EDITORIAL
Hydrogengreeting!
While we wait for the first snow, this autumn, as the weather gets colder, this situation can also be compared to some extent with the development of the hydrocarbon economy. The fact that investment is not yet basking in the headlines does not mean that the green transition has been cancelled. Winter and snow will soon be here and so will investment in the hydrogen economy.
While we wait for the first snow, this autumn, as the weather gets colder, this situation can also be compared to some extent with the development of the hydrocarbon economy. The fact that investment is not yet basking in the headlines does not mean that the green transition has been cancelled. Winter and snow are coming soon and so will investment in the hydrogen economy.
The articles in the newsletter look at Finland as an investment destination through a variety of different lenses. The situation is certainly not stuck or hopeless, but our country has chips well on the table in international markets. The strengths on which green transition projects can move forward are our country's low electricity prices and biogenic carbon dioxide reserves. In addition to these, there are many other factors that should be taken into account, but the market for these products has not grown as fast as previously expected. Patience and faith are therefore required, especially from investors.
There is much more to the green transition and hydrogen economy value chain than just hundreds of millions of euros in plant projects. The members of the Finnish Hydrogen Valley include a comprehensive group of companies from many different industries that experience and, above all, believe that they will also succeed in finding new business and growth in the new hydrogen economy boom. We hope that this same message will increasingly permeate both the business and public sectors. If and when the hydrogen economy investment gets off the ground, it will have a major impact not only on the success of businesses but also on local economies and, by extension, on people's well-being.
We strive to provide our members with a service that contributes to the success of each actor, individually and collectively. It's worth reading the experts' views in this letter, which contains lots of good advice for your journey.
For the past couple of years, the shift in goalposts has certainly been a source of concern for many, as there are more questions than exclamation marks in the air. There are still too many unresolved dilemmas that mean the market for clean synthetic fuels is still expected to grow rapidly. But this momentum should not be lost in Finland, especially in the East.
Boosting investment, especially in eastern Finland, is Vetylaakso's most important task. Our recently updated strategy continues to get to the heart of this and its objectives are aimed at tackling the main factors holding back investment. That is why you will also read more and more about the ResilEast programme. We have also just joined the European Hydrogen network to further improve our own and our members' knowledge and networking opportunities. More about all of these in this newsletter.
Even though 2025 is coming to an end, things will not slow down at all. Our activities will continue to be seen and heard in the markets and the media. Lobbying is a matter close to our hearts. Contact us if you need a vision, support, or even just a bad joke.
Jami Holtari, Managing Director, Finnish Hydrogen Valley Association
Markku Kivistö:
Finland is the most competitive country in Europe for clean energy investment
According to Markku Kivistö of Business Finland, hydrogen and its derivatives are the cornerstone of future industry
Finland has an exceptionally strong position in the European energy scene. According to Markku Kivistö, Business Finland's Invest in Director, Finland is even the most competitive destination for clean energy investments in Europe.
- This is no coincidence. Finland's energy system has been built over the long term and in a multifaceted way. We have no fossil fuels of our own, so we have naturally developed clean solutions. In addition, a strong grid and a modern electricity market create a good basis for industry, including the hydrogen economy," says Kivistö.
Kivistö points out that the hydrogen economy does not develop overnight. We are now talking about the emergence of a whole industry. It requires planning, infrastructure, investment and, above all, demand. The hydrogen economy will generate new innovations in Finland; new technology exports. At the same time, there is a question of a substitution market, whereby the current fossil fuel-based industry is being replaced by cleaner alternatives.
- Such structures and their transformation are not created in a few years, but take decades of work.
He stresses that the main bottleneck in the hydrogen economy is the competitive price as a substitute for fossil fuels and the unclear regulation of the market. The product must be competitive with fossil alternatives, or regulation must create incentives for clean solutions. According to Kivistö, competitiveness is also undermined by how green or clean hydrogen can be produced.
About 70% of the cost of producing hydrogen comes from the price of electricity. This is where Finland is strong.
- We have some of the lowest electricity prices in Europe and a highly reliable electricity grid. This gives Finland an advantage when industry is looking for places to invest," says Kivistö.
