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   Are You Planning to Keep Working Part-Time from Home? Take These Taxation and Employment Issues into Account

   We put together a list of things to keep in mind about taxation and employment law when engaging in hybrid work in Finland. Taxation Checklist for Employees Automatic EUR 750 deduction for the production of income: All wage and salary earners automatically receive a EUR 750 deduction for the production of income (for the 2021 tax year). If your expenses are higher than this, you can claim them in your tax return as expenses for the production of income. Workspace deduction: If you work remotely, you are entitled to a workspace deduction: The workspace deduction can be made either based on a formula or based on actual expenses. The formula-based workspace deduction is determined based on remote work days and was EUR 225–900 in the taxation for 2020.  It is worth making the deduction based on actual expenses if you work from home a great deal. If so, you can deduct, for example, the expenses from the furnishings and rental, lighting and heating of your workspace. When deducting actual expenses, you need to be able to present the Finnish Tax Administration with a description of the expenses and the related receipts on demand. Work tools: The tax treatment of work tool purchases depends on whether you bought the tools yourself or whether your employer bought them and either gifted or loaned them to you. If you bought work tools , you can deduct the purchase, maintenance and repair costs as expenses for the production of income if the tools you bought are primarily used for work. You can deduct the expenses as a single deduction during the year of purchase if the purchase price does not exceed EUR 1,200/tool (2021 tax year) or as annual 25% depreciations if the purchase price of the tool is over EUR 1,200.    If you are loaning work tools from your employer , in other words the tools remain owned by your employer, they are a taxable benefit for you. If you employer purchases work tools and gives ownership of them to you , the fair value of the tools is considered pay and your employer must notify the benefit to the income register. Reimbursement of travel expenses : If you are working from home part of the time, you can deduct your travel expenses between home and your workplace for the days on which you go to the workplace. There is a EUR 750 deductible for travel expenses between home and work. You can only claim travel expenses in your tax return to the extent they exceed EUR 750. Remember to deduct travel expenses according to the least expensive mode of transport. Data Connection: The right to deduct the cost of a data connection depends on whether you or your employer has purchased the connection. If you purchased the connection, you can deduct the connection as expenses for the production of income. If the connection is partially in work use, you can deduct 50% of the cost, and if it is used primarily for work, you can deduct the cost in full. If your employer reimburses you for the cost of a data connection you have purchased, the compensation is taxable income both with respect to work and private use. In this situation, your employer will deduct withholding tax from the compensation. If your employer purchases the data connection , the benefit is tax free for you both with respect to work and private use. Employment Law Checklist for Employees Agreeing on hybrid work with your employer: Hybrid work is subject to the same rules as work performed at the workplace. Voluntary hybrid work does not necessarily require a separate employment agreement. Always follow the instructions your employer gives you regarding hybrid work. Obligatory hybrid work: As a rule, the place of employment agreed in the employment agreement is binding on the employer with respect to hybrid work, too. This means that the employer cannot in normal circumstances unilaterally make hybrid work an obligation for employees unless this has been agreed in the employment agreement. Hybrid work and equal treatment: Employees must be treated equally unless there is an acceptable cause for different treatment based on the duties and position of the employees. Thus, hybrid work instructions can be different in different positions as long as there is a clear reason for it. Such reasons can include the nature and contents of tasks as well as the type of work. It is also possible to set limits for hybrid work. For example, your employer can require that there must always be a certain number of employees at the workplace or forbid hybrid work if an employee refuses to comply with instructions. Working abroad: It is always recommended to negotiate and make a written agreement with your employer on working abroad. It important for both you and your employer to confirm in advance how social security is determined while working abroad, i.e. which country's social security provisions apply to the remote work. Occupational safety and health and coping with work: Hybrid work highlights the employee’s own responsibility to ensure, for example, sufficient rest time. The employer should also have discussions with employees to remind them to look after their wellbeing. The employment accidents insurance taken out by your employer also applies to work performed outside the workplace, but in remote work it is more tied to the work space than at the actual workplace. If necessary, you or your employer should supplement the statutory accident insurance with a voluntary insurance policy.

