Eco-innovation in Finland - European Commission · EIO Country Brief: Finland 2011 7 Figure 2.2 Components of the eco-innovation composite index for Finland, 2011 (EU average = 100)

EIO Country Brief: Finland 2011 0

Eco-innovation in

Finland

EIO Country Profile

2011


Eco-Innovation Observatory

The Eco-Innovation Observatory functions as a platform for the structured collection and

analysis of an extensive range of eco-innovation information, gathered from across the

European Union and key economic regions around the globe, providing a much-needed

integrated information source on eco-innovation for companies and innovation service

providers, as well as providing a solid decision-making basis for policy development.

The Observatory approaches eco-innovation as a persuasive phenomenon present in all

economic sectors and therefore relevant for all types of innovation, defining eco-innovation as:

“Eco-innovation is any innovation that reduces the use of natural resources and decreases the

release of harmful substances across the whole life-cycle”.

To find out more, visit www.eco-innovation.eu

Any views or opinions expressed in this report are solely those of the authors and do not necessarily

reflect the position of the European Commission.

http://www.eco-innovation.eu/


Eco-Innovation Observatory

Country Profile 2011: Finland

Authors

Leena Saarinen, Anne Karjalainen, Jarmo Vehmas

Coordinator of the work package

Technopolis Group Belgium

Acknowledgments

The document has been prepared with the kind support of the representatives of the Finnish

administration, SITRA – the Finnish Innovation Fund, TEKES – the Finnish Funding Agency for

Technology and Innovation and Green Net Finland (Cleantech business network), namely:

Mrs. Merja Saarnilehto, Ministry of the Environment, ETAP HLWG representative

Mrs. Teija Palko, Ministry of the Environment and Economy

Mr.Jukka Noponen, SITRA – Finnish Innovation Fund

Mr.Christopher Palmberg, TEKES - the Finnish Funding Agency for Technology and Innovation

Mr. Lauri Hietaniemi, Green Net Finland

A note to Readers

Any views or opinions expressed in this report are solely those of the authors and do not necessarily

reflect the position of the European Commission. A number of companies are presented as illustrative

examples of eco-innovation in this report. Their inclusion in this report does not imply that EIO endorses

these companies and, it should also be noted that, the report is not an exhaustive source of information

on innovation at company level.

This brief is available for downloaded from www.eco-innovation.eu/Finland


Table of contents

Summary .................................................................................................................................... 4

1 | Introduction ............................................................................................................................... 5

2 | Eco-innovation performance .................................................................................................... 6

3 | Leading eco-innovation areas and markets ......................................................................... 10

4 | New trends: areas and markets on the rise .......................................................................... 15

5 | Public policy in support of eco-innovation ........................................................................... 19

6 | Main findings ........................................................................................................................... 22

6.1 Strengths and weaknesses of Finland in the promotion of eco-innovations .............................22

6.2 Opportunities and threats for eco-innovations in Finland ..........................................................23

References .................................................................................................................................................... 25

ANNEX 1. Policy measures addressing eco-innovations in Finland....................................................... 27


Summary

In comparison with 2010, the eco-innovation performance of Finland has not changed remarkably.

Regarding eco-innovation inputs, Finland retains its strong performance, and compared to the EU27

average, has a good overall performance in eco-innovation activities and eco-innovation outcomes.

Finland thus managed to maintain its position and remained first in the ranking of eco-innovation

countries. However, the country is facing major challenges particularly in terms of improving its

environmental outcomes as well as socio-economic outcomes.

The greatest challenges for eco-innovations concern high material consumption, the aging of society as

well as low material productivity, energy-efficiency and high GHG emissions, which result from energy

intensive industrial sectors, freight transportation and traffic as well as extensive earthworks and

hydraulic engineering.

Finland has a good socio-technical knowledge base and the know-how in different environmental

sectors is versatile, which is also evident in the leading eco-innovation areas. The last years’ leading

areas of renewable energy – sustainable water and waste management –continue to have a strong

foothold in the Finnish eco-innovation market, but with a slightly more distinct turn towards the

sustainable use of natural resources. The emphasis has slightly shifted towards material efficiency

related eco-innovations, but the energy sector in general has the highest volume in terms of turnover,

which is also supported by the strong R&D investments that are particularly high in terms of eco-

innovation improving energy efficiency and reducing GHG emissions.

The focus of the emerging eco-innovation areas was on intelligent transport systems, sustainable

regions, green business models and decentralised energy production. These areas combine different

environmental business sectors that are pursuing changes, for example, in current policy measures as

well as changes in the current infrastructure.

Nationally, Finnish eco-innovations are facing problems in market penetration, which is strongly related

to the policy measures. Currently, the most influential measures are related to R&D funding and laws

and regulations that are bound to objectives set by the government and the EU. However, the emphasis

in political guidance has also begun to more sharply favour demand-side measures that have an impact

on resource efficiency and, in particular, the sustainable use of natural resources.


1 | Introduction

The Finnish economy is based strongly on added value obtained from natural resources. At the same

time Finland has abundant natural resources in terms of the clean forest, fresh water as well as peat,

mineral reserves and arable land. However, eco-innovation needs and challenges are strongly

associated with material efficiency. According to the Eurostat data, Finland is the second least resource

efficient country among the EU27 (measured by domestic material consumption per capita), and, at the

same time, Finland has very low material productivity (EEA 2011). These challenges are already linked

to sustainability; particularly in relation to the need to reduce the consumption of natural resources like

carbon dioxide emissions as well as the amount of waste generated (TEM 2010).

The high material consumption in Finland appears to result from the construction sector and production

of domestic exports. This is particularly due to Finland’s low population density and the construction of

housing and infrastructure for its Nordic climate, which requires the extensive use of land mass, and

thus impacts on material efficiency. The demand and value of exports are not necessarily dependent on

the material intensity of the products produced but the quality of the materials used. Thus, reducing the

material intensity of exported products would not necessarily decrease the export value (Mattila & al.

2011). In other words, there is a demand for both systemic and technological eco-innovations that aim at

transforming the Finnish production structure towards a less materially intensive form, while altering the

infrastructure to meet current needs in a more sustainable way. Particularly, new eco-innovations are

needed in extractive industries, the food industry, the commercial sector and renovation (Saarnilehto

2011).

Although R&D eco-innovative approaches, e.g. low-energy building concepts for the construction sector,

are already utilised, the difficulty of creating markets for new eco-innovations continues to be a major

challenge. On the other hand, the energy sector seems to be the most extensively funded, which is

considered potentially problematic for the R&D of eco-innovations in terms of the uneven allocation of

funds (Kosola 2011).

In addition to low material efficiency, high GHG emissions as well as high energy intensity poses major

challenges for eco-innovations. These two sectors are interconnected as the majority of the GHG

emissions in Finland are produced by the energy sector. Also traffic and energy intensive industries

contribute significantly to the high energy intensity and GHG emissions. Generally, the aging of the

population and particularly Finland’s cold climate and northern location as well as the sparsely populated

area are challenges that will continuously need special attention in terms of environmental planning,

management and monitoring.


