and research institutes.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 26 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 27 ; (iii) activities related to waste landfills, incinerators 28 and mechanical biological treatment plants 29 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Selection criteria shall ensure that all projects contribute to the climate change objectives are linked to the intervention fields 022 or 027 that have 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility.

The implementation of the investment shall be completed by 30 June 2026.

C.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

D. COMPONENT P1C4: LOW-CARBON SOLUTIONS FOR COMMUNITIES AND TRANSPORT

Finland has set a target to become the world’s first fossil-free welfare society, reaching carbon neutrality by 2035. As part of the transition to becoming carbon neutral by 2035, Finland has also set a target of halving greenhouse gas emissions from transport by 50% by 2030 compared to 2005. The overall goal of this component of the Finnish recovery and resilience plan is to contribute to achieving the transport emissions objective by reducing emissions in transport and promoting the use of carbon-free modes of transport. Currently, alternative motor vehicles account for only 2,3% of the passenger car fleet, whilst 48% of all public electricity charging and gas refuelling stations are located in the main metropolitan areas (Helsinki, Tampere, Turku).

The component includes investments promoting the use of non-fossil private and public transport, including investment in charging and refuelling infrastructure for vehicles that use non-fossil fuels. Those investments shall be accompanied by reforms including a roadmap for stimulating the use of non-fossil transport and a revision of transport taxation.

The component contributes to addressing Country Specific Recommendations on focusing investment on the green transition, in particular on clean and efficient production and use of energy (Country Specific Recommendation 3 2020), as well as on promoting investment in low carbon and energy transition (Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

D.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P1C4R1): Roadmap to fossil-free transport

Finland estimates that additional action is needed to reduce CO2 emissions in transport by an additional 1,65 megatonnes by 2030. Finland’s government adopted a Resolution on the roadmap for fossil-free transport on 6 May 2021, which presents measures to achieve the 2030 target and a path to emission-free transport by 2045.

In the first phase, decisions shall be made on subsidies and incentives which will promote emission-free transport. Among the measures foreseen are the inclusion of biogas and electro fuels in the distribution obligation, support for public distribution infrastructure for transport electricity and gas, for private charging infrastructure for housing companies and workplaces as well as several purchase subsidies (all-electric cars, electric and gas-powered vans and trucks) and support for sustainable transport modes (cycling, walking, public transportation). The calculated emission reduction of these measures is at least 0,62 megatonnes (Mt). Investments foreseen under this component will support the implementation of this reform. Decisions on the financing of these measures will be under consideration in the government budget negotiation in the autumn of 2021.

In addition, impact assessments on possible further measures shall be finalised by 31 December 2021. Measures to be assessed shall include:

·Increasing the distribution obligation for biogas and biofuel from the current 30%

·Prerequisites for increasing remote work

·Emission reduction potential of combined transport

·Digital transport solutions and promotion of mobility services

·Other credible, verifiable emission reduction measures.

Once the progress of EU-level measures and the outcome of the impact assessments are known, Finland shall assess and decide on the possible need for additional measures and adopt policy proposals by the end of 2021 to achieve the remaining emissions reductions (phase 3 of the roadmap). To this end, various alternative measures, including national emissions trading for fossil fuels, shall be prepared. The baseline scenario on emissions of domestic transport shall be updated by autumn 2021 to get new estimations on the amount of emissions reductions needed to meet the 2030 goal.

Following the implementation of the Roadmap for fossil-free transport, Finland shall reduce the greenhouse gas emissions of domestic transport by at least 29% by 2025, compared to 2005 levels.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (P1C4R2): Tax reform for sustainable transport

A reform of the taxation of employee transport benefits shall stimulate the use of electric vehicles, public transport and bicycles. It shall include lower tax rates for electric vehicles for the period 2021-2025, simplified taxation schemes for commuter tickets and tax-free advantages on employee bicycles.

Finland shall further prepare a review of company car taxation to favour low-emissions vehicles, including lower tax rates for low-emission company cars.

In addition, a working group composed of civil servants is expected to have adopted a report in May 2021, advising the Finnish government on the necessary tax measures to improve the efficiency of transport emission control and ensure the long-term fiscal base.

The implementation of the reform shall be completed by 30 June 2022.

Investment 1 (P1C4I1): Public electricity and gas charging and refuelling infrastructure

This measure shall provide support for the construction of a widely available network of public infrastructure for the charging of electric vehicles (including public transport) and refuelling of gas vehicles in order to reduce emissions by encouraging the replacement of fossil-fuelled vehicles with vehicles powered by alternative fuels. Support shall be made available for:

I)high-power chargers;

II)public transport charging points for buses;

III)compressed biogas (CBG) stations; and

IV)liquefied biogas stations.

To be eligible for support in groups i), iii) and iv), the recharging and refuelling points must be publicly accessible. In group ii), a requirement for eligibility is that the supported infrastructure is used for local public transport. The support takes the form of competitive calls under the responsibility of the Energy Authority through a top-up of an existing aid scheme which is currently based on the Government Decree (498/2018) on infrastructure aid for transport electricity and biogas in 2018-2021. A new Government Decree shall be adopted in 2022 to cover the period of 2022-2025. The calls shall be open to individual companies as well as municipalities. The investments shall be implemented in line with Directive (EU) 2018/2001.

The implementation of the investment shall be completed by 30 June 2025.

Investment 2 (P1C4I2): Private charging infrastructure

This measure promotes the construction of a private electric car charging station infrastructure. The lack of a home charging infrastructure has been identified as one of the bottlenecks that hampers the incentive for electric vehicle ownership.

The budget of the existing scheme “grant for promotion of electric transport infrastructure in residential buildings” shall be increased. The support takes the form of investment grant for projects that meet specified criteria set by the Ministry of the Environment. The support is targeted at housing companies. The scope of the support shall be broadened by supporting charging stations at the workplace. A separate scheme shall be prepared and be available as of 2022. The support shall be targeted at companies and employers.

The implementation of the investment shall be completed by 30 June 2024.

D.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

E. COMPONENT P1C5: ENVIRONMENTAL SUSTAINABILITY AND NATURE —BASED SOLUTIONS

The Finnish government has set a target of halting biodiversity loss by 2030. The overall goal of this component of the Finnish recovery and resilience plan is to contribute to halting the loss of biodiversity caused by intensive use of natural resources as well as combating pollution of the Baltic Sea.

The component includes investments that aim at promoting innovative solutions to combat pollution, such as using gypsum, an industrial by-product to reduce the phosphorus concentration in the Baltic Sea, as well as at developing climate-sustainable forest management. These investments are complemented by a reform of the nature conservation act. This act shall provide a legal basis for the national biodiversity strategy and it shall aim at strengthening biodiversity.