   Published: 1.12.2021

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   Harmonised Rules to Keep Artificial Intelligence in Check

   Four Main Classifications of AI The goal of the proposed regulation is to incorporate obligations into special legislation in order to put the responsible use of AI into specific terms. AI systems often process information about the activities and lives of consumers, and responsibility in this context means, for example, transparency, fairness and ethicality. The aforementioned proposed AI regulation , which was published by the European Commission in April 2021, is an example of legislative efforts to harmonise the use of AI in the EU. The goal for harmonised European rules is to increase trust in the use of AI and reduce applications of AI that violate of the EU's fundamental rights, such as police state mass surveillance, scoring of citizens or other applications that pose a threat to citizens. These threats will be addressed by a classification of AI application into four main categories based on whether the application poses an unacceptable risk, high risk, limited risk or minimal risk. These categories are based on the purpose of use, not the technology being used. AI is used for a wide array of applications, from chatbots to facial recognition and from the pharmaceutical industry to autonomous weapons. The obligations set forth in the proposed regulation are intended to promote transparency and consumer confidence. Transparency Increases Trust The responsible use of AI and responsible data processing require transparency. Transparency can be a strong competitive advantage not only in business but also from the perspective of customers or personnel.  Keeping up with and adopting the latest technological developments can open up innovative business opportunities and perspectives. Clear communication to consumers creates an image of a company's activities while increasing trust and commitment amongst consumers, employees and other stakeholder groups. However, it is important to note that many consumers may have difficulty conceptualising how AI functions. Responsible use of AI can be seen as part of corporate responsibility. A regulatory model based on soft-law joint or self-regulation could be problematic, as it may not be enough to earn the trust of consumers, and other stakeholders would have little to no say in it. This kind of model also does not seek to distinguish between organisations responsible for supervision and those responsible for imposing sanctions. Like the GDPR, the AI Regulation would require precision in data and data administration, sufficient data security and proper documentation of the realisation of transparency and the fulfilment of the disclosure obligation. The Commission’s proposal solves the separation of supervision and sanction power by establishing a European Artificial Intelligence Board, which would share responsibility for supervision with the Member States’ market supervisory authorities, while Member States would be responsible for imposing administrative fines and other sanctions. This is the same solution that was adopted in the GDPR. Criticism of Proposed Regulation The AI Regulation is a major legislative project, but the proposal is neither comprehensive nor watertight. For example, it presents few practical solutions to prevent algorithmic bias, despite the fact that this was one of the primary concerns that lead to the project being launched in the first place. The proposal’s definition of AI has also been criticised for being too broad. On the other hand, the reasoning behind the broad definition is to ensure that it is technology neutral and future proof so that it would not immediately become outdated as technology develops. The scope of application should be clear and the requirements proportionate. Clear boundaries can be justified, e.g. based on the principal of legal certainty. The definition of what applications are considered high risk is somewhat unclear in the annex of the proposed regulation, which creates uncertainty on the markets as to the suitability of the regulation. The proposal has also been criticised for being overly complex and, as it would be directly applicable legislation, for leaving little room for Member States due to aiming for far-reaching harmonisation. There are also fears that increasing bureaucracy will hinder AI innovation. What Next? The Commission’s proposal is currently being debated by legislators, the European Parliament and the Council of Europe. Though the proposal has given rise to questions and doubts, the Member States are for the most part supportive of the goals of the proposal and have begun to find common ground in negotiations. The Slovenian EU presidency has aimed to present a compromise proposal in November 2021 . Companies applying or planning to apply AI should keep abreast of the latest developments in the legislative project.