Winning products: aviation fuel and methanol
If you ask Kivistö which applications of hydrogen he believes in most, the answer is aviation and industry.
- Synthetic aviation fuel, or e-SAF, is currently the most promising area. It is supported by regulation, and airlines have already set up their own funds to secure production. Methanol also has a lot of potential, as it has many uses.
In the near future, the direction of the hydrogen economy will largely depend on German demand. Germany is the engine of the hydrogen market in Europe as a whole. It will determine how fast regulation proceeds and how much demand is created.
- Finland can play an important role at the European level - but on a global scale, we need to focus on our own strengths," says Kivistö.
Hydrogen derivatives are building the industry of the future
Kivistö is cautiously optimistic about the forest industry's potential to use biogenic carbon dioxide.
- The ideas are there, but the business logic still needs to evolve. Investments need to be large, markets need to be clear and buyers need to be long-term. If these are right, CO₂ from the forest industry can become a valuable raw material for synthetic fuels, for example.
According to Kivistö, hydrogen and its derivatives will form an essential part of the industry of the future. In transport, the role of hydrogen varies between different modes of transport.
- Hydrogen is a raw material for industry, but also an energy carrier. It is used in fertilisers and heavy transport. Hydrogen is no longer a marginal phenomenon, but an essential part of the fight against climate change.
Mr Kivistö would like to thank the regions and actors who are building Finland's future.
- There are hundreds, if not thousands, of people in Finland who work on this every day. We have the will, the know-how and the networks in place. Finland's Hydrogen Valley is an excellent example of how regional cooperation can deliver results.
Finland is an undervalued investment destination
Italian venture capitalist Stefano Ferrari sees Finland as an emerging centre for deep tech and climate technology
Italian venture capitalist Stefano Ferrari believes that Finland is one of Europe's most undervalued yet promising destinations for investors looking for genuine technological know-how and industrial depth.
Ferrari works for Algebris Investments, focusing on deep technology and climate technology. With a PhD in physics and extensive experience investing in cleantech companies across Europe, he looks across the continent for new investment opportunities. Increasingly, he is looking north to Finland.
Algebra Ventures focuses on deep technology and industrial IP
According to Ferrari, Algebra Ventures was founded on the idea that Europe's competitive advantage lies not in consumer technology, but in scientific research and hardware-based innovation.
- Most B2C start-ups come from the US, but Europe has an exceptionally strong ecosystem for device-based deep tech solutions. Where there are laboratories, research institutes and industrial heritage, there is long-term value creation," says Ferrari.
Algebris Investments typically invests €3-5 million in Series A funding rounds. According to Stefano, the fund's strategy focuses on climate and industrial technology, energy and mobility innovation, and automation.
- We're not just looking for software - we're looking for something tangible, physical, with real intangible property (IP) and a long-term competitive advantage," he stresses.
An interesting and under-researched market
According to Ferrari, Finland is a fascinating and still underestimated field for European investors. He highlights three main reasons.
1. A strong research base and public support
- Finland has an exceptionally well-functioning system for supporting research-based start-ups. Business Finland, EU funds and universities work together pragmatically and with minimal bureaucracy.
2. High technical skills and manufacturing culture
- Both Finland and Italy have a common tradition: people can build things, not just design them. This is exactly the kind of skills that deep tech investors value.
3. Openness to international investors
- Finland is incredibly open to outside capital and cooperation. In many Central European countries, ecosystems are closed. In Finland, people have been welcome from the beginning.
Ferrari also finds Finland's geopolitical location interesting.
- Proximity to Russia does not scare investors - quite the opposite. It makes Finland a strategic base for energy, defence and materials technologies.
Opportunities and challenges
Ferrari acknowledges that Finland's small domestic market is both a strength and a limitation.
- It's a great place to build technology, but not always the best place to test it on a large scale. Many Finnish start-ups have to go international early. This is both a blessing and a risk.
Another structural challenge is the limited volume of venture capital investment.
- There are only a few medium-sized VC funds and not enough growth-stage funding. Many promising start-ups are bought too early - before their true value has matured.
