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1、Energy Policy ReviewFinland 2023The IEA examines the full spectrum of energy issues including oil,gas and coal supply and demand,renewable energy technologies,electricity markets,energy efficiency,access to energy,demand side management and much more.Through its work,the IEA advocates policies that
2、will enhance the reliability,affordability and sustainability of energy in its 31 member countries,11 association countries and beyond.Please note that this publication is subject to specific restrictions that limit its use and distribution.The terms and conditions are available online at www.iea.or
3、g/t&c/This publication and any map included herein are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers and boundaries and to the name of any territory,city or area.Source:IEA.All rights reserved.International Energy Agency Website:w
4、ww.iea.orgIEA member countries:Australia Austria Belgium CanadaCzech Republic Denmark EstoniaFinland France Germany Greece HungaryIreland ItalyJapanKoreaLithuania Luxembourg Mexico Netherlands New Zealand NorwayPoland Portugal Slovak Republic Spain Sweden Switzerland Republic of TrkiyeUnited Kingdom
5、 United StatesThe European Commission also participates in the work of the IEAIEA association countries:INTERNATIONAL ENERGYAGENCYArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouth AfricaThailandUkraineRevised version,May 2023 Information notice found:www.iea.org/corrections3 FOREWORD Fore
6、word The mission of the International Energy Agency(IEA)is to shape a secure and sustainable energy future for all.We work with countries around the world on strengthening energy security and reaching net zero emissions.Our energy policy reviews are an essential IEA tool for providing insight and ad
7、vice to governments on how to best achieve their energy and climate goals.This report commends Finland for the impressive steps that it has taken to improve its energy security and advance its clean energy transition.I had the privilege of meeting with the Prime Minister and other members of the Fin
8、nish government in Helsinki in October 2022 to discuss how Finland and Europe can respond to the evolving challenges of the global energy crisis and take advantage of the opportunities of the new global energy economy that is emerging.Finland has set one of the most ambitious climate targets in the
9、world and the Climate Change Act was updated last year to create a legal obligation to reach carbon neutrality by 2035.It has already made notable progress towards this target,seeing strong growth in onshore wind generation,for example.It has also deployed the first new nuclear reactor in Europe in
10、over 15 years,which started commercial operation in April 2023.Thanks to these and other steps,Finland has one of the lowest levels of reliance on fossil fuels among IEA member countries.Historically,Russia has been a key source of Finlands energy imports.Following Russias invasion of Ukraine,Finlan
11、d has taken several positive steps to end any remaining reliance on Russian energy imports.For example,it has deployed a floating storage and regasification terminal that is capable of covering the natural gas needs of both Finland and Estonia.It has also launched a well-designed consumer awareness
12、campaign that has contributed to a considerable reduction in energy demand.Despite notable successes,some challenges remain.Imported fossil fuels still account for over one-third of Finlands energy supply,and some areas of the economy,such as transport and key industrial activities,are particularly
13、dependant.Also,land use change and forestry,a sector which has historically offset a significant amount of Finlands greenhouse gas emissions,was a net source of emissions for the first time in 2021.Whether this is a one-off aberration or the start of a long-term trend will have implications for Finl
14、ands overall climate and clean energy strategy.I sincerely hope the recommendations in this report will help Finland achieve carbon neutrality while ensuring energy security.Dr Fatih Birol Executive Director International Energy AgencyIEA.CC BY 4.0.5 TABLE OF CONTENTS ENERGY INSIGHTS Foreword.3 Exec
15、utive summary.11 1.General energy policy.17 Country overview.17 Energy sector overview.18 Energy production,supply,and demand.19 Key institutions and energy players.22 Key energy and climate targets.23 Key energy and climate policies.24 Covid-19 response.26 Measures to address high energy prices.26
16、Response to Russian invasion of Ukraine.28 Energy taxation.29 Fossil fuel subsidies.32 Energy poverty.32 Critical minerals and batteries.32 Hydrogen.33 Gender equality in the energy sector.34 Assessment.34 Key recommendations.37 ENERGY SYSTEM TRANSFORMATION 2.Energy and climate change.41 Overview.41
17、 Energy-related GHG emission.42 Emission drivers and carbon intensity.43 Climate targets.44 Climate policy and key mitigation measures.45 Carbon pricing.46 Reduction of peat for energy use.48 Methane emissions.49 Carbon capture,utilisation,and storage.50 Climate change impacts and adaptation.51 IEA.
18、CC BY 4.0.TABLE OF CONTENTS 6 Assessment.52 Recommendations.55 3.Energy efficiency.57 Overview.57 Energy demand.58 Energy efficiency and the energy crisis.59 Energy efficiency targets.59 Efficiency policy and measures.61 Industry.62 Buildings.65 District heating and cooling.69 Transport.71 Assessmen
19、t.75 Recommendations.78 4.Renewable energy.81 Overview.81 Renewable energy targets.82 Renewable energy policy and support measures.84 Assessment.95 Recommendations.99 5.Energy research and innovation.101 Overview.101 Key energy technology innovation actors.102 Energy innovation priorities and guidin
20、g documents.103 Resource push.105 Knowledge management.109 Monitoring,evaluation and tracking of results.112 Assessment.113 Recommendations.115 ENERGY SECURITY 6.Electricity.119 Overview.119 Electricity demand,generation,and trade.120 Electricity infrastructure.123 Electricity market and prices.128
21、IEA.CC BY 4.0.TABLE OF CONTENTS 7 TABLE OF CONTENTS Electricity Policy.134 Electricity emergency response.140 Assessment.141 Recommendations.144 7.Nuclear.147 Overview.147 Nuclear energy policy and regulation.148 Nuclear power plants.149 Uranium mining and enrichment.150 Nuclear research and innovat
22、ion.151 Research reactor decommissioning.152 Nuclear waste management.152 Assessment.153 Recommendations.156 8.Natural gas.159 Overview.159 Gas demand and supply.160 Gas infrastructure.162 Gas market and prices.165 Gas policy.166 Gas emergency response.168 Assessment.168 Recommendations.170 9.Oil.17
23、1 Overview.171 Oil supply and demand.172 Oil policy.174 Oil market and prices.176 Oil infrastructure.177 Oil emergency policy and stockholding.178 Assessment.179 Recommendations.180 ANNEXES ANNEX A:Review team and supporting stakeholders.181 ANNEX B:Statistical notes.184 IEA.CC BY 4.0.TABLE OF CONTE
24、NTS 8 ANNEX C:Glossary and list of abbreviations.188 Annex D:Hydrogen projects in Finland,2022.191 LIST OF FIGURES,TABLES AND BOXES Figures Figure 1.1 Energy production,supply and demand in Finland,2021.20 Figure 1.2 Total energy supply by source in Finland,2005-2021.21 Figure 1.3 Total final consum
25、ption by source in Finland,2005-2020.21 Figure 1.4 Energy demand per sector and per fuel,and electricity generation by fuel in Finland,2021.22 Figure 2.1 GHG emissions by sector in Finland,1990-2021 and targets.41 Figure 2.2 Energy-related GHG emissions by sector and by fuel in Finland,2005-2021.42
