May 19. 2024. 1:29

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US Inflation Reduction Act may heavily impact Finnish industries

Large Finnish companies are worried the hotly-debated US Inflation Reduction Act could have significant implications on their operations and the rest of the EU, a recent survey conducted by the Finnish Confederation of Industries shows.

The US Inflation Reduction Act (IRA), a package that aims to boost US domestic green energy projects with subsidies and tax breaks, has put the EU on alert, with European Commission President Ursula von der Leyen recently countering with her Green Deal Industrial Plan proposal.

Finnish companies, too, are now questioning their long-term plans because of this, according to the survey that was conducted among companies with a turnover of more than €100 million.

Among those surveyed, 65% of the companies expect the American stimulus package to have an effect on their operations, while nearly half believe that exporting to the US will become even more difficult, the survey adds.

The impact the US IRA would have on the EU’s competitiveness on the world stage is something 94% of the surveyed companies are worried about, of which 54% believe such concerns to be significant, the survey also says.

Moreover, almost 20% of the companies surveyed said they were even planning to shift their investments to the US due to the IRA, which marks the US’ push to make green investments more attractive by way of tax breaks and subsidies.

A race for state subsidies and increasing protectionism would play out like “poison” for a small and open market like Finland, the CEO of the Confederation of Finnish Industries, Jyri Häkämies, said about the survey’s results.

Finland must defend market-driven climate actions based on ”true” competitiveness, he said, adding that international trade rules should also apply to the green transition.

Indeed, there are still unused resources in the EU Recovery Fund that could be harnessed for the green transition, he added.

(Pekka Vänttinen |