The component contributes to addressing Country Specific Recommendations on focusing investment on the green transition (Country Specific Recommendation 3 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

E.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P1C5R1): Modernisation of nature conservation legislation

Finland does not currently have a legal basis for the national biodiversity strategy and for voluntary nature conservation measures, including restoration and active natural management measures. Finland shall update the Nature Conservation Act (1096/1996) to respond better to current needs in order to strengthen biodiversity. Legislative amendments to the Act shall ensure that decision-making takes better account of the preservation of biodiversity outside nature conservation areas and the maintenance of ecosystem services. In addition, new measures shall be adopted to enhance the effectiveness of the conservation of habitats and species.

The government shall submit the new Nature Conservation Act to Parliament by 31 January 2022. The new Act shall enter into force during 2022. The implementation of the Act shall be carried out by the Centres for Economic Development, Transport and the Environment, Metsähallitus and the Ministry of the Environment.

Finland is expected to also adopt a regulation on the financial support system for restoration and care measures, which shall support measures to rehabilitate and manage endangered habitats, species and landscape values.

The implementation of the reform shall be completed by 31 December 2023.

Investment 1 (P1C5I1): Gypsum treatment and nutrient recycling

The measure shall support climate and environmental objectives by treating arable land with gypsum. This solution aims at reducing the phosphorus load from agriculture to the Baltic Sea. The measure also aims at reducing the discharge of nutrients into water bodies by promoting nutrient recycling from nutrient rich waste streams from urban areas, which is expected to contribute to prevent eutrophication and degradation.

The investment is composed of two elements:

I)treatment of fields with gypsum; and

II)R&D projects on nutrient recycling.

The support for the treatment of fields with gypsum shall be granted under government decree 510/2020, which was issued under the Act on the Organisation of Water Resources and the Marine Strategy (1299/2004). Competitive calls for tender for the gypsum procurement, transport and application services shall be launched under the responsibility of the Centre for Economic Development, Transport and the Environment for South-West Finland in 2021. The measure is targeted at producers and farmers. 540 000 hectares of fields in Finland have been identified as suitable for gypsum treatment. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). In particular, monitoring of the concerned arable lands and water bodies shall take place to ensure the absence of adverse impacts on land (including soil) and aquatic ecosystems and absence of adverse impacts on its carbon balance. In case any adverse effects are identified, appropriate measures shall be taken to ensure ecosystem and/or carbon balance recovery and the use of gypsum should be prevented in the concerned area. Financing under this investment shall not be used to apply gypsum to grow food-based biofuel/bioenergy crops. The support for the R&D projects on nutrient recycling shall be granted under Government Decree on nutrient recycling and wastewater treatment energy efficiency projects in 2020-2026 (657/2020). Open calls shall be launched under the responsibility of the Ministry of the Environment. The projects shall support the introduction of new techniques and methods for nutrient recycling, the production of competitive end-products with a high degree of processing, investment in R&D and the competitiveness of the industry. In the selection process, particular attention, shall be paid to the impacts on climate change, eutrophication and biodiversity.

Selection criteria shall ensure that all projects contribute to the climate change objectives are linked to the intervention field 045bis that has 100% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility. To this end, selected projects for gypsum supply shall ensure that at least 50%, in terms of dry weight, of the processed separately collected non-hazardous dry gypsum waste generated by the relevant manufacturers that are supplying the gypsum, shall be converted into secondary raw materials. Selected projects for nutrient recycling shall ensure that at least 50% of the recoverable nutrients or biomass in wastewater shall be converted into secondary raw materials.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (P1C5I2): Climate-sustainable measures in the land use sector

This measure focuses on the development of climate-sustainable land use methods. Finland shall finance initiatives that enable the forestry sector to use better targeted and more diverse logging and farming methods, in which soil, natural values and water protection shall be taken into account more strongly than at present ("precision forestry"). It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). The measure shall include additional methods, technologies and generation of information to promote the sustainability of forests, including by favouring mixed forests and strengthening forest biodiversity, inter alia through increasing the amount of dead wood in the site. In the forests where continuous forest management methods are applied, which implies that there are no clear cuts, there shall be no new or remedial ditching. The development of new methods are expected to improve value creation and render forest activity chains more efficient, while new innovations that may be utilised nationally and globally may be developed.

The support for the development of new land use measures shall be granted on the basis of Government Decree 5/2021 on grants for climate measures in the land use sector in 2020-2025. The Ministry of Agriculture and Forestry shall publish a call for applications for development and training projects. At least seven projects shall be funded. The measure is targeted at actors in the forest sector (forest owners, planning, technology, contracting and other companies and communities active in the field).

Eligibility/selection criteria shall ensure that all projects contribute to the climate change objectives linked to the intervention field 050 that has a 40% climate coefficient in accordance with Annex VI to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility. Only projects that support climate adaptation and mitigation and are consistent with the requirements of the DNSH guidance shall be eligible under this measure.

The implementation of the investment shall be completed by 31 December 2025.

E.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

PILLAR 2: Digitalisation and the data economy will strengthen productivity and make services available to everyone

F. COMPONENT P2C1: DIGITAL INFRASTRUCTURE

This component of the Finnish recovery and resilience plan includes investments in communication and transport infrastructure to meet the needs of an increasingly digital society.

First, Finland aims to invest in the digitalisation of rail transport, which shall help Finland meet its emission reduction targets, increase the capacity of the system, and improve service quality. In particular, the ‘Digirail’ project aims to introduce a new automatic train protection system on the entire Finnish network, as the current system will reach the end of its lifetime by the end of this decade. The implementation of the project shall help to ensure rail services that are fit for the future.

Second, Finland intends to use non-repayable support to finance private investments in high-speed broadband networks in areas where access would not be provided on a commercial basis. The component aims to address the remaining gaps in high-speed broadband infrastructure across Finland, in particular in rural areas that have lower access rates. Comprehensive, high-quality and fast communication networks are needed across Finland as the digitalisation of work and industrial production increases and services are shifted to digital channels. The deployment of new digital solutions across sectors require fast and reliable communication networks, especially for critical applications.

The component contributes to addressing Country Specific Recommendations to focus investment on the green and digital transition, in particular on sustainable and efficient infrastructure (Country Specific Recommendation 3 2020), as well as to focus investment-related economic policy sustainable transport, taking into account regional disparities (Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

F.1.    Description of the reforms and investments for non-repayable financial support

Investment 1 (P2C1I1): Digital connectivity - Developing the quality and availability of communications networks

The investment is an investment support scheme to increase the quality and availability of communication connections in areas where such connections are not provided based on market mechanisms alone. The measure includes the adoption of the legislation for the support programme, as well as the disbursement of financial support to broadband providers. Broadband connections supported under the scheme shall offer at least a capacity of 100 Mbit per second. The non-repayable support from the Facility shall complement the national broadband support programme, based on the Broadband Support Act, which contains provisions on the conditions for granting and disbursing funds, as well as on the competent support authority and its tasks. The supporting authority shall carry out analysis to ensure that projects are selected only in areas where market-based solutions are not available in line with the General Block Exemption Regulation. Finland shall establish a coordinator position in the National Broadband Office with the aim of promoting broadband and planning the coordination of national and EU broadband funding to avoid overlaps and ensure complementarity.