26、Figure 2.3 Energy-related GHG emissions and main drivers in Finland,2005-2021.44 Figure 3.1 Energy consumption and drivers in Finland,2005-2021.58 Figure 3.2 Total final consumption by sector in Finland,2005-2021.58 Figure 3.3 Average household annual energy expenditure,selected countries,2022 versu
27、s 2019.59 Figure 3.4Finlands 2020 and 2030 energy efficiency targets and status 2005-2020.60 Figure 3.5Total final consumption in industry by source in Finland,2005-2021 and energy use by subsector,2021.63 Figure 3.6 Total final consumption in the building sector by source in Finland,2005-2021,and b
28、y end use in 2020.66 Figure 3.7 Energy intensity of space heating in Finland,2005-2020.66 Figure 3.8 District heat supply by source in Finland,2005-2021.69 Figure 3.9 Total final consumption in transport by fuel,2005-2021,and by mode in 2020.72 Figure 3.10Transport energy intensity in select IEA cou
29、ntries,2005-2020.72 Figure 3.11 Registered electric vehicles and public charging points,2012-2021.73 Figure 4.1 Renewable energy in total final consumption in Finland,2005-2021.82 Figure 4.2 Renewable energy in key metrics in Finland,2021.82 Figure 4.3 Finlands renewable energy targets,trajectories
30、and status 2005-2030.83 Figure 4.4 Renewable energy in electricity generation in Finland,2005-2021.87 Figure 4.5 Renewable energy in heating and cooling in Finland,2005-2020.91 Figure 4.6 Renewable energy in transport in Finland,2005-2021.93 Figure 4.7 Obligated share of biofuels in annual transport
31、 fuel sales,2011-2030.94 Figure 5.1 Energy related R&D public budget by sector in Finland,2010-2020.105 Figure 5.2 Energy-related public R&D funding per GDP in IEA countries,2020.105 Figure 5.3 New patents in energy-related technologies in Finland,1995-2019.111 Figure 5.4 New patents in environment-
32、related technologies by GDP in IEA countries,2019.111 Figure 6.1 Monthly electricity demand,2021-2023 and range in 2016-2021.120 Figure 6.2 Electricity demand by sector in Finland,2005-2022.121 Figure 6.3 Electricity generation by source and net imports in Finland,2005-2022.122 Figure 6.4 Finlands e
33、lectricity imports and exports,2005-2022.122 Figure 6.5 Peak demand and electricity generation capacity during peak,2005-2022.123 Figure 6.6 Electricity infrastructure in Finland.124 IEA.CC BY 4.0.TABLE OF CONTENTS 9 TABLE OF CONTENTS Figure 6.7 Industry and household electricity prices in Finland,2
34、Q 2022.133 Figure 7.1 Share of nuclear in electricity generation in IEA member countries,2021.147 Figure 7.2 Nuclear electricity generation,2005-2021.148 Figure 7.3 Nuclear energy research and innovation budget,2010 to 2020.151 Figure 8.1 Share of natural gas in Finlands energy system,2005-2021.160
35、Figure 8.2 Natural gas demand by sector in Finland,2005-2022.161 Figure 8.3 Finlands natural gas imports by country,2005-2022.161 Figure 8.4 Finlands natural gas infrastructure.162 Figure 8.5 Finlands Natural gas imports by source,2005-2021.164 Figure 8.6 Natural gas prices for industry in Finland,2
36、Q 2022.166 Figure 9.1 Shares of oil in Finlands energy sector,2005-2021.172 Figure 9.2 Crude oil,NGL and refinery feedstock net imports by country,2005-2022.172 Figure 9.3 Oil products demand by sector in Finland,2005-2021.173 Figure 9.4 Oil products production in Finland,2005-2021.174 Figure 9.5 Fi
37、nlands net exports of oil products by country,2005-2021.174 Figure 9.6 Price comparison for automotive diesel in the IEA,2Q 2022.176 Figure 9.7 Price comparison for unleaded gasoline(95 RON)in the IEA,2Q 2022.177 Figure 9.8 Finlands oil infrastructure,2022.178 Figure 9.9 Emergency oil stocks by type
38、 in Finland,December 2017-December 2022 179 Tables Table 1.1 Finlands 2020 and 2030 energy sector targets and 2020 or 2021 status.24 Table 1.2 Energy tax rates in Finland,2022.30 Table 2.1 Finlands non-ETS annual greenhouse gas targets and emissions,2013-2020.45 Table 2.2 Emissions Trading System re
39、venues in Finland,2013-2022.47 Table 3.1 Main measures and expected energy savings under the National Climate and Energy Strategy.61 Table 3.2 Energy savings expected in Finland under Article 7 of the Energy Efficiency Directive.62 Table 4.1 Energy Aid grant funding,2018-2021.86 Table 4.2 Feed-in ta
40、riff payments in Finland,2019-2021.88 Table 6.1 Installed generation capacity in Finland,2018-2021.125 Table 6.2 Finlands interconnection capacity,2022 and 2035.126 Table 6.3 Finnish electricity transmission system AC lines,2018-2021.126 Table 6.4 Finnish electricity distribution system lines,2016-2
41、021.127 Table 6.5 Finnish electricity distribution system substations,2016-2021.127 Table 6.6 Finnish electricity distribution system investments,2016-2021.127 Table 6.7 Key indicators of Finlands wholesale electricity market,2018-2022.129 Table 6.8 Finnish electricity generation companies with more
42、 than 100 MW,2021.130 Table 6.9 Key retail market indicators in Finland,2018-2021.132 Table 6.10Electricity price breakdown for a typical household consumer in Finland,2018-2021.133 Table 7.1 Nuclear energy plants in Finland,2022.149 Box Box 3.1 Thermal storage.70 IEA.CC BY 4.0.11 ENERGY INSIGHTS Ex
43、ecutive summary Finlands energy and climate policies are centred on achieving carbon neutrality by 2035 while ensuring energy security,reducing energy import dependency,promoting a sustainable economy and protecting biodiversity.Finlands Climate Change Act was updated in July 2022 with a legal oblig
44、ation to reach carbon neutrality by 2035.In support of this obligation,the Act sets binding targets to reduce greenhouse gas(GHG)emissions,excluding land use,land-use change and forestry(LULUCF)by 60%by 2030,80%by 2040 and 90-95%by 2050.The Act also requires the development of several documents defi
45、ning the specific measures to achieve these targets.Thanks to its nuclear reactors and large domestic production of renewable energy(mainly forestry solid biomass as well as generation from hydro and wind),Finland has one of the lowest levels of reliance on fossil fuels among IEA member countries.In
46、 2021,fossil fuels covered 36%of Finlands total energy supply(TES),the second-lowest share among IEA countries and much lower than the IEA average of 70%.Finland has no domestic fossil fuel production and all supplies of crude oil,natural gas and coal are imported.The energy intensity of the economy
47、 and energy consumption per capita are both very high due to the countrys relatively large heavy industry sector and the high heating demand from its cold climate.The National Climate and Energy Strategy(NCES)is the key document defining the measures by which Finland will meet the European Unions(EU
48、)2030 energy and climate targets and achieve carbon neutrality by 2035.Finland plans to achieve carbon neutrality by maintaining a high share of nuclear energy,increasing electricity generation and heat production from renewables,improving energy efficiency,and electrifying most energy demand across
49、 the economy.There is also a push for the development,commercialisation and cost reduction of new and emerging energy technologies to drive energy transition in hard-to-abate sectors and end uses,especially industry and heavy transport.Bioenergy plays a key role in Finlands climate and energy policy
50、.Forestry biomass is a key source of electricity and heat,and biofuels play a central role in supporting energy transition in the transport sector.Finlands plan to achieve carbon neutrality also relies on increasing carbon removals from LULUCF to offset remaining emissions.Finland has made notable p
51、rogress in moving towards carbon neutrality.It deployed the first new nuclear reactor in Europe in over 15 years,which started full operation on 16 April 2023,and has seen strong growth in onshore wind generation.However,notable challenges remain.Imported fossil fuels still account for over a third