2 | Eco-innovation performance

The analysis in this section is based on the EU27 Eco-innovation scoreboard (Eco-IS) for the year

2011. Eco-IS via its composite Eco-innovation index demonstrates the eco-innovation performance of a

country compared to the EU average and with the EU top performers. Eco-IS is based on 16 indicators,

which are aggregated into five components: eco-innovation inputs, eco-innovation activities and eco-

innovation outputs as well as environmental outcomes and socio-economic outcomes.

Figure 2.1 EU27 Eco-innovation scoreboard 2011, composite index

Source: EIO, 2011

With an overall score of 148, Finland kept its first place and leads with Sweden and Denmark in the Eco-

Innovation Scoreboard (Figure 2.1). This year the differences between the top three countries were

relatively small, whereas the variations among the EU27 in different indicators are large. Although the

position of Finland in the EU27 ranking did not change, Finland’s overall score declined by almost eight

units compared with the last year’s result. The data acquired by the national experts suggests that the

depiction of Finland on different indicators is an accurate portrait. However, the comparison between the

overall results in 2010 and 2011 should be treated with caution as the basket of indicators used in the

2011 scoreboard has been slightly modified. Figure 2.2 below shows the performance of Finland in each

of the five components of the Eco-IS composite index.

Eco-innovation inputs

In the eco-innovation input index of the Eco-IS, Finland took first place by scoring 72% above the EU27

average performance. In fact, Finland shared first place in each indicator in the eco-innovation input

index that consisted of (1) national indicators of the government’s environmental and energy R&D

expenditure allocation, (2) R&D personnel and (3) cleantech investment. Although the overall

performance of Finland for eco-innovation inputs seems rather steady in comparison with other EU

members, it should be noted that Finland has continued to invest particularly heavily in green early-stage

investments, and thus scores an overwhelming 374% above the EU27 average performance in this

category.


Figure 2.2 Components of the eco-innovation composite index for Finland, 2011 (EU average = 100)

Source: EIO, 2011

Finnish cleantech attracted just under €205 million in investments between 2007 and 2009. The high

volume is partially due to the €120 million single investment in WinWind company in 2008. Although, if

the WinWind investment is excluded Cleantech investment between 2007 and 2009 still showed a clear

growth. However, it is important to take into consideration that there are no comprehensive statistics on

the figures (investment, employment, turnover etc.) for Finnish environmental business. In addition,

close to 40% of the deals that Cleantech Scandinavia has registered in Finland are undisclosed or

confidential. Thus, the figures only give an indication of trends rather than exact information (Teppo et al.

2011).

According to the latest data, three technological areas (advanced materials, energy efficiency and

energy storage) received the majority of investment between 2007 and the first half of 2010. The area of

advanced materials particularly concerned coatings with different functions, wood treatment

technologies and functional composite materials, such as carbon nano-materials. Investments in energy

storage consisted of various types of batteries such as flexible recyclable flat batteries for disposable

applications and Li-ion batteries for applications in electric vehicles as well as solar charged batteries for

portable devices. And energy efficiency related investment included technologies principally related to

improvements in power electronics, smart metering for home appliances, monitoring equipment, smart

grids and efficiency improvements in industrial applications (Teppo et al. 2011).

Traditionally, support for R&D has been strong in Finland, and according to the Eco-IS Finland performs

67% above the EU27 average in terms of the governmental appropriation of environmental and energy

R&D (% of GDP). In 2009, R&D funding broke a new national record in Finland when Tekes (The

Finnish Funding Agency for Technology and Innovation) funded energy and environmentally sound

solutions with up to €230 million (Kosola 2011). Generally, Tekes runs programmes with a budget of

over €600 million budget to enhance cleantech development in specific areas such as water, renewable

energy and bio refineries (Teppo et al. 2011).


Finland possesses high-level know-how in various cleantech areas such as power electronics and

combustion technologies, and thus it is no surprise that Finland also has a good performance in the R&D

personnel statistics (2.97 / 2.54% of the total labour force), which means a 79% performance above the

EU27 average. However, in relation to the total amount of R&D personnel and researchers, the top four

countries in the Eco-IS (Finland, Luxembourg, Sweden and Denmark) have few differences.

Eco-innovation activities

The eco-innovation activities index was based on the statistics of companies with an ISO 14001

certificate,1 and business innovation activities aimed at material efficiency and energy saving sourced

from the Community Innovation Survey (CIS). In this component, Finland scored 25% above the EU27

average performance placing Finland fourth and far behind Spain, the Czech Republic and Sweden.

Although the overall performance in the eco-innovation activities index was not significant, Finland did

manage to improve its results by 20% compared to its Eco-IS 2010 results.

According to the CIS, 17% of the surveyed Finnish companies reported an improvement in their material

productivity, which places Finland third and 28% above the EU average. Also in the same survey,

17.18% of Finnish companies reported an improvement in their energy productivity. In this indicator,

Finland scored a mark of 119 compared to the EU average (100).

The development of ISO 14001 certification in Finland has been irregular during the past ten years. At

the beginning of the 21st century the number of ISO 14001 certificates issued began to decline, whereas

the years 2007–2009 show a steady growth trend as annually 120 to 150 companies acquired the ISO

14001. In this indicator (measured as the number of certified organisations per million inhabitants),

Finland placed sixth among the EU27 by scoring a mark of 129 against the 100 average.

Eco-innovation outputs

Finland placed fourth by scoring 89% above the EU average in the eco-innovation outputs index. This

component was based on eco-innovation related patents, eco-innovation related academic publications

and electronic media coverage of ‘eco-innovation’. However, the performance of the coverage of ‘eco-

innovation’ in electronic media was extremely low as Finland scored 79% below the EU average.

Nevertheless, in the two other indicators Finland performed very well compared to the EU27. Alongside

Sweden, Finland had the highest amount of scientific publications (per mln population) related to ‘eco-

innovation’ in the EU27. In addition, Finland had the fourth highest amount of environmental patents (per

mln population) and scored 91% above the EU average. As Finland has extensive R&D funding, these

results should not be surprising. However, it has been suggested that Finnish patents do not efficiently

penetrate markets.

Environmental outcomes

The environmental outcomes index continues to be the Achilles heel for Finland’s performance as the

overall score as well as the scores on individual indicators were far below the EU average (scoring 23

points below the average of 100) placing Finland 19th in the environmental outcomes index. The index

was based on the intensity of the GHG emissions and productivity in material consumption, energy use

and water use in the EU27.

Finland has a great deal to learn from the other EU members in terms of energy productivity as the

performance of Finland in this indicator was the worst among the EU27 (38 points below the average of

1 Note: Eco-IS 2010 included EMAS certification.


100). According to the Eco-IS, the ratio between the gross inland consumption of energy and GDP from

1990 to 2008 continued to be one the highest in contrast to other EU countries. In 2009, there was a

slight decrease, but the overall figures in the past two decades indicate a growing trend. In the 2010

country description, Finland’s northern geographical location and low population density were identified

as the main reasons for the high energy intensity in Finland.

In addition, over 80% of all the GHG emissions in Finland are generated by the energy sector (Statistics

Finland 2011). Thus, improvements in energy efficiency should also act as an essential method for

reducing GHG emissions. In the environmental outcomes index, Finland also scored 15 points below the

EU average of 100 in the GHG emission intensity indicator. The annual amount of GHG emissions in

Finland has fluctuated significantly and in 2009 GHG emissions began to increase again. The fluctuation

is mainly a result of the economic situation in the most energy intensive industrial sectors, variable

weather conditions and the amount of energy produced from renewable energy sources (Statistics

Finland 2011). However, it should be noted that transportation and traffic also cause a great amount of

the GHG emissions.