The implementation of the measure shall be completed by 30 June 2026.

Investment 2 (P2C1I2): Transport and land use - Digirail project

Finland aims to introduce the European Rail Traffic Management System (ERTMS) on the entire national network by 2040, along with the 4G and 5G-based Future Railway Mobile Communication System (FRMCS). The introduction of ERMTS and FRMCS shall help ensure that rail services are fit-for-future. To that end, the investment shall fund the Digirail development and verification phase, which encompasses the preparation and carrying-out of testing and piloting activities in the period 2021-2026. Following successful testing in a laboratory environment, the new radio-based system shall be tested under realistic conditions on a test track, before being deployed on a pilot track for commercial train traffic, where the newly developed system shall be used as the single train control system. By the end of 2027, in the final stage of the development and verification phase, the ERTMS system is expected to be tested on a commercial pilot track where the new system is used as the single train control system. As of 2028, i.e. after the support by the Facility, Digirail and ERTMS is planned to be rolled-out across the entire Finnish network.

The implementation of the investment shall be completed by 30 June 2026.

F.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

G. COMPONENT P2C2: ACCELERATING THE DATA ECONOMY AND DIGITALISATION

G.1.    Description of the reforms and investments for non-repayable financial support

This component of the Finnish recovery and resilience plan includes reforms and investments that shall support the digitalisation in Finland by facilitating data-driven innovation, the exchange of digital information and use of public sector data and by fostering research in key technologies in order to increase Finland’s competitiveness. By increasing the interoperability of data for multi-stakeholder use, Finland aims to exploit the full potential of the digital transformation. This requires standardisation for the exchange of digital information covering both businesses and the public sector. The component also includes the development of a repository system for monitoring the implementation of the recovery and resilience plan.

By extending the coverage of the residential and commercial property information system with information on housing company loans, the component contributes to addressing Country Specific Recommendations to strengthen the monitoring of household debt and establish the credit registry system (Country Specific Recommendation 4 2019), as well as to focus investment on research and innovation (Country Specific Recommendation 3 2020 and Country Specific Recommendation 3 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

Investment 1 (P2C2I1): Digital economy – Real-time economy (RTE) programme

The investment aims to help create common solutions and structures to facilitate the exchange of digital financial data between organisations in a structured machine-readable format (such as e-invoices, e-receipts, procurement documents and financial statements), in line with the vision of a ‘real-time economy’. The exchange of structured financial data shall support the automation of processes with positive impact on productivity in both the public and private sector, while also promoting the digitalisation of government and society as a whole. Under the steer of the Ministry of Employment and Economy, the project implementation will be under the responsibility of the National Board of Patents and Registration in cooperation with the Tax administration and the State Treasury.

The investment shall enable the sharing of information between businesses, between businesses and public authorities, and within the public sector, based on the ‘Once-only’ principle. In particular, the investment shall cover the following elements:

I)the establishment of an “ecosystem for the real-time economy”, which shall be developed in public-private cooperation. The financial support shall be used to create a minimum viable ecosystem (MVE), i.e. a production version of the basic digital platform and related infrastructure/ software solutions, by the end of 2022, which shall be able to transmit at least e-invoices;

II)the creation of digital infrastructure to be functional at the end of 2024, which shall allow for sharing, receiving and using a company´s financial data such as e-receipts, e-invoices and procurement messages in line with the relevant legal requirements related to data protection and privacy. The digital infrastructure shall at least contain the following characteristics:

oCommon interface solutions for sharing financial data in a structured form

oStandardised machine-readable format for electronic business documents.

The implementation of the investment shall be completed by 31 December 2024.

Investment 2 (P2C2I2): Acceleration of data economy and digitalisation - Virtual Finland

The Virtual Finland service platform will improve Finland's competitiveness, enabling the delivery of seamless digital services from the public and private sector for different target groups coming to Finland, such as companies, employees, university students and tourists. The investment will renew the service concept and integrate the services that are currently handled separately in different ministries and agencies into a user-friendly entity.

The aim of the investment is to offer a single service interface for businesses and individuals that would like to reside, establish themselves or do business in Finland. The investment covers the digitalisation of the services, including both the creation of new and the replacement of existing processes, such as filling out and mailing paper forms or physical transactions at an office, which currently require in-house presence in Finland. The scope of the service platform is expected to cover both public services (such as digital identity, e-residency, or patent registration) and private services (including commercial insurance, banking, accounting, financial, legal and other services).

In the first phase (2021-2022), the Ministry for Foreign Affairs of Finland (MFA) shall coordinate the development work. During the first phase a more permanent management model for the next development steps and production phase shall be planned and defined. The implementation shall involve MFA, Ministry of Finance, Ministry of Economic Affairs, other ministries, Finnish Tax Administration, Digital and Population Data Services Agency, Finnish Innovation Fund, Patent and Registration Agency, Finnish Immigration Service and possibly other agencies.

The measure shall cover the following elements:

-By 31 December 2022, the first production version of ‘Virtual Finland’ platform shall be available, supporting at minimum the following functionality: identification of a person and business user, digital identity, reliable sharing of data between the different parties involved in the platform. The interoperability of the public administration and private sector digital service platforms shall ensure seamless digital services for customers.

-By 31 December 2025, at least two service processes, notably the entry process for a non-Finnish private individual and a non-Finnish business, shall be fully supported by the Virtual Finland platform.

-The Virtual Finland platform is expected to successively integrate services for additional target groups (higher education students, non-listed companies, seasonal workers, tourists, exporting companies).

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (P2C2I3): Accelerating key technologies (microelectronics, 6G, artificial intelligence and quantum computing)

The objective of the measure is to fund applied research and deployment of new technologies, in order to safeguard Europe’s competitiveness, information security and sovereignty. Funding shall be provided for national applied RDI activities and the infrastructure supporting them, i.e. testing and experimentation environments, which shall be related to microelectronics, 5G/6G technologies, artificial intelligence or quantum technology. Funding shall be channelled through Business Finland’s competitive financing instruments. Projects shall be selected based on open calls and the selection criteria shall ensure the digital contribution of the projects and their compliance with the ‘do no significant harm’ principle. In particular, the measure shall support the following technologies:

-Microelectronics: The investment aims to secure the value chain of the semi-conductor production to increase the autonomy in this key technology. Financial support shall be provided to accelerate and increase Finnish companies’ investments in the development of the production value chain of microelectronics, increase the ability to design and manufacture semiconductor components in Finland and the EU by enabling Finnish companies to participate in the potential Important Project of Common European Interest (IPCEI) for microelectronics.

