Energy lawyers are truly at the centre of action. Europe’s energy shock, set off by the war in Ukraine, flung energy markets to the centre of the attention of citizens, policymakers and the media. At the same time, the global climate crisis is calling for an urgent transformation of the energy system all over the world. Nora Steiner-Forsberg, General Counsel and member of the Executive Management team at the Nordic energy company Fortum, and Partner Samuli Tarkiainen from our Energy service discussed the energy transition in the Nordic countries and the role of lawyers.
16.2.2023
The Nordic energy transition goes on despite the energy shock
Samuli Tarkiainen
Related services
‘The energy transition is the best solution to the current crisis. It is a way to reduce our carbon footprint and the dependency of Europe on the import of fossil fuels,’ says Nora.
The Nordic energy system has shown resilience to the energy shock, thanks to favourable natural conditions, a balanced mix of energy sources and good transfer connections between the countries. Power production in the Nordics has been almost fully decarbonised, with hydro and nuclear as the backbone and wind power growing fast.
What’s more, decarbonisation is well on its way in heating. District heating, which is the dominant technology, is undergoing a fuel switch from fossil fuels to forest biomass and recovered waste heat streams.
However, for entire societies to become carbon neutral, industry and transport need to be decarbonised as well. This will require even more emissions-free power and fuels. New capacity must be accompanied by modifications to the market model. Smart regulation can help bring these changes about.
‘You need to have different layers of regulation,’ Nora says. Right now, we are in the middle of the energy shock, and lawmakers must respond. Governments are intervening in the energy markets to cut power bills, and energy companies are bringing back coal power plants to secure the supply of energy.
Despite this setback, European regulators must not be diverted from the path towards carbon neutrality. In the medium and long term, it requires not only building more renewable capacity but also investing in power grids, developing the import infrastructure and transforming the demand side of the energy market.
In regulation, the USA is ahead of the pack with the Inflation Reduction Act. European lawmakers should also grasp the moment to transform the energy system.
‘I hope that the EU can manage the classifications in hydrogen so that we can really be in par with the US, because there will be a lot of competition,’ Samuli says.
Energy lawyers can play their part in shaping regulation. Firstly, lawyers can spread knowledge on the types of rules that would work best for the energy transition. Secondly, lawyers put the rules to practice and impact the efficiency of the regulatory system. Finally, since the energy transition must happen quickly, Nora stresses the importance of cooperation:
‘It is really important to keep good contact with your stakeholders, whether it is regulators, municipalities or other stakeholders. This will make processes faster and smoother. Of course, you need to be able to earn trust first, with accountability, transparency and working together to achieve the joint goals.’
Listen to Nora and Samuli’s talk on Legal500’s Global Green Hub for views on facilitating the energy transition with regulation and the elements of a balanced decarbonised energy system for Finland.
Latest news
Latest references
WithSecure – Sale of open source data collection product and business
We advised WithSecure Oyj in the sale of its open source data collection product and business to Patria Oyj. The divested business combining software and services falls outside WithSecure’s current strategy. Through the sale, WithSecure sharpens its focus on the Elements portfolio. WithSecure is a global cyber security company (listed on NASDAQ OMX Helsinki) with more than 35 years of industry experience. WithSecure offers partners flexible commercial models, ensuring mutual success across the dynamic cyber security landscape. Patria is an international company in the defence and security industry offering defence, security and aviation life cycle support services and technology solutions. As a result of the transaction, Patria will open a new office in Oulu and 10 WithSecure experts currently working in the business area will join Patria.
Case published 30.9.2024
A. Ahlström – ESG advisory and corporate sustainability due diligence process planning
We advised A. Ahlström in establishing a corporate sustainability due diligence process plan which incorporates best practices and tailored solutions based on our expertise within relevant business sectors. Our comprehensive ESG offering also included tailored training for members of the investment team and management team and the board of directors of several portfolio companies. ‘The ESG team at Castrén & Snellman provided us with legal and practical advice around the ESG regulatory tsunami that we need to incorporate in our ESG work,’ comments Camilla Sågbom, Director, Sustainability and Communications, at A. Ahlström Oy. A. Ahlström is a family-owned industrial company, developing leading global specialist positions in Forest & Fiber and Environmental technology sectors.
