The Government aims at decreased energy consumption and intense growth in the share of renewable energy sources

300/2008

Today, 6 November 2008, the Government has approved a new, ambitious climate and energy strategy for Finland, with detailed insights into climate and energy policy measures up to 2020, and suggestions up to 2050. This Long-Term Climate and Energy Strategy will be submitted to Parliament in the form of a report. The strategy's preparation is based on the Government Programme of Matti Vanhanen's second Cabinet.

The strategy clearly proves that the objectives proposed by the European Commission for Finland regarding the reduction of emissions, promotion of renewable energy, or enhancing the efficiency of energy consumption, cannot be attained without new, prominent climate and energy policy measures.

Without any new measures, in 2020 Finland's greenhouse gas emissions would exceed those of 1990 by approximately 20 per cent, almost entirely due to emissions from energy production and industry. The EU aims to reduce the emissions from the aforementioned sectors by 21 per cent from 2005 to 2020 with the help of the EU's emission trading directive.

According to the Commission's proposal, Finland should, by means of national measures, cut emissions from other sectors, such as transport, house-specific heating and agriculture, by an average of 16 per cent from the 2005 level, by 2020.

Final energy consumption 310 TWh and electricity consumption 98 TWh in 2020

The strategic objective set by the Government for Finland entails halting and reversing the growth in final energy consumption so that, in 2020, final energy consumption is approximately 310 TWh, i.e. almost equal to the current level. In 2020, without any new measures being taken, energy consumption will be almost 10 per cent lower than where the current trend seems to be leading.

According to the strategy, in 2020 electricity consumption would be around 98 TWh, while at present it is less than 90 TWh per year. Without any new measures, electricity consumption would rise remarkably higher.

In order to attain the objectives set, the efficiency of energy consumption must be enhanced, particularly in housing, construction and transport. The range of measures required is broad and will be completed as part of the work of the Energy Efficiency Committee, which is currently underway.

Share of renewable energy to rise to 38 per cent through intensified support and steering systems

The goal is to increase the share of renewable energy to 38 per cent by 2020, in line with the obligation proposed for Finland by the EU Commission. This objective is highly challenging, and its attainment will only be possible if the growth in final energy consumption can be reversed.

In order to stimulate a shift to renewable energy usage, the current support and steering systems will be intensified and structures changed. Indeed, meeting the obligation would require an intense increase in the use of wood-based energy, waste fuels, heat pumps, biogas and wind energy. For instance, the use of forest chips will be increased by two or three times over current levels, and by 2020, some 6TWh of wind energy will be harnessed for use, which would entail the construction of a minimum of 700 new 3 MW wind power plants in Finland.

As a new method for promoting renewable energy, a cost-effective feed-in tariff system, operating on market terms as far as possible, will be introduced. This option is being investigated by a working group established by the Ministry of Employment and the Economy.

The aim: sufficient, moderately priced electricity sourcing that supports climate objectives

As regards electricity sourcing, the Government is committed to ensuring an adequate supply of moderately priced electricity in such a manner that electricity sourcing will simultaneously support other climate and energy policy goals. In future, electricity sourcing should continue to be based on a versatile system, diversified thanks to the cogeneration of power and heat.

The nation's own production capacity should be able to provide for peak consumption and possible import disturbances. In constructing Finland's own capacity, priority will be given to plants that do not emit greenhouse gases, or ones with low emissions, such as combined power and heat plants using renewable fuels, and financially profitable and environmentally acceptable water and wind power plants.

As concerns nuclear power, the Government's strategy defines the following policy: "According to calculations, in terms of sufficient electric energy, a decision-in-principle as per the Nuclear Energy Act on the additional construction of nuclear energy generation would be necessary in the next few years, i.e. during the current Government term, to facilitate the replacement of condensing power capacity causing emissions, with capacity with no emissions, and to improve the self-sufficiency of electricity sourcing. The consideration concerning a decision-in-principle will, however, be based on the premise that nuclear power will not be constructed in this country for the purposes of the permanent export of electricity."

Financing needs due to the strategy will be handled in connection with state budget proceedings

Matters concerning financing needs will be handled and decided on as part of the framework decision and budgeting processes of the state economy. According to the framework decision reached by the Government on 13 March 2008 on the state economy for the years 2009-2012, with respect to any financial needs exceeding the framework decision, a stand will be taken in the budget proposal for 2009, and the framework decision of spring 2009. In connection with the budget proposal for 2009, decisions were based on measures targeted at the years 2008 and 2009. Accordingly, climate and energy financing will increase from EUR 350 million in 2007 to EUR 440 million this year already, and next year, to EUR 550 million.

A ministerial working group for climate and energy policy has been responsible for the preparation of the strategy, including representatives from all Government parties. The ministerial working group is chaired by Mauri Pekkarinen, Minister of Economic Affairs, and the other members are Sirkka-Liisa Anttila, Minister of Agriculture and Forestry, Tarja Cronberg, Minister of Employment, Jyri Häkämies, Minister of Defence, Jyrki Katainen, Minister of Finance, Paula Lehtomäki, Minister of the Environment, Jan Vapaavuori, Minister of Housing, and Stefan Wallin, Minister of Culture and Sport. The strategy has been prepared by sector ministries in cooperation, each being responsible for the development values and emission reduction sectors of their respective sectors.

Further information:

Mauri Pekkarinen, Minister of Economic Affairs, tel. +358 10 606 3500

Taisto Turunen, Director General, MTI, tel. +358 10 606 4700