Circular economy incentives

This is how we implement the Circular Economy Programme

The use of natural resources may cause emissions or harm ecosystems without the party causing the harm paying for any of the costs incurred. Companies and consumers often lack the financial incentives to make choices that would be beneficial for a circular economy.

The transition to a circular economy requires funding for research, development and innovation (RDI). At its best, public RDI funding directs innovation activities to new fields and encourages the private sector to finance experiments and innovations that promote the circular economy.

The public sector can support low-carbon and circular economy solutions by procuring products, services, and contracts with smaller negative environmental impacts than the alternatives would have. The public sector can also create new markets by procuring energy and resource efficient solutions.

What we do and where we are now:

1. We will develop economic incentives that promote the sparing use of natural resources, reduce carbon dioxide emissions, and promote the wider adoption of circular economy service models.

• As regards the waste tax, the Government has decided to explore the possibility to extend the waste tax to wastes to be landfilled that could be utilised. The study will be completed in spring 2026, and hazardous waste will also be included. 
• The recycling industry was included in the electricity tax category for industry at the start of 2022. Responsible organisation: Ministry of Finance. 
  • Government proposal on amending the legislation on energy taxation (in Finnish) | Finlex. 
• Parliament approved a tax on mining minerals excavated in Finland that is applicable as from 2024. The tax was raised in the beginning of 2026. The tax on metalliferous minerals is 2.5% of their taxable value, while the tax on other minerals is EUR 0.60 per tonne. The purpose of the tax is to allocate a fair compensation to the society for the use of non-renewable natural resources.
  • Act Amending the Act on Mining Minerals Tax 1361/2025 (in Finnish) | Finlex
• In the beginning of 2023, the waste tax on landfilled waste was raised from EUR 70 to EUR 80 per tonne. From 2023 the tax base has included a tax on gypsum waste from construction and demolition and from 2027 it will also include a tax on green liquor dregs.
  • Act Amending the Waste Tax Act 962/2022 (in Finnish) | Finlex

2. We will increase low-carbon circular economy solutions e.g. in construction, energy and infrastructure projects and service procurements in the public sector.

• Project on ecological objectives for public procurements (in Finnish) cooperated with a broad range of stakeholders to prepare the national objectives to 2035 for the most significant procurement categories to reduce the carbon and ecological footprint and promote a circular economy by setting targets for the relevant procurements. Based on the proposals of this project, the Government approved a resolution on the ecological objectives of public procurements on 13 March 2026. Responsible organisation: Ministry of the Environment.
  • Government resolution on the strategic ecological objectives of public procurements to 2035 (in Finnish) 
• Green Deal agreements for public procurers contribute in a concrete way to the implementation of low-carbon circular economy procurements (emission-free work sites and sustainable procurements in early childhood education and care). Responsible organisation: Ministry of the Environment.
• The network-based Competence Centre for Sustainable and Innovative Public Procurement in Finland KEINO promoted low-carbon circular economy solutions through the KEINO Academy, change agents and thematic developer groups. The Competence Centre seized operating in 2024 but some of the measures will continue. 
  • KEINO | hankintakeino.fi
  • News item: Activities of KEINO to be wound down (in Finnish) | hankintakeino.fi
• The guide to low-carbon circular economy procurements helps to incorporate the targets into the preparation and implementation of procurements. Responsible organisation: Ministry of Finance.
  • Guide to low-carbon circular economy procurements (in Finnish) | hankintakeino.fi
• The Criteria Bank for sustainable procurements was published in autumn 2023. The actors in the private sector can use the Criteria Bank to find sustainability requirements for their own procurements. The criteria were developed in interaction among the customers, suppliers and key stakeholders in the field. Responsible organisation: Ministry of Economic Affairs and Employment.
  • Criteria Bank | kriteeripankki.fi
• The project on distributing risks in sustainable and innovative public procurement explored ways to manage the uncertainties related to the introduction of new solutions. The proposals of the final report of the project published in May 2022 include new models for public funding. Responsible organisations: Ministry of Economic Affairs and Employment and Prime Minister’s Office.
  • Project on distributing risks in sustainable and innovative public procurement (in Finnish) | tietokayttoon.fi
  • Final report: Distributing risks in sustainable and innovative public procurement (in Finnish) | Institutional Repository for the Government Valto
• Motiva Oy conducted a study on the procurement criteria for low-carbon infrastructure construction and the need to develop them in support of the circular economy. The report was published in April 2022. Responsible organisations: Ministry of the Environment and Finnish Transport Infrastructure Agency.
  • Study: Procurement criteria for low-carbon infrastructure construction in support of the circular economy (in Finnish) | uusiomaarakentaminen.fi

3. We will increase funding for RDI and ecosystem activities that promote a low-carbon circular economy and for demonstration and facility investments.

• The Circular Economy and Zero Waste mission of Business Finland ran from 2023 to 2025. The missions guide the operations of Business Finland in the long term. The aim was to broadly create value for society and find significant future market opportunities for Finnish companies, including with respect to a systemic change of a circular economy.
• Finland’s Sustainable Growth Programme has earmarked EUR 110 million to Business Finland for the industry’s recycling and reuse investments. The projects are to be implemented by 2026. Responsible organisation: Business Finland.
  • Finland's Sustainable Growth Programme | Business Finland
  • RRF funding granted in 2021–2023 (in Finnish) | Business Finland
• The EU regional and structural policy programme Innovation and Skills in Finland (2021-2027) aims to promote energy efficiency and the circular economy and to reduce greenhouse gas emissions. Funding (about EUR 677 million) will also be targeted to actions to prepare for climate change. Responsible organisations: Ministry of Economic Affairs and Employment and Ministry of the Environment.
  • Innovation and Skills in Finland (2021-2027) | valtioneuvosto.fi
• One of the national themes of the Innovation and Skills in Finland 2021–2027 programme under the EU’s regional and structural policy is the green transition. EUR 11.5 million in funding is allocated to the theme concerning a carbon-neutral circular economy society. Responsible organisation: Ministry of the Environment.
  • Funding for green transition development projects from the European Regional Development Fund
• In June 2022 the Ministry of the Environment awarded more than one million euros in grants to municipalities for climate and circular economy projects. Funding was granted to 20 projects to reduce greenhouse gas emissions and promote the sustainable use of natural resources. Responsible organisation: Ministry of the Environment.
  • Press release: Over one million euros in funding for municipalities’ climate and circular economy work (in Finnish)