The only indicator in the environmental outcomes index where Finland showed a performance above the

EU average was on water productivity in which Finland scored narrowly above the EU average (111

against 100). On the other hand, the average water footprint in Finland is 1414 m3 per capita per year,

which is higher than the global average (Mekonnen 2011). In Finland, reducing the water footprint

requires more efficient solutions in terms of water cycles and the use and availability of water, which can

be achieved through improvements in energy and material efficiency.

In addition to energy productivity, Finland also had one of the lowest material productivities among the

EU27 scoring 50 against the EU average of 100. The high material consumption results from high

expenditure on earthworks, e.g. road construction, railway and municipal engineering, as well as

hydraulic engineering, e.g. dredging and flood control. However, it should be noted that 90% of the

products manufactured in forestry, metal, chemicals and electro-technological industries are exported.

Thus, material flows included in these processes actually serve consumption that takes place abroad

and are not directly a result of domestic consumption (Mattila & al. 2011).

Socio-economic outcomes

The socio-economic outcomes index was based on the exports of products from eco-industries (% of

total exports), employment in eco-industries (% of total work force) and turnover in the eco-industries.

The overall score for Finland in this component was 106 placing Finland only slightly above the EU27

average. The low score was mainly due to poor performance in the indicator showing exports from

eco-industries, which was far below the EU27 average with a score 73 points below 100.

On the other hand, compared to the EU27, Finnish ‘eco-industries’ performed particularly well as their

turnover was 2.56% of total GDP, placing Finland fifth in this indicator and 39% above the EU average.

In the indicator concerning employment in ‘eco-industries,’ Finland performed 32% above average and

placed 8th

among the EU27. According to the latest study, the turnover of Cleantech Finland in 2010 was

€17.9 billion, which means that Cleantech markets grew 5.6% from their 2009 level (Cleantech Finland

2011).


3 | Leading eco-innovation areas and markets

According to the analysis produced by the Statistics Finland (2010), the Finnish environmental business

sector is principally concentrated on the recovery of sorted materials, electricity production (wind and

hydropower) as well as soil and water remediation (Statistics Finland 2010). In general, the most

successful eco-innovation areas have traditionally developed from gradual improvements in process

know-how, particularly in the forestry sector, which can also be seen as a source for the entire eco-

innovation industry in the areas of energy and water technology.

The last years’ leading areas – renewable energy, sustainable water and waste management – continue

to have a strong foothold in the Finnish eco-innovation markets with a slightly more clear turn towards

the sustainable use of natural resources. Although nationally the demand has shifted towards systemic

eco-innovations, the current eco-innovation markets continue to be small and fragmented among

different industries. However, the most intensive growth is now taking place in the renewable energy

sector in Finland (Cleantech Finland 2011).

The economy has been strongly based on natural resources (water, forests, mineral resources), which

has resulted in advanced technology and strong environmental expertise in various areas related to

material and energy technologies. The diversified know-how has been seen as having potential for

creating new combinations that may create competitive solutions for eco-innovation markets. These

factors have particularly advanced innovations related to energy efficiency and new materials. In

addition, strong investment in research for product development that has built on previous cooperation

within and between industries has also created an opportunity for enterprises to utilise research for

production.

Eco-innovation markets

The Finnish environmental business is expected to continue its growth as the estimate for 2011 is a

9.6% increase in turnover, which amounted to €17.9 billion last year. Around 80% of the turnover in the

cleantech business is created by the top ten companies, which have concentrated on solutions related to

material cycles in construction, the water sector, recycling, logistics and new materials as well as energy

efficiency in renewable energy production, production processes, smart grids and structures, green

construction and biofuels (Cleantech 2011). In general, venture capital investments reveal that in the

past ten years the leading areas for Finnish eco-innovations have remained relatively uniform. The

growth rates of different areas have varied, but no radical changes have taken place, so far.

The water and energy sectors have been central for Finnish environmental innovations, and particularly

the value of the energy sector has increased due to the growing emphasis on climate issues in politics.

This has also been evident in the environmental innovation related to investments in R&D as it has

leaned heavily towards energy technology. Thus, it is hardly a surprise that nearly half of the turnover of

the Finnish environmental business in 2010 was related to energy efficiency. The estimates for the next

three years consider the production, supply and transfer of renewable energies the most promising

areas. Nonetheless, water supply and sewerage as well as waste treatment and recycling are, at the

moment, growing market areas (Cleantech 2011).

In addition to technology input, on the national level high material consumption and GHG emissions

have increased the demand for systemic innovations related to energy efficiency and, particularly,

material efficiency. On the other hand, one of the key instruments creating markets for eco-innovations

has been strong policy guidance that has often committed to stricter standards than would have been

required by international institutions, such as the EU. However, it is an acknowledged problem that


Finnish eco-innovations have trouble penetrating the national markets, which often means that potential

concepts are sold abroad, before their realisation in Finland.

Resource efficiency from the versatile renewable energy sector

The increasing price of energy and raw materials as well as the increase in environmental awareness

has moulded Finnish political and business activities towards searching for greater sustainability.

Despite that, energy production still principally leans on traditional, large-scale and cumbersome

centralised systems. Renewable energy solutions have become one of the most profitable and fastest-

growing areas within the environmental business market in Finland (Teppo et al. 2011).

Research institutions and companies have both increased the expertise at the renewable energy sector

and grown the markets for it, but political guidance has been an important factor. The government of

Finland has had several national strategies for improving resource efficiency and particularly, the share

of renewable energy. In 2008, the government set a national objective that aims at increasing the share

of renewable energy to 38% of the total final energy consumption by 2020 (EEA 2011). In order to meet

the national (and the EU) objectives, the Ministry of Employment and Economy (TEM) published a €750

million subsidy scheme for promoting renewable energy in 2010. Here the core areas were bio- and

wind energy. Also in 2010 a new action plan for energy efficiency was launched which aims at a 20%

reduction in energy use by 20% (Teppo & al. 2011).

In the renewable energy sector, successful eco-innovations in terms of market penetration relate to

smart power generations, wind energy, wave energy, and bioenergy and biofuels, energy efficiency in

buildings as well as smart metering systems. On the other hand, efficiency improvements have been a

great concern in the area of energy and resource use, and in this respect industrial energy efficiency is

also regarded as a very promising area for Finnish cleantech ventures (Teppo & al. 2011).

Slightly unexpectedly, considering the bias against the amount of daylight in the country in winter,

Finland also has leading eco-innovations and high expertise in solar collectors. However, this area lacks

political measures that could drive systemic change towards alternative, decentralised energy

productions systems.

Savosolar MPE AI Absorber

MPE AI Absorber is a new type of direct-flow

absorber of a solar collector. In brief, the absorber

is a construction inside the collector that absorbs

solar radiation and is heated by its influence,

whereas the direct flow refers to a structure where

liquid flows directly inside the structure absorbs heat instead of separate tubes attached to heat

absorbing plates.

