Preparation of sectoral low-carbon roadmaps progressing as planned

Ministry of Economic Affairs and Employment 5.5.2020 11.16 | Published in English on 7.5.2020 at 10.35
Press release

An energy-themed webinar organised by the Ministry of Economic Affairs and Employment on 5 May 2020 focused on the production of clean energy and the need for energy in the future. One of the issues addressed at the webinar was the effect of the coronavirus crisis and the related recovery measures on investments required to pursue the 2035 climate target.

“Less than a year ago, we called for the swift preparation of sectoral low-carbon roadmaps, with completion scheduled by June 2020. Although this was considered an extremely tight schedule, work has progressed as planned despite the coronavirus crisis,” Minister of Economic Affairs Mika Lintilä notes appreciatively.

“As we will hear today, a low-carbon society requires large amounts of clean electricity. Joint action is now required to ensure sufficient availability of clean energy at a sufficiently low price. This paves the way for greener growth and new business opportunities for clean technologies,” Lintilä continued.

“The roadmaps represent a powerful input for the new climate and energy strategy. Many people I have talked to have expressed a keen interest in green recovery measures which, in fact, share much of the same ideology with low-carbon road maps. We must make every effort to benefit from the lessons learned during roadmap work and put these into use to help the Finnish economy recover from the coronavirus crisis,” Minister Lintilä emphasised.

Industrial emissions reductions can play a crucial role in the achievement of the 2035 target

In his presentation, Vice President Petri Vasara from Pöyry, the roadmap work consultant for large industrial unions, explored the possibilities for industrial emissions reductions (forestry, technology and chemistry) identified during the roadmap work.

Vasara emphasised that a viable and competitive industry is a basic requirement for development. As other requirements and, at the same time, unique opportunities Vasara mentioned competence, RDI investments, new technologies adapted to industrial scale, and an encouraging market environment favourable to low-carbon investments.

“The actions proposed in the scenarios for the industry sector by 2035 would  very significantly permit achievement of the national carbon neutrality target. Greenhouse gas emissions from the key industrial sectors addressed in the low-carbon scenario could decrease by as much as 10 Mt by 2035 from the level of 2015,” Vasara explained.

“Low-carbon and cost-competitive electricity that can be reliably supplied is a key requirement for many essential emission reduction measures. In the scenarios, industrial electricity consumption is expected to increase by as much as 50% by 2035 from the current level.”

Electrification is a great opportunity for society – climate neutrality can be achieved in production

Representing the Finnish Energy Industries at the webinar, CEO Jukka Leskelä pointed out that emissions from energy production have fallen sharply over the past 10 years. In the future, the electricity market will be fully equipped to produce a sufficient amount of climate-neutral electricity.

“Electrification is a great opportunity for our society. It would involve a sharp increase in the consumption of electricity in the 2030s and beyond. The biggest challenges of the electricity system have to do with the balance between production and consumption. Electrification requires a well-functioning and extensive electricity market, strong networks, flexible demand and regulating power.

“Decarbonisation will cause a sharp fall in emissions from heating in the 2020s, the use of peat will decrease at least by half, and oil heating will be discontinued. The growing need for sustainable wood fuels will pose a challenge until new technologies are widely available. Climate neutrality also requires the integration of different energy systems (electricity, heating, transport, industry),” Leskelä pointed out.

Fingrid to build a robust network to enable the transmission of rapidly growing wind power

As pointed out by Jussi Jyrinsalo, Senior Vice President at Fingrid Oyj, in his presentation, wind power production is currently strongly concentrated on the northern parts of Finland’s west coast while consumption is expected to grow in the south, causing a sharp increase in the need to transfer electricity from north to south, and from the west coast to the east. To respond to this need, Fingrid is planning to build an additional 2,500 MW of transmission capacity between northern and southern Finland by 2030.

“At the moment, wind power construction is vigorous and market-based. Annual energy production will grow from the current 6 TWh to 15 TWh as early as in 2022, at which time the annual production of wind power will outgrow hydropower,” Jyrinsalo projected. “The near-term annual increase in wind power will be around 1,000 MW, and carbon-free industrial processes will also cause a significant increase in electricity consumption. All this will require heavy investment in the main power grid.”

“Fingrid will update its long-term vision for the main grid in 2020. We are studying the wind power and consumption trends and geographics. Sectoral roadmaps represent a significant input,” Jyrinsalo noted.

Climate solutions require sizeable investments and a stable operating environment

In his closing remarks, Director-General Riku Huttunen emphasised the need to invest in research and development of low-carbon technologies. Finland is investing approximately EUR 35 billion in research and product development of climate solutions in 2020–2050.

“Eventually we as the front-runners will see wider markets for our products and technologies. However, the challenge is to make investments in new technologies profitable in relation to conventional technology.”

“Investment in energy production and industry strongly underline the need to maintain a stable and predictable regulatory and operating environment. Otherwise we may risk losing our competitive edge and, in the worst case scenario, cause carbon leakage,” Mr Huttunen stressed.

Results of roadmaps to be used in the preparation of the new climate and energy strategy

The Ministry of Economic Affairs and Employment has launched the preparation of a new national climate and energy strategy. The strategy will be prepared in coordination with the medium-term climate plan. The strategy will be completed in summer 2021 and it will be submitted as a report to Parliament in autumn 2021.

In addition to the 2035 target, the strategy will take into account sector-specific work carried out in various ministries and the Commission’s forthcoming Green Deal communication on increasing the EU’s emission reduction targets for 2030.

To support the strategy work, a background study “Energy and climate policy measures to achieve a carbon neutral Finland” will be launched as part of the Government’s analysis, assessment and research activities.

The study will be conducted by a consortium led by VTT Technical Research Centre of Finland. This project serves research and analyses needs in the preparation of the national climate and energy policy strategy and medium-term climate policy plan.

Inquiries:
Riku Huttunen, Director-General, Ministry of Economic Affairs and Employment, tel. +358 50 431 6518
Juhani Tirkkonen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 365 3412 (sectoral roadmaps)
Petteri Kuuva, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4819 (climate and energy strategy)