Part of Oil Security Toolkit
IEA (2020), Finland's legislation on oil security, IEA, Paris https://www.iea.org/articles/finland-s-legislation-on-oil-security
The Finish legislative response to oil supply disruptions relies on a multiplicity of primary and secondary legislative measures. While the consolidated versions of the 1994 Act on the Compulsory Stockholding of Imported Fuels (1994/1070) (SIF) and the 1992 Act on Safeguarding Security of Supply (1992/1390) (SSS) provide the framework, more detailed guidance is contained in the 1994 Regulation on Mandatory Storage of Imported Fuels (1994/1071) (MSIF), the 2008 Government Decree on the Emergency Supply Agency (2008/455) (DESA) and the 2013 Government Decision on Security of Supply Objectives (2013/857) (DESO).
The provisions of the Finnish oil supply emergency regime are triggered when supply disruptions threaten to detrimentally affect the production or commercial activities related to crude oil or fuel products (article 16 SIF). The Finnish emergency provisions may also be triggered if Finnish international obligations require Finland to release emergency stocks (article 16 SIF).
With respect to supply disruptions affecting Finnish production or commercial activities related to crude oil of fuel products, it is the Finnish Council of State that authorises the National Emergency Supply Agency (NESA) to release emergency stocks (article 16 SIF).
With respect to stock releases in accordance with Finnish international obligations, it is the Finnish Ministry of Employment and the Economy that may grant a permit for releasing emergency stocks (article 16 SIF).
Responsibility of obligation is shared in two parts. Both government and industrial sector are obligated to store crude oil and petroleum products.
Articles 2(2-3) SIF create the obligation to create and to maintain emergency stocks of crude oil and fuel products. Finland meets its stockholding obligation by imposing a mandatory stockholding requirement on importers of crude oil and of fuel products (article 7 SIF), who may delegate at least parts of their stockholding obligation (article 19 SIF) to storage facilities within the European Union (article 12(a)(1) MSIF) or other economic operators within Finland (article 12(a)(3) MSIF). Alongside these commercial stocks, Finland also created and maintains government stocks (article 3 SSS).
The Finnish Ministry of Employment and Economy coordinates the development of emergency plans and strategies (article 4 SSS) which are drawn up by each national ministry with respect to their respective spheres of competence.
There is the Finnish NESA (article 5 SSS, see also article 1 DESA), which is supervised by the Ministry of Employment and the Economy and that manages public-private cooperation in the field of emergency preparedness (article 6(1) SSS), ensures that all technical emergency systems are functioning (article 6(2) SSS), manages emergency stocks (article 6(4) SSS) and creates such emergency stocks to ensure that Finland is protected against supply disruptions and that Finland meets its international obligations (article 6(5) SSS).
According to article 8 SIF, importers shall store quantities of crude oil or of fuel products corresponding to two months of average net imports in the previous year. The NESA is in turn obliged to store such quantities of emergency stocks that domestic demand for crude oil and fuel products can be satisfied for an average of five months in case of supply disruptions (article 3(1) DESO).
Availability of stocks
According to article 3 SSS, Finland’s emergency stocks must be stored in such manner that their physical accessibility and availability is ensured at all times.
According to article 16 SSS, the location of emergency stocks is determined by the Finnish NESA in light of expected centres of demand. In principle, emergency stocks must be located in Finland (article 9 SIF). Article 3 SSS further provides that stocks should be stored in such a manner that they can be delivered to end users and markets within such time frames and under such conditions that the effects of delivery disruptions can be alleviated.
Sale of excess stocks
At times of emergency, the Finnish Council of State authorises the NESA to take the measures necessary to alleviate an ongoing supply disruption. Finland’s primary emergency response measure is the release of emergency stocks. Alongside the NESA, the Ministry of Employment and Economy possesses a residual competence to “steer energy production and consumption in ways consistent with security of supply, and so as to fulfil international agreement requirements” (article 3(1) DESO).
According to article 16 SIF, the addressees of Finland’s stockholding obligation may respond to emergency situations by releasing emergency stocks by selling certain quantities of emergency stocks or by lowering the required level of emergency stocks that all addressees of the stockholding obligation must maintain at all times.
Finnish primary legislation does not appear to provide for the possibility of demand restraint measures (at least not explicitly).
Relaxations of Road Traffic and Transport Laws
Finland’s emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.
Article 15 SIF imposes upon all addressees of the Finnish stockholding obligation the obligation to provide all information to the Finnish NESA that the implementation of the provisions of SIF require (see also 8(e) SSS). Similar reporting duties are imposed by articles 4(1-4) MSIF.
The Finnish authorities tasked with supervising the implementation and enforcement of the Finnish emergency provisions are entitled to enlist the help of Finnish custom authorities in order to validate the information required to determine the stockholding obligation of Finnish entities that must stock crude oil and fuel products (article 21 SIF). Failure to comply with the provisions of SIF may lead to the imposition of fines (article 23 SIF).
As a Member State of the European Union, Council Directive 2009/119/EC obliges Finland to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.
Finland’s compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).
As a Member of the IEA, Finland is obliged, pursuant to article 2 of the International Energy Programme (IEP), to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP. The IEP does not, however, make any provision for the enforcement of any obligations imposed by the IEP.