Savosolar Ltd is was established only in 2009 and it has already become a significant innovator in the

solar energy area. The company produces innovative high efficiency flat plate collectors and

absorbers. The collectors are based on a combination of a direct flow technology, vacuum deposited

selective nano-structured multilayer absorption coating. The company's processes and quality systems

meet the ISO 9000 standard. Savosolar aims at becoming world technology leader in Solar Thermal

Technology in commercial and industrial markets and wishes to contribute to the climate change

challenge by using sustainable solar energy.

Savosolar MPE AI Absorber solar collector is a full-aluminium direct-flow absorber with a new type of

coating technique (MEMO coating) that gives the product three layers of coating: two made with

reactive magnetron sputtering and one with Plasma Enhanced Chemical Vapour Deposition technique.


The coating has 96% absorption and 5% emissivity rate, and it can endure as high temperatures as

550 °C remaining stable without the degradation of the optical and mechanical properties. The

absorber is a construction inside the collector that absorbs solar radiation and heats the collector,

whereas the direct flow refers to a structure where liquid flows directly inside the structure absorb heat

instead of separate tubes attached to heat absorbing plates.

Absorber design and coating are improving heat transfer 20% compared with traditional design and the

product is economical throughout its lifecycle. It can help to battle climate change by finding a more

sustainable yet effective ways to solve energy shortage problems.

Information source: www.savosolar.fi

Improving eco-efficiency through clean industrial processes

Finland has a long tradition in recycling and waste treatment, which has created a strong knowledge

base for recycling in different business areas. This was evident in last year’s country brief as two of the

best practices in the leading areas concerned textile recycling and the reuse of batteries. The recovery

of sorted materials is also the most user-accepted area and recycling in Finland has long been a norm

within Finnish society (Ecorys 2008). At the moment, the largest market area – in terms of the annual

revenue of environmental business activity (% of total turnover) in recycling and waste treatment –

seems to be the recovery of sorted materials and the treatment and disposal of hazardous waste

(Statistics Finland 2010).

Since Finland has traditionally been strong in the forestry sector and wood processing, these areas have

also spurred different environmental technologies to meet national requirements concerning

environmental protection and more sustainable resource use. Recently, new areas have emerged which

are related to recyclable and eco-friendly biochemical, biomaterials and wood-based composite

materials for replacing traditional oil-based and energy intensive products and processes. In the pulp

and paper and forestry sector in general, bio- and nanotechnology as well as material technology

applications have begun to take the lead. Forestry is also important in the sense that as an ‘old’ and

traditional industry the changes in its production have been made throughout the whole chain, not just

for a single technology. The aspect of systemic innovation in the forestry sector has come forth through

the development of new value chains and higher value-added products for the sector.

ISmart Codon Permutator Technology/ Industrial enzymes

Metgen Ltd has applied laccase enzyme for

cleantech applications by developing enzymes for

biomass treatment. The enzymes are used for

energy savings in the pulp and paper industry and

biomass treatment for extracting chemical from

cellulosic biomass.

MetGen Ltd was established in 2008 and its head office is in Turku, whereas the company operates in

Europe and the USA. In addition to the industrial enzymes, the company is also an active operator in

the development and production of biopharmaceuticals. MetGen's biocatalytical processes make the

production processes faster, cleaner and less-expensive.

Laccase enzymes occur naturally in fungi and they are able to decompose various organic compounds

including lignin (chemical binding the cells of wood plants). The enzymes belong to the multinuclear

copper-containing oxidases and their uses span from the textile to pulp and paper industry and from

wood applications to bioremediation.

Practically, MetGen's Smart Codon Permutator technology carefully selects the gene sites to be

http://www.savosolar.fi/


mutated and synthesis representative oligo libraries. The proprietary technology offers a remarkable

advantage over existing technologies in terms of selectivity, productivity and the final cost of the

desired industrial enzymes. The enzymes are used for energy savings in the pulp and paper industry

and biomass treatment for extracting chemical from cellulosic biomass.

Information source: http://www.metgen.fi/index.php

Eco-efficiency through new materials

The Eco-IS revealed that, despite considerable inputs, the environmental outcomes do not seem to

correspond to the investments made. The domestic markets are developing too slowly and the

legislation (e.g. on restrictive business practices) does not encourage the launching of eco-innovations.

However, the figures for environmental outcomes suggest that Finland ought to improve its overall

performance in energy and material efficiency and reduce GHG emissions. The current situation is

worrying as Finland is consuming 50% more than in 1980 (Cleantech Finland 2011b).

In order to reverse this unsustainable trend, the Finnish government has recently began to pay more

attention to activities that would directly improve the material productivity and sustainable use of natural

resources and not just energy related issues. Several related strategies and were set in motion and

estimates made from 2008 to 2010 including a resource strategy, national waste plan, and an estimate

of the need for a national bio economy plan (EEA 2011).

Although Finland does not have many systemic innovations related to material efficiency, the area of

applied or functional materials has produced significant results in terms of eco-efficiency. For instance,

new solutions for materials and clean processes have decreased emissions from pulp and paper to a

small fraction of what they used to be a few decades ago (ETAP 2006). The core areas in research and

markets consist of novel materials for energy technologies, biomaterials, intelligent structures and

advanced materials that enable new applications (Tekes 2011). New material solutions (e.g. coatings

and re-use) have been considered effective ways to reduce waste, improve energy efficiency as well as

extend the lifetimes of innovations.

New more efficient and sustainable wind turbine tower

Ruukki has developed a long-lasting and recyclable

concept for special steel products that are light and cost-

effective. In 2010, the company began to apply its

sustainable steel concept on development of wind power

farms, and it developed a new type of wind turbine tower solution that enables higher hub heights –

available from 100 to 160 metres increasing the energy output by 40-50%.

Ruukki (Rautaruukki Corporation) was established already in 1960, and it has developed a long

expertise in construction and engineering solutions with strong know-how in special steels. The

company has a wide-range of solutions and services relating to lighter structures, lower energy costs

and efficient energy production. The company has operations in around 30 countries, and it has

integrated the principles of sustainable development and corporate responsibility as an integral part of

the business.

Ruukki's steel products are high strength and wear resist that are light, recyclable and have short

construction times. The R&D activities of the company are concentrated on energy efficiency and

productivity, which have resulted in wind turbine towers. The tower is built with open, lattice structure

that is light, more energy-efficient and easy to dismantle and re-use.

The light and recyclable structure contributes to raw material savings through the cradle-to-cradle

concept as well as to fuel savings in logistics. It is also more energy-efficient (higher energy output and

http://www.metgen.fi/index.php


less energy consuming to produce than heavier structures), and thus produces less CO2 emissions.

Information source: http://www.ruukki.com/Products-and-solutions/Infrastructure-solutions/Wind-

towers#tab1

http://www.ruukki.com/Products-and-solutions/Infrastructure-solutions/Wind-towers#tab1

http://www.ruukki.com/Products-and-solutions/Infrastructure-solutions/Wind-towers#tab1


4 | New trends: areas and markets on the rise

In 2011 the emphasis seemed to begin to shift away from product innovations and a technology-based

approach towards systems and innovations that result from the need for social sustainability as well as

changes in (urban) lifestyles. Although the emerging eco-innovation areas still include smart grid

applications, sustainable construction and solutions that combine different technological know-how, the

emerging eco-innovations involve a more comprehensive approach, rather than concentrating on

improvements in one small area, such as wasted space use in urban settings.