   Published: 1.12.2021

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   SPACs Accelerating Mergers and Acquisitions and Sustainability

   Until now, SPACs have mostly been a US phenomenon, but many companies now have their sights on the European market. Globally, the amount of capital looking for a suitable acquisition target is staggering: the aggregate value of mergers and acquisitions is an average of USD 500–550 billion a year. Existing SPACs are expected to announce over USD 700–800 billion in deals over the next two years. Buoyed by a promising start, SPACs are set to play an important role in Finland, too. This development would be faster if the Finnish Tax Administration would dispel uncertainty by taking a position on the tax treatment of SPACs. There is currently no case law or established taxation practice applicable to SPACs. Speed is needed, because SPACs could also have a decisive role in achieving sustainability goals. Merging with a SPAC would offer growth companies a new way to raise significant new capital quickly, because the SPAC’s valuation of the growth company can be based on future profit forecasts, which makes early-stage investments possible. ESG-oriented SPACs offer institutional investors and private investors the opportunity to invest in companies that align with the investor’s own values. Value-driven investors often prioritise long-term value creation over quarterly profits. As listed companies, SPACs are more transparent and better governed than private companies. Under Nasdaq’s new requirements, SPAC boards are also set to become more diverse. We are in the midst of a radical shift in how our society moves, builds and eats. This transition will require the scaling up of sustainable technologies, which in turn will require an unprecedented amount of capital. SPACs are an innovation that could help achieve these goals.

   Published: 24.11.2021

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   Pre-trial Investigations Set the Course for Criminal Procedures – Prepare for Investigations with This Checklist

   Checklist for Pre-trial Investigations – Bring in an Attorney from the Start To a large extent, the handling of the pre-trial investigation sets the course for the following criminal procedure. At best, organisations or companies can avoid mistakes that can be difficult to remedy later on in the process. The framework of a criminal procedure is locked in in the pre-trial investigation. Waiting until the prosecutor has pressed changes to plan a defence handicaps the defendant once the criminal trial begins. An attorney specialised in criminal procedures can anticipate and help plan for later stages of the proceedings. A pre-trial investigation could concern, for example, an accident at the workplace or suspected offences such as environmental offences, abuses of inside information, misuse of trade secrets, various financial offences or other business offences. Below is a checklist of instructions that apply to pre-trial investigations regardless of the nature of the suspected offence: A Professionally Drafted Final Statement Can Spare You from Charges Once the police have completed their work, the pre-trial investigation material, i.e. the records of the police interviews and other material collected during the investigation, are sent to the parties for a final statement. This is the first time that a suspect can review the pre-trial investigation material in full as well as the police interview records of the other parties in the case. At this stage, it is very important to state a position on the pre-trial investigation material and submit a final statement. In a final statement addressed to the prosecutor, the attorney states a position on the legal aspects and evidence of the case and provides grounds for not bringing charges. At best, the prosecutor will decide to not bring charges, and the company and its private respondents will avoid a trial. Even if the prosecutor does decide to bring charges, a professionally drafted final statement improves the chances of success in the coming trial. Corporate Fines on the Rise When an offence has taken place in the operations of a company, suspicion falls on the people who acted on behalf of and/or are in certain positions in the company. Despite this, the company may be subject to a claim for a corporate fine. A clear trend over the past few years has been that prosecutors make corporate fine claims more often and that the amounts of the fines claimed have grown significantly. This highlights the importance of a well-handled pre-trial investigation. Castrén & Snellman offers a Criminal Procedures and Investigations service that handles criminal procedures in business from pre-trial investigations to criminal trials.

   Published: 27.10.2021

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   Reform of Employment Contract Non-Competition Clauses – Checklist for Employers