52、of Finlands energy supply and some areas of the economy,such as transport and key industrial activities,remain dependant on them.Also,while LULUCF has historically offset a significant amount of GHG emissions,there has been a declining trend in carbon removal from LULUCF since 2010.In 2021,for the f
53、irst time,the land-use sector was a net source of GHG emissions.IEA.CC BY 4.0.EXECUTIVE SUMMARY 12 Energy efficiency is a pillar of Finlands strategy to achieve carbon neutrality by 2035,lower energy bills,protect vulnerable consumers and boost energy security.As industry accounts for more than half
54、 of energy demand,energy efficiency agreements with specific action plans for industry sectors are expected to achieve the highest amount of savings from 2021 to 2030.In the buildings sector,fuel switching from oil to more efficient heating solutions drove improvements in heating efficiency.Finland
55、is a world leader in heat pump sales.District heating(DH)plays a significant role in the country,and its supply is transitioning away from fossil fuels towards bioenergy and waste heat.Finland is also a world leader in the development of thermal storage solutions,providing flexibility to DH networks
56、 but also to the electricity sector,thanks to sector integration.In the transport sector,the performance of passenger cars has improved and the fleet of electric vehicles(EVs)roughly doubled each year from 2012 to 2021.Looking ahead,Finland aims to not increase the energy demand of the industry sect
57、or while increasing its value added,strongly raising the share of space heating from non-combustion sources and electrifying the transport fleet with ambitious targets for 2030.Finlands NCES and other key policy documents indicate that a strong increase in renewable energy is needed to meet the 2035
58、 climate neutrality goal.Much of the growth in renewable electricity generation is expected to come from onshore wind generation,along with the development of Finlands first large-scale offshore farms.Solar PV,so far only a small source of generation,is also expected to rapidly increase deployment.W
59、ood fuels are expected to play a major role in reducing fossil fuel demand in the near future,but in the long term,the government wants to move to heating and cooling systems based on non-combustion technologies(heat pumps,waste heat recovery and geothermal).Increased use of renewable energy by pass
60、enger vehicles is driven mainly by a biofuel obligation and,to a smaller extent,EV adoption.The government sees low-emission hydrogen and hydrogen-based fuels as better solutions than direct electrification for heavy road transport,maritime transport and aviation.There is also a notable push to incr
61、ease biomethane production for use in transport and heating.Finland is a world-level player in energy technology innovation.In 2020,it ranked fourth among IEA countries for government budget allocations on energy research and development(R&D)as a share of gross domestic product(GDP).The NCES and oth
62、er key policy documents note that increased innovation is required to support the commercialisation and cost reduction of new and emerging energy technologies that are key to achieving Finlands climate goals.There is a focus on finding solutions for hard-to-abate sectors and on developing new energy
63、 technologies and services with the potential for global deployment to maximise climate benefits and promote Finlands economic competitiveness.Within the context of Finlands climate policy,there is an intent to increase Finlands“carbon handprint”,or positive global climate impacts,through the export
64、 of clean technology.The government sees critical mineral mining and processing and the battery supply chain as promising areas for delivering strong economic returns while supporting a secure energy transition.Finland has large deposits of cobalt,nickel,lithium,graphite and other critical minerals
65、and is already a major producer of several of these materials.In 2021,Finland refined around 10%of global cobalt output.Finland is home to the only producer outside of the Peoples Republic of China(hereafter“China”)supplying the cobalt for lithium-ion batteries and several Finnish companies are curr
66、ently expanding the production of nickel,cobalt and lithium.Finland is also active across the battery supply chain,from mining and processing of raw materials to manufacturing batteries and charging IEA.CC BY 4.0.EXECUTIVE SUMMARY 13 ENERGY INSIGHTS technologies,as well as battery recycling.The gove
67、rnment aims to increase Finlands role in the global battery supply chain through increased innovation,with a focus on developing products with higher added value.The National Battery Strategy 2025,published in June 2021,presents a road map for Finland to become a major player in the international ba
68、ttery industry.Finland aims for the electricity sector to play a major role in achieving the 2035 carbon neutrality target and long-term emissions reductions.The government expects most investment in the electricity sector to be driven by market forces,but it has introduced support measures to encou
69、rage investments to reduce the carbon intensity of electricity generation further and increase the electrification of energy demand.Energy taxation has also been adjusted to make investments in low-carbon generation and electrification more attractive.The government is encouraging the transmission a
70、nd distribution system operators to make significant investments to support increased low-carbon generation and electrification.Nuclear energy plays a key role in Finlands energy sector and is a central part of the governments plans to achieve carbon neutrality by 2035 and reduce energy import depen
71、dence.Nuclear is the largest source of electricity generation in Finland,amounting to 33%of total electricity generation in 2021.This figure is expected to increase to more than 40%following the start of operations of the Olkiluoto 3 reactor on 16 April 2023.As of 2021,Finland had the sixth-highest
72、share of nuclear generation among IEA member countries.It is also a global leader in nuclear waste management and disposal.The Onkalo nuclear waste disposal facility,under construction near the Olkiluoto nuclear power plant,is expected to start operating in 2025 and will be the worlds first permanen
73、t geological disposal facility for spent nuclear fuel and high-level radioactive waste.Finland does not have any uranium mining or nuclear fuel enrichment facilities.However,Terrafame,a 70%state-owned mining company,has been working to establish a facility to produce yellow cake uranium at a mine in
74、 the Kainuu region that produces nickel and other metals for batteries.In February 2022,the government granted a uranium recovery and refining permit that allows Terrafame to produce up to 250 tonnes of uranium each year.Only minor investments and final approvals are needed before uranium production
75、 can start.Once operational,it would be the only site in the European Union mining and processing uranium.Natural gas plays a small role in Finland(6.4%of TES in 2021)compared to the IEA average of 24%.However,natural gas is a key fuel for some parts of heavy industry.Finlands energy policy is focus
76、ed on reducing the use the gas,especially following the cut-off of gas supplies from the Russian Federation(hereafter“Russia”),formerly Finlands main supplier.There are efforts to increase industrial electrification and efficiency and boost the production of biogas and low-emission hydrogen to help