On the other hand, this also creates opportunities for international investors.
- With little competition, Finland still offers underpriced skills and intangible assets - high quality that has not yet been priced to its full value.
Hydrogen is a niche economy
Ferrari was also asked for his views on hydrogen investment. He answered directly.
- There is a place for hydrogen, but only in certain niche areas. The energy consumption of electrolysis is huge, and the return on investment is still limited.
Ferrari sees potential in two main areas. These are heavy transport, where electrification is difficult or impractical. The second is waste gasification processes, where hydrogen can be produced economically while reducing emissions.
- I haven't invested in any hydrogen start-ups yet, so that tells you something," adds Ferrari.
Cooperation with industry
Ferrari stresses that Finnish startups should stay close to industry and build genuine partnerships with large companies.
- Laboratory innovation alone is not enough. You need an industrial partner that can scale up production and commercialise the solution globally. In Finland, this collaboration often happens more naturally than elsewhere.
He cites several industries where Finland has a clear advantage; energy, mining and automation, and praises companies such as Metso, Valmet, Wärtsilä and Neste as strong industrial platforms for new innovations.
Ferrari offers three pieces of advice for Finnish founders:
1. Build a balanced team.
- We are looking for people who complement each other - technical founders, commercial thinkers and networkers.
2. Demonstrate market potential.
- Show that your solution is relevant outside Finland - can it be extended to Central Europe, the US or Asia?
3. Protect your intangible assets and data.
- Technological defensibility is your safety net. Without it, a startup is just an idea.
At the end of the interview, Ferrari sums up his views.
- Finland is a small country, but it has a big soul. If start-ups continue to work with research institutions, industry and international investors, this country could become Europe's next deep tech success story.
- If Finland were a stock, I would buy it," smiles Ferrari.
VIEW
Pia Erkinheimo, Corporate Social Responsibility Director, Nordic Nano
Also, the Atlantic fireplace is money
At the Future Energy Solutions event in Lappeenranta in September, Nordic Nano's Pia Erkinheimo said on stage: "There is money behind the Atlantic. In the interview, we set out to unpack this idea: where do the most potential investors come from, how is Finland perceived internationally and is eastern Finland of particular importance in the eyes of investors?
Nordic Nano develops environmentally friendly nanotechnology solutions for solar energy, energy storage and hydrogen production. Pia Erkinheimo is the company's Corporate Affairs and Sustainability Manager.
- I have noticed an interesting development: US investors who are putting their money into the energy revolution are now looking to Europe and the Nordic countries, including Finland, with an open mind. I have also been contacted in this way," says Erkinheimo.
In the big picture, Finland is seen as a country with high-tech expertise and the credibility that comes with NATO membership.
- The Finns themselves may not have thought that we had taken particular care of our defence capabilities or resilience.
Geopolitics has not surfaced in US debates. According to Erkinheimo, they often look at Europe as a whole, rather than at such a "granular level".
The range of the drone does not scare
In Europe, investors recognise that there is support money for the green transition, both at national and EU level. According to Erkinheimo, the aim of the policy is to reduce dependence on China and build the continent's own sovereignty over its production chains.
- Security of supply and self-sufficiency are emphasised. In the same context, the interests of the defence industry are also at stake. There is interest in Nordic Nano because we are looking for partners and subcontractors in the EU and its allies. When you tell a European investor that you can get from Helsinki to Imatra by train in two and a half hours and by car in three, they don't think it's far. If the investor has ever been to Helsinki, the journey to Imatra does not seem like a barrier.
An example of a major investment in eastern Finland is Solar Foods, which decided to locate its plant in Lappeenranta.
When competition for funding is fierce, communication matters too
When it comes to Finnish companies, Erkinheimo sees a clear development in investor communications, for example.
- Written materials have come a long way. They show a clear quality and international standard. But when a company takes to the stage to pitch, the skills are not always as polished. Good presentation material, i.e. a deck, alone is not enough if the performance does not pay off.
He points out that with every new technology, the investor has a lot to learn.