   The consideration of the bill is likely to continue in Parliament in the autumn of 2021, and the amendment is proposed to enter into force already on 1 January 2022. The bill has generated a great deal of questions among our clients. Here is our FAQ relating to the draft amendment. 1. Who can employers make a non-competition agreement with in the future and what is the maximum duration? The amendment would not change the group of people with whom a non-competition agreement valid after the end of the employment relationship could be lawfully made. To be valid, a non-competition agreement would continue to require a particularly weighty reason relating to the employer’s operations or to the employment agreement. Such a reason could exist, for example, with respect to employees working in product development or if the employer has an interest in retaining customers. The maximum duration of a non-competition agreement would also remain unchanged. The main rule would be that a non-competition agreement could be valid for a maximum of one year after the end of the employment relationship. 2. What does the obligation to pay compensation mean in practice? The obligation to pay compensation is an obligation of the employer to compensate employees for a non-competition agreement that remains in force after the end of the employment relationship. According to the bill, the compensation would be determined as follows: The proposed compensation would not be payable if the employment relationship ended for a reason attributable to the employer. Termination on financial and production grounds is one example of such a situation. Compensation also would not have to be paid if the employer has already paid reasonable compensation for an over six-month non-competition agreement as defined in current legislation or if the payment of such reasonable compensation has begun before the new legislation enters into force. 3. Can the employer decide to waive the non-competition obligation in order to avoid having to pay compensation? Following the amendment, the employer would be entitled to terminate a non-competition agreement extending beyond the end of the employment relationship if circumstances change during the relationship, for example, if the employee’s duties change. The notice period would be at least one-third of the duration of the non-competition obligation, but no less than two months. However, the employer would not be entitled to unilaterally terminate a non-competition agreement once the employee has ended their employment relationship. 4. Does the compensation obligation also apply to non-competition agreements predating the amendment? The new legislation would be mandatory and would also apply to non-competition agreements entered into prior to the entry into force of the amendment. However, there would be a one-year transitional period before the provisions concerning the compensation obligation become applicable to non-competition agreements that predate the entry into force of amendment. Employers could also terminate such non-competition agreements without notice during the one-year transitional period. 5. What should employers do to prepare for the amendment and when do they need to act? The proposed compensation obligation will create a new personnel cost item for employers, which highlights the importance of considering the necessity of non-competition agreements even more carefully than before. The transitional period means that now is a good time to review your non-competition agreements in light of the upcoming amendment.

   Published: 5.10.2021

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   The Time for Offshore Wind Farms Approaching in Finland – Hundreds of Turbines in Development

   The political will to increase the adoption of offshore wind power is clearly present. In November 2020, the European Commission published the EU Strategy to harness the potential of offshore renewable energy for a climate neutral future . The goal of the strategy is to increase offshore wind power capacity to at least 60 gigawatts (GW) by 2030 and then to 300 GW by 2050. This would be a 25-fold increase of the current 12 GW capacity over the next 30 years. Finland is also seeking to increase the adoption of offshore wind power. According to Prime Minister Sanna Marin’s government programme from 2019, the government will seek to improve the prerequisites for the construction of offshore wind farms and ultimately increase implementation in order to achieve the goal of nearly emission-free production of electricity by the end of the 2030s. According to Finland’s sustainable development programme published in 2021, a total of 161 million euros will be directed to investments in new energy technology, such as offshore wind power. The funds will come from the EU’s recovery package. Lower Real Estate Tax Would Improve Profitability One example of a concrete measure to promote offshore wind power is the planned reduction of the real estate tax for wind power. Currently, the replacement cost is 75% of the construction costs for both offshore wind farms and onshore wind farms. In practice, offshore wind farms nevertheless pay significantly more real estate tax than onshore ones. This is because offshore wind farms involve demanding foundation work and other construction costs, which means that the taxation values that form the basis for real estate tax are higher than for onshore wind farms. The Ministry of Finance has prepared an amendment to the real estate taxation so that the replacement cost of offshore wind farms would include a smaller amount of the construction costs. The intent here is to place onshore and offshore wind power on equal footing with respect to real estate tax. Significant Potential in the Baltic The regional councils of Finland’s coastal municipalities approved the first maritime spatial plan for Finland’s territorial waters and exclusive economic zone at the end of 2020. Finland’s Maritime Spatial Plan 2030 is not legally binding, but does identify, among other things, potential areas for the development of offshore wind power. According to the plan, the Baltic Sea has significant potential with respect to offshore wind power. This potential is greater in Finland’s coastal regions compared to other Nordic countries. The Gulf of Bothnia, in particular, has been identified as being well suited to extensive offshore wind power construction. There are numerous offshore wind power projects currently being developed in Finland. For example, a large-scale offshore wind farm is being planned in Åland, with LUT University studying options for moving forward. The government of Åland is planning as many as 500 offshore wind turbines with a total nominal capacity of 6 GW in an area of approximately 1,000 square kilometres. The planning and preparatory phase is estimated to continue into 2024. Territorial Waters or Exclusive Economic Zone? The authority processes required for offshore wind power projects, such as permitting processes, differ slightly from onshore wind power projects. For example, offshore wind farms require a water permit in accordance with the Water Act. The authority proceedings for offshore wind farms also differ according to whether the wind farm is going to be constructed in Finnish territorial waters, which are closer to the coast, or in the exclusive economic zone, which is farther out to sea. In territorial waters, wind farms require, among other things, a zoning plan that allows wind farms as well as building permits, just like for onshore wind farms. In contrast, the exclusive economic zone is not subject to land use planning and no building permits are necessary for wind turbines in the exclusive economic zone. However, construction in the exclusive economic zone requires an exploitation right and consent to construct in the exclusive economic zone granted by the Finnish government and may also require, among other things, an environmental impact assessment process. There is a very strong will in Finland to significantly increase the adoption of offshore wind power, and the practical implementation of projects requires versatile legal expertise. Castrén & Snellman has assisted clients in the permitting of major projects in the Finnish exclusive economic zone. Our firm also has extensive experience of wind power projects, most recently the development and sale of the Puskakorpi wind farm project . 

