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2. Executive summary

Taking stock of the Nordic countries’ pathways to climate neutrality

With global greenhouse gas (GHG) emissions at their highest levels in human history, the need for rapid transformation of societies is immense. Science calls for immediate and deep emission reductions across all sectors to avoid accelerating climate change. Hence, countries that have the tools, know-how and institutional and financial capacity must step up and lead by example.
The Nordic region is well prepared to take on this responsibility and has a strong track record of leading by example. In accomplishment of the Helsinki Declaration on Carbon Neutrality
Nordic Co-operation (2020, November 4). Declaration on Nordic Carbon Neutrality. Retrieved from, https://www.norden.org/en/declaration/declaration-nordic-carbon-neutrality
, the Nordic countries have committed themselves to assess the scenarios for how to achieve climate neutrality. Furthermore, the Nordic region aims to be the world’s most sustainable and integrated region by 2030 (Our Vision 2030
Nordic Council of Minister (2020). The Nordic Region – towards being the most sustainable and integrated region in the world: Action Plan for 2021 to 2024. Retrieved from, https://norden.diva-portal.org/smash/get/diva2:1508295/FULLTEXT01.pdf
). The most recent status report
Nordic Council of Ministers (2023). Norden – en bæredygtig og integreret region? Statusrapport for Vores Vision 2030. Retrieved from, https://norden.diva-portal.org/smash/get/diva2:1760998/FULLTEXT02.pdf
(2023) shows that Nordic green ambitions are challenged and points to a need for greatly accelerated efforts.
This report, Nordic Stocktake, reaches a similar conclusion. Due to the Nordics being early starters within the green energy transition, there have been tangible emissions reductions within the energy sector. However, other sectors are lagging behind, and the Nordic region needs to increase the pace of transition to continue leading by example.
Reaching climate neutrality is a massive task, and there are many challenges to overcome. Most of these challenges are not unique to the Nordic countries and solving these in the Nordic region – in countries well-positioned to do so – would prove valuable for global climate action.

To stay well below 2 °C, pursuing 1.5 °C, we need ambitious climate neutrality targets and immediate climate action.

The messages in the latest IPCC assessment report are clear: immediate and deep emission reductions are necessary in order to stay well below 2 degrees, pursuing 1.5 °C. The latest UNEP Emission Gap Report (2022) reaches the same conclusion and calls for transformative action
UNEP (2022, October 27). The Closing Window Climate crisis calls for rapid transformation of societies. Emissions Gap Report 2022. United Nations Environment Programme. Retrieved from, https://www.unep.org/resources/emissions-gap-report-2022
This is further underscored by the scenarios in the recently released report from the EU Climate Advisory Board. The Advisory Board recommends keeping the EU’s GHG emissions budget within a limit of 11 to 14 gigaton CO2e between 2030 and 2050. This requires emission reductions of 90–95% by 2040, relative to 1990.
All the Nordic countries have set targets for climate neutrality, the target year varying from 2030 to 2050. The targets differ with respect to what the target encompasses and how it can be reached. With the exception of Sweden, the Nordic countries include the land use, land-use change and forestry sector (LULUCF) when aiming for net-zero emissions – with the caveat that the role of LULUCF in reaching climate neutrality in Norway and Iceland is yet to be determined. Currently, only Norway and Sweden allow removals and reductions in emissions outside national borders to count towards achieving climate neutrality, and in Sweden, only as so-called supplementary measures that may be used for the remaining 15% of emissions.

Emissions have been reduced significantly since 1990 in the energy and waste management sectors – deep decarbonization is needed in all remaining sectors.

Net GHG emissions in the Nordic countries, including emissions/removals from the LULUCF sector, have been reduced from 203 million tonnes of CO2e in 1990 to 150 million tonnes of CO2e in 2021, corresponding to a reduction of 26%. This reduction is almost exclusively achieved through large emissions reductions in the energy sector.
The energy sector accounts for 55% of total net GHG emissions in the Nordic region. From 1990 to 2021, the GHG emissions in this sector were reduced by 54 million tonnes of CO2e (40%) across the Nordic countries.
In waste management, emissions have been reduced by 8 million tonnes of CO2e (a 59% reduction). 
For domestic transport, industrial processes, and agriculture, forestry and land-use, emission reductions have been smaller. Reaching climate neutrality rests on the achievement of deep decarbonization within these sectors in the coming years.
From 1990 to 2021, the GHG emissions from the Nordic domestic transport sector were reduced by only 3 million tonnes of CO2e, corresponding to 5%. In the industry sector, emissions have been reduced by 5 million tonnes of CO2e (a 17% reduction). In agriculture, forestry and land-use, the LULUCF-sink has shrunk by 20 million tonnes of CO2e (a 31% reduction in the amount of carbon stored in the forest and soil sinks) while emissions from agriculture have been reduced by 4 million tonnes of CO2e, corresponding to a 12% reduction.

