What changed for data centres on July 1
Finland has moved electricity used in data centres out of the reduced tax category II and into the general category I. The rate rises from 0.05 cents per kilowatt-hour to 2.24 cents, an increase of 2.19 cents on every unit of power a server consumes. For a large facility drawing tens of megawatts around the clock, that difference runs into millions of euros a year, and it lands on the one input a data centre cannot cut.
The Finnish government expects the reform to raise about 47 million euros in additional annual revenue at 2026 levels, though this year yields roughly half that because the change took effect mid-year. The measure was set in the October 2025 budget bill and came into force on July 1 2026, so operators have had the numbers for months. What is new is that the higher bill is now real rather than proposed.
Why Google paused a billion-euro build in Kajaani
Google had assembled roughly 1,400 hectares of land across Kajaani and Muhos for a potential billion-euro data centre, then held back. In a consultation response the company said it had not yet made an investment decision and named regulatory stability and predictable operating conditions among the factors that matter most. A 45-fold tax swing is the opposite of predictable, and it arrived while the site was still on the drawing board.
The pause is the clearest signal of how the tax reshapes siting maths. Finland sold itself to hyperscalers on cheap, clean, cold-climate power, and the reduced tax band was part of that pitch. Removing it does not make Finnish power expensive in absolute terms, but it removes a margin of certainty that large multi-year builds are priced on, and that certainty is what a billion-euro commitment buys.
What Nordic siting looks like now
The government is not walking away from the sector. It has promised a subsidy scheme, built on a national data-centre roadmap and capped at the level of the old tax relief, to take effect in autumn 2026. Until that design is published, operators face a gap in which the tax is higher and the replacement support is only a promise, which is the worst window in which to sign a long lease.
For anyone weighing a Nordic build, the practical takeaway is to price tax risk, not just power price. Sweden and Norway sit next door with their own incentives, and a policy that can move a rate 45-fold in one budget cycle belongs in the risk column beside grid-connection queues. The cheapest kilowatt-hour is worth little if the tax on it is set by a bill you cannot forecast.
Read next: AI Is Now Outrunning the Power Grid | Google Runs at 9% Overhead. Power Use Rose 37%
