The Association of Finnish Cities and Municipalities (AFCM) welcomes the Commission’s objective to strengthen the EU’s industrial base, enhance value creation within Europe, and reduce strategic dependencies on external suppliers. These objectives also contribute to strengthening local and regional vitality, employment, and the conditions for sustainable growth. Furthermore, the promotion of cleaner industrial technologies is consistent with municipalities’ climate and sustainability objectives.
However, the proposal should better reflect the practical challenges of implementation at local level. Key concerns relate to land-use planning, permitting procedures, administrative burden, public procurement and the availability of resources. Introducing new obligations without adequate resourcing risks delaying projects rather than accelerating them.
EU should adopt a cautious approach to the creation of new digital platforms and access points linked to regulatory obligations. The Industrial Accelerator Act would create a centralised Single Access Point with specific functional requirements and links to the European Business Wallet. Recent EU initiatives — including the Industrial Accelerator Act, Cloud and AI Development Act, Chips Act 2.0, Environmental Omnibus and the Grids Package — would together require extensive national electronic portals. In practice, this would mean integrating services from multiple authorities, including municipalities, into national systems. Experience indicates that “one-stop-shop” solutions is a complex and resource-intensive undertaking, requiring careful assessment. These obligations risk generating significant additional costs and undermining existing investments in digital infrastructure. The more detailed the EU-level technical requirements, the greater the risk of duplication and inefficiencies. Finland already has multiple data repositories and digital services, particularly for permitting, making large-scale rebuilding neither efficient nor necessary.
Public procurement needs simplification, not retroactive origin requirements or higher costs (art. 11)
It should be explicitly clarified that Union origin requirements for electric vehicles in public procurement apply only to new vehicles, including in relation to public service contracts. The Regulation should not apply retroactively to vehicles already lawfully acquired, registered or placed in service in the Union, nor prevent their continued use after 31 December 2035 (Annex III, Part I). Otherwise, the rules could restrict the use of clean vehicles already purchased for public transport and other service contracts, increase administrative burden and compliance costs, reduce competition, and raise public procurement prices.
AFCM supports the objective of strengthening European electric bus manufacturing. However, implementation should take into account the current market structure and the long procurement cycles of public transport authorities. European electric bus manufacturing capacity and availability are not yet sufficient across the Union, and uncertainty remains regarding the effects of the proposed regulation and the residual value of existing fleets. A sufficiently long transition period for new electric bus procurement is therefore needed to avoid supply shortages, reduced competition and increased procurement costs for public transport authorities.
AFCM questions the assumption in Article 11(3)(c) that local authorities should accept prices for products of European origin that are up to 25% higher. This concerns very substantial sums at a time of severe fiscal constraints. For example, given municipalities’ annual procurement volume of approximately EUR 10 billion, the financial impact could be significant. Case law under EU competition law considers a price difference of 5–10% to be indicative of product differentiation (the so-called SSNIP test). The proposed 25% margin departs substantially from this benchmark and poses a significant risk to public finances.
As a matter of principle, AFCM considers that the EU should refrain from regulating Member States’ spatial planning. The EU is not considered to have the competence to regulate spatial planning under the ordinary legislative procedure (Article 192(2) TFEU). Spatial planning is a core expression of local democracy and municipal self-government. It is closely linked to land policy and land ownership, and municipalities have broad powers to determine whether planning is required and to prepare and adopt plans. As directly elected local representatives, municipal decision-makers are best placed to balance competing interests and determine appropriate land-use solutions in light of local conditions. Spatial planning and permitting are distinct processes. However, permitting rules may in practice interfere with spatial planning. Competence limits cannot be circumvented through the harmonisation of permitting procedures: regulation that effectively directs planning discretion interferes with municipal competences regardless of its formal characterisation. EU legislation must therefore ensure that permitting rules do not de facto interfere with spatial planning.
The streamlining of procedures is acceptable only provided that it does not encroach upon land-use planning (art. 25 and 27)
AFCM notes that Articles 25 and 27 would interfere with the competence of the Member States and spatial planning powers of local government by requiring the designation of physical areas and the approval of a baseline permit for activities located within them. AFCM considers this highly problematic. Compliance with this obligation — also subject to a 12-month deadline — would in practice require a planning procedure, since projects listed in Annex I generally require a legally binding land-use plan. The proposed regulation can only be considered acceptable if it does not interfere with land-use planning or restrict the nationally organised system of spatial planning and municipal decision-making in practice. Due regard must therefore be given to distribution of competences and it must be ensured that the Union’s competences are exercised in accordance with the principles of subsidiarity and proportionality laid down in the Treaties.
The nature and practical implementation of the baseline permit are difficult to envisage, since environmental, water management, building and other permits cannot properly be granted in the absence of a specific project and sufficient information about its impacts.
AFCM considers that the “polluter pays” principle must cover the costs of public supervision and the administrative procedures required for environmentally harmful activities. Those costs must remain with the operator. The proposed Industrial Accelerator Act would depart from the fundamental principle that operators bear the costs of the environmental assessments and administrative approvals, including permits, required for their activities. A system under which so called baseline permits are effectively granted ex officio by public authorities would shift the costs of economic activity from operators to the public — and, in particular, to the residents of the municipalities where the activity is located. Such an outcome cannot be regarded as acceptable. Such regulation is particularly inappropriate at EU level, where individual Member States have limited ability to influence the outcome.
AFCM adopts a critical stance towards regulatory solutions whereby crucial procedural rules are included into so-called “toolbox regulation” proposed in the Regulation on Speeding Up Environmental Assessments and subsequently activated through other legislative instruments. Such a structure may undermine the clarity of the legal framework, particularly where the referenced provisions have not yet been adopted or may later be amended. The regulatory framework should, where necessary, be implemented using more transparent legislative drafting techniques, so that the relevant provisions are incorporated into each instrument concerned on a case‑by‑case basis, rather than being effected through cross‑referencing provisions in other instruments. In any event, particular caution should be exercised in extending the scope of tacit approval, as the procedure is ill‑suited to complex environmental and permitting processes involving the rights of third parties and considerations of public interest. Such procedures require an express decision that is based on an actual substantive assessment by the competent authority.
ASSOCIATION OF FINNISH CITIES AND MUNICIPALITIES
Jose Valanta
Director of Customer Relations
Pauliina Jalonen
Adviser
