6. Finland

6.1. Climate neutrality target

Finland has adopted a target of reaching carbon neutrality by 2035 and becoming carbon negative thereafter. The target was first set in the government programme in 2019

Finnish Government (6. June 2019). Inclusive and competent Finland – a socially, economically and ecologically sustainable society. Retrieved from, https://julkaisut.valtioneuvosto.fi/handle/10024/161664

and later codified in law in the Climate Act

Ympäristöministeriö (2022, July 1). Ilmastolaki. Finlex. Retrieved from, https://finlex.fi/fi/laki/ajantasa/2022/20220423

. Despite what the term suggests, “carbon neutrality” covers all greenhouse gases and is defined as removals by sinks being as large as emissions. As the target takes into account LULUCF sinks, the target year of 2035 is not directly comparable to those of other countries which do not factor in all sinks. Finland does not have separate targets for carbon dioxide removal. On the other hand, buying offsets from abroad is not included as a mechanism to reach the target.

Choosing 2035 as the target year was informed by the work of the independent advisory Finnish Climate Change Panel

Ollikainen, M., Weaver, S. & Seppälä, J. (July 2019). An approach to nationally determined contributions consistent with the Paris climate agreement and climate science: application to Finland and the EU. The Finnish Climate Change Panel. Retrieved from, https://www.ilmastopaneeli.fi/wp-content/uploads/2019/10/Finlands-globally-responsible-contribution_final.pdf

. An earlier study commissioned by the Finnish Innovation Fund, Sitra, came to a similar conclusion

Rocha, M., Sferra, F., Schaeffer, M., Roming, N., Ancygier, A., Parra, P., Cantzler, J., Coimbra, A.& Hare, B. (June 2016). What does the Paris climate agreement mean for Finland and the European Union? Climate Analytics. Retrieved from, https://www.sitra.fi/en/publications/what-does-paris-climate-agreement-mean-finland-and-european-union/

. While defining a country’s share of emission reductions compatible with globally reaching the temperature goals set in the Paris Agreement depends on various factors, not least the equity criteria used for distributing the effort between countries, the Finnish target can be considered to meet its fair share of global efforts.

Carbon neutrality by 2035 is complemented by targets for different years. The Climate Act sets targets for the combined emissions from emissions trading and effort-sharing sectors to be reduced by at least 60% by 2030, 80% by 2040 and 90-95% by 2050, compared to 1990 levels. Sectoral targets will be discussed in the respective sections later in the report.

6.2. Status of GHG emissions

Finland has reduced emissions relatively consistently over the past 20 years. From a high of 85.5 million tonnes of CO₂e in 2003, total emissions (excluding LULUCF) have declined by 44% to 47.8 million tonnes in 2021. Compared to the 1990 levels of 71.0 million tonnes, the reduction has been a more modest 33%. As Finland’s emissions have, until recently, been dominated by the energy sector, interannual variation has been relatively large, owing to big fluctuations in, for example, heating demand and electricity imports depending on the weather. It is noteworthy that the declining long-term trend in emissions has not been significantly affected by disturbances such as the post-pandemic recovery and the energy crisis triggered by Russia’s war of aggression against Ukraine.

However, progress has been highly uneven across sectors. The waste and construction and housing sectors have reduced their emissions by 65% and 53%, respectively, compared to 1990 levels. Emission reductions in transport and mineral and metal industry, on the other hand, have been relatively modest, at 18% and 3%, respectively. The energy industry has successfully cut emissions by no less than 64% from the peak in 2003 but compared to 1990 levels the reduction has been less than half of that. While agricultural emissions declined by 12% in the 1990s, they have since remained essentially unchanged. Emissions from the emissions trading sector have declined much more than in the effort-sharing sector.

Whereas total emissions (excluding LULUCF) have been declining, the development in the LULUCF sector has seen the opposite. In 2021, for the first time, the sector turned from a net sink into a net source of emissions. While the net sink has been declining from a high of more than -30 million tonnes in 2009 for a long time, the recent collapse from -17 million tonnes in 2020 to +2 million tonnes in 2021 is unprecedented.

Ministry of the Environment Finland. (2030). Annual Climate Report 2022. Retrieved from, https://julkaisut.valtioneuvosto.fi/handle/10024/164392

Owing to this, net emissions (including LULUCF) in 2021 were actually 7% higher than in 1990, despite success in cutting emissions. This development jeopardises the carbon neutrality goal which was originally based on the assumption of a -21 million tonne net LULUCF sink in 2035. The Finnish Climate Change Panel estimates that the LULUCF gap in 2035 could now be as large as 19 million tonnes. Taking into account already announced measures, there would be a need to increase the LULUCF sink – or compensate it with alternative measures – by an additional 14 million tonnes.

