Background information

The Electrification Subsidy is part of a law on electrification aid for energy-intensive industries (Laki energiaintensiivisen teollisuuden sähköistämistuesta) [493/2022] that allows subsidy to energy-intensive industries for the period 2022-2026.

The aim of the subsidy is to prevent the risk of carbon leakage, to safeguard the cost competitiveness of industry and to steer operators towards more carbon neutral industrial production.

The subsidy compensates defined energy-intensive sectors for the indirect costs of emission trading on electricity prices. The aid is targeted in particular at larger companies.

Content of measure

Companies operating in a sector exposed to a significant risk of carbon leakage can apply for support. Further, companies must use at least 50% of the aid granted for development activities aimed at emission reductions, energy efficiency improvements or increasing the share of renewable energy in energy consumption.

The Energy Agency (Energiavirasto) examines the applications for aid and takes decisions on the granting of aid and on the use of the aid planned by the companies. The Energy Agency supervises the use of the subsidies and other compliance with the Law on Electrification Subsidies.

The amount of electrification aid to be granted is based on the electricity consumption of the aid applicant, which is estimated either on the basis of the production of a tonne of product or on the basis of the electricity consumption of the production. The price of the emission allowance and the aid intensity affect the amount of aid. The electricity to be subsidised must be consumed in the production of the eligible product.

In the 2022 government supplementary budget, €87 million was allocated for the electricity subsidy. For the period 2023-2026, an annual amount of €150 million has been earmarked.

Use of measure

The Ministry of Economic Affairs and Employment of Finland has estimated that there are just over 30 companies and around 70 establishments eligible for electrification subsidy in Finland.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Larger corporations	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public support service providers	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Consultation through tripartite or bipartite social dialogue bodies	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

The Ministry of Economic Affairs and Employment asked for an opinion on a draft Government Decree on electricity subsidies for energy-intensive industries from Confederation of Finnish Industries (EK).

Views and reactions

Confederation of Finnish Industries (EK) sees that electrification subsidy is good way to support energy-intensive companies for changing the production in a more carbon-neutral electrification.

Sources

• 20 May 2022: Consultation of EK (EK:n lausunto) sähköistämistuesta (api.hankeikkuna.fi)
• 01 July 2022: Energiavirasto (2022), Teollisuuden sähköistämistuki (energiavirasto.fi)
• 08 July 2022: TEM (2022), Energiaintensiivisen teollisuuden toimijat voivat hakea sähköistämistukea 2022−2026 (tem.fi)