77、reduce natural gas demand.Oil plays a relatively small role in Finland(21%of TES in 2021)compared to the IEA average of 35%.The NCES outlines a variety of measures to further reduce oil consumption in transport by improving efficiency and encouraging the uptake of alternative fuels.Finlands Roadmap
78、to Fossil-Free Transport details measures to support the governments objective to reduce GHG emissions from transport by at least 50%by 2030(versus 2005)and end fossil fuel consumption in transport entirely by 2045.The government views the use of liquid biofuels as a key interim strategy to limit oi
79、l IEA.CC BY 4.0.EXECUTIVE SUMMARY 14 consumption in transportation.Finlands biofuels blending mandates were among the highest in the world at 19.5%in early 2022.The government plans to significantly increase them to 34%by 2030,including a sub-target of 10%for advanced biofuels.In the longer term,the
80、 uptake of EVs is viewed as the principal means of limiting oil consumption and achieving the goal of ending fossil fuel consumption in transportation.Peat plays a small but notable role in Finlands energy system for electricity generation and heat production.In 2021,peat accounted for 2.7%of TES an
81、d 2.9%of electricity generation.Ireland is the only other IEA country were peat plays a notable role in the energy system(2.5%of TES and 1%of electricity generation in 2021).The government aims to reduce the use of peat for energy by at least 50%by 2030.However,it is likely that the use of peat for
82、energy will stop well before 2030,with most large-scale peat-fired plants closing or switching to other fuels between 2023 and 2026.Starting in late 2021,global energy prices began to increase rapidly,especially in Europe.Price spikes and high volatility are persisting into 2023,driven by Russias in
83、vasion of Ukraine.In February 2022,Finland announced a range of measures to reduce the impact of higher energy prices,particularly for household electricity and heating,and for transportation and agricultural companies.According to the government,these measures will decrease tax revenues by EUR 450
84、million in 2022 but will not increase government spending.The government is examining how energy transition investment programmes could reduce energy costs and is preparing a loan guarantee programme to support investments by private households and housing companies in energy efficiency measures,ren
85、ewable heating systems,EV charging infrastructure and the purchase of EVs.Finland has historically relied on energy imports from Russia.In 2021,Finland spent EUR 10.1 billion on energy imports,with EUR 5.3 billion going to imports from Russia.By share of spending,Russia accounted for 81%of Finlands
86、crude oil net imports,75%of its natural gas,52%of its coal and 51%of its electricity net imports.Russia accounted for 25%of wood chips imports for energy use.Finland also imported nuclear fuel from Russia in 2021,accounting for 35%of the total monetary value of the countrys nuclear fuel imports.Howe
87、ver,following the Russian invasion of Ukraine,Russia unilaterally stopped supplying Finland with most wood products,including wood chips in March 2022,and with electricity and natural gas in May 2022.Finland is focused on reducing any remaining reliance on Russian energy imports and ensuring secure
88、access to energy by increasing imports from other countries and domestic renewable energy production and by reducing energy demand through energy efficiency.In line with these goals,Finland has taken several strong steps,including securing a ten-year lease on a floating storage and regasification(FS
89、RU)terminal capable of covering Finlands and Estonias gas demand.The FSRU started commercial operations in December 2022.On the demand side,Finland launched a consumer awareness campaign in August 2022 that aims to progressively increase public understanding on how to reduce energy demand to reduce
90、the impacts of the energy crisis driven by the Russian invasion of Ukraine.The campaign led to significant electricity savings from August to December 2022.IEA.CC BY 4.0.EXECUTIVE SUMMARY 15 ENERGY INSIGHTS The government of Finland should:Develop a contingency plan to achieve the 2035 net zero emis
91、sions target in case the LULUCF sector fails to deliver the needed carbon sinks.Ensure that temporary measures taken in response to energy price shocks do not undermine signals for long-term clean energy decisions and investments.Support increased deployment of energy storage to accelerate the integ
92、ration of renewable energy and boost the resilience and flexibility of the electricity grid and heating networks.Accelerate the uptake of electric vehicles with a clear plan for expanding EV charging infrastructure.Support increasing the vehicle turnover rate with a preference for EVs while encourag
93、ing less use and ownership of private vehicles by improving the infrastructure for public transport,walking and cycling.Prepare an offshore wind power road map that establishes a clear regulatory regime and ambitious targets and timelines for deployment.Incentives should be considered if needed.Asse
94、ss whether additional measures are needed to reduce oil consumption further to achieve the 2030 target to reduce transport emissions by 50%versus 2005.IEA.CC BY 4.0.17 ENERGY INSIGHTS 1.General energy policy Key data (2021)TES:1 391 PJ,-5%since 2011 TES by source:bioenergy and waste 33.6%,oil 20.8%,
95、nuclear 18.5%,coal 6.3%,natural gas 6.4%,electricity imports 4.6%,hydro 4.1%,peat 2.7%,wind 2.2%,heat 0.6%Energy intensity per capita(TES/capita):251.0 GJ/capita(IEA average:166.7 GJ/capita);-8%since 2011 Energy intensity per GDP(TES/GDP):5.44 MJ per 2015 USD PPP(IEA average at 3.7 MJ per USD);-12%c
96、hange since 2011 TFC:1 067 PJ;+2%since 2011 TFC by sector:industry 53%,buildings 31%,transport 16%Source:IEA(2022)Country overview Finland is located in Northern Europe,bordering Norway,Sweden and Russia,with coastlines on the Gulf of Bothnia and the Gulf of Finland.Finland has a relatively large la
97、nd area of 338 000 square kilometres(km2),which is covered mostly by forests and lakes.In 2022,the population was around 5.6 million,with the majority(over 85%)residing in cities located in the south of the country.Helsinki is the capital and largest city,with a population of around 660 000 in the c
98、ity limits and 1.5 million in the metropolitan area.Finland has a cold climate,with a long winter in the north and the interior.While winter is relatively mild along the western and southern coasts,even these regions have several months with sub-freezing temperatures and snowfall.Summer is generally
99、 mild and moderately rainy.Finlands cold climate(causing high heating demand)and well-developed economy with high industrial production give it one of the worlds highest levels of energy demand per capita.Finland is a parliamentary republic with a unicameral parliament consisting of 200 seats.Regula
100、r elections for all seats are held every four years to support the formation of a government under a Prime Minister.National elections are held every five years to select the President,who is the head of state.Most responsibility for energy and climate policy resides with the national government.Fin
101、land has 19 regions.The governments of the 18 mainland regions are composed of delegates from the respective regions municipalities.The 18 regional governments of the mainland have important roles in energy and climate policy,including urban planning and local transportation systems.IEA.CC BY 4.0.1.