- So the company has to be patient, because the investor wants to understand the technology, which is often very new. In addition to the maturity of the technology, the investor will assess many other things: the size of the market, the competitive situation, the sales strategy, the regulatory environment and, of course, whether there is a team here that can take the product or service to market and win the trust of customers. Arrogance on both sides does no one any good.
An interesting observation was made by a US investor who said: 'If a climate technology company's website is too polished, then maybe they've put their money where their mouth is. However, Erkinheimo stresses that this does not mean that it is not worth investing in the visual appearance, but the balance is important. Erkinheimo describes pitching as a sporting performance.
- A five-minute performance can be shockingly difficult. I've had them myself, and it's both exciting and terrifying. Maybe once a year every investor should pitch their portfolio companies to their fellow investors to remind themselves what it's like," he laughs.
Advice for project developers: find the right investor
Erkinheimo wants to give concrete advice to Finnish operators. When a company is looking for external investors, it is important to consider its ownership strategy: whether the company is best suited to an industrial partner (corporate venture capital) or a private equity investor or perhaps a family office. The scaling of plant and equipment investments is the most challenging, but there are also specialist investors who understand hardware scaling.
It is also important to check the background of investors.
- In today's global environment, you have to look carefully at who is behind the investment community. Geopolitics matters. Patience, dialogue and the right partners are what Finnish climate technology companies need to attract capital from across the Atlantic," Erkinheimo sums up.
MEMBERS PRESENTED: Neoen
Gotta forge when the iron is hot
According to Miika Pillin, Project Development Director at Neoen, the energy future of eastern Finland will come from cooperation and bold decisions
Neoen has quickly become one of the leading players in the Finnish renewable energy field. The French-based company, now owned by Brookfield, Canada, is the world's largest independent producer of renewable energy. In Finland, the company is already the market leader in wind power and the market leader in battery projects.
Neoen started in Finland in 2018 and Finland is the company's third largest market, just after Australia and France. Lappeenranta is an important base for Neoen, with two batteries in operation in Ylikkälä.
Project Development Director Miika Pilli leads Neoen's Finland team, which is responsible for all wind, solar and battery projects in the country. Pilli is passionate about regional development, energy networks and especially the opportunities in eastern Finland.
- Eastern Finland needs investment and a better grid. No one can succeed alone - cooperation is essential.
Wind power generation change and a blank spot on the map
Pilli remembers well the years when the Muuko wind farm in Lappeenranta was new and wonderful.
- In 2013, the 95-metre-high tower felt big. Now we are building 200-300 metre power plants that will generate three times that amount of electricity.
Technological leaps in wind power have made investments more efficient and enabled production inland.
- Wind conditions and higher towers now make it possible to build wind power virtually anywhere in Finland, not just on the west coast.
When Pilli looks at the map, eastern Finland and Lapland are blank spots. Wind power has not been able to be built because of Defence Forces restrictions, and the sun is concentrated in the south. This imbalance needs to be broken, he says, which is why Finland's Hydrogen Valley has a crucial role to play.
- The Hydrogen Valley is doing essential work. If we do not talk about the potential of eastern Finland, nothing will change. Now the geopolitical window is open; we must strike while the iron is hot.
The core network - Finland's pride and joy
Pilli describes Finland's electricity network as almost perfect.
- Fingrid's network is world-class: reliable, open and market-based. This is not a given in the rest of Europe.
Increasing production volumes require continuous improvement. More capacity is needed all the time. The eternal chicken-and-egg phenomenon can be solved, says Pill.
The paradox of the electricity market
The fall in electricity prices is good news for consumers, but a challenge for producers. All costs are rising, but the market price is low. This makes it more difficult to finance new projects.
This is why PPAs are even more important. They bring predictability to both producers and industry:
- When the price is stable, investment decisions are easier to make. It's a win-win situation for everyone.
Fingrid estimates that electricity consumption in Finland could even double in the next 10 years.
- More consumption means more demand and more investment in wind, solar and battery projects, Pilli envisages.
Finland's Hydrogen Valley is doing essential work
Neoen does not develop hydrogen technology itself, but actively follows the field and participates in collaborative projects. According to Pill, the hydrogen economy is of particular interest from the point of view of electricity consumption.
