The Council of the European Union has adopted an implementing decision amending the approval of Finland's recovery and resilience plan, introducing new milestones and targets under the green transition pillar to accelerate the country's path to carbon neutrality by 2035. The decision, published on 3 July 2026 and set for formal adoption on 8 July 2026, updates the original plan approved on 29 October 2021, adding concrete deadlines for reducing coal use, reforming energy taxation, and investing in clean energy and circular economy projects.
The amended plan sets a binding target to reduce coal use for energy to 36 petajoules by the second quarter of 2026, down from 60 petajoules in 2019, as part of Finland's phase-out of coal by 2029. Energy taxation reforms include lowering the industrial electricity tax to 0.05 cent per kilowatt-hour, phasing out the energy tax refund by 2025, and raising the tax on fossil heating fuels by 2.7 euros per megawatt-hour from 1 January 2021. Investments under the plan cover energy infrastructure, new energy technology, and a dedicated package for the autonomous Åland region, including solar power and offshore wind reports. Milestones require calls for applications by the fourth quarter of 2021 and the fourth quarter of 2024, with project completion by the second quarter of 2026.
Under the industrial reforms and green and digital transition component, Finland must reform its Climate Act to set binding targets for 2030, 2040, and 2050 by the second quarter of 2022, and amend the Waste Act to achieve a 55% recycling target by 2025 by the fourth quarter of 2024. Investments support low-carbon hydrogen, carbon capture managed by Business Finland with at least 131,534,000 euros allocated for climate objectives, direct electrification, and recycling. All measures must comply with the 'Do no significant harm' principle, ensuring environmental safeguards.
The decision impacts several stakeholders. Finnish energy producers face a tight deadline to reduce coal consumption and shift to renewables, with potential cost increases for fossil fuel users due to higher heating fuel taxes. Industrial electricity consumers benefit from a lower tax rate, improving competitiveness. The autonomous Åland region gains targeted investment for solar and offshore wind, supporting its energy transition. EU taxpayers and the European Commission monitor compliance, as the plan is financed through the Recovery and Resilience Facility, with disbursements tied to milestone achievement.
The Council's adoption formalises the amendments, which were prepared by the Commission in consultation with Finnish authorities. The next step involves Finland implementing the milestones and reporting progress to the Commission, which will assess compliance before releasing further funds.