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Reform Support

Do No Significant Harm (DNSH) Guidelines for Implementing the Green Transition in Finland

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Supporting reforms to ensure efficient and effective revenue administration and public financial management.

Summary

The Commission supports the Finnish authorities to implement the DNSH criteria to fund the
decision-making process with a view to advance the green transition. The main beneficiary is The
Ministry of the Environment, with close involvement of Ministries of Finance, and Economic
Affairs and Employment.

Context

The European Green Deal aims to make Europe climate neutral by 2050. Finland has, however,
decided to take this one step by pledging to carbon neutrality by 2035. Finland’s Sustainable
Growth Programme funded by the EU’s recovery package, “Next Generation EU”, is instrumental
for reaching this goal. As part of the Programme, Finland has allocated about 50% of Recovery and
Resilience Facility (RRF) funds to support the domestic green transition. The RRF funding must
follow the “Do No Significant Harm” (DNSH) principle defined by Article 17 of the Taxonomy
Regulation.

The principle is also reflected to various degrees in Regulations establishing other EU funding
programmes such as the Just Transition Fund, the InvestEU, Horizon Europe and the European
Regional and Development Fund.

This principle can also be recognised - though to a lesser extent- in other established EU funded
programmes such as the Just Transition, InvestEU, Horizon Europe and the European Regional and
Development Fund.


Finland intends to increase its administrative capabilities, as well as its knowledge of the
application of the DNSH principle. These measures will ensure that reforms and investments
planned across the country are in line with EU, as well as national climate environmental targets.

Support delivered

The Finnish authorities are provided support (by the EU) in three interlinked project phases
between 2022 and 2024. These include but are not restricted to:

  • Identifying and understanding the green transition investment needs and gaps in Finland.
  • Providing ad hoc support to apply the DNSH guidelines in selected pilot cases, and organise two seminars to present the results of the project

Results achieved

The project provides guidance to Finnish authorities in implementing the “Do No Significant Harm”
(DNSH) criteria in funding decisions. As a result, Finnish authorities will gain a thorough
understanding of how public funds are currently directed to help achieve climate and energy
objectives. They will develop the capacity to quickly and reliably make funding decisions that
accelerate the green transition and do not harm the environment (do not negatively impact the
environment). The project will contribute to the implementation of the European Green Deal by
allocating public which will go towards green priorities.

Lessons learned from a variety of pilot cases and clear guidelines will be shared with the
Commission and EU Member States to contribute to good practice approaches for integrating the
DNSH into public funding processes.

Knowledge shared will include findings garnered from pilot cases and clear guidelines for the
Commission and EU Member States will also be provided. This will contribute to the understanding
of good practices which will further integrate DNSH into public funding processes.