The Finnish lakeside city of Lahti has transformed itself from a polluted industrial centre to a pioneering hub for clean technologies over the past four decades, offering lessons for other mid-sized cities transitioning to a low-carbon future.

In 2021, Lahti became the smallest city to become the European Green Capital, a competition started in 2010 to reward green urban initiatives and encourage the exchange of best practices across Europe. 


Having already cut its carbon emissions by 70% since 1990, Lahti aims to become carbon-neutral by 2025 — 10 years earlier than Finland’s national target — and hopes to share its environmental knowledge and inspire other cities. 

“If we can find ways to improve our environment in a city like Lahti, which is not the richest and does not have all the resources in the world, it shows how this can be done in similar cities,” says Milla Bruneau, the executive director of Green Lahti, the public organisation promoting Lahti as a green capital. 

Building on its ambitious roadmap and ecosystem of 130 cleantech companies, the Finnish city of 120,000 people is investing in education to cultivate more local talent and start-ups contributing to the green transition.

Lake restoration

Lahti’s journey to become a green capital began in the 1970s, when the city set out to clean up its largest local lake — Vesijärvi — which used to have visible eutrophication and be among the most polluted in Finland. Eutrophication is the process whereby a body of water becomes too nutrient-rich, often as a result of run-off, causing massive algal blooms that suck oxygen out of the water and killing aquatic life. 

“When I was a kid, we couldn’t swim or fish in the lake. The whole ecosystem was ruined,” says Ms Bruneau. After wastewater discharge into the lake was stopped and a long-term restoration project began in the early 1990s, Vesijärvi’s conditions began to improve, along with a significant reduction in its blooms of blue algae.

Expertise developed during the lake clean-up project led the University of Helsinki to set up an environmental laboratory in Lahti in 1996. The research centre now works on everything from stormwater and algae to soil purification.

Tomi Tura, a director at Ladec, Lahti’s regional development agency, says that the success of the lake restoration project was “very valuable” for the city, and triggered the formation of businesses in areas such as water and soil purification.

Ecopal, a Lahti-based start-up founded in 2014 that specialises in recovering waste heat and producing renewable energy, is one that has benefited from the city’s ecosystem. 

“We helped them in their early phases by enabling them to showcase their solution and referring them to a publicly-owned swimming pool and private hotel in Lahti,” says Mr Tura.

Circular economy

More than 99% of the Lahti region’s household waste is re-utilised, with about half used to produce energy. The city has a goal to become a zero-waste, circular economy city by 2050. At the Kujala Waste Centre, residents, businesses and public waste management companies work together towards this goal.

At the 70-hectare site, publicly-owned Salpakierto manages around 200,000 tonnes of waste from Lahti and nine other municipalities each year. The centre includes a soil-processing facility, a biogas and composting plant, and a facility for transforming waste roof materials into asphalt.

Jorma Mikkonen, a senior vice president of corporate relations and sustainability at L&T, a Finnish circular economy specialist that also operates in Lahti, says it is a “vibrant city” with a long history of co-operation between companies, the public sector and academia. “For a long time, Lahti was known as the design capital of Finland and now the circular economy-related businesses are increasing their importance,” he says. “The [cleantech] actors know each other in a medium-sized city like Lahti, which promotes networking.” 

This collaborative spirit is exemplified by a new circular economy biogas plant being built by beverage company Hartwall and local utility Lahti Energia, which will produce gas from mash, a byproduct from Hartwall’s brewery in the city.

“The raw materials travel efficiently from the field to the brewery and back: the leftover material from the production of biogas is returned to the field to feed the barley crop,” Tomi Korte, Hartwall’s director of production and supply chain, said in a statement

Mobility cluster

While Lahti successfully phased out coal in the spring of 2019, Ms Bruneau admits that the city still has some work to do in promoting sustainable construction and urban mobility. “All the things we have done so far have been political decisions, but when it comes to mobility, we start to enter the area where people make choices,” she explains, adding that this involves teaching citizens about more sustainable mobility rather than mandating it.

More than 30 businesses operating in Lahti’s electric transportation cluster are working on solutions to address mobility issues. A prominent player is Kempower, a producer of electric vehicle-charging solutions founded in 2017 as a spin-off from welding machine company Kemppi Group.

Tomi Ristimäki, the CEO of Kempower, says that Lahti’s e-mobility cluster is growing fast, helped by the city’s industrial heritage, logistics connections and co-operation across the public and private sectors.

“Lahti is traditionally a manufacturing city, and many of our staff offer a high level of manufacturing expertise learned in the city,” he explains. But Mr Ristimäki says that for the ecosystem to develop, more investment in education is needed, adding that the company wants to work closely with technology-focused universities and polytechnics. 

Educational push

Despite its established ecosystem of cleantech companies, Lahti has been limited in its ability to foster new start-ups due to its lack of university and graduate-level talent.

“We have the lowest educational level in Finland,” says Ms Bruneau. “When we start to raise that, we will get more professionals in the city to work on research and development, electrification of mobility and to start their own businesses.” 

The Lahti campus of the University of Applied Sciences was established in 2020, and is hoped to improve educational attainment in the region, including a new electric transportation systems Master’s degree aimed at serving the needs of companies, such as Kempower. 

“We need to give entrepreneurs and employees real added value,” says Mr Tura, noting that Lahti is much cheaper than the Helsinki region. “We are focusing our efforts on showing companies how they can be part of the business networks and value chains here.”

Even with a need to bring up the next generation of skilled talent, Finnish experts still believe that Lahti has great conditions to be a testbed for innovative cleantech start-ups. 

“Lahti’s geographical and population size have made it an area where new solutions can easily be tested,” says Helena Saren, the head of smart energy at Business Finland, the national development agency.

This article first appeared in the October/November print edition of fDi Intelligence. View a digital edition of the magazine here.