102、GENERAL ENERGY POLICY18 Finlands autonomous region of the land Islands(population around 30 000 in 2020)has a separate parliament and head of government and greater control over policy making,including for energy policy.Finland has a well-developed,market-based economy with a GDP of around USD 315 b
103、illion in 2021(44th in the world)and a high GDP per capita of USD 54 682 in 2021(18th in the world),compared to the OECD average of USD 48 754.The Finnish economy relies mainly on the service sector(69%of GDP in 2021),followed by industry(28%),then agriculture,forestry and fisheries(3%)(OECD,2023).F
104、inland is competitive in promoting start-ups.Exports account for a large share of GDP(around one-third in 2021),with most exports going to other EU member states.Finlands major exports include forestry products and high-value chemicals and metals.The Finnish economy is dependent on raw materials imp
105、orts,except for timber and some minerals(OECD,2020).The Finnish economy has experienced steady growth in recent years,with GDP growing by 41%between 2010 and 2019.The Covid-19 pandemic resulted in a notable drop in GDP of 2%in 2020.Finland experienced an economic rebound in 2021,with GDP growing by
106、9%.The OECD estimates that economic growth will slow sharply to 1.1%in 2022 and 0.6%in 2023 owing to the continued disruptions of the pandemic and the Russian invasion of Ukraine.Energy sector overview Finlands energy and climate policies are centred on achieving carbon neutrality by 2035 while ensu
107、ring energy security,reducing energy import dependency,promoting a sustainable economy and protecting biodiversity.Finlands Climate Change Act was updated in July 2022 with a legal obligation to reach carbon neutrality by 2035.In support of this obligation,the Act sets binding targets to reduce GHG
108、emissions,excluding LULUCF by 60%by 2030,80%by 2040 and 90-95%by 2050.The Act also requires the development of several documents defining the specific measures to achieve these targets.Finlands plans to achieve carbon neutrality focus on maintaining a high share of nuclear energy,increasing electric
109、ity generation and heat production from renewables,improving energy efficiency,and electrifying most energy demand across the economy.There is also a push for the development,commercialisation and cost-reduction of new and emerging energy technologies to drive energy transition in hard-to-abate sect
110、ors and end uses,especially industry and heavy transport.Bioenergy plays a key role in Finlands climate and energy policy.Forestry biomass is a key source of electricity and heat,and biofuels play a key role in supporting energy transition in the transport sector.Finlands plan to achieve carbon neut
111、rality also relies on increasing carbon removals from LULUCF to offset remaining emissions.Following Russias invasion of Ukraine,there has been a strong focus on reducing reliance on Russian energy imports by increasing imports from other countries and reducing energy demand through improved energy
112、efficiency and increased use of renewable energy.In 2021,imports from Russia accounted for 81%of Finlands crude oil net imports,75%of its natural gas net imports and 19%of its electricity net imports(in 2020).In May 2022,Russia unilaterally stopped supplying electricity and gas to Finland.IEA.CC BY
113、4.0.1.GENERAL ENERGY POLICY19 ENERGY INSIGHTS Finland has made notable progress in moving towards carbon neutrality and reducing its reliance on energy imports from Russia.It has one of the lowest carbon intensities of electricity generation among IEA member countries.It deployed the first new nucle
114、ar reactor in Europe in over 15 years,which started full operation on 16 April 2023,and has seen strong growth in onshore wind generation.However,notable challenges remain.Imported fossil fuels still account for over a third of Finlands energy supply and some areas of the economy,such as transport a
115、nd key industrial activities,remain dependant on fossil fuels.Also,while LULUCF has historically offset a significant amount of GHG emissions,there has been a declining trend in carbon removal from LULUCF since 2010.In 2021,for the first time,the land-use sector was a net source of GHG emissions(see
116、 Chapter 2).Energy production,supply and demand Thanks to its nuclear reactors and large domestic production of renewable energy(mostly forestry solid biomass as well as generation from hydro and wind),Finland has one of the lowest levels of reliance on fossil fuels among IEA member countries.In 202
117、1,fossil fuels covered 36%of Finlands TES,compared to the IEA average of 70%.Finland does not have domestic fossil fuel production and all supplies of crude oil,natural gas and coal are imported(Figure 1.1).The energy intensity of the economy and energy consumption per capita are both very high due
118、to the countrys relatively large heavy industry sector and the high heating demand due to its cold climate.Oil plays a relatively smaller role in Finland(21%of TES in 2021)compared to the IEA average of 35%.Natural gas plays a notably smaller role in Finland(6.4%of TES in 2021)compared to the IEA av
119、erage of 24%.Finland uses only a small amount of coal(6.3%of TES in 2021,compared to the IEA average of 10%).Peat plays a small but notable role in Finlands energy system for electricity generation and heat production.In 2021,peat accounted for 2.7%of TES and 2.9%of electricity generation.Ireland is
120、 the only other IEA member country were peat plays a notable role in the energy system(2.5%of TES and 1%of electricity generation in 2021).Finland has seen a notable shift in the mix of its energy supply(Figure 1.2).From 2011 to 2021,the share of fossil fuels in TES declined from 53%to 36%,with the
121、share in TES falling for all fossil fuels:oil(26%to 21%),natural gas(9.6%to 6.4%)and coal(11%to 6.3%).The share of peat in TES also declined,from 5.8%to 2.7%.These shifts were mainly driven by fuel switching in industry and in electricity and heat generation away from fossil fuels to renewable energ
122、y(mainly solid biomass).From 2011 to 2021,bioenergy and waste in TES steadily increased from 23%to 34%.Wind generation also grew significantly,from 0.1%to 2.3%of TES.Over this period,the share of nuclear in TES was relatively stable,averaging 18%,but is expected to increase now that the new Olkiluot
123、o 3 reactor is fully operational.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 20 Figure 1.1 Energy production,supply and demand in Finland,2021 IEA.CC BY 4.0.*Other renewables include hydro,wind and solar.Source:IEA(2022).Finland has experienced a notable decline in fossil fuel demand(Figure 1.2).From 2011
124、 to 2021,the share of fossil fuels in total final consumption(TFC)dropped 36%to 33%,compared to the IEA average of 69%in 2020.The drop in fossil fuel demand was mainly due to reduced oil demand in the transport and industry sectors.There has been overall growth in the direct use of bioenergy,which p
125、lays a significant role in Finlands energy system.From 2011 to 2021,the share of bioenergy and waste in TFC grew from 19%to 24%,compared to the IEA average of 6%in 2020.A relatively large share of Finlands energy demand is covered by electricity,but there has been almost no increase in electrificati
126、on in the last decade.From 2011 to 2021,the share of TFC covered by electricity decreased,from 27.6%to 27.3%,but remained above the IEA average of 23%in 2020.District heat also plays a major role in Finland,covering 15%of TFC in 2021,compared to the IEA average of 2%in 2020.The share of DH peaked in
127、 2010(when the winter was exceptionally cold)at 17%,then gradually decreased to 15%in 2021.Industry accounts for,by far,the highest share of TFC(52%in 2021,compared to the IEA average of 36%in 2020),followed by buildings(33%)and transport(16%)(Figure 1.3).Industry energy demand is covered by a diver
128、se mix of sources,with notably high shares of bioenergy and waste(33%of industry TFC in 2021,compared to the IEA average of 7%in 2020)and electricity(26%of industry TFC in 2021,compared to the IEA average of 4%in 2020).Finland is notable for having almost no use of natural gas in buildings.In 2021,g
129、as covered just 0.7%of building TFC compared to the IEA average of 35%in 2020.Most building energy demand is covered by electricity(43%of building TFC in 2021,equal to the IEA average of 44%),followed by district heating(34%),bioenergy and waste(17%),and oil(6.1%).0 200 400 600 8001 0001 2001 400Pro
130、ductionTotal energy supplyTFC(by fuel)TFC(by sector)PJOther renewables*District heatElectricityBiofuels and wasteNuclearPeatNatural gasOilCoalTransformations and lossesIndustryTransportBuildingsImportsIEA.CC BY 4.0.1.GENERAL ENERGY POLICY 21 ENERGY INSIGHTS Figure 1.2 Total energy supply by source i