   Published: 23.9.2021

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   Greening Competition Law – Sustainability Agreements and Competition Law

   For example, if the Commission were to follow its traditional enforcement practice, it might prohibit any arrangement between companies that would raise the price of a product for consumers, even if such an arrangement would clearly benefit other (future) customers, e.g. by reducing air pollution or GHG emissions. Actors in the field of competition law, however, have recognised that competition law, too, needs to better address the climate crisis and green objectives. Currently in the EU there is an ongoing debate on how competition rules and sustainability policies could work together in the context of the European Green Deal. The Commission has promised to provide guidance on how to cooperate in compliance with competition law and avoid ‘greenwashing’ practices having negative effects on competition and harming consumers. The Commission’s Steps to Address the Issue In autumn 2020, the Commission launched a discussion on the matter and published a call for contributions about how competition rules could support sustainability policies. Regarding antitrust, the Commission has concentrated on cooperation between undertakings but omitted questions regarding what dominant companies could do to further the sustainability of their business without abusing their position. However, in Castrén & Snellman’s reply to the Commission (all replies are available here ), we also discussed the challenges sustainable dominant companies currently face. On 10 September 2021, the Commission issued a Competition Policy Brief , in which it offered an overview of the debate concerning greening EU competition policy. In this context, the Commission promises to enhance the clarity and legal certainty of the horizontal and vertical guidelines in terms of sustainability initiatives. What to Expect from the Commission? First, the Commission intends to clarify the ways in which companies may cooperate to reach sustainability goals without restricting competition (Art. 101(1) TFEU). Secondly, as any agreement restricting competition may be exempted under EU competition law, the Commission aims to address how the exemption (Art. 101(3) TFEU) is applied to sustainability agreements. Regarding the applicability of the exemption, the Commission will address at least following issues: The Commission may still provide individual guidance to companies in the form of guidance letters and by adopting decisions that the competition rules are not applicable to certain initiatives. It also welcomes all companies to bring real-life case examples for it to review. Not Quite There Yet? The Commission emphasises that well-functioning and fair markets facilitated by competition law and policy are a key to promote green ambitions, since, for example, companies on a competitive market have incentives to use less costly recourses and innovate more climate-friendly products for consumers valuing sustainability. C&S as well as many other respondents to the Commission’s call for contributions have argued that the Commission should update its traditional enforcement practices and take green objectives into account better in its enforcement. EU law should not hinder this, since according to the TFEU, environmental protection requirements must be integrated into the definition and implementation of the Union's policies and activities in particular with a view to promoting sustainable development. (Art. 11). Further, the wording of the TFEU (Art. 101) does not obligate the Commission to follow a narrow consumer welfare standard according to which the consumer who pays for a product should benefit directly from the restrictive cooperation. The Commission’s concessions to arguments emphasising the climate crisis do not seem as ambitious as some of us commentators would have hoped for. The European Court of Justice (the ECJ ) may, however, pursue green objectives more boldly, as it has also done in the past in other contexts. For example, in the Finnish Concordia Bus case (C-513/99) the ECJ accepted that environmental factors were taken into account in the comparisons of tenders in the context of public procurement even though the Commission disagreed. While waiting for the ECJ’s input, the discussion will surely continue. We welcome the legal certainty the Commission will promote around the topic through the clarifications mentioned above.   Anna Kuusniemi-Laine Joona Havunen Anna Joutsi