-6G, artificial intelligence and quantum computing: Financial support shall be given to investments into the development of 6G, artificial intelligence and quantum computing, which are considered important for technological competitiveness in the future. The objective is to create competitive development environments for artificial intelligence, future telecommunications technology and the application of quantum computing in Finland, to participate for example in forming a European testing and experimentation facilities for artificial intelligence (AI TEF), to renew the national 5G test network and its operation model, and to create a development environment for the software required in quantum computing.

The implementation of the investment shall be completed by 31 December 2025.

Reform 1 (P2C2R1): Development of the residential and commercial property information system

The objective of the measure is to improve consumer protection in the housing market as well as competition in the housing sector and make available information on the financial and technical condition and repair needs for residential and commercial property. Currently, there is no central register for housing company loans; instead, data are only entered in the accounts of housing companies. The development of such a residential and commercial property information system, which enables fairer treatment of consumers in credit granting situations, is a key condition for the creation of a positive credit registry.

The investment shall support the development of the residential and commercial property information system, to collect information on financial and technical condition and repair needs, in full compliance with relevant data protection provisions. Information on housing company loans shall be transmitted to the positive credit data register, which shall help address private over-indebtedness.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (P2C2R2): Enhancing the effectiveness and transparency of RRP reforms and investments by developing information systems, administration and audit

To answer to the specific needs of the Finnish recovery and resilience plan in terms of coordination, management, control, reporting and audit, the roles and responsibilities of the relevant Finnish authorities shall be enshrined in a new legal instrument. Successful implementation of these tasks also requires additional targeted temporary investments to ensure the functioning of the management and control system, in line with regulatory needs. This shall include inter alia the setting up of the necessary administrative capacities and the creation of an IT repository system.

The implementation of the reform shall be completed by 31 December 2021.

G.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

H. COMPONENT P2C3: DIGITAL SECURITY

This component of the Finnish recovery and resilience plan aims to help create a comprehensive framework for addressing cyber and information security issues, which is a prerequisite for a successful digital transition. Through a cyber-security development programme, Finland shall invest into civil cyber security skills. Finland also aims to reinforce anti-money laundering measures by creating a digital system that shall ensure better exchange of information between different actors involved in anti-money laundering tasks, both nationally and internationally, in conjunction with the necessary legislative amendments.

The component contributes to addressing Country Specific Recommendation 4 2020 on ensuring effective supervision and enforcement of the anti-money laundering framework as well as to Country Specific Recommendation 3 2020 on focusing investments on the green and digital transition, in particular research and innovation.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

H.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P2C3R1): Ensuring effective supervision and enforcement of the prevention of money laundering

The reform shall facilitate the collection and exchange of information between the competent authorities for the prevention and detection of money-laundering, including through the automation of data processing and analysis. It shall provide support to improve the data processing within the supervisory authority as well as the exchange of information among different authorities, and to implement a more effective risk-based supervision of anti-money laundering measures. The bank and payment accounts control system shall be amended to increase the efficiency of the prevention, detection and prosecution of money-laundering and terrorist financing. The timeliness, coverage and accuracy of the register of beneficial owners shall be improved.

The legislative changes shall enter into force by 31 December 2025 and the digital tools of the authorities and private sector actors working in the fight against money laundering shall be operational by 30 June 2026.

The implementation of the reform shall be completed by 30 June 2026.

Investment 1 (P2C3I1): Civilian cybersecurity skills

The objective of the investment is to increase basic cybersecurity skills of the general population to ensure that citizens can use digital services safely and identify the risks associated with the use of different devices, products and services.

First, the investment shall fund a research project to collect and summarise information from all EU Member States on how each country trains citizens in basic cybersecurity. Second, the information shall be used to create a common digital platform for teaching and developing cybersecurity skills, supported by this investment. In a third stage, the platform shall be made available for all Europeans in different languages.

The project shall be implemented by a research consortium bringing together Finland’s key cybersecurity research universities under the responsibility of the Ministry of Transport and Communications.

The implementation of the investment shall be completed by 31 December 2024.

Investment 2 (P2C3I2): Cybersecurity exercises

The aim of this investment is to provide cyber security exercises, to develop the society’s resilience and preparedness for cyber security incidents. The exercises play a key role for the prevention, management and resolution of cyber attacks. Exercises allow for practicing and developing the handling of cyber attacks in a secure environment. The exercises shall be provided by higher education institutions to the staff of the public administration concerned. At least 2 000 public officials shall be trained during 19 exercises.

The training shall be implemented by a University of Applied Science bringing together Finland’s key cybersecurity public officials under the responsibility of the Ministry of Transport and Communications.

The implementation of the investment shall be completed by 31 December 2025.

H.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

PILLAR 3: Raising the employment rate and skills level to boost sustainable growth

I. COMPONENT P3C1: EMPLOYMENT AND LABOUR MARKET

This component of the Finnish recovery and resilience plan addresses challenges related to employment and labour market. Finland’s workforce is shrinking, affecting the country's growth potential, while high structural unemployment when compared to other Nordic countries persists, aggravated by the COVID-19 crisis.

The objective of the component is to raise the employment rate and strengthen the functioning of the labour market. This shall be done through a structural reform and digitalisation of the public employment services ("Nordic Employment model"). Employment shall also be fostered by phasing out the extended unemployment benefit to older people ahead of the statutory retirement age, the so-called "unemployment tunnel". A third element to raise employment is by facilitating work- and education-based immigration. Finally, promoting labour market integration of young people and people with partial work capacity are also proposed interventions.

The component contributes to addressing Country Specific Recommendations on improving incentives to accept work and enhance skills and active inclusion, notably through well-integrated services for the unemployed and the inactive (Country Specific Recommendation 2 2019) and on strengthening measures to support employment and bolster active labour market policies (Country Specific Recommendation 2 2020). The component is also expected to contribute to relevant principles of the European Pillar of Social Rights.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

I.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P3C1R1): Nordic Model of Employment Services

The objective of the measure is to reform the public employment services process.

The reform consists of transitioning towards a new Nordic model of employment services, which shall enhance active labour market policies by improving personalised and integrated services for job-seekers. The model shall also include an active search obligation for job-seekers. The application of the new model is expected to contribute to the employment of around 10 000 persons.

The model shall be complemented by the development of a digital information system for public employment services, comprising the following functionalities:

I)customer relations management production system;

II)appointment booking system;

III)self-reporting tool (‘Message service’);

IV)online guidance service.

The implementation of the reform shall be completed by 31 December 2023.

Reform 2 (P3C1R2): Removal of additional days of unemployment allowance

The objective of the reform is to foster employment by removing disincentives to work for older people and attenuating a targeting of redundancies on older employees. The need to introduce such a reform stems from the fact that the right to additional days of earnings-related unemployment benefits results in extending periods of unemployment among older people approaching their statutory retirement age.

The measure consists in amending the Unemployment Security Act in order to phase out the age limit for additional days of earnings-related unemployment benefits. The expected impact is an increase in employment of about 7 900 workers by the end of 2029, i.e. beyond the timeframe of the Recovery and Resilience Facility.