The diffusion of new eco-innovative solutions and the volume of change in new areas continues to be

guided by political measures, but customer acceptance and involvement have already influenced

business areas such as sustainable textile and transportation. While energy and material efficiency are

stressed by political measures through means of various strategies, policies and regulations, R&D

activities are increasing interest in moving towards developing cleaner processes and concepts that

acknowledge material flows as a whole.

Intelligent transportation systems

The largest amount of the GHG emissions that are outside emissions trading, are produced by

transportation of which 90% is produced by road traffic. The climate and energy strategy as well as the

recent national strategy for walking and cycling 2020 have both aimed at addressing these issues. In

addition to the promotion of cycling and walking in cities, attention has been paid to improvements in the

fuel efficiency of vehicles, the use of alternative energy and fuel sources in traffic as well as raising

awareness among consumers (Finnish Ministry of Transport and Communication 2011, TEM 2008). In

addition, the Finnish regional strategy 2020 prioritises the development of ecological and sustainable

transportation and logistics solutions (TEM 2010).

Important areas in terms of eco-innovations are community planning and strategic land use planning,

and already in Finland reasonable community planning and the efficient use of telecommunications links

has successfully reduced the need for traffic. In addition, in the Helsinki metropolitan area investments in

access to services and the salubriousness, quality and functionality of the living environment have

contributed to the reduction of emissions and energy consumption. Also public transportation between

regions has been enhanced by strategic land use planning and the development of transportation

systems (TEM 2010b). There is also growing consumer acceptance of and interest in, e.g. shared

transportation solutions and electric cars.

Smart infrastructures for electric mobility in built Environments

Aalto University, is a multidisciplinary university that was established in 2010 when the Helsinki School

of Economics, Helsinki University of Technology and the University of Art and Design Helsinki merged.

The university aims to provide a strong multidisciplinary education and research, aiming at becoming

one the leading institutions in the world in terms of research, education and its own specialised

disciplines.

The Smart Infrastructures for Electric Mobility in built Environments (SIMB) is a project of Aalto

University and funded by the Finnish Agency for Technology and Innovation. The project started in

2010 with a broad stockholder value analysis involving industry, public authorities and end-users. The

overall aim of the project is to significantly accelerate the introduction of sustainable electric mobility in

Finland with a focus on built environment. The scenario is based on the smart energy production and

distribution scenario, in which the batteries of the electric and hybrid vehicles will deliver energy on


demand to the grid. The aim is to prepare the Finnish industrial players and consumers for the energy–

transition paradigm.

In the frame of the Tekes' Sustainable Community Programme, the SIMB project aims at

complementing the real estate and the building based concepts of sustainability, and thus the project

comprises electro-technical solutions in the areas of the charging infrastructure, sustainable mobility

schemes related to energy systems as well as the identification of value creation logics of electric

mobility.

Information source: http://www.aalto.fi/en/about/ and http://simbe.tkk.fi/Home/Home

Sustainable regions

Connected to the concept of intelligent transport systems is the idea of a sustainable city and region.

This means that all the functions in the city (or area) are built and planned with ecological and social

sustainability as well as social responsibility in mind. In the environmental business market in Finland,

these types of systemic innovation are already under construction. However, the markets are currently

abroad, namely in Asia, where the concepts can be built from scratch, whereas in Finland they also

involve structural change and the integration of old infrastructures. One of the most successful cases

produced by the Finnish environmental business community has been the solutions for DigiEcoCity Ltd

in China (See DigiEcoCity 2010).

However, on national level there are many drivers for making Nordic cities more sustainable. In addition

to the highly needed improvements in resource efficiency, Finland is undergoing a demographic change,

which will have effects that currently are unknown. The population forecast indicates that amount of

elderly people is rising and working-age population is constantly decreasing (Statistics Finland 2011). In

particular, aging will have an effect on housing conditions, and thus there will most likely be a need for

more functional solutions for services as well as residential areas. In addition, settlement in urban areas

will continue to intensify.

The expertise to plan and build the sustainable living environments shown by DigiEcoCity Ltd is not the

only Finnish concept in the area. In addition to know-how in the areas of low energy production,

sustainable architectural lightning and design, the Finnish Innovation Fund (Sitra) has initiated several

different projects that aim to develop cities in accordance with the principles of sustainable development.

For instance, the Low2No project aims at building a sustainable city block that is energy-efficient and

low-carbon (Sitra 2011).

Eco-city concept, Eriksson Architects Ltd

Eriksson Architects Ltd was established in 1979 and its main focus is on sustainable design solution in

building design and urban planning. The company is committed to develop and implement the latest

environmental initiatives and technologies.

The company creates plans for new urban areas concerning large city areas as well as smaller towns

and villages. The core idea is to implement sustainable values in all building design covering both new

and refurbishment. The company aims at creating methods to renovate old energy-consuming areas in

a way that the energy and electricity consumption are reduced and the water and natural resources

are conserved. Within this framework, the Erikkson Architect company offers overall concepts and

designs for eco-cities.

http://www.aalto.fi/en/about/

http://simbe.tkk.fi/Home/Home


Their eco-cities include sustainable energy planning, carbon control, infrastructure, and traffic planning.

In addition, landscape design is included in the concept, which contributes also to the aesthetic aspect.

A successful example of their eco-city model is e.g. in China, Mentogou Eco Valley that combines

research institutes with environmentally friendly and eco-efficient urban living for 50,000 inhabitants.

Information source:

http://www.cleantechfinland.com/solutions/green_construction/eriksson_architects_ltd/ and

http://www.eriarc.fi/

Picture source: http://www.eriarc.fi/

Green business models

Although Finnish enterprises are generally centralised and many companies have not yet changed their

business models completely, there are attempts to reduce the environmental impacts of companies in

terms of the development of logistics, sustainable industrial processes or areas such as packaging

materials. In addition, a demand for change in terms of business models, for instance in the food

industry, is essential for reducing waste and producing reduced environmental loads. The common

denominator for all green business models, irrespective of size, is that the companies applying green

business models change their core business strategy from selling products to selling service systems

which include their products, i.e. Product Service Systems (FORA 2010).

The estimates for the market potential for green business models in Finland are slightly smaller than

they are for other Nordic countries. However, the main potential market areas in the Nordic countries

particularly concern wastewater treatment, heat and recovery production processes and efficiency in

recycling raw materials (FORA 2010).

http://www.cleantechfinland.com/solutions/green_construction/eriksson_architects_ltd/




Green business model for waste and wastewater treatment

Watrec, is a Finnish company established in 2003 and

specialised in environmental engineering and science as

well as bio waste, wastewater and process water treatment.

The company offers plants and processes for organic waste

materials and wastewater treatment, and its solutions enable

the production of green renewable energy from organic

waste materials and wastewater.

Watrec's green business model contributes to development and design of services that increase energy

productivity and improve material cycles. The focus of the company is on tailored systems to find

solutions for the challenges related waste and wastewater. The company aims at the reduction in use of

chemicals by designing systems with the minimum or zero consumption of chemicals. For instance, the

Membro process is designed to treat waste water with high levels of ammonia and organic substances.