   Published: 20.9.2021

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   Is the Clock Ticking on Working Time Regulation as We Know It? EU Working on Reform of Working Hour Regulation

   The EU’s Working Time Directive requires that working hours must be measured using a system that is objective, reliable and accessible to all relevant parties. Be honest, do you already know what that kind of system actually looks like? I can reveal to you that not many people yet know exactly what these criteria mean in practice. Nevertheless, based on preliminary ruling C-55/99 of the Court of Justice of the European Union (CJEU), the working hours records of all employers should fulfil the above criteria. This preliminary ruling concerned a situation in which an employer had only recorded overtime hours, as it was the common practice in Spain. The CJEU ruled that this does not meet the criteria of the Working Time Directive and that all working hours must be recorded. In January 2021, the European Parliament also approved a draft for what is called the Right to Disconnect Directive , which would incorporate these criteria into EU legislation. It is time to take look at these criteria and think about how your company’s working hours records will work in the future. The EU’s Working Time Directive has not changed much since its inception in the 1990s, despite the fact that the amount of related case law has ballooned and working life has taken leaps and bounds towards more flexible working time arrangements in the intervening years. Compiling and updating case law into EU legislation is a typical practice in EU law, and it seems that this may finally be around the corner for the regulation of working time. In the following, I cover the main features of a working time record that is compliant with the Working Time Directive and provide a few tips on how companies can prepare for possible changes to EU working time legislation. Objectivity and Reliability of Working Time Records According to legal scholars, the objectivity and reliability criteria are clearly intertwined. The objectivity requirement encompasses the recording of actual working hours as well as an objective process for collecting this information. The reliability requirement more strongly highlights avoiding and preventing working hour entries from being purposefully or accidentally manipulated in such a way that they become false. Employers should keep the following things in mind: Access Criteria at Workplaces According to the CJEU, access to working time records is essential, particularly with respect to their function as evidence. There are many interpretations of this requirement as well, but employers should keep in mind at least the following: You Don’t Have to Give Up All Your Tried-and-True Practices To be clear, it is worth noting that it will very likely remain possible to instruct employees to make working time entries , though the employer’s obligation to maintain working time records cannot be delegated. Workplaces also do not need to give up, for example, trust-based working hour models and flexible working time arrangements as long as they comply with current legislation. It is also un likely that changes will be made to national legislation concerning working time records before a consensus on potential amendments is reached on the EU level. To this end, European labour market organisations have begun bilateral negotiations that are set to continue until 2024. Could Proactive Workplaces Find a Working Time Record System Suited to Hybrid Work? On the other hand, even if the EU’s working time legislation isn’t amended for years to come, working time arrangements may need to be updated at workplaces simply due to the increase in hybrid work. Given that the latest Working Time Directive was enacted in 2003, concepts like home office work, shared work stations and crowdworking cloud services were not part of the discussion at the time. Some legal scholars have said that we are currently shackled to an ‘antique’ and ‘conservative’ Working Time Directive, which presents obstacles to developing new practices. If the goal of European labour market organisations is to increase flexibility in working life, achieving this goal will require a complete overhaul of the EU’s Working Time Directive. However, workplaces can take active and responsible measures now to influence, for example, what kinds of working time practices will be adopted to increase the flexibility of working life. The first step could be the kind of system for recording working time as described in the CJEU preliminary ruling C-55/19 , which is a good fit also for hybrid work.