The implementation of the reform shall be completed by 30 June 2023.

Reform 3 (P3C1R3): Streamlining the work- and education-based immigration process

The objective of the reform is to attract international talent by streamlining the administrative procedures for processing residence permit applications based on work and education. This is expected to increase immigration of skilled workers and to improve the opportunities for international degree students to find employment in Finland. Consequently, the reform shall contribute to addressing labour shortages in specific sectors, notably by supplying experts, students and researchers in leading and growth sectors.

The measure consists in an extensive cross-administrative project on improving immigration legislation (namely, amendments to Chapter 5 of the Aliens Act 301/2004) and shortening residence permit processes. Along with a reduction in the average number of days required for processing residence permit applications, a “fast-track” shall be created for growth entrepreneurs, specialists and their family members.

The legislative reform is supported by an investment in digital infrastructure to ensure the readiness of the permit system and other information systems in the residence permit process to meet the needs of the work- and education-based immigration. The digital infrastructure shall include the following areas of development:

I) new digital structures and functionalities;

II) system integration and data transfer interfaces;

III) system development related to the registration and processing of applications;

IV) implementation of the “Fast Track”;

V) inter-sectoral knowledge-based management capabilities;

VI) customer guidance and instructions, communications and marketing that support the reformed process;

VII)improvements in usability and performance required by the reform, measures supporting deployment and increase in the automation code.

The implementation of the reform shall be completed by 31 December 2024.

Reform 4 (P3C1R4): Strengthening the multidisciplinary services for young people (Ohjaamo services)

The objective of the reform is to strengthen the multidisciplinary character of one-stop-shop youth centres (Ohjaamo), and especially address the needs of NEETs (young people not in employment, education or training) so as to improve their employment prospects. This shall be achieved through a temporary incentive for municipalities to attract or adjust resources to Ohjaamo services, improving thereby the response to young people’s needs, by offering combined educational, health, social and employment services. The Ohjaamo services constitute an association of organisations, and the majority of the experts working therein remain jobholders in their own organisations. When a municipality recruits a new employee to the Ohjaamo services, the municipality may apply for funding for the staff costs of an additional person who shall be temporary and ensure, notably through trainings, the reform of the work culture and operating practices of the services. This incentive model is expected to lead to the more effective integration of health and social services and expertise in the education sector to the Ohjaamo service points. The funding of the reform is channelled through the Development and Administration Centre for Employment and Economic Development (KEHA Centre).

The implementation of the measure shall be completed by 31 December 2024.

Investment 1 (P3C1I1): Development of work ability, productivity and well-being at work

The objective of the investment is to raise the employment rate by increasing the participation of people with partial work ability, including persons with disabilities, in the labour market and to increase the employment rate by enhancing mental health and work ability, in view of extending working careers.

The investment shall consist of the following interventions:

I)Setting up of a new intermediate labour market operator to promote the adaptation and placement of persons who have a significant risk of being permanently excluded from the labour market;

II)Addressing service shortcomings for people with partial work ability and suffering from mental health disorders: this shall be done through trainings and by extending the existing Work Ability Programme to five more municipalities or joint municipal authorities and by extending the existing Individual Placement and Support (IPS) Model to six more hospital districts.

III)Providing preventive support for work ability through physical and mental health measures for individuals and workplaces. Many workplaces are displaying a lack of organisational measures, ineffective cooperation, unclear responsibilities in support of work ability, resulting in shorter working careers. A virtual work ability house shall be established to facilitate the search and dissemination of information and practical measures to support work ability.

The implementation of the investment shall be completed by 31 December 2025.

I.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

J. COMPONENT P3C2: RAISING THE COMPETENCE LEVEL AND REFORM OF CONTINUOUS LEARNING 

This component of the Finnish recovery and resilience plan addresses challenges arising from globalisation, technological and demographic changes, which affect the Finnish economy and threaten employment’s level. Developing skills of working age people (through reskilling and upskilling), including the low-skilled, in areas relevant to the labour market is key to strengthening workforce’s employability in an increasingly digital and greener economy.

The overall objective of this component is to raise Finland’s level of competences and increase the effectiveness of the higher education system. To achieve this goal, the component includes the following activities: (i) a reform of continuous learning to meet the competence needs of the future; (ii) investing in the digitalisation of continuous learning; (iii) increasing the number of student places in higher education; and (iv) investing in the digitalisation and modernisation of higher education in Åland.

The component shall support smoother transitions between working life and education. It shall also contribute to improving the conditions for employment, especially among under-represented groups, and to enabling people in key economic sectors to take on new tasks.

The component contributes to addressing Country Specific Recommendations on improving incentives to accept work and enhancing skills and active inclusion, notably through well-integrated services for the unemployed and the inactive (Country Specific Recommendation 2 2019), as well as on strengthening measures to support employment and bolster active labour market policies (Country Specific Recommendation 2 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

J.1. Description of the reforms and investments for non-repayable financial support 

Reform 1 (P3C2R1): Reform of continuous learning

The objective of this reform is to improve employment opportunities of working age people (including those belonging to under-represented groups) by developing their skills and competences and to support the long-term growth potential of companies and the vitality of regions. The reform aims at increasing the matching between the provision of educational courses and the labour market’s needs.

The measure consists of the following interventions: (i) creating a service centre for continuous learning and employment to promote the reform’s implementation; (ii) creating a system for anticipating labour and competence needs; (iii) carrying out training programmes which support the digital transition, the understanding of new ways of working, and citizens’ ability to manage new digital tools, as well as a just transition to a carbon-neutral society; and (iv) carrying out tailor-made training to improve the quality of guidance services, practices and tools.

The implementation of the reform shall be completed by 30 June 2025.

Investment 1 (P3C2I1): Digitalisation programme for continuous learning

The objective of this investment is to enable and accelerate the transformation of the education, training and skills development system across administrative boundaries by carrying out an extensive digitalisation programme to develop digital services and information resources that support continuous learning. The development of existing and new digital services shall also increase the innovation capacity of higher education and facilitate access to digital educational services.

The measure consists of two main elements: (i) creating a digital service package for continuous learning that covers the entire education system and across administrative boundaries; and (ii) increasing the digitalisation and flexible learning in higher education institutions. As a result, the new digital solutions shall provide services, service chains and service packages that meet customers’ needs significantly better than at present, reduce overlapping work between different actors, and improve the efficiency of resources used and operating methods across administrative boundaries.

The implementation of the reform shall be completed by 31 December 2024.

Investment 2 (P3C2I2): Improving the level of education by increasing student places in higher education

The objective of this investment is to raise the level of education by increasing the number of people with a higher education degree. This is expected to contribute to the economic recovery and mitigate the negative effects of the COVID-19 pandemic by accelerating young people’s access to higher education.

