Finland: Environmental Technologies
Finland is a relatively large country by area, covering 132,000 square miles, with a small population of 5.2 million and 2.2 million households. The three largest cities house over 25 percent of the population, leaving the rest of the country sparsely inhabited. Finland has a solid communications infrastructure including an extensive road network, railway system, air services, and telecommunications.
Finland is an advanced industrial economy: the metal, engineering, and electronics industries account for 50 percent of export revenues, forest products for 30 percent. Finland is also one of the leading countries in Internet use. Economic growth in Finland is mainly driven by domestic demand, particularly private consumption and private investment. In 2005, GDP was USD 193.2 billion. It is estimated that GDP growth for 2006 will be 3.6 percent and around 3 percent for 2007. GDP per capita in 2005 was USD 37.206, and inflation was 0.9 percent.
The environmental sector in Finland has evolved into a dynamic area in which production of new technologies is gaining international prominence. Both individuals and leaders of industry have become highly conscious of the high standards of environmental protection and preservation. In Finland, the necessity for utilizing the best available technology is included in the Water Act, Air Pollution Control Act, Waste Act, and Sea Protection Act.
The Finnish Government has set several environmental protection policies and national programs for water protection, air pollution control, soil protection, and waste management. It has also signed several international conventions related to protection of the marine environment and watercourses and air pollution control.
The environmental technology market was estimated at more than USD 3.2 billion in 2005, including professional services. Since the end of the 1990s, the market has expanded by about 15 percent a year.
Gaseous pollutants, such as ozone and nitrogen oxides, and fine particles cased by emissions from industries, power stations, and smaller combustion plants continue to be the main air pollutants in Finland. However, due to well-planned measures taken to combat pollution, harmful emissions and acidification have both declined in Finland considerably over the last 20 years.
Urban air quality remains a challenge even though traffic emissions and emissions from other sources that cause fine particle concentration have been restricted. Due to increasing environmental concerns in surrounding countries (i.e., in Russia - the Kola Peninsula and St. Petersburg - and in the Baltic States), demand for air pollution control equipment continues to be strong in Finland. Sulphur dioxide and nitrogen oxide emissions are the leading causes of acidification.
In general, the water quality in Finland is excellent. Finland’s knowledge of water protection and technology is of high standard and the related equipment used very sophisticated. However, in recent years, the coastal water quality has deteriorated, and, currently, over 20 percent of coastal areas are classified as satisfactory, passable, or poor.
Eutrophication is the main water protection problem in lakes and in the Gulf of Finland, resulting from excessive nutrient loads. More than one-half of anthropogenic discharges come from agriculture.
There are no specific laws on soil protection in Finland, but soils are protected, and their sustainable use is ensured through legislation controlling the various activities that affect soils, such as construction, sand and gravel extraction, farming, and forestry. Legislation on pollution, nature conservation, and landscape conservation also helps to protect soils.
Hydro-geological conditions in Finland differ considerably from those elsewhere in Europe, and different factors may lead to soil degradation here. Typical forest soils have low buffering capacity and are therefore vulnerable to acidification caused by natural processes or pollution. Acidification is the most widespread type of soil degradation.
A total of 119 million tons of wastes of various types was generated in Finland in 2003. Some 65 percent of this waste was recovered. Construction, forestry, agriculture, and mining accounted for about 87 percent of all wastes.
The following products offer the best potential:
- Air and water pollution: monitoring, measuring, and sampling instruments for the detection of air and water pollution.
- Sulphur dioxide emissions removal: all types of advanced air cleaning technologies that are used in the pulp and paper, chemical, and heavy metal industries, as well as in municipal energy and power plants.
- Given the high level of demand, competition within this market sector is strong.
- Nitrogen oxide emissions: the demand for nitrogen oxide emission removal equipment is growing, which includes catalytic converters and low nitrogen oxide combustion technology for burners and boilers.
- Small particles and dust reduction equipment: products such as dynamic and electrostatic precipitators; fabric filters; centrifugal fans, and blowers.
- Waste management: equipment to improve waste management processes, in particular, closed systems for lumber companies and for the prevention of phosphorous discharges.
- Municipal waste recycling and recovery: all kinds of new technical advances for the entire recycling logistics chain, including sensors, separators, monitoring, optic handling devices for metal recycling, crushers, and bio waste separation equipment.
The metals industry and the pulp and paper industry are the two major investors in environmental technology, especially in air pollution and water protection technologies. The producer responsibility principle in waste management has increased reuse and recycling, offering new business opportunities for companies.
The key competitive factors in selling environmental technology in Finland are quality and level of technology, with price as a secondary factor. For monitoring, measuring and control equipment, using an importer is recommended. Finnish importers have direct distribution channels to the end users and have strong relations with the various energy, chemical, or paper manufacturers, as well as direct access to the municipalities that mainly invest in wastewater technologies.
There are no trade barriers or major regulations that need to be overcome in Finland. Since joining the European Union (EU) in 1995, Finland has replaced its customs law and regulations with EU law and coherent regulations. Thus, Finland applies external EU tariffs to imports from non-EU countries. Goods imported into Finland are also subject to a general Value-Added Tax (VAT) of 22 percent.
Market Issues and Obstacles
There are some 300 environmental technology firms in Finland, of which about 20 percent operate abroad as well. A majority of the Finnish companies are small- to medium-sized. To support Finnish environmental technologies know-how in the field, Government-funded technology centers known as Tekes (Technology Development Centers) and VTT (Technical Research Centers) support and enhance R&D in environmental technologies, especially in air pollution control equipment, thus creating a market with increased local competition.
The Finnish Ministry of the Environment produces legislation on environmental protection, nature conservation, land use, and building and housing. The Ministry also supervises and controls the way legislation is put into practice. National legislation has been widely harmonized with community (EU) legislation, particularly in the fields of environmental protection and nature conservation.
Ministry of the Environment regional environment centers guide and monitor the implementation of environmental legislation in the respective regions. Local authorities organize and supervise waste management in their respective areas. They also set local regulations on waste management and issue waste permits to firms and operations.
Excerpts from “Finland: Environmental Technologies Overview”, US Commercial Service, January 2007.