The Act on Biofuels and Bioliquids (393/2013, hereinafter referred to as “the Sustainability Act”) entered into force on 1 July 2013. The act imposes sustainability criteria for biofuels and bioliquids in accordance with the Renewable Energy Directive (RED) as part of the Finnish legislation. It also defines national measures to verify sustainability. However, the obligation to verify sustainability is not determined in the Sustainability Act. Instead, the obligation to verify the sustainability of biofuels and bioliquids is laid down in other acts, through financial benefits and subsidy systems in accordance with RED.
According to RED, sustainable biofuels and bioliquids are a requirement for being included in the national distribution obligation, lower taxes, the fulfilment of terms and conditions of state subsidies, and the application of the zero emission factor. If biofuels or bioliquids are not verified to be sustainable, they cannot be included in the distribution obligation, they will be taxed more heavily, and the terms and conditions of state subsidies will not be fulfilled. Furthermore, if the economic operator cannot verify the sustainability of a bioliquid in an annual emissions report in accordance with the Emissions Trading Act, the bioliquid will be considered to be fossil.
The following economic operators pertaining to the Sustainability Act have an obligation to apply for a sustainability scheme:
- parties with a distribution obligation in accordance with the Act on the Promotion of the Use of Biofuels in Transport (446/2007)
- parties with a tax obligation in accordance with the Act on Excise Tax on Liquid Fuels (1472/1994)
- operators in accordance with the Emissions Trading Act (311/2011) and users of aircraft in accordance with the Act on Emissions Trading in Air Traffic (34/2010)
- recipients of state subsidies, whose subsidy decision imposes an obligation to verify sustainability
- starting from 2021, parties with a distribution obligation in accordance with the Act on the Promotion of the Use of Biofuel Oil (418/2019)
The verification of the sustainability criteria must be based on an economic operator’s sustainability scheme in accordance with the Sustainability Act or a voluntary scheme approved by the European Commission. The Energy Authority approves national sustainability schemes and monitors their compliance. For a separate application, the Energy Authority may also issue an advance ruling for a raw material in accordance with the Sustainability Act or the Distribution Obligation Act. The Ministry of Economic Affairs and Employment is responsible for general steering, monitoring and development of activities in accordance with the Sustainability Act.