The measure consists in increasing by at least 600 the number of places allocated to higher education institutions offering degree studies targeted at professional sectors experiencing labour shortages. Such sectors include social and health care, education, technology and ICT sectors. All professional sectors chosen shall contribute to a successful implementation of the recovery and resilience plan. The investment shall cover the costs of students’ education to the higher education institution for the entire duration of the studies.

The implementation of the investment shall be completed by 31 December 2022.

Investment 3 (P3C2I3): Raising the level of competence and renewing continuous learning, digitalisation and modernisation of education in Åland

The objectives of this investment are to increase the quality of skills delivered by the educational system, strengthen opportunities for lifelong learning, support job creation and entrepreneurship in Åland.

The measure consists of: (i) introducing student-centered digital education in all higher education studies from bachelor’s degrees to postgraduate studies (this is designed to enable an increasing number of students to participate in higher education regardless of physical distance or different life situations, including combining work and studies); (ii) updating and developing higher education institutions’ digital guidance and management system so that it may also be integrated with national data databases and national digital continuous learning ecosystems (this aims to ensure equal conditions for studying in Åland compared to other Finnish higher education institutions); (iii) creating two new bachelor’s and master’s programmes in the fields of digitalisation, automation and renewable energy (this is designed to foster research, development and innovation within the studies’ subject fields).

The implementation of the investment shall be completed by 31 December 2024.

J.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

K. COMPONENT P3C3: RDI, RESEARCH INFRASTRUCTURE AND PILOTING

This component of the Finnish Recovery and Resilience Plan addresses challenges in the area of research, development and innovation (RDI). Despite being among Innovation Leaders according to the European Innovation Scoreboard for years, Finland has suffered a setback in 2010s as regards investments in RDI activities, in particular in terms of private sector investments in RDI activities. Another challenge faced by Finland is the need to step up cooperation within public RDI entities and between public and private entities involved in RDI, including at international level.

The objective of the component is to contribute to strengthening RDI intensity, raising the share of RDI expenditure in Finland from 2,9% (2019) to 4% of GDP by 2030 and increasing the ambition level of RDI activities, in line with National Roadmap for Research, Development and Innovation adopted in spring 2020. To this end, the component proposes two investment packages that aim at promoting green transition and investing in research and innovation infrastructure supporting sustainable growth and digitalisation.

The package promoting green transition includes investments for supporting projects of leading companies, accelerating key sectors and strengthening competence in key sectors, and for supporting innovative growth companies (investments 1-4 below). 

In order to ensure that the investments under this component comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 30 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 31 ; (iii) activities related to waste landfills, incinerators 32 and mechanical biological treatment plants 33 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected. The following R&D&I actions shall be considered compliant with the ‘Do no significant harm’ Technical Guidance (2021/C58/01): (i) those R&D&I actions resulting in technologically neutral outcomes at the level of their application; (ii) those R&D&I actions supporting alternatives with low environmental impacts for which these exist; or (iii) those R&D&I actions that are primarily focused on developing alternatives with the lowest possible environmental impacts in the sector for those activities for which no technologically and economically feasible low-impact alternative exists.

The package promoting innovation and research infrastructures includes investments for the development of local research infrastructures, national research infrastructures and innovation infrastructures.

The component contributes to addressing Country Specific Recommendations to focus investment-related economic policy on research and innovation, low carbon and energy transition and sustainable transport (Country Specific Recommendation 3 2019), as well as to focus investment on the green and digital transition, in particular on clean and efficient production and use of energy, sustainable and efficient infrastructure as well as research and innovation (Country Specific Recommendation 3 2020). 

K.1.    Description of the reforms and investments for non-repayable financial support

Investment 1 (P3C3I1): RDI funding package promoting the green transition – Leading companies

The objective of the investment is to support – via scheme managed by Business Finland - partnerships and ecosystems between companies and other research organisations that strengthen the competitiveness of business and enhance the effectiveness of Research & Development activities. The partnerships to be funded shall focus on areas of activity that support the green transition.

The investment consists of supporting the creation of new sectors, products, businesses and operating models as well as the use of research results from universities, universities of applied sciences and research institutes for the needs of companies. Partnerships shall significantly leverage other national RDI funding, companies’ own RDI investments, and the utilisation of EU and other international funding. Flexible partnerships and ecosystems between companies and research organisations and other RDI actors are expected to strengthen the competitiveness of business and industry and improve productivity.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (P3C3I2): RDI funding package promoting the green transition – accelerating key sectors and strengthening competence (Academy of Finland)

The objective of the investment is to boost – via scheme managed by the Academy of Finland - RDI activities supporting the green transition, focusing on the key sectors and technologies of the green transition in order to promote use and sharing of know-how and to improve the quality and effectiveness of partnerships and ecosystems. The eligibility/selection criteria shall require that research is targeted at the low-carbon economy and climate change adaptation and resilience. The scheme shall be cutting across all branches of science and sectors including hydrogen economy, high-value bioproducts and emission-free energy systems and competences in data analysis and social sciences.

The measure consists of interventions to strengthen the existing research clusters, increase the level of expertise, including outside the existing research clusters, and to support the renewal of business activities. The investments in RDI of key sectors and technologies shall also enhance partnerships and ecosystems of RDI actors. The measure shall provide support to research organisations, such as higher education institutions or research institutes.

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (P3C3I3): RDI funding package promoting the green transition – accelerating key sectors and strengthening competence (Business Finland)

The objective of this investment is to boost – via scheme managed by Business Finland - RDI activities supporting the green transition, focusing on the key sectors and technologies of the green transition in order to promote utilisation and sharing of know-how and to improve the quality and effectiveness of partnerships and ecosystems. The scheme shall be cutting across all branches of science and sectors including the hydrogen economy, high-value bioproducts and emission-free energy systems and competences in data analysis and social sciences related to resilience and adaptation to climate change.

The measure consists of interventions to strengthen the existing research clusters, increase the level of expertise, including outside the existing research clusters, and to support the renewal of business activities. The investments in RDI of key sectors and technologies shall also enhance partnerships and ecosystems of RDI actors. The measure shall provide support to private and public research organisations as well as companies or municipalities. In particular, it shall aim to provide support to the projects for leading companies selected under investment 1 above.

The implementation of the investment shall be completed by 31 December 2025.

Investment 4 (P3C3I4): RDI funding package supporting the green transition – Supporting innovative growth companies

The objective of the investment is to increase – via scheme managed by Business Finland - small and medium enterprises’ investments in RDI and to improve their preparedness for the digital and green transition. The investment is also expected to strengthen research-based business by developing the findings of higher education institutions and research institutes into new business supporting the green transition.

The measure consists of providing targeted support to companies with high growth potential that develop solutions for the green transition, in order to boost the growth of companies already engaged in exports and to increase the number of export companies. The support for the selected companies shall include funding for RDI activities, advice and information and contacts in the target markets.

The implementation of the investment shall be completed by 31 December 2025.

