25 November 2005 - A government report into Finland's future energy and climate policy is being submitted to its parliament and will recommend greater investment in energy efficiency and renewables in order for Finland to meet its Kyoto commitments in the period 2008-2012.
The report describes how the Government intends to meet international requirements for restricting greenhouse gas emissions in Finland and what longer-term goals the Government has for the future trend of greenhouse gas emissions.
In this strategy the Government promises to invest in the adoption of renewable energy sources, in energy conservation and in the reduction of greenhouse gas emissions. In addition, by utilizing the Kyoto mechanisms, the State of Finland will acquire emission units allowed by the Kyoto Protocol. Through the actions outlined in the strategy and through flexible mechanisms, such as emissions trading within the EU, Finland will meet the obligations set and approved for it. Without these measures, the report says that Finland's greenhouse gas emissions would exceed the target set by the Kyoto Protocol by about 15 per cent.
After the preliminary debate to be held in Parliament next Wednesday, the report will be subject to thorough political debate in Parliament and in its committees during the coming months.
As background information for the outlines and stands taken in the report, the trends of Finnish society and its energy consumption and generation, and the resulting emissions and other greenhouse gas emissions, have been projected up to the year 2025. However, concrete actions focus on measures that will be taken to meet the goals set for the Kyoto commitment period 2008-2012, as well as on the input required for this purpose.
The strategy points out that the environment where energy and climate policy measures are carried out has undergone major changes in recent years; for instance, the world market prices of fuels have risen, and the emissions trading introduced by the EU has meant higher electricity prices. Moreover, the goals adopted in the EU help promote energy efficiency and the increased utilization of renewable energy sources. However, the impetus given by these external factors needs to be supplemented with national measures.
Important results have already been achieved in increasing the efficiency of energy use. The Government will intensify these efforts by introducing new energy conservation measures. The goal is to reach an additional reduction of 5 per cent in energy consumption by the year 2015 when compared against the situation where no new measures are taken. The long-term goal in energy conservation is to halt the growth of total primary energy consumption and to bring about a falling trend.
The target set in the strategy is that the total consumption of renewable energy would increase by at least one quarter by 2015, and by at least 40 per cent by the year 2025. Renewable energy could then account for nearly one third of primary energy consumption, as against 23 per cent in 2003. In particular, the strategy emphasizes the increased utilization of wood chips made from logging waste, as well as field biomass, recycled fuels and biogas. The target is at least to triple their share of primary energy, from about 2 per cent in 2004 to over 6 per cent within the next 15-20 years.
During a year with average rainfall, the share of electricity produced using renewable energy has been about 27 per cent of the total consumption of electricity. Finland is committed to the recommended target that was set in conjunction with the EU Directive on the promotion of electricity produced from renewable energy sources. According to this target, electricity produced from renewable energy sources in Finland should account for 31.5 per cent of the total consumption of electricity in 2010.
Indigenous energy sources play an important role in the security of energy supply. Renewable energy sources and biofuels accounted for about 30 per cent of the total consumption of primary energy in 2003. The aim is to bring about a marked increase to this percentage during the next 10-15 years. The goal is that the total consumption of indigenous energy sources will rise by at least one quarter during the same period of time. The Ministry of Trade and Industry has launched an investigation on how the role of peat could be secured against imported fuels in the generation of electricity in condensing power plants.
The greenhouse gas emission target specified for Finland according to the Kyoto Protocol and the EU burden-sharing agreement is 70.5 million tonnes of CO2 equivalent per year for the period 2008-2012. This means that emissions need to be reduced on average by about 11 million tonnes per year. The State of Finland will contribute to this goal by acquiring on average two million tonnes of emission reductions per year with the help of the Kyoto flexible mechanisms. Responsibility for reaching the rest of the emission reduction target rests with the emissions trading sector and other external sectors. The Government estimates that the emission reduction achieved outside the emissions trading sector will be about one million tonne per year.
The trading of carbon dioxide emissions that started within the EU at the beginning of the year will considerably improve the competitiveness of renewable energy sources. On the other hand, the trading has brought about a major new cost item for Finnish industry. The Government improves the competitiveness of energy-intensive industry by lowering the electricity tax paid by industry. The purpose is to help ensure that jobs stay in Finland.