131、n Finland,2005-2021 IEA.CC BY 4.0.Source:IEA(2022).Figure 1.3 Total final consumption by source in Finland,2005-2021 IEA.CC BY 4.0.Source:IEA(2022).As in most IEA member countries,Finlands transport sector remains almost entirely reliant on oil(81%of transport TFC in 2021),with a growing share(17%)c
132、overed by biofuels and a very low share(2.0%)covered by electricity,mainly in rail(the IEA average for the share of electricity in transport is 0.9%).Finland is a leader in the deployment of EVs,which accounted for 3.6%of passenger vehicles in 2021(versus the EU average of 1.6%)and for 31%of new pas
133、senger vehicle sales(versus an EU average of 17.4%).Thanks to its nuclear reactors and a high share of generation from renewable energy,Finland has one of the lowest carbon intensities of electricity generation among IEA countries(101 grammes of carbon dioxide per kilowatt hour g CO2/kWh in 2021,com
134、pared to the IEA average of 321 g CO2/kWh).The carbon intensity of Finlands generation is expected to continue to decline thanks to increasing generation from nuclear and renewables.From 2010 to 2021,the share of generation from nuclear energy was relatively steady at around 33%but is expected to gr
135、ow notably now that the new 1.6 gigawatts(GW)Olkiluoto 3 reactor is fully operational(Figure 1.4).Between 2010 and 2021,the shares of generation from coal(18%to 4%),natural gas(14%to 5%)and peat(8%to 3%)declined,while there was strong growth in wind generation(0.4%to 11.3%).Hydropower is a major 0 2
136、00 400 600 8001 0001 2001 4001 600PJElectricity importsWindHydroBioenergy and wasteNuclearPeatNatural gasOilCoal0 200 400 600 8001 0001 200PJHeatElectricityBioenergy and wastePeatCoalNatural gasOilIEA.CC BY 4.0.1.GENERAL ENERGY POLICY 22 source of generation but experiences notable variations in out
137、put based on annual precipitation.From 2010 to 2021,the share of generation from hydro varied between a minimum of 16%and a maximum of 24%.Finland has a high share of generation from bioenergy and waste,which was relatively stable at around 18%of generation from 2010 to 2021,compared to the IEA aver
138、age of just 4%in 2021.Figure 1.4 Energy demand per sector and fuel,and electricity generation by fuel in Finland,2021 IEA.CC BY 4.0.Source:IEA(2022).Key institutions and energy players The Ministry of Economic Affairs and Employment has the principal responsibility for developing Finlands energy pol
139、icy.Within the ministry,the Energy Department leads on energy markets,energy efficiency,emissions trading,renewable energy,nuclear energy and fossil fuels.The Energy Department co-ordinates energy environment-related matters between ministries,including the Ministry of the Environment(especially on
140、climate change);the Ministry of Finance(for implementing energy taxation);the Ministry of Agriculture and Forestry(for biomass and LULUCF issues);the Ministry of Transport and Communications(for promotion of low-emission and energy-efficient transport);and the Ministry of Education,Science and Cultu
141、re(for research and innovation R&I policy).Finlands Energy Authority is the independent regulator responsible for licensing,supervising and promoting the efficient functioning of the electricity and gas markets.The Energy Authority is also the key entity responsible for implementing Finnish and EU e
142、nergy and climate policy,with a focus on reducing emissions and increasing energy efficiency and the use of renewable energy.Business Finland is a public organisation responsible for attracting trade,tourism and foreign investment to Finland and providing financial support for R&I.It is supervised b
143、y the Ministry of Economic Affairs and Employment and manages several of Finlands key R&I funding programmes.Motiva Oy is a state-owned company that implements government policies on energy conservation and the promotion of renewable energy sources.The Finnish Safety and Chemicals Agency(Tukes)is in
144、 charge of the market surveillance of both the EU Ecodesign Directive and the Energy Labelling Directive.The Natural Resources Institute Finland(Luke)is a research and expert organisation that promotes the bioeconomy and sustainable use of natural resources.Luke monitors natural resources,produces d
145、ata on GHG emissions,supports natural resource policies,and 0 50 100 150 200 250 300 350 400 450 500Industry Buildings TransportDistrict heatElectricitySolarBioenergy and wasteCoalNatural gasOilEnergy demandPJOilSolarNatural gasWindBioenergy and wasteHydroNuclear0 5 10 15 20 25TWhElectricity generat
146、ionIEA.CC BY 4.0.1.GENERAL ENERGY POLICY 23 ENERGY INSIGHTS produces Finlands official food and natural resource statistics.The Radiation and Nuclear Safety Authority is tasked with nuclear safety and radiation monitoring.The National Emergency Supply Agency is a network of ministries and industries
147、 that maintains and develops security of supply on the basis of public-private partnership initiatives.Statistics Finland is a government agency responsible for producing most official data(including energy data).The Finnish Competition and Consumer Authority(FCCA)is an independent authority respons
148、ible for ensuring fair and efficient market performance(including energy markets)for the benefit of the national economy and consumers.It has the power to bring legal cases to enforce Finnish and EU laws and regulations on competition and consumer protection.The Consumer Ombudsman,which works in con
149、junction with the FCCA,enforces compliance with consumer protection legislation,with a particular focus on marketing and contract terms(FCCA,2023).Finland has a strong energy industry sector with big players active across the Nordic markets.Fortum is the major electricity producer and the second-lar
150、gest heat producer in Finland.It also operates in power and heat sales;it is 50.8%government-owned.Fortum owns the Loviisa nuclear power plant and also provides waste management services.Teollisuuden Voima Oyj(TVO)is a Finnish nuclear power company owned by a consortium of power and industrial compa
151、nies.It owns the Olkiluoto nuclear power plant.Neste is a state-owned oil company that operates Finlands two oil refineries.Neste is also the largest producer of biodiesel in the world.Key energy and climate targets Finlands energy and climate policies are centred on achieving carbon neutrality by 2
152、035 while ensuring energy security,a sustainable economy and biodiversity protection.Finlands Climate Change Act was updated in July 2022 with a legal obligation to reach carbon neutrality by 2035.In support of this obligation,the Act sets binding targets to reduce GHG emissions(excluding LULUCF)by
153、60%by 2030,80%by 2040 and 90-95%by 2050.Finland also has a variety of energy and climate targets defined by EU directives(Table 1.1).GHG emissions from Finlands energy-intensive industry and large electricity generation are regulated under the EU Emissions Trading System(ETS).Finlands National Energ
154、y and Climate Plan(NECP)defines 2030 targets for non-ETS GHG emissions,renewable energy,energy efficiency and cross-border electricity interconnections that are intended to support the achievement of EU-wide 2030 targets.Finland achieved its 2020 targets for energy efficiency(primary and final energ
155、y consumption);renewables in gross final energy consumption,heating and cooling,and transport;and cross-border electricity interconnection.Finland just missed its target for renewables in electricity.Finland was able to achieve its 2020 GHG emissions reduction target under EU accounting rules that a
156、llow credits from years when emissions were below annual Effort Sharing Decision targets to offset for years when emissions exceeded annual targets.In addition,a notable part of the emissions reductions achieved in 2020 resulted from the negative impacts of the Covid-19 pandemic.Finland is updating
157、its 2030 targets for energy efficiency and renewables to reflect the 2035 carbon neutrality target and increased climate ambitions at the EU level.Finland is pushing the European Union to aim for carbon neutrality by 2035 to 2040,well ahead of the current goal of 2050.IEA.CC BY 4.0.1.GENERAL ENERGY
158、POLICY 24 Table 1.1 Finlands 2020 and 2030 energy sector targets and 2020 or 2021 status Target Metric 2021 status 2020 targets 2030 targets Total GHG emissions CO2-eq emissions versus 1990-33%(2020)No target-60%Non-ETS GHG emissions CO2-eq emissions versus 2005-11%(2020)-16%-39%Energy efficiency Pr
159、imary energy consumption(PJ)1 318 1 501 1 458 Final energy consumption(PJ)1 041 1 116 1 044 Renewable energy share Gross final energy consumption 43%38%51%Electricity 39%41%53%Heating and cooling 53%54%61%Transport 21%10%45%Cross-border electricity interconnection 29%(2020)18%15%Key energy and clima