- Finland needs big consumer investments, such as hydrogen plants and data centres, to keep the market in balance. All players on the hydrogen side want electricity produced from renewable energy, and we are a natural partner in this.
Pill's message to the region is clear. Courage, cooperation and a voice are needed. Keeping quiet will not change anything.
He praises the communication and networking work of the Valley of Hydrogen in Finland
- We are happy to be involved. When you get one investment going, you create a virtuous circle that feeds on itself.
Neoen's Finnish organisation employs around 30 people and already has a development portfolio of 10 gigawatts of projects.
- The growth curve is steep. We want to build a renewable energy ecosystem in Finland that supports the growth of the hydrogen economy and industry. Cooperation with Hydrogen Valley Finland is natural and important to us. Hydrogen Valley Finland is doing essential work. If we don't talk about the potential of eastern Finland, nothing will change," says Miika Pilli.
NEWS FROM US AND THE WORLD
ResilEast preparations are progressing - visibility is increasing and partnerships are being forged
The preparation of the ResilEast programme has entered a new phase. After the seed phase, work has now moved on to the preparation of the actual project, with Business Joensuu acting as coordinator.
The ResilEast programme aims to combine Finland's energy supply and national defence in a way that creates jobs and grows the economy of the whole country, strengthens the country's crisis resilience and security in times of peace, hybrid influence and war, and addresses the challenges of climate change.
Business Joensuu will be responsible for coordinating the whole project and submitting the funding application once the plan is ready. The aim is to have the project ready for submission to the financiers in November. The budget is based on a three-year, €3 million package.
ResilEast is first and foremost a programme of cooperation. Its success depends on the commitment of the armed forces, the regions and other key actors, as well as adequate funding.
- The aim is to build a strong, cross-border spirit of cooperation between the operators in eastern Finland," says Tomi Haring, Managing Director of Business Joensuu, which coordinates the project.
Cooperation expands and national visibility increases
In recent weeks, preparations for ResilEast have gathered momentum both regionally and nationally.
- Perhaps the biggest change is that the programme now has a completely different level of national visibility," says Haring.
One of the major forums for ResilEast was the Eastern Finland Energy Forum, which brought together hydrogen and energy stakeholders from across Finland. The closing panel, organised by the Finnish Hydrogen Valley Association and moderated by Jami Holtar, was highly appreciated by the participants.
- The feedback was very positive and widespread. It's great to see different regions working together and building a common understanding of the potential of the hydrogen economy," says Haring.
Sitra involved and the programme in the media headlines
Haring says that Sitra is strengthening its role as a partner in the programme. Two events have been agreed with Sitra, the first of which will take place later this year and the second early next year.
The events bring together companies, representatives of the Defence Forces, influencers and experts. They aim to increase common understanding and build new perspectives on the ResilEast programme content.
Sitra's involvement brings credibility and national weight.
The funding base for ResilEast is also being explored through the Eastern Finland programme. According to Haring, interest in ResilEast is now stronger than ever.
- There is no lack of interest, quite the opposite. Fingrid has been very interested in the whole, and their involvement is an excellent sign. Now there is more suction than pushing. This is a positive situation; many players want to be involved in building a new and vibrant Finland.
Numerous national media, most recently Yle and Iltalehti, have reported on the programme, but interest in local newspapers is even more moderate.
- I think the local media are still waiting for concrete decisions and regional impacts before they start to cover the issue more widely," Haring says.
Finland's Hydrogen Valley sharpened its strategy
During the summer and autumn, Finland's Hydrogen Valley updated its strategy. The strategy gives a clear direction to our work for the next five years. Of course, in a constantly evolving industry, the strategy needs to adapt quickly to changes in the operating environment.
Our activities aim to remove barriers to wind power, increase the capacity of the electricity grid, exploit biogenic carbon dioxide and promote the ResiEast programme.
Thanks to all those who participated in the strategy work and to Saara Raudasoja, who was responsible for leading the strategy work.