The process combines biological and physical processes to produce a cost-efficient operation and to

achieve high removal rates for ammonia, COD, solids and phosphorus.

In the Watrec's biogas plants the waste is turned into biogas and fertilizers in a sustainable way. The

plants contribute to the waste management and decentralised production of clean renewable energies

and high quality fertilisers. The biogas produced can be used for electricity and heat as well as vehicle

fuels. The biogas is considered a step towards reducing greenhouse gases in power production.

The environmental impacts of a green business model are variable. The reduction of the GHG

emissions would take place due to the reduction of energy and material consumption but also the on-

site recycling of waste materials would reduce logistics and thus contribute to the reduction of emissions

and resource efficiency. Decentralisation of energy production would also promote renewable energies

and thus improve energy efficiency and the reduction of emissions produced by energy industry. Use of

renewable energy would also replace oil.

Information source: http://www.watrec.fi and

http://www.cleantechfinland.com/solutions/renewable_energy/watrec/

Decentralised smart grids

The outcomes of political and R&D investments in the energy sector are evident in the high know-how of

Finnish companies and the extensive research and living-lab activities. While the infrastructure is based

on centralised systems, there are already several early-stage eco-innovations related to decentralised

electricity production that have not yet reached the market. In Finland, expertise related to decentralised

energy production is particularly developed in bioenergy and biofuels, gasification and gas cleaning.

The so-called hybrid solutions that combine different energy production models enabling the use of the

best available source are considered a key asset of Finnish eco-innovations in terms of commercialising

innovation. Decentralised smart grids could also enhance material productivity by the use of biomass. In

the future, decentralised energy production, such as micro-turbines and fuel cells, is expected to

increase in Finland (VTT 2009).

http://www.watrec.fi/

http://www.cleantechfinland.com/solutions/renewable_energy/watrec/


5 | Public policy in support of eco-innovation

In Finland, eco-innovations have not yet gained a firm ground in policies, but have remained in the

interfaces of different political areas where the role of eco-innovations is emphasised differently. The

main problem lies in the fragmented field that contains many different policy actors who face difficulties

in co-operating, and thus in addressing eco-innovation comprehensively. However, as Finland’s ETAP

roadmap suggests, Finland has a long tradition in the development and exploitation of eco-friendly

innovations and in providing consistent signals concerning the desired direction for change (MTI 2006).

Overall, Finnish environmental policy does not include direct policies tailored for eco-innovations but the

conditions concerning eco-innovations are embedded in different statutes on innovation policy and

environmental policy.

The role of eco-innovations in public policies is perceived as a pivotal means for enhancing sustainable

development and the cost-efficiency required to achieve environmental protection targets. In order to

strengthen the impacts of eco-innovations brought about by political guidance, in 2009 the Ministry of the

Environment established a two-year forum called the Finnish National Environmental Innovation Panel.

The Panel evaluated the need for environmental innovations, regulatory measures and other means of

promoting eco-innovations, including national funding and measures for fostering eco-innovations at the

EU level (Ministry of the Environment 2011).

Generally, policies concerning eco-innovations in Finland have already had a first generation and more

commonly represent second generation policies. In other words, eco-innovation policies have moved

forward from promoting end-of-pipe solutions and aim at increasing material efficiency and energy

efficiency. Nevertheless, currently Finland has strong policy guidance in terms of energy efficiency, but

lacks measures in terms of resource efficiency. Thus, the position of the eco-innovation policies cannot

be fully characterised as second generation policies. Yet, for instance, the Natural Resource Strategy for

Finland (Sitra 2009) and several other strategic objectives, targets and indicators on resource efficiency

(EEA 2011) indicate that there exists the political will to thoroughly realise second generation policies as

well as push the eco-innovation policies towards third generation policies.

Public Policy supporting eco-innovation

Several supply- and demand-side policy measures have been implemented to support eco-innovations,

and they cover a wide range of different strategies and action plans related to resource efficiency. The

emphasis is on energy efficiency and strategies that particularly aim at improving material efficiency.

These strategies include the National Waste Plan and the Consumer Policy Programme, which, among

other things, promote sustainable consumption and production methods.

Supply-side policy measures have been a traditionally focus, which is evident in Finnish R&D funding. In

2009, the funding for environmental innovations (excluding EU funding) was around €334–354.8 million

depending on the definition of eco-innovation. Over €230m was granted to climate change control, one

third of which was used for funding energy efficient systems. The share of renewable energies was

€50m of which €12m was granted to waste management and recycling (Kosola 2011). In addition to the

funding of universities and other research institutes and technology programmes, supply-side measures

include funding for the R&D activities of enterprises by the provision of loans and subsidies as well as

the maintenance of the so-called intermediary organisations (TEM 2009).


Figure 5.1 Policy measures addressing eco-innovations in Finland

Group of policy

measures Type of policy measure

Focus of policy measures (tick if applies)

Generic focus on

eco-innovation

Resource efficiency improve

ment

Energy efficiency improve

ment

Reduction of

emissions incl. CO2

Other relevant

areas (e.g. renewable

energy, etc.)

SUP

PLY

SID

E FO

CU

S

Equity/business support

Venture capital funds X X X X X

Public guarantee funds X X

Support for R&D in public sector

and industry

R&D funding X X X X X

Collaborative grants X X X X X

R&D infrastructure X X X X X

Fiscal measures Tax incentives for R&D and start-ups

Tax incentives for R&D personnel

Education, training and

mobility

Tailored training courses for companies, entrepreneurs

Advise/consulting for start-ups, companies, entrepreneurs

X X X X X

Placement schemes for students X X X

Support for R&D workers recruitments

Networks and partnerships

Competence centres, clusters, science-technology parks

X X X X X

Technology platforms and innovation networks

X X X X X

Foresight and common vision building X X X X

Market intelligence and other forms of information sharing

DEM

AN

D S

IDE

FOC

US

Regulations and standards

Regulations, targets, cap & trade schemes

X X X X X

Performance standards, labelling, certification

X X X

Public procurement

“Green“ public procurement of goods and services

X X X X

R&D procurement X X X X X

Pre-commercial procurement

Technology Transfer

Advisory support for technology adopters

X X X

Financial or fiscal support for technology adopters (e.g. grants for

purchasing new technology) X X X X X

Support of private demand

Tax incentives for consumers (e.g. for purchasing eco-innovative products)

Tax reductions for products and services (e.g. VAT reductions)

Demand subsidies (e.g. eco-vouchers, consumer subsidies)

X X X

Awareness raising and information provision

X X X X X

In recent years, the focus of Finnish innovation policy has begun to emphasise the development of

innovative demand alongside the supply-side approach. Consequently, regulations have more actively

become part of policies. However, in reality the current measures, such as public procurement,

regulations, standards and taxes have been utilised very little in demand-driven innovation policy

(Ahvenharju 2011).

The relevant demand-side policy measures have particularly been connected to public demand and the

opportunities of the public sector to influence private demand. Thus, typical measures in this area have

concerned the support for the economic sector, consumer policies, regulations and standards, and

public procurement as well as incentives for private sector innovation activities (TEM, 2009; See also

Figure 5.1).