Case published 5.9.2024
Vapaus Bikes Finland – Series A funding round
We represented Vapaus Bikes Finland Oy, a company offering employee benefit bikes, in its international EUR 10 million Series A funding round. The investors behind the funding are private equity investors Shift4Good and Superhero Capital Ltd as well as Tesi together with the European Guarantee Fund of the European Investment Bank. The equity-based funding will support the company’s international expansion, software development, platform automation, and the growth of its concept for the second-hand market of bikes. Vapaus Bikes Finland is at the forefront of sustainable mobility services and has been a pioneer in the Employee Benefit Bikes sector since late 2020. It has been ranked among Finland’s fastest growing companies. Shift4Good is an impact venture capital fund focused on the decarbonisation of the transportation sector. Tesi (officially Finnish Industry Investment Ltd) is a state-owned, market-driven investment company that invests in venture capital and private equity funds and directly in Finnish startups and growth companies.
Case published 21.8.2024
City of Rovaniemi – Former employees ordered to pay damages in an investment decision matter
We successfully acted for the City of Rovaniemi in a matter concerning offence in public office and damages claims in relation to a significant investment decision made by the city. The defendants were the city’s former municipal corporate officer, who was in an employment relationship, and a city treasurer, who was in a public-service employment relationship and acted as the supervisor of the municipal corporate officer. The criminal matter related to the City Board’s decision to invest EUR 2 million of the city’s funds in bonds offered by a newly established investment company in accordance with a decision prepared by the defendants. A significant part of the company’s operations involved quick loan business. The main legal question in the matter was whether the investment of public funds constitutes an exercise of public authority and whether regulation on offences in public office therefore becomes applicable even to a person in an employment relationship. The municipal corporate officer in an employment relationship was charged with aggravated abuse of public office based on her negligence in the preparation and presentation of the investment decision as well as based on a conflict of interest due to the fact that she had invested her own money in a company that received funding from the investment target presented to the City Board. The charges of an offence in public office against the city treasurer concerned his position as the supervisor and reporter of the city’s investment activities. He was also involved in the preparation and presentation of the City Board’s decision. The processing of the matter started in the District Court of Lapland in June 2022. In its judgment given in August 2022, the District Court stated, based among other things on our argumentation, that the investment of public funds constitutes an exercise of public authority and that regulation on offences in public office can therefore be applied to the municipal corporate officer. The District Court deemed that the conduct of the former municipal corporate officer fulfils the characteristics of abuse of public office and that the conduct of the former city treasurer fulfils the characteristics of violation of official duty with respect to the preparation of the investment decision, but the right to bring charges had become time-barred. Punishments could therefore not be imposed on the defendants, but the defendants were ordered to jointly and severally pay the city approximately EUR 114,000 in damages plus interest for late payment. The city treasurer’s share of the amount was 10%. The prosecutor accepted the judgment but the other parties appealed it to the Court of Appeal. Acting for the city, we pursued claims for both punishment and damages in the Court of Appeal. The Rovaniemi Court of Appeal processed the matter in November and December 2023. In its judgment given in June 2024, the Court of Appeal upheld the District Court’s judgment with respect to the abuse of public office and violation of official duty. The Court of Appeal deemed that the municipal corporate officer had failed in her duty to declare the conflict of interest. In addition, she had failed in her duty to ensure that the prepared decision was in compliance with the city’s investment guidelines and that it had been properly put out to tender. The Court of Appeal also found that the text of the investment proposal was insufficient and misleading and that the municipal corporate officer’s conduct was intentional. As regards the city treasurer, the Court of Appeal held that he had failed in his duty to ensure that the investment proposal to the City Board complied with the investment guidelines, that the presentation was not misleading and that risks were taken into account as required by the investment guidelines. With the judgement, the Court of Appeal took a clear position that abuse in public offices and when exercising public authority is not acceptable. The judgment is also significant as it declares that investing public funds constitutes an exercise of public authority and that the liability for acts in office therefore becomes applicable even to persons in employment relationships. In addition, a key question for the Court of Appeal to assess was defining the amount of economic damage in a matter related to investment activities. The Court of Appeal held based on our arguments that the conduct of the municipal corporate officer and the city treasurer had caused damage to the city. The Court of Appeal increased the amount of damages to EUR 210,000 with the city treasurer’s share limited to 10%. The amount was increased because the Court of Appeal deemed that the city had suffered damage not only in terms of the loss of capital but also in terms of the loss of estimated return on investment. The judgement is not final.
Case published 21.8.2024