The Finnish Climate Change Panel. (2023). Suuntaviivoja Suomen ilmastotoimien Tehostamiseen [Guidelines for enhancing climate action in Finland]. Retrieved from, https://www.ilmastopaneeli.fi/wp-content/uploads/2023/02/ilmastopaneelin-julkaisuja-1-2023-suuntaviivoja-ilmastotoimien-tehostamiseen.pdf

Figure 5: The past development of total emissions and sinks in Finland and the required trajectory to reach national emissions targets

Source: Ollikainen, M. (2023). Ilmastopaneelin yleiskatsaus: tilanne ja haasteet. The Finnish Climate Change Panel. https://www.ilmastopaneeli.fi/wp-content/uploads/2023/05/Ilmastotyon-tilanne-Suomessa_8.5.2023_Ollikainen.pdf

6.3. Assessment of timing and adequacy

The Finnish Climate Change Panel estimates that reducing emissions (excluding LULUCF) is progressing faster than anticipated, leading to an emission levels of 18-19 million tonnes in 2035, instead of the earlier plans of 21 million tonnes. This does not yet factor in policy changes from the new government, some of which are expected to increase emissions, at least in the short term. The Panel also points out that there are uncertainties involved in making these estimates and additional measures, particularly in the effort-sharing sector, are still needed.

This promising progress is, however, overshadowed by the collapse of the net LULUCF sink. To bridge the gap, 19 million tonnes’ worth of measures in the LULUCF sector would be required. As already announced measures are estimated to provide 5 million tonnes, the remaining gap is 14 million tonnes. The panel recommends a range of measures to reduce emissions and increase sinks in the LULUCF sector as well as to introduce technical sinks.

■ Fossil and process emissions (the striped part is the range)

■ The net sink of land use sector and technological sinks (the striped part is the range)

Figure 6: The required emissions reduction and increase in sinks to reach carbon neutrality by 2035

Source: The Finnish Climate Change Panel. (2023). Suuntaviivoja Suomen ilmastotoimien Tehostamiseen
https://www.ilmastopaneeli.fi/wp-content/uploads/2023/02/ilmastopaneelin-julkaisuja-1-2023-suuntaviivoja-ilmastotoimien-tehostamiseen.pdf

In the energy sector, emissions have declined and are expected to decline more rapidly than previously anticipated. According to the Low-carbon roadmap by Finnish Energy

Energiateollisuus [Finnish Energy]. (2022). Energia-alan vähähiilisyystiekartta [Low-carbon roadmap for the energy sector]. [PowerPoint prensentation]. Retrieved from, https://energia.fi/files/6691/Energia-alan_vahahiilisyystiekartta_paivitetty_1_2022.pdf

(updated in 2021), which anticipates the demand for electricity, heating and gas, the energy transition in Finland is progressing well and the emissions are decreasing faster than expected. The energy industry is committed to reducing emissions from energy production by half by 2030, compared to 2018. This objective might already have been achieved in 2023, according to the updated roadmap.

In domestic transport, the share of electric vehicles in newly purchased cars has been increasing. However, the effect on the total car fleet only materialises slowly and trucks are more difficult to electrify. The blending obligation of biofuels provides a quick and effective way to reduce emissions in land transport and has been the main driver in reducing transport emissions. However, because of its impact on fuel prices, targets adopted earlier have been reduced, leaving a gap between transport emissions and emission targets.

In industry, phasing out fossil fuels in energy use and industrial processes is progressing. However, reducing emissions in the sector hinges on the success or failure of a handful of key projects, most notably in the metal industry. Realising plans requires a significant increase in the provision of affordable, clean electricity.

In waste management, emissions have declined and are projected to continue to decline rapidly. However, emissions from waste incineration – addressed under the energy sector – have increased rapidly in recent years. Further emission reductions can be found in moving towards a circular economy, including reductions in waste and higher recycling rates.

In agriculture and forestry, reducing emissions and increasing sinks faces significant challenges. The biggest single source of agricultural emissions – farming on organic soils – is socially and politically tricky to address. Reversing the rapid decline of forest sinks and shifting the LULUCF sector from a net source back to a large net sink would require a range of measures, many of which would take time to have an impact and are likely to face strong opposition, both from political parties and the industry. Currently, the sink development in the LULUCF sector is the biggest obstacle for Finland to reach carbon neutrality by 2035.