National strategies and action plans

Finland has an extensive amount of strategies aimed at improving eco-efficiency and facilitating the

development of markets for eco-innovations. Regarding eco-innovations, first and foremost in

importance is the National Innovation Strategy (2009) that particularly emphasises demand-side

innovation policy measures. In the latest research and innovation policy report guidelines for

development from 2011–2015/2020 were presented. A particularly interesting notion in relation to eco-

innovation in this report was the emphasis on the development of integrated models for technological

and social innovations as well as the innovative and sustainable use of natural resources (Research and

Innovation Council 2010).

The National Resources Strategy that aims at guiding the efficient and sustainable use of natural

resources was published in 2009. The strategy defines specific objectives and visions for 2030. The

main strategic areas for the next 20 years concern the efficient utilisation of material flows, the bio

economy, and a regional approach to the utilisation of resources. The policy measures suggested here

are economic incentives, tax reforms and energy policy instruments (EEA 2011; Sitra 2009).

In terms of eco-innovations, other important strategies are Finland’s Mineral Strategy (2010), the Climate

and Energy Strategy (2009) and the Programme for the Built Environment (2010) (EEA 2010). These

strategies – and several other programmes and action plans – also include regional approaches which

take into account the fact that regional resources generate both national added value and local

wellbeing.

Generally, the policy measures that have had the most extensive influence on eco-innovations have

been the ones with binding objectives, such as those resulting from EU directives. Although systemic

innovations and resource efficiency have become the core interest of the strategies, the focus of the

public policies has not yet effectively shifted towards the support of systemic eco-innovations. Policies

effectively promote innovations that enhance the pollution control and energy efficiency of production

processes, but the measures supporting material efficiency are inadequate for the time being. A prime

example is that waste legislation comprises a wide-range of measures that are principally based on the

emergence and treatment of waste in the value chain, when the waste has already been generated.

In addition, although foresight activities related to eco-innovations are carried out extensively, the results

are not utilised appropriately. For instance, the majority of current innovation services and projects do

not seem well-suited to SMEs. In addition to foresight activities, Finland seems to lack the necessary

tools to evaluate the impact of policies and investments on eco-innovations (Saarnilehto 2011).

Interestingly, one of the recommendations of the Finnish National Environmental Innovation Panel, led

by the Ministry of the Environment, included a national plan for eco-innovations, which could work as a

means to support the markets for and the development of eco-innovations (Saarnilehto 2011).


6 | Main findings

6.1 Strengths and weaknesses of Finland in the promotion of eco-innovations

With regard to the promotion of eco-innovations, the core strengths of Finland lie in its funding,

education and cultural values. The technological knowledge base is robust and supports the strong

expertise available in various different environmental sectors. This is partially due to a high standard of

education and a free, good quality education system. On the other hand, the funding activities in the

area of R&D have also contributed to the emergence of diverse expertise, for instance in the renewable

energies (solar, wind and wave energy, etc.) or in the water sector (water management, wastewater

treatment, industrial water cycles, etc.).

In addition, nationally the collaboration between enterprises and different industries and research

institutions has been very successful. There are several intermediary organisations and platforms, such

as universities and innovation parks, enhancing collaboration as well as the production and distribution

of knowledge.

Figure 6.1 Strengths and Weaknesses of Finland in the promotion of eco-innovations

Strengths Weaknesses

- Strong technical knowledge base: multi-faceted

know-how in various environmental sectors

- Abundant R&D funding

- Strong and functional collaboration of

enterprises and research institutions

- ‘Efficiency thinking’ embedded in culture – the

will to find better solutions and savings

- Highly educated population and high human

capital

- Fragmented management of environmental

policies: lack of skills and tradition to collaborate

closely with different administrative bodies

- Political framework: inadequate measures for the

introduction of new innovations to markets

- Inadequate means to evaluate the potential of the

green economy

- Poor networking skills

- Global environmental responsibility not embedded

in culture

- Lack of venture capital and long repayment

periods for environmental loans

On the other hand, ‘efficiency thinking’ as well as the political will to find a better and more cost-effective

solution are embedded in Finnish culture. Generally, people respect environmental regulations and laws,

and are motivated to take action to improve and sustain the clean environment.

Current weaknesses are strongly related to the malfunctioning of administrative organs and problems

concerning the political framework. The responsibility for environmental innovation policies is divided in a

practical way among different ministries and agencies. Thus, it is hard to administrate such issues as

political measures related to eco-innovations comprehensively and efficiently. In this respect, there is

lack of skills and tools as well as a lack of a political tradition that would enable the achieving of the

close collaboration of different administrative bodies. Generally, a clean environment is highly valued,

but global environmental responsibility is not well embedded in Finnish culture.

The political framework also has weaknesses as there is a lack of sufficient measures for estimating the

potential of different environmental sectors in terms of the diffusion and development of eco-innovations.


Furthermore, the current policy measures for introducing new eco-innovations to the markets are also

inadequate.

Although collaboration between enterprises and research institutions is nationally exemplary, the skills

for international networking are seen as relatively poor and unsuccessful. Economically, there are also

problems in acquiring enough venture capital, plus the repayment times for environmental loans are too

long. Both of these problems require a reassessment of the current business models.

6.2 Opportunities and threats for eco-innovations in Finland

The current opportunities are related to the increase in demand-side policies and systemic innovations

as well as the aim to intensify resource efficiency. Eco-innovations are considered as a way to promote

the economic and social welfare of the country and an opportunity to improve the state of the

environment.

Furthermore, although Finland has problems with market penetration in terms of new eco-innovations,

Finnish innovations do not lack potential. There are several successful cases among the SMEs that

have managed to take their innovations to international markets. Finland has also succeeded in

promoting itself as an environmental brand that is known for its clean environment and eco-friendliness.

Figure 6.2 Opportunities and threats for eco-innovations in Finland

Opportunities Threats

- Eco-innovations are considered to have both

economic and environmental benefits

- Internalisation potential of the SMEs

- Finland has a good reputations in terms of the

state of its environment; ‘clean environment and

eco-friendliness’ as a brand

- Biofuels, decentralised energy production, bio

economy

- Trends towards systemic innovations and

demand-side measures

- Regional policies combined with scarcely

populated country

- Problems to efficiently allocate policy measures

/ inability to make clear distinctions between

major and minor environmental issues

- Strong concentration on centralised systems,

particularly in the energy sector

Furthermore, the emphasis on demand-side and supply-side measures has the potential to promote the

diffusion of the existing eco-innovations, for instance, by strengthening market demand through

subsidies or tax incentives for different types of eco-innovations. In this respect, there is potential for

Finland in several eco-innovative areas, such as decentralised energy production, biofuels, or the

creation of a bio economy.

Nevertheless, there are also potential threats for Finnish eco-innovation. Firstly, there is a slight regional

bias among different innovation activities. Since wealth, industrialisation and education are not divided

equally in Finland, there is a potential threat concerning the increase in the wealth gap between

Finland’s different regions. This is related to eco-innovations to the extent of the connection between

regional GDP and innovation activities. For instance, the ranking of regions in accordance with patent

activities is almost exactly the same as the ranking order for municipalities in accordance with their GDP

per habitant (TEM 2009). In other words the differences in regional innovation performance are related

to factors concerning their level of education and industrialisation as well as the internationalisation of

the regions in Finland. This is potentially problematic for Finland due to the differences between the

different regions.