Investment 5 (P3C3I5): Promoting innovation and research infrastructure – Local research infrastructures

The objective of this investment is to finance – via scheme managed by the Academy of Finland - the renewal and development of local research infrastructures. It shall cut across all branches of science and research. Emphasis shall be put on the objectives of the green and digital transition. The selection criteria shall take into account the experience gained in the selection of projects for national research infrastructures (Investment 6 below).

The measure consists in providing financial support for the construction of local research infrastructure, such as for the acquisition of equipment and systems, the creation or updating of services. The measure shall also support the objectives of the National Research Infrastructure Strategy, cutting across all branches of science with an emphasis on the green transition and digitalisation. Special emphasis shall be put on strengthening of research infrastructures in line with the strategies and profiles of the hosting institutes such as universities, universities of applied sciences, research institutes and other research organisations. Finally, the investment shall help to strengthen the openness and interoperability of the research infrastructures of various actors (universities, universities of applied sciences, research institutes, companies and other RDI actors).

The implementation of the investment shall be completed by 31 December 2025.

Investment 6 (P3C3I6): Promoting innovation and research infrastructure – National research infrastructures

The objective of this investment is to finance – via scheme managed by the Academy of Finland - the renewal and development of national research infrastructures with emphasis on the objectives of the green and digital transition.

The measure consists in providing financial support for the construction of national research infrastructures, such as for the acquisition of equipment and systems, the creation or updating of services. At least 40 % of the value of the investment shall be allocated to RDI activities related to digitalisation. The measure shall also support the revision of the Academy of Finland’s research infrastructure grant criteria in accordance with the objectives of the National Research Infrastructure Strategy, with an emphasis on the green transition and digitalisation. Finally, the investment shall help to strengthen the openness and interoperability of the research infrastructures of various actors (universities, universities of applied sciences, research institutes, companies and other RDI actors).

The implementation of the investment shall be completed by 31 December 2025.

Investment 7 (P3C3I7): Promoting innovation and research infrastructure – competitive funding for innovation infrastructures

The objective of the investment is to support – via scheme managed by Business Finland - development of testing environments (innovation infrastructures), with emphasis on the objectives of the green and digital transition. The aim is also to increase the openness and interoperability of research and innovation infrastructures.

The measure consists of support to developing the environments needed for the development and testing of solutions that promote carbon neutrality and digitalisation in genuine user conditions. Such environments may include different research infrastructures of cities, municipalities and other public actors, or innovation environments jointly built by companies and other actors.

The implementation of the investment shall be completed by 31 December 2025.

K.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

L. COMPONENT P3C4: STRENGTHENING COMPETITIVENESS AND BOOSTING GROWTH IN CRISIS-IMPACTED SECTORS

The objective of this component of the Finnish recovery and resilience plan is to raise export capabilities by making sector-specific investments that are based on Finland’s strengths and international market potential. Second objective is supporting the recovery and sustainable renewal of the cultural and creative industries. The cultural and creative sectors have creative expertise and they both create and commercialise intellectual property. This promotes innovation and create added value in other sectors as well. Furthermore, the actions in this component shall support the renewal of the Finnish tourism industry, with the aim to increase export of services. Finland's SMEs account for only 16% of exports, which is below peer countries. International business development of SMEs and commercialisation of innovations often requires extra financial effort that is lacking in many SMEs. There is further potential in creative and cultural industries and tourism to support the growth of exports, in particular in services.

The component contributes to addressing Country Specific Recommendation 3 2020 on taking measures to provide liquidity to the real economy, in particular to small and medium-sized enterprises, front-loading mature public investment projects and promote private investment to foster the economic recovery and focusing investment on the green and digital transition, in particular on clean and efficient production and use of energy, sustainable and efficient infrastructure as well as research and innovation.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

L.1.    Description of the reforms and investments for non-repayable financial support

Investment 1 (P3C4I1): Growth acceleration programme for small enterprises

The objective of this investment is to accelerate growth of Finnish micro and small enterprises and boost their internationalisation capabilities.

The investment consists in providing business development grants to micro and small enterprises. Key eligibility/ selection criteria for projects shall include the promotion of new digital solutions, the green transition and RDI activities linked to these.

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (P3C4I2): Key programmes for international growth

The objective of this investment is to support international growth of companies by means of specific development grants.

The investment consists of the following interventions:

I.programme to promote low-carbon, circular economy and digital renewal in industry and to increase exports of industrial services;

II.electric heavy-duty vehicle transport ecosystem;

III.conversion and procurement subsidy; 80% of allocated funds is expected to be allocated as purchasing subsidies for new gas and electric trucks and for electric cars and 20% of the allocated funds is expected to support gas and ethanol conversion of existing cars, vans and heavy vehicles;

IV.health and wellbeing expertise and technology; this is designed to support the initiatives included in the Health Sector Growth Strategy’s roadmap, which aim to develop health sector ecosystems as well as new solutions and innovations for export markets;

V.programme for growth and exports of water expertise; this is designed to promote the creation, piloting and internationalisation of technologies, methods, service concepts and solutions in the water management sector.

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (P3C4I3): Support for the renewal of the cultural and creative sectors

The objective of this investment is to support the growth of the cultural and creative sector as strong potential drivers for future economic growth.

The investment consists in providing grant support to entities operating in the cultural and creative sectors. Most of the financial support (75% of the allocated funds) shall target companies and organisations in the cultural and creative sectors for developing innovative service, production and operating models and for strengthening the international competitiveness of the sectors and entities concerned. The rest (25%) of the allocated funds shall be used as development and pilot funding to support innovation and new cooperation in companies in the creative economy.

The implementation of the investment shall be completed by 31 December 2025.

Investment 4 (P3C4I4): Supporting sustainable and digital growth in the tourism sector

The objective of the investment is to boost sustainable growth and innovation in tourism sector.

The investment consists of purchases of services to plan, develop and implement the digital carbon footprint calculator for tourism services, sustainable tourism service packages, national operating model for knowledge-based management and coaching programmes for tourism companies and regions to support the sustainable and digital transition. In addition, the investment includes purchases of services for developing Visit Finland Data Hub and other digital services (STF-platform and visitfinland.com) through integration and open interfaces into a comprehensive and compliant travel data ecosystem. The investment also includes RD&I funding for research, experimentation and development projects that support the commercialisation of tourism business and innovations.

The implementation of the investment shall be completed by 30 June 2025.