Reaching climate neutrality is a massive task, but there are multiple pathways to climate neutrality in the Nordic countries.

Leading by example and achieving climate neutrality requires the Nordic countries to accelerate their decarbonisation efforts in all sectors. This is a massive task. However, we can learn from previous experiences and intensify the planned efforts, initiatives and policies that form multiple pathways across the Nordic region.
The energy sector plays a key role in the green transition and all Nordic pathways to climate neutrality rely on decarbonization of energy production. Current development has focused on the expansion of green power production, particularly with respect to bioenergy, wind and solar. Favourable conditions, such as high potential for bioenergy, geothermal and hydro power in some of the Nordic countries, have also helped the transition towards a low-carbon energy sector. Pathways to climate neutrality include further massive expansion of renewable energy production to decarbonize the power sector as well as other sectors and to provide renewable energy for mitigation initiatives in hard to abate sectors, supplemented by improvements in energy efficiency.
In the domestic transport sector, emissions have been addressed with a range of initiatives focused primarily on road transport and passenger cars. Electrification of the car fleet has accelerated across the Nordic region in recent years with Norway as a frontrunner. Biofuels and blending requirements, partly driven by EU regulation, have also played a large role. Despite previous efforts, emissions in the transport sector remain high across the Nordic region, with almost no real GHG reductions compared to 1990. There are large differences in the development across the Nordic countries in this sector, with three countries seeing increases in emissions from 1990 to 2021. Further electrification of the private car fleet, enhanced public and multi-modal transportation and plans to decarbonise heavy transport are part of the Nordic countries’ plans and strategies for the domestic transport sector.  
The emissions from industrial processes in the Nordic countries have primarily been regulated through the EU Emissions Trading System (EU ETS) and different national carbon pricing mechanisms. The sector is largely dependent on developments in the energy sector with respect to the access to dependable green power to electrify industrial processes without losing international competitiveness. Carbon Capture and Storage (CCS), Carbon Capture and Utilization (CCU) and similar technologies are expected to play a large role in achieving net-zero emissions in this sector and the Nordic countries are piloting different initiatives such as government support for CCS on point-sources and prioritizing R&D for CCS-technologies.
In waste management, previous policies across the Nordics have focused on reducing the emissions from landfill and increasing the level of recycling, especially in households. Plans include reducing the total amount of waste, increasing the recycling rate and fostering circularity.
Across the Nordic countries, not nearly enough has been done to reduce the GHG emissions from agriculture. Most initiatives have focused on reducing emissions from agriculture by targeting the activities on the farm and despite talk about more demand-side initiatives, they still need to be implemented. For forestry and land-use, initiatives have been targeted at rewetting and/or afforestation of wetlands and peatlands, but progress is slow. Pathways to climate neutrality in the Nordic countries involve large emissions reduction in agriculture in particular, but more specific initiatives and strategies are needed. 

The main challenges are the same across the Nordic countries.

There are still many challenges and barriers to reaching climate neutrality in the Nordic region. Many of these are the same across the Nordic countries (and beyond).
Across the Nordic countries, in the energy sector, a combination of scepticism towards energy production facilities due to negative impacts on local populations and nature, as well as a slow review and permit processes, risk halting the planned expansion of green power. At the same time, increasing the share of renewables in the energy mix creates intermittency issues regarding a sufficient expansion of supplementary power production that can be regulated. 
For domestic transport, the main challenges are in the road transport sub-sector. Firstly, the future role of biofuels as a mitigation instrument is unclear. The production of biofuels is limited by land resources, competing with food production and ecosystems services, and limited availability of a waste feed-stock for production of advanced biofuels. Secondly, and despite positive developments in electric vehicle uptake, internal combustion engine cars (ICE) still have a dominant presence on the roads. Phasing out ICE cars and trucks is a major challenge.  
Regarding the industry sector and emissions from industrial processes, the main cross-Nordic challenges are incentivising emission reductions in an internationally competitive sector – while avoiding carbon leakage - and scaling up and providing incentives for carbon removal technologies. The attainment of Nordic countries’ individual and joint ambitions to reach net-zero GHG emissions may require very significant CCS deployment within a couple of decades, but that will require significant efforts and cross-Nordic collaboration on capture, transport and geological storage of CO2.  
In waste management, reducing emissions is not the major challenge. Instead, issues such as reducing the amount of waste generated, increasing recycling rates of sorted waste and, in general, the broader transition to a circular economy is lacking across the Nordic region.
In agriculture, forestry and land-use, strategies and initiatives are hard to implement due to political concerns such as carbon leakage, regressive effects on income distribution, food security and rural development. This is a major challenge in decarbonising and transforming the agricultural sector in all the Nordic countries. Across the Nordic countries, strengthening carbon storage in sinks and reducing emissions from forestry and land-use also proves difficult. This is especially true regarding emissions from degraded wetlands, such as cultivated peatlands. The Nordic forest sink is strained by climate change and increased demand for biomass. 