Another critical challenge is the difficulty of efficiently evaluating which sectors and areas should be

concentrated on when allocating different policy measures for eco-innovation. This is not only

problematic in the sense of the development of an efficient policy framework but also in the fact that it

threatens to put too much emphasis on a single environmental sector like biomass or biofuels. In

addition, the strong commitment to centralised systems, particularly in the energy sector, limits the

potential of small-scale energy solutions, such as decentralised energy production, to penetrate the

domestic market.


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Sulkinoja, M., 2011, Finnish Cleantech Venture Report 2011, Nordic Cleantech Open, Available at:

http://www.nordiccleantechopen.com/x7scg483/wp-content/uploads/2010/11/Finnish_

Cleantech_Venture_Report_2011-1.pdf


ANNEX 1. Policy measures addressing eco-innovations in Finland

Group of policy

measures Type of policy measure

Specific measure Please provide reference to or brief summary of specific measures

(national, regional) add cells if necessary

Focus of policy measure (tick if relevant)

Generic eco-

innovations

Resource efficiency improve

ment

Energy efficiency improve

ment

Reduction of emissions incl. CO2

Other areas (e.g.

renewable energy,

etc.)

SUPPLY SIDE

FOCUS

Equity/business support

Venture capital funds

- Finnvera: Environmental loan; Finnvera acts according to the Export Guarantee Act

X X X X

- Sitra (Finnish Innovation Fund) X X X X

Public guarantee funds

- Finnvera: Environmental Guarantee X X

Support for R&D in public sector and

industry

R&D funding

- Tekes (Finnish Funding Agency for Technology and Innovation, funded by Ministry of Transport and Communications): grants funding and subsidies for the development of products, services and processes that are in accordance with sustainable development

X X X X X

- Academy of Finland X X

Collaborative grants

- Tekes: programmes that fund collaborative projects between enterprises, universities and other research institutions such as ClimBus, Groove, Biorefine, Green growth, Green mining, Sustainable community, Water Programme

X X X X X

R&D infrastructure

- Ministry of the Environment X X X X

- Ministry of Transport and Communications X X X

Fiscal measures

Tax incentives for R&D and start-ups

Tax incentives for R&D personnel

Education, training and mobility

Tailored training courses for companies, entrepreneurs

Advice/consulting for start-ups, companies,

entrepreneurs

- Tekes: measures that serve start-ups in general

- Wood energy advisors network (regional) help to create business plans for bioenergy suppliers

X


- Invest in Finland: helps to promote different industries and technologies; services and trades (e.g. Cleantech)

X X X X X

Placement schemes for students

- Education related to utilisation and use of renewable energy in Universities (environmental monitoring, waste management, renewable energy, sustainable development in less developed countries etc.), Universities of Applied Science (Bioenergy Development Centre; advisory role in wood energy)

X X X

Support for R&D workers recruitments

Networks and partnerships

Competence centres, clusters, science-technology parks

- SHOK (Strategic Centres for Science, Technology and Innovation): SHOKs related to eco-innovations: CLEEN Ltd/ Energy and environment, Forest cluster, Built environment

X X X X X

- Lahti Science and Business Park Ltd includes OSKE (Centre for Expertise Programme): Cleantech, Energy technology, Forest industry future, Living business, Nanotechnology - Research and Innovation Council

X X

X

X

X

X

- Advisory Board for Sectoral Research - The Finnish Cleantech Cluster

X

X X

X X

X

X X

Technology platforms and innovation networks

- Green Net Finland X X X

- Cleantech Finland Business Forum (managed by Confederation of Finnish Industries)

X X X X

- Tekes: programmes: Biorefine, Sustainable community, Green growth

X X X X

Foresight and common vision building

- Ministry of the Environment: Finnish National Environmental Innovation Panel

X X X X

- Ministry of Employment and the Economy (TEM-konserni) X X

- Finpro (concentration on markets) - Government Foresight Network - Sitra: National Foresight Network (supports policy making) - Tekes: modelling

X X X

X X

X X

X X X X

Market intelligence and other forms of

information sharing

DEMAND SIDE FOCUS

Regulations and standards

Regulations, targets, cap & trade schemes

- Waste legislation : includes general waste legislation, end-of-waste, waste treatment and recovery, legislation on specific types of wastes, products and activities, waste shipments, and Waste Oil Charge Act

X X X

- Environmental protection Act: also regulates waste X X

- Law on promotion of biofuels in transport - Energy and eco-efficiency standards for new buildings - Emission taxes and charges (waste, oil release, air traffic noise - User charges for pollution control services

X X

X

X X

X X X

X X


- pollution based product charges and taxes - Taxes related to natural resource use - Taxes and charges on energy and transport - Administrative charges (permit, registrations, licences)

X X

X

X

X

X

Performance standards, labelling, certification

- Electricity metering obligation (2009): smart electricity meters utilised in every household in Finland

X X X

- Energy efficiency label scheme (2010): in accordance with the Ecodesign Directive

X X X

Public procurement

“Green“ public procurement of goods and

services

- Acquisition law: energy efficiency requirements in public investment, which also regulate competition concerning acquisitions in accordance with sustainable development related to energy, the environment, transport, welfare and health

X X X

- Motiva Ltd: Equipment procurements, Energy procurements and Material efficiency

X X X X

R&D procurement

- Tekes: procurement for the preparatory work of innovative public procurement

X X X X X

Pre-commercial procurement

Technology Transfer

Advisory support for technology adopters

- Environmental guide for public procurements

- HYMONET: Database for environmentally friendly products

- Energy Offices: independent actor, assist local firms and

communities and help plan and realise their energy projects

X X

X

X

Financial or fiscal support for technology adopters

(e.g. grants for purchasing new technology)

- Tekes, Ministry of Employment and Economy, Ministry of the Environment grant energy subsidies to enterprises, municipalities or other communities: for climate and eco-friendly projects enhancing the use of renewable energies, energy savings, energy production or the intensification of its use, reducing environmental hazards caused by the production or use of electricity

X X X X

- Finnvera: grants environment loans for investments that preserve the environment (energy efficiency, material efficiency, emissions, water, etc.)

X X X X X

Support of private demand

Tax incentives for consumers (e.g. for

purchasing environmentally efficient

products)

- Law on product taxes: tax incentive for recyclable packing/ per product unit

Tax reductions for


products and services (e.g. VAT reductions)

Demand subsidies (e.g. eco-vouchers, consumer

subsidies)

- Repair and energy subsidies for improving the energy efficiency of buildings and for the utilisation of renewable energy sources

X X X

Awareness raising and information provision

- Motiva Ltd.: advising and informing consumers, industry and the public sector about issues related to the sustainable use of energy and materials

X X X X

- Consumer office: consumer education related to sustainable development

X X X X

EIO Country Profile: Finland 31

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Eco-Innovation

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Innovation framework Programme (CIP). The Observatory is developing an integrated

information source and a series of analyses on eco-innovation trends and markets, targeting

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The EIO directly informs two major EU initiatives: the Environmental Technologies Action Plan

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Documents

Eco-innovation in Finland - European Commission · EIO Country Brief: Finland 2011 7 Figure 2.2 Components of the eco-innovation composite index for Finland, 2011 (EU average = 100)