Enormous Economic Impacts from Investments into the Battery Industry in Finland
The economic impact of green investments on Finland’s national economy is significant, according to a joint study by different industry associations. Finland’s gross domestic product (GDP) would be three billion euros higher annually if just one-fifth of the green investment projects listed in the Confederation of Finnish Industries’ (EK) data window were realized. Tax revenues could cumulatively increase by over 16 billion euros over the 30-year lifespan of these projects.
The battery industry plays a key role in green transition investments. However, the data window used as the basis for the study only includes some of the battery industry projects expected to be implemented in the coming years.
According to Invest in Finland, there is a potential of up to 15 billion euros of investments into the battery industry in Finland over the next few years. In EK’s data window, projects worth about 8 billion euros are listed, and the study estimates that only about 3 billion euros of these will materialize. If the same parameters used in the study are applied to all planned projects (15 billion euros), the impact on GDP could be as high as 64 billion euros. The tax impact would be up to 7.5 billion euros, and the study estimates that 114 000 person-years of employment could be generated.
The report suggests that regional economic impacts could be further enhanced by increasing the degree of domestic resources in the technology, subcontracting services, and labor used in the execution of the investments. Even greater opportunities arise from exports if solutions developed in Finland can be utilized in similar investment projects worldwide.
The cost structure of battery industry plants varies by plant type and the volume of domestic raw materials. Increasing domesticity has a major regional economic impact: for example, a 10-percentage-point increase could result in an over half-a-billion-euro impact on Finland’s economy for every billion invested over the lifecycle of a plant.
Finland is competing globally for battery industry investments. In order to get these investments into Finland and to maximise the economic impact, Finland must do everything possible to ensure this, by for example speeding up the permitting procedures and giving financial aid.
– For example, the planned Green Investment Tax Relief will improve Finland’s position in the global investment competition, and this tool needs to be introduced as soon as possible. The smoothness and predictability of permitting also plays a major role in the realization of the planned investments, says Pia Vilenius, CEO of the Finnish Battery Industry Association.
The report was part of the EK’s green investment data window project. In addition to the Finnish Battery Industry Association, the study included the Confederation of Finnish Industries EK, Bioenergy Association of Finland, Finnish Energy, Finnish Metal Refiners’ Association, Renewables Finland, and H2 Cluster Finland.
