Carbon neutral Finland 2035 – national climate and energy strategy.

The present document contains Finland's National Climate and Energy Strategy for a carbon neutral Finland towards 2035. It covers all greenhouse gas emissions in the emissions trading sector, the effort sharing sector and the land use sector, as well as carbon sinks in the land use sector and other sectors. The Strategy outlines measures by which Finland will meet the EU’s climate commitments for 2030 and achieve the targets set in the Climate Change Act for reducing greenhouse gas emissions by 60 per cent by 2030 and being carbon neutral by 2035. The Strategy has a strong focus on the green transition and the phasing-out of Russian fossil energy. With regard to heat production, the Strategy focuses on promoting non-combustion-based heating. It further includes a national hydrogen strategy to promote the hydrogen economy and electrofuels and to set quantitative targets for hydrogen electrolysis capacity. The emissions trading system and a predictable long-term climate and energy policy are key steering instruments of the Strategy, which defines the policy measures for the industry and energy production included in the emissions trading system. The measures outlined in the Strategy will improve the opportunities for companies to make long-term investments in advanced clean technologies.
The policy guidance of the Strategy include: 1) Reducing greenhouse gas emissions and carbon sinks; 2) Promoting renewable energy; 3) Hydrogen and electro fuels; 4) Promoting energy efficiency; 5) Energy delivery reliability and security of supply; 6)Use of nuclear energy; 7) Development of the energy market; 8) Research, innovation and competitiveness; 9) Strengthening climate change adaptation; and 10) Influence within the EU.
In relation to the emissions trading sector, Finland will continue to play an active role in ensuring that the EU’s emission reduction targets will be particularly directed to the emissions trading sector. It further plans to utilise one-off flexibility (emissions are reduced in the emissions trading sector) and LULUCF flexibility (emissions are reduced in the land use sector). A Climate Change Plan for the Land Use Sector (MISU) will be prepared. In relation to promoting renewable energy, a new Government Decree on General Terms of Granting Energy Aid will be prepared in 2022; EUR 150 million will be annually allocated to demonstration projects concerning new technology. Furthermore, licencing procedures for green transition investments will be accelerated by allocating more resources to permit authorities, and grants will be allocated to municipalities and regional councils to speed up permit and planning procedures for green transition investments and wind power construction. The use of timber and heavy decayed wood in incineration will be avoided. The important role of nuclear energy as an emission-free energy source will be taken into account at the national level and in the development of the EU’s laws and policies. As regards research and innovation, clean innovations and solutions will be developed and introduced in a broad and technology-neutral manner to enable a carbon-neutral economy. Investments will be made in the development of new technologies and the commercialisation of innovations. It is estimated that the taxation of fossil fuels will be increased by EUR 250 million during the parliamentary term. The Government will prepare a roadmap for energy taxation, which will support the achievement of the carbon neutrality target of 2035 together with the emissions trading system.
Risk management of the impacts and consequences of climate change will be strengthened in the energy and industrial sectors, and this will be taken into account in the preparation of the next national climate change adaptation plan in 2022.