160、te policies The Ministerial Working Group on Climate and Energy Policy directs the implementation of policies regarding the carbon neutrality target,strengthening of carbon sinks,and decision-making on climate and energy policy,considering the impacts on social justice and global competitiveness.The
161、 group is chaired by the Minister of the Environment and Climate Change and includes the Minister of Economic Affairs and Employment(responsible for energy policy),the Minister of Transport and Communications,the Minister for Development Cooperation and Foreign Trade,the Minister of Agriculture and
162、Forestry,the Minister of Social Affairs and Health,and the Minister for Nordic Cooperation and Equality.The National Climate and Energy Strategy,adopted in June 2022,is the key document defining the measures by which Finland will meet the European Unions 2030 energy and climate targets and achieve t
163、he national targets set in the Climate Change Act for reducing GHG emissions by 60%by 2030 and being carbon neutral by 2035.The strategy focuses on green transition and phasing out imports of Russian fossil energy.To achieve the needed emissions reductions,the strategy defines support measures to in
164、crease the use of renewable energy(see Chapter 4),improve energy efficiency(see Chapter 3)and promote innovations that accelerate and reduce the cost of energy transition.Finland provides one of the highest levels of public spending on energy R&I among IEA member countries(see Chapter 5).The strateg
165、y also relies on a significant increase in carbon removal through LULUCF to offset remaining emissions(see Chapter 2).The NCES includes measures to further reduce Finlands already low carbon intensity of electricity generation(including a ban on coal-fired generation by 2029 and goals to reduce peat
166、-fired generation and increase generation from renewables)and to boost the electrification of energy demand in industry,transport,and heating and cooling(see Chapter 6).Nuclear energy plays a key role in Finlands plans to achieve carbon-neutral electricity generation and reduce energy import depende
167、nce.Finlands 1.6 GW Olkiluoto 3 is the first reactor deployed in Europe in over 15 years and started full commercial operations 16 April 2023(see Chapter 7).Natural gas plays a relatively small role in Finland but is a key fuel for the economically important heavy industry sector.Finland is working
168、to diversify and decarbonise its gas supply(see Chapter 8).It also aims to reduce oil demand,especially from transport and buildings(see Chapter 9).IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 25 ENERGY INSIGHTS The Climate Change Act mandates the development of four policy plans that provide additional de
169、tails on Finlands climate and energy policies and supporting measures.The policy plans are the Medium-term Climate Change Policy Plan(defining mitigation measures for non-ETS sectors through 2030,published in July 2022),the National Climate Change Adaptation Plan(defining adaptation measures through
170、 2030,still under development),the Long-term Climate Change Policy Plan(defining policy through 2050,still under development)and the Climate Change Plan for the Land-Use Sector(defining measures to ensure LULUCF continues to act a major emission sink,published in July 2022)(see Chapter 2).In 2021,th
171、e Ministry of Transport and Communications adopted the Roadmap to Fossil-Free Transport,a resolution detailing plans to reduce GHG emissions from the transport sector in line with the 2035 carbon neutrality goal.The roadmap details pathways and measures to reduce GHG emissions from domestic transpor
172、t by at least 50%by 2030(versus 2005)and to achieve an entirely fossil fuel-free transport sector by 2045(see Chapters 3 and 4)(Finland,Ministry of Transport and Communications,2021).Finland is working on a legislative road map for a low-carbon construction sector based on life cycle assessments to
173、ensure all areas of construction(renovation,new buildings and transport infrastructure)are compatible with climate targets.Measures to promote wood construction will be continued(see Chapter 3).The reduction in industrial emissions is mainly based on sectoral low-carbon road maps.The low-carbon road
174、 maps will be updated as needed in 2023.The NCES notes that electrification and low-emission hydrogen will play a key role in reducing industrial emissions,noting a particular challenge to quickly increase emissions-free heat production and a need for strongly linking different energy systems(system
175、 integration)to phase out industrial use of fossil fuels.To support these efforts and drive low-carbon investments,the government will introduce an electrification subsidy for energy-intensive companies(see Chapters 3 and 4)As an EU member state,Finland is required to develop several documents detai
176、ling how national policies support the achievement of EU-wide climate and energy targets.Finlands NECP,adopted in 2019,details the policies and measures to support 2030 EU climate and energy targets relevant at that time.Finland is updating its NECP to reflect the increased EU ambition for reducing
177、GHG emissions and to account for the national 2035 carbon neutrality obligation.The updated NECP must be submitted to the European Commission in 2023.Finlands National Long-term Strategy,adopted in 2020,details the national policies to support the European Unions goal to achieve carbon neutrality by
178、 2050.In September 2022,the government announced its budget proposal for 2023;the total of EUR 80.5 billion is EUR 15.6 billion higher than the 2022 Budget.The proposal includes significant funding for green transition and addressing the energy security impacts of the global energy crisis and Russia
179、s invasion of Ukraine.An appropriation of approximately EUR 241 million is proposed for the package concerning security of supply,energy self-sufficiency and clean technologies.These measures include energy investments for biogas,hydrogen,financial support to housing companies for EV charging,subsid
180、ies for phasing out oil and gas heating in residential buildings,and subsidies to ensure the availability of domestic wood.The package includes an additional EUR 225 million for IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 26 Energy Aid schemes,hydrogen projects and the National Battery Strategy 2025.The b
181、udget also includes EUR 2.8 million to support municipalities in drawing up climate plans.Covid-19 response In response to the Covid-19 pandemic,the European Union established the Recovery and Resilience Facility,which provides EUR 724 billion to support EU member states recovery and resilience plan
182、s.Finland submitted its plan in May 2021.The European Commission approved the plan in October 2021,authorising EUR 2.1 billion in grant funding(equal to 0.9%of Finlands GDP)for projects and reforms to be completed by 2026.Unlike many other EU member states,Finland did not request any funding as loan
183、s.The plan allocated 50.4%of the funding to green transition to support the 2035 carbon neutrality target,including EUR 161 million for renewable energy(offshore wind,solar photovoltaics(PV),biogas,renewable transport fuels,geothermal and heat recovery),EUR 151 million for new energy transmission an
184、d distribution infrastructure,EUR 156 million for low-emission hydrogen and carbon capture storage and utilisation(CCUS),EUR 70 million to replace oil boilers with low-or zero-carbon heating systems,and EUR 40 million for private and public EV charging points(EC,2022a).The Ministerial Working Group
185、on Sustainable Growth in Finland is responsible for implementing the plan.In June 2022,the European Commission announced that the Recovery and Resilience Facility funding delivered to Finland would decrease from EUR 2.1 billion to EUR 1.8 billion because Finlands economy rebounded better than foreca
186、st.The facility allows for such changes to ensure that the limited funding flows to the member states the most impacted by the pandemic.Finland is in the process of developing an updated plan to reflect the lower level of funding and has indicated that reduced EU funding for certain programmes(repla
187、cing oil boilers and the deployment of EV charging stations)will be partially replaced with national funding.The government has created an ad hoc programme to distribute Finlands Recovery and Resilience Facility funding for renewable energy and energy infrastructure.The programme will award grants c
188、overing a certain share of investment costs of completed projects,with the level of funding depending on the technology and the size of the project.It will be run in a manner similar to the Energy Aid programme,which provides grants covering investment costs in renewable energy and energy efficiency