The challenges can be overcome – especially through cross-Nordic collaboration.

As stated by the IPCC, “There are options available now in every sector”. This is also true in the Nordic region. Since many of the challenges, as outlined above, are the same or similar across the Nordic countries, there is ample opportunity for Nordic collaboration on the path towards climate neutrality.
In the energy sector, we recommend the next steps for Nordic collaboration:
  • knowledge-sharing on increasing acceptability - and reducing potential negative impacts on nature and local populations - for renewable energy installations
  • cross-Nordic analysis/overview on future energy supply and demand, especially regarding balancing power capacity by supplementing increasing renewable power
  • knowledge-sharing on energy efficiency policies.
In the domestic transport sector, we see a need for Nordic collaboration on:
  • developing a Nordic roadmap for the sustainable development, production and use of biofuels and synthetic fuels
  • developing a strategy for how to reallocate ICE cars to those users and uses that would have the lowest travel needs and a supporting assessment framework to identify the GHG trade-offs of different policies.
  • supporting urban action plans for zero emission passenger and freight transport.
  • knowledge-sharing on promoting public transport across the Nordic countries to further lower emissions from the use of ICE cars and coordination of rail transport systems across the Nordics.
To address emissions from industrial processes, Nordic collaboration could focus on:
  • piloting public procurement for low-carbon industrial products
  • knowledge-sharing on best practices in incentivising direct electrification of suitable industrial processes across the Nordic countries.
  • intensifying collaboration on the value chain of Carbon Capture and Storage across the Nordic countries.
  • developing a joint Nordic CCS strategy to increase the potential to realise economies of scale in transportation and storage infrastructure for captured carbon dioxide.
  • Nordic research on governance and business models for generating CO2 removal (negative emissions).
For waste management, emissions are low and declining and Nordic collaboration efforts should thus focus on governance of waste more generally – and not just on territorial emissions from the waste management sector. There are options and a need for more Nordic collaboration in improving conditions for the circular economy. 
Agriculture, forestry and other land-use is a challenging sector for all the Nordic countries and the potential for valuable Nordic collaboration is high. We recommend that Nordic collaboration focuses on:
  • knowledge sharing and research co-operation on addressing emissions from organic soils.
  • knowledge sharing on carbon pricing in agriculture – risks and incentive structures.
  • Nordic research on climate accounting on farms and improving knowledge on ways to reduce emissions on the farm from livestock, such as manure management – including biogas production, crop cultivation and fodder additives to reduce methane releases from ruminants.
  • studies on examples of how to improve the conditions for producers of plant-based proteins, both in terms of research, education and regulatory frameworks.
  • Nordic research and innovation funds targeted towards plant-based production.
In addition to the opportunities from Nordic collaboration that arise directly from the shared challenges in the different sectors, we see further opportunities for Nordic collaboration:
  • a study on Nordic scenarios for climate neutrality (at the Nordic level)
  • knowledge-sharing on efficient climate policy collaboration between government levels
  • coordination and transparency on assumptions for climate neutrality strategies and pathways in the Nordic countries
  • coordination of value chains on waste, CCS and bioenergy across the Nordics to enhance efficiency and economies of scale effects in terms of money, energy and GHG emissions
  • increased knowledge-sharing (“best practices”) and collaboration on addressing consumption-based emissions in the Nordic countries
  • collaboration on a just and fair transition, incl. more research on making carbon taxes and pricing fair.