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The outlook review on energy by Ministry officials offers a vision for a carbon-neutral Finland

Ministry of Economic Affairs and Employment
Publication date 6.3.2019 10.00 | Published in English on 6.3.2019 at 16.25
Press release

The outlook review published by the Ministry of Economic Affairs and Employment on 6 March 2019 outlines policies and measures that will lead Finland towards becoming a carbon neutral economy, using its energy and climate policy as a means to this end.

According to the Ministry’s public officials, consistent long-term energy and climate policy measures aimed at achieving a carbon-neutral Finland must continue even when governments change.

At present, the EU-level objective is to become carbon neutral by 2050. In Finland, reports published by VTT Technical Research Centre of Finland, the Finnish Environment Institute (SYKE) and the Natural Resources Institute Finland support the view that carbon neutrality could be achieved in Finland by the late 2030s.

The Ministry of Economic Affairs and Employment emphasises that energy and climate policy must be based on thoroughly researched data and best estimates of future development. Energy consumption generates approximately 75 per cent of greenhouse gas emissions.  Investments in the energy sector typically span decades. 

“A rational and responsible energy and climate policy cannot be based on empty talk and false promises about schedules that are impossible to achieve, and measures that would result in decarbonisation without any effort,” said Jari Gustafsson, Permanent Secretary at the Ministry of Economic Affairs and Employment in his opening speech at the publication event. 

To achieve carbon neutrality, investments need to focus on a rapid reduction of greenhouse gas emissions in all emission sectors. Additionally, methods to remove carbon dioxide from the atmosphere will be needed. 

Quick and efficient implementation of the existing targets is important in Finland, but even more so on a global and EU level.  In the upcoming government term, cost-effective implementation of directives on energy efficiency and renewable energy, included in the Clean Energy Package, will be required.

“The electricity, gas and heating markets are evolving, but regardless of the systems in question, the security of supply must be ensured. With the gradual decline in the use of coal, and with the profitability of heat and power cogeneration suffering, it is becoming increasingly challenging to ensure the security of supply in the district heating and electricity markets,” says Riku Huttunen, Director-General of the Energy Department.

Following the electrification of society and increase in intermittent renewable energy production, more integrated energy use in different sectors combined with more efficient storage will be required. Smart grids will enable the growth of intermittent renewable energy production. In addition, long-term projects to build weather-proof power transfer and transmission networks will improve the security of supply.

“Many renewable energy technologies have now reached a point where they will no longer require production subsidies during the next government. Wind power will no longer require subsidies because it is becoming a profitable solution in market terms,” says Riku Huttunen.

Similarly, production aid for forest chip electricity will be discontinued in 2021 following an increase in the price of emission allowances. There will be no need to continue granting compensation on emissions trading to energy-intensive industrial facilities. Instead, support measures should focus on new technologies and especially innovative demonstration projects to promote energy efficiency and renewable energy use.

Finland will become a frontrunner in low-carbon technologies. Early and timely investment in new technologies will create new markets and growth. In a world where fossil fuels continue to account for more than 80% of all fuels used, there is an enormous need for new investment. Finland’s Presidency of the European Union will provide an opportunity to promote such investments and focus on low-carbon technologies throughout the EU.

Jari Gustafsson, Permanent Secretary, Ministry of Employment and the Economy, tel. +358 29 504 7400
Riku Huttunen, Director-General, Ministry of Economic Affairs and Employment, tel. +358 50 431 6518

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