Hydrogen Valley Association of Finland joins Hydrogen Europe
Hydrogen Europe is the European umbrella organisation for the hydrogen economy, operating worldwide. The organisation aims to:
- Enabling the deployment of clean hydrogen as an abundant and affordable energy carrier and raw material that will effectively accelerate Europe's transition to a net zero energy economy,
- bring together a wide range of actors - large and medium-sized companies, national hydrogen associations, NGOs, regional authorities and other organisations - to support the deployment of clean hydrogen and fuel cell technologies,
- promote national, European and international policies and initiatives that strengthen the market position of European hydrogen technologies at home and worldwide,
- promote and coordinate research, development and innovation in reliable, clean hydrogen technologies,
- act as a reliable and united voice for the European hydrogen sector through the joint efforts of its members at European level;
- be a driving force for the future development of the hydrogen economy, creating sustainable jobs and growth.
Hydrogen Europe has over 600 members around the world. Read more about Hydrogen Europe.
Fingrid's Electricity System Vision Final Report 2025
Fingrid has published its electricity system vision. For eastern Finland, the vision of "From Hydro to Mainstream" means, among other things:
Wind and solar power in Eastern Finland will require significant investment from Kemijärvi all the way to Lappeenranta to connect new wind and solar power to the grid. This connection will also feed new consumption in Kymenlaakso and South Karelia and the rest of Southern Finland. As the scenario involves new generation in both eastern and western Finland, there is also a need for east-west connections.
Read more about the full electricity system vision and the impact of investment location starting on page 50.
Gasgrid: towards a national hydrogen infrastructure
Gasgrid is exploring options for the alignment of national hydrogen infrastructure and hydrogen transport needs in Finland and the Baltic Sea region. The purpose of the hydrogen market study is to assess the interest of industry to connect to the hydrogen infrastructure in the future and to evaluate the development of projects by industrial operators in relation to infrastructure development needs.
The hydrogen market survey is open to all industrial operators and project developers in the hydrogen market. The survey asks operators to provide information on the location of potential hydrogen projects, their hydrogen transport and storage needs and their development timeline.
The study will allow the hydrogen infrastructure to be developed to meet the needs of operators, and Gasgrid can contribute to helping Finnish industrial operators to exploit renewable energy and create new innovative solutions.
You can access the hydrogen market survey here.
Answer the survey!
The hydrogen economy and P2X technologies are rapidly developing areas that open up significant business opportunities for different industries. We are now identifying the skills and RDI support that businesses need to exploit the full potential of these developments.
By answering this short questionnaire, you can influence how training, skills development and cooperation are geared to the needs of businesses. This is an opportunity to put your views forward - and to ensure that future developments support your business growth and competitiveness.
It will only take a moment to respond. Thank you for your participation!
You can reply here from the link.
UPCOMING EVENTS
Come to the Technology 25 event on 4-6 November at Messukeskus and meet us at the Finnish Hydrogen Valley Association stand Business South Karelia, stand 7g150. We will be at the fair for three days!
The leading technology and industry event in the Nordic Region showcases the latest technologies for smart and sustainable industry.
Register at here.
Hydrogen Valley Finland will participate in the Hydrogen Summit in Tampere on 14-15 January. We have booked a stand with 10 of our members. Send a message to Jami or Tommi and we will tell you more!
Join us now!
The Finnish Hydrogen Valley Association provides its members with interesting and up-to-date information on the opportunities offered by the hydrogen economy and renewable energy. We are your organisation's voice in the industry and make sure that the issues that are important to you are brought to the attention of decision-makers. We network actively, meet energy industry leaders on a regular basis and get the latest information on industry developments for your benefit.
We will provide you with regular briefings on industry developments, company visits, a newsletter six times a year, media coverage on topics that are important to you, visibility on social media channels and we will be your organisation's communications support to get your message across to your stakeholders. Looking after your interests is our job.
Join our growing team here or call Jami Holtari 040 055 1435 or Tommi Siikaniva 0400 885 747 and we'll tell you more.
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Green hydrogen and carbon dioxide to power South-East Finland is an ERDF-funded group project in the Renewable and Competent Finland 2021-2027 programme. The main implementer is LUT University, where the Finnish Hydrogen Valley Association is one of the co-implementers.
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