   Published: 9.9.2021

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   Freedom of Contract in Demanding Construction Projects Should Not Be Limited in Legislative Reform

   There is also an active public debate surrounding the quality of building construction and climate goals. The pending reform of the Land Use and Building Act intends to enact new circular economy and sustainability goals  and attempts to address the quality issues, for example, through mandatory liability periods for various project parties. According to current information, the reform draft has mainly looked to traditional housing and infrastructure construction as well as the Finnish General Conditions for Building Contracts YSE 1998. However, many extensive and demanding construction projects, such as power plant projects, are carried out using non-traditional models. The FIDIC contract forms are one example of a model that is in widespread use internationally, and the alliance model has also increased in popularity. Will lawmakers take these non-traditional models sufficiently into account when renewing the legislation? Mandatory liability periods would be an additional legislative hurdle that should not be put in the way of extensive infrastructure and plant projects. The parties to these kinds of projects are often large international operators from a variety of countries. Taking the reform’s planned liabilities into account and incorporating them into the other levels of the contract chain could prove difficult if not impossible. At the end of the day, the cost of this risk will be paid by the owner, and there is no guarantee that the quality of building construction will improve. The same is true in investor-driven housing construction projects. Instead of enacting mandatory liability periods, lawmakers should trust agreements between professionals, which give demanding projects the freedom of action they need.

   Published: 7.9.2021

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    Building Contracts: Circular Economy and New Regulation Create New Business in the Construction Industry

    Circular Economy Thinking Guides New Regulation The goal of the circular economy is to use materials as efficiently and sustainably as possible and keep them circulating safely for as long as possible. Finland’s goal is to be a leader in the circular economy by 2025, which is reflected both in the regulation of the construction sector and in policy planning. The pending reform of the Land Use and Building Act is to include proposals for numerous provisions that promote the circular economy, such as requirements concerning the longevity of new buildings and how they can be repaired and demolished and more detailed provisions on the demolition situations. A new decree on climate assessments for buildings and guidelines supporting it are also intended to promote more sustainable and efficient building construction. The decree is related to the reform of the Land Use and Building Act and is currently being circulated for comments. The decree seeks to map the climate impacts of buildings using a method to assess the carbon footprint of buildings in such a way that carbon budgets can be set for new buildings by 2025. Naturally, EU policies also have a major impact on the circular economy of the construction sector . The Commission has set ambitious targets for promoting the circular economy within the EU.  The role of construction is touched upon in both the European Green Deal and the circular economy action plan. A separate circular economy strategy for buildings is also being worked on and is estimated to be ready in 2021 or 2022. Expect to see additional policies and potential recycling targets in the very near future. Green Deal Agreements Accelerate Development In addition to actual legislation, the construction industry has committed to voluntary measures to promote the circular economy. Last year, the Ministry of the Environment entered into two circular-economy-related Green Deal agreements with several representatives of the construction industry. In these Green Deal agreements, construction sector companies have voluntarily committed to sustainable demolition principles and to promoting the collection and reuse of plastic waste. Green Deal agreements are an excellent indicator that it is possible to pursue climate goals in good cooperation outside of traditional regulatory frameworks. The Future of the Circular Economy in the Construction Industry The growing global and national enthusiasm for coupling the construction sector to the circular economy is unlikely to abate. It is certain that the material streams used by the construction industry will come under increasing scrutiny in this decade. This will also open up space for new kinds of businesses, some of which can already be seen, for example, with respect to the use of surplus materials. It is important to keep up with the new opportunities created by the circular economy thinking. It is already possible to incorporate circular economy ideas into project development agreements and construction contracts today.

    Published: 7.9.2021