Climate funding

The state’s climate funding consists of central government guarantees, tax reliefs and several different appropriations for specific sectors. Besides these, the state-owned Finnish Industry Investment Ltd also invests in innovations that promote the clean transition. The state’s climate funding complements private funding and can also be used to close possible funding gaps. The funding enables to make climate-smart actions economically profitable and boosts the introduction of new technologies. 

ACE LIFE project and climate funding

The ACE project to boost climate solutions, funded from the EU LIFE programme, is implemented in 2024–2030. The aim is to support the achievement of Finland’s carbon-neutrality target with a particular focus on emissions from the effort sharing sector. The effort sharing sector means the non-emissions trading sector, which comprises construction, heating of buildings, housing, transport and waste management, and industrial F-gases. For this project, the Ministry of the Environment is responsible for the package of measures concerning climate funding. The aim is to promote the effective targeting of the state’s climate funding, support the application for the already available funding, boost the upscaling of climate innovations, and find solutions to challenges related to climate funding together with various stakeholders. 

The purpose of the complementary funding strategy to be drawn up in the ACE project is to build an understanding of the current situation with respect to climate funding and of the funding gaps of the Medium-term Climate Plan. The project will prepare a tool for the assessment of the climate impacts of the funded projects. The network of experts on climate funding will support this work. The project includes the provision of up-to-date information on climate funding and support in the application for funding for new projects. A model will also be created for the upscaling of climate innovations. 

• Read more about the ACE project | carbonneutralfinland.fi

Funding opportunities

The Ministry of the Environment will promote more effective utilisation of the already available funding channels for climate investments and projects. The ACE project will maintain up-to-date information on the funding opportunities. This information will be available in the funding information service of Motiva. The project will also provide information on the support services for funding and on successful investments. 

• Funding information service (in Finnish) | Motiva
• EU funding advisory service

Later on, the ACE project will support the preparation of new climate projects, including by helping to find consortium partners and facilitating the development of project ideas. The focus will be on projects that are large in the Finnish scale, such as LIFE. The ACE project will also formulate ready-made project concepts among partners to be utilised in the future. ACE webinars will be organised to present these concepts. The aim is to launch more projects in Finland that aim to promote climate change mitigation and the implementation of the Medium-term Climate Plan.

• EU LIFE programme (in Finnish)

Impactful targeting of funds

The Ministry of the Environment will formulate a complementary funding strategy. For the strategy, the Ministry will map out the current situation of climate funding and the most significant funding gaps in the implementation of the Medium-term Climate Plan. The Finnish Environment Institute will support this work for the part of impact assessments. The strategy will outline how the funding should be targeted in future to support the impactful implementation of the climate plan and assess how the state could introduce various kinds of steering instruments to support investments in the green transition.

The Centre for Economic Development, Transport and the Environment for Pirkanmaa and the Finnish Environment Institute will develop a tool for the assessment of the climate impacts of the funded projects. The tool will offer information on the climate impacts of different kinds of projects to support funding decisions and monitoring. The aim is to improve the impact of the funding from the climate perspective. The tool is primarily intended for the Centres for Economic Development, Transport and the Environment, but it can also be used by other bodies that allocate grants and by the applicants.

Upscaling of innovations

The Tiina and Antti Herlin Foundation will launch a process to develop a model for upscaling climate innovations. The aim is to enable fluent upscaling of climate innovations throughout the development process. Funding challenges are faced especially by companies that aim for their first industrial-scale facility, and this can slow down the transition into a carbon-neutral society. The Foundation seeks to find innovative funding mechanisms for upscaling a few climate projects to be piloted, and the aim is to also offer other kinds of support for the pilot projects. The agricultural and food sector has been selected as the specific theme for the pilots.

Challenges related to climate funding solved together

A network of experts on climate funding will be launched under the ACE project. The network will bring together experts from the public and private sector, promote the development of climate funding and formulate policy recommendations for targeting the funds. The network will support the tasks under the ACE project, including by commenting on the complementary climate funding strategy, developing the impact assessments of the funded projects and seeking means to upscale climate innovations.

Work on transformation paths concerning the challenges related to climate funding is planned for 2025. This work will combine the preparation of scenarios and close dialogue with stakeholders in formulating the policy recommendations.