L.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

PILLAR 4: Improving the availability of social welfare and health care services and increasing cost-effectiveness

M. COMPONENT P4C1: IMPROVING THE AVAILABILITY OF SOCIAL WELFARE AND HEALTH CARE SERVICES AND INCREASING COST-EFFECTIVENESS

This component of the Finnish recovery and resilience plan addresses several challenges related to the availability and cost-effectiveness of social welfare and healthcare services. Access to social and health care services in Finland is fragmented. The fragmentation of the service system and of its digital solutions poses a challenge to developing the necessary responses to address the population health and social needs. Therefore, the objective of this component is to enhance access to health and social services across the country and to remove the backlog in the provision of services related to COVID-19 pandemic. The component shall contribute to the implementation of the seven-day care guarantee reform, which consists in reducing the time limits for non-urgent care in primary health care to seven days from the current three-month deadline. It shall also contribute to improving the basic care guarantee, reducing inequalities, focusing on earlier identification and effective prevention, and strengthening the quality and cost-effectiveness of health and social services. A further aim is to improve the working conditions and well-being of health and social workers. The component includes a reform and investments that mutually reinforce each other. The reform shall contribute to the preparation of the social and healthcare reform. The investments shall contribute to: (i) implementing the care guarantee (including mental health care) and reducing the backlog in provision of services arising from the COVID-19 pandemic; (ii) strengthening prevention and early identification of social and health needs as part of implementing the care guarantee; (iii) strengthening the knowledge base and improving guidance to support the cost effectiveness of social and health care services; (iv) introducing digital innovations in the form of a care guarantee service; and (v) introducing a person-centred digital information system in Åland.

The component contributes to addressing Country Specific Recommendations on improving the cost-effectiveness of and equal access to social and healthcare services (Country Specific Recommendation 1 2019) and on addressing shortages of health workers to strengthen the resilience of the health system and improve access to social and health services (Country Specific Recommendation 1 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

M.1.    Description of the reforms and investments for non-repayable financial support

Reform 1 (P4C1R1): Preparation of the social welfare and health care reform in support of implementing the care guarantee

As part of the preparation of the social and healthcare reform, the objective of this measure is to improve the accessibility of health and social services by promoting the implementation of the care guarantee. This reform shall provide support to the following activities: (i) implement the care guarantee and strengthen the delivery of services; (ii) strengthen prevention and early identification of social and health care needs and (iii) strengthen the knowledge base and improve guidance to support the cost-effectiveness of social and health care digital solutions.

The Act on the Implementation of the Reform of Health, Social and Rescue Services and on the Entry into Force of Related Legislation is expected to have entered into force on 1 July 2021. The reform consists in adopting a number of legislative acts to reform the social welfare and health care system in Finland, based on which 22 regional welfare areas shall be established. The welfare areas shall be responsible for the delivery of social, healthcare and rescue services. They shall be operational by 1 January 2023.

The implementation of the reform shall be completed by 30 June 2023.

Investment 1 (P4C1I1): Promoting the implementation of the care guarantee and reducing the service backlog due to the COVID-19 pandemic

The objective of this investment is to reduce the backlog in the provision of health and long-term care treatments.

The measure consists of support to: (i) streamlining care, rehabilitation and service processes and introduce new and more efficient customer-oriented, multi-disciplinary and multi-professional approaches; and (ii) developing social and healthcare services and making them more accessible and responsive to the needs of vulnerable people. Improving the availability of basic services requires systematic development of operating models and a permanent change in their implementation. The projects shall promote the availability of social and healthcare services using innovative operating models that have been found effective, such as customer and service guidance, on-site medical appointments, and remote healthcare services.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (P4C1I2): Strengthening prevention and early identification of health problems

The objective of this investment is to introduce new cross-sectoral approaches to foster inclusion, promote health and well-being and strengthen prevention and early identification as a way to promote the implementation of the care guarantee.

The measure consists of support at national level for: (i) welfare audits; (ii) analysis of human well-being and health; (iii) new self-care tools (including mental health promotion methods) that may be used independently; and (iv) referral services. The measure also includes support at regional level for integrated multi-sector service management, including social and health services and cultural, sport and nature-related services.

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (P4C1I3): Strengthening the knowledge base and evidence-based decision-making to increase cost-effectiveness of social welfare and health care services

The objective of this investment is to increase the quality and cost-effectiveness of social and health services by promoting research on good practices and develop effective monitoring and methods of analysis.

The measure consists of support for: (i) implementing monitoring measures for the care guarantee and addressing the information gaps identified during the COVID-19 crisis; (ii) strengthening the use of information on costs and cost-effectiveness in social and health-related decision-making, planning, guidance and service production; (iii) developing research to improve the efficacy of the social and health system, thus improving the quality of services, and (iv) developing a welfare-economic impact assessment mechanism and working methods to support social decision-making in the follow-up of the COVID-19 crisis.

The implementation of the investment shall be completed by 31 December 2025.

Investment 4 (P4C1I4): Introducing digital innovations for social welfare and health care services

The objective of this investment is to deliver digital solutions to support the development of social and healthcare services and promote the implementation of the care guarantee.

The measure consists of delivering digital solutions for: (i) increasing resource efficiency and facilitating access to services, including by speeding up care needs assessment and referral, as well as by enabling more remote diagnosis, monitoring and treatment of diseases; (ii) supporting early identification of problems and increasing the use of preventive services; (iii) enabling a wider range of multidisciplinary services and expertise to be shared between different regions and service providers, and (iv) strengthening the role of customers and thereby increasing efficiency and effectiveness of services.

National and regional actors shall develop digital services targeting citizens, professional systems and management solutions.

Citizens’ services include, but are not limited to (I) pre-service and access digital solutions (e.g. directories of services, symptom assessments, self-care services, benefit calculators), (II) self-care, handling (e.g. digital mental health services, after-care and after-care monitoring services) and (III) digital solutions for preventive and non-threshold services.

Professional systems may include (I) customer segmentation and segment-specific digital service models based on customer data analysis; (II) new business management solutions (e.g. placement in long-term care services, work planning and optimisation of home care), and (III) digital solutions for cross-professional work (e.g. teleconsultations, team receptions).

Management solutions may include the development and implementation of advanced knowledge management and analytics solutions. These shall enable better control and national monitoring of service packages and improve the cost-effectiveness of the service system.

The development of digital services shall take into account vulnerable peoples’ need to ensure accessibility. The introduction of these services is also expected to be supported by increasing customer understanding of the use of the digital services to support health and wellbeing.

The implementation of the investment shall be completed by 31 December 2025.

Investment 5 (P4C1I5): Introducing person-centered digital health care information system in Åland

The objective of this investment is to create a modern healthcare information system for health and medical care in Åland, which should be compatible with the needs of the municipal social services as well as private operators.

The measure consists of support for: (i) developing customer-centred processes based on patient needs, values and preferences; (ii) developing digital services that enable patients’ participations; (iii) developing information and process structures as a basis for creating patient overviews and a coordinated care plan; (iv) developing a coordinated care plan that integrates all the patients' care plans into social and health care; (v) developing and implementing standards for the electronic exchange of data and medical records systems that allow for improved prevention, diagnosis, treatment and drug management; (vi) developing digital information services supporting cooperation between healthcare units and organisational events, both regionally and with the national healthcare system in Finland and Sweden, and (vii) contributing to the development and implementation of standards for health outcomes.

The implementation of the investment shall be completed by 31 December 2025.

M.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support