189、 projects(see Chapters 3 and 4).Measures to address high energy prices Starting in late 2021,global energy prices began to rapidly increase,especially in Europe.Price spikes and high volatility persist in 2023,driven by the Russian invasion of Ukraine.In February 2022,Finland announced a range of me
190、asures to reduce the impact of higher energy prices,particularly for household electricity and heating and for transportation and agricultural companies.According to the government,these measures would decrease tax revenues by EUR 450 million in 2022 but will not increase government spending.In earl
191、y 2022,the Electricity Market Act was amended to reduce retail electricity prices by reducing the allowed profits for distribution system operators(DSOs)and the allowed increase in distribution network tariffs.The rate of return for DSOs was reduced from 5.73%to 4%,the lowest level ever.The limit fo
192、r the maximum annual tariff increases was IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 27 ENERGY INSIGHTS reduced from 15%to 8%.These changes are expected to reduce DSO charges to consumers by EUR 350 million(Finland,Ministry of Economic Affairs and Employment,2021a).The government is examining how energy
193、transition investment programmes could reduce energy costs and is preparing a loan guarantee programme to support investments made by private households and housing companies in energy efficiency measures,renewable heating systems,EV charging infrastructure and for the purchase of EVs.The 2023 budge
194、t proposal also includes several measures to limit the impact of high electricity and heating costs,especially for low-income families with children.Increased electricity prices can now be taken into consideration when granting social assistance.The government is preparing a fixed-term income tax cr
195、edit for electricity costs that will be in force for four months(this would reduce tax revenue by an estimated EUR 265 million).The government will also prepare a separate financial support scheme for electricity available to households unable to make full use of the fixed-term income tax credit.Thi
196、s scheme is estimated to increase spending by EUR 85 million.In addition,the government lowered the value-added tax(VAT)on electricity from 24%to 10%from December 2022 to April 2023(this will decrease tax revenue by an estimated EUR 290 million).The government is also increasing funding available th
197、rough housing allowances to help cover higher heating costs and to support the renovation of single-family houses.The government estimates this will cost around EUR 6.3 million in 2023.The government is preparing a windfall profit tax on electricity producers which aims to offset the cost of aid to
198、consumers while ensuring that clean energy investments continue.According to the proposal,the tax would be 30%of the companys net profits exceeding a 10%return on capital in 2023.The law is expected to enter into force at the beginning of 2023 and the tax will be paid in early 2024(Fortum,2022a).In
199、addition,the government recommends that energy companies grant longer payment times to consumers with high electricity bills resulting from the energy crisis.The government is preparing amendments to the Electricity Market Act to increase consumer awareness of electricity supply contracts that use s
200、pot pricing.In the future,consumers will be required to expressly consent to spot pricing.When offering an electricity supply contract that uses spot pricing,the supplier must provide information on the opportunities,costs and risks of the contract.To reduce transportation costs,the government tempo
201、rarily increased the maximum tax deduction for travel expenses related to commuting to work from EUR 7 000 to EUR 8 400 and increased the kilometre allowance for work commuting expenses with a personal car from 0.25 EUR/km to 0.30 EUR/km.These changes were valid for 2022 and are expected to reduce e
202、xpenses for 570 000 commuters and lower tax revenue by around EUR 142 million.The government budget for 2023 reduced the VAT on passenger transport to zero between January and April 2023(this would reduce tax revenue by an estimated EUR 60 million)and continued the deduction for commuting expenses a
203、t 0.30 EUR/km for 2023(at a cost of EUR 24 million).In April 2022,the government reduced the biofuels blending obligation for 2022 and 2023,which could reduce transport fuel costs as biofuels are typically more expensive than diesel or gasoline(see Chapter 4).The government is examining the creation
204、 of a tax deduction for park-and-ride expenses related to work commuting.It is also working on a commercial diesel tax system to lower the cost of diesel used by professional drivers while taking into account Finlands climate goals.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 28 Response to Russias invasio
205、n of Ukraine In response to Russias invasion of Ukraine,Finland and the European Union are aiming to end reliance on Russian energy imports by imposing bans on imports from Russia,increasing imports from other countries,and reducing energy demand through improved energy efficiency and increased use
206、of renewable energy.Finland has historically relied on energy imports from Russia.In 2021,Finland spent EUR 10.1 billion on energy imports,with EUR 5.3 billion going to imports from Russia.By share of spending,Russia accounted for 81%of Finlands crude oil net imports,75%of its natural gas,52%of its
207、coal and 51%of its electricity net imports.Russia accounted for 25%of wood chips imports for energy use.Finland also imported nuclear fuel from Russia in 2021,accounting for 35%of the total monetary value of the countrys nuclear fuel imports.However,following the Russian invasion of Ukraine,Russia u
208、nilaterally stopped supplying Finland with most wood products,including wood chips in March 2022,and electricity and natural gas in May 2022(Finland,Ministry of Economic Affairs and Employment,2022).In March 2022,the European Union imposed sanctions banning all imports of Russian coal,which came int
209、o full effect in August 2022.In June 2022,the European Union imposed sanctions banning seaborne imports of Russian crude oil starting 5 December 2022 and Russian petroleum product imports starting 5 February 2023.Pipeline imports of crude oil and petroleum products are exempt(but Finland does not im
210、port Russian oil via pipelines).In May 2022,the European Commission introduced the REPowerEU plan,which proposes numerous measures intended to end EU reliance on Russian energy imports while supporting energy transition.REPowerEU will provide EUR 210 billion in grant funding to support these efforts
211、.The grants will be awarded through the existing EU Recovery and Resilience Facility.Member states(including Finland)are updating their national recovery and resilience plans with requests for the REPowerEU funds(EC,2022b).Under the REPowerEU plan,the European Union adopted a natural gas storage obl
212、igation requiring that,in total,EU gas storage facilities be at least 80%full by 5 November 2022 and 90%full by 1 November in subsequent years.Finland does not have natural gas storage but contributes to this gas storage obligation requirement by storing gas in Latvias underground gas storage facili
213、ty,which is connected to Finland via the Balticconnector pipeline that links Finland to the gas network of the Baltic states via Estonia.On 5 November 2022,the European Unions total gas storage was 95%full and Latvias was 58%full.The high level of storage filling contributed,along with mild weather,
214、to lower pressure on gas prices during the winter of 2022/23.In March 2022,Finland appointed the Ministerial Working Group on Preparedness to guide preparedness activities related to the effects of Russias invasion of Ukraine.The group is tasked to form a comprehensive picture of the effects of the
215、crisis,assess these effects(particularly in relation to the economy and security of supply,including energy supply),and decide on launching necessary measures and allocating resources.In May 2022,Finland secured a ten-year lease on a floating storage and regasification terminal that is intended to c
216、over Finlands and Estonias gas demand.The FSRU can support 5 billion cubic metres(bcm)of natural gas imports per year.In 2021,Finlands gas IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 29 ENERGY INSIGHTS demand was 2.6 bcm and Estonias 0.47 bcm.In December 2022,the FSRU started supplying gas,with full comme
217、rcial starting in January 2023.The ten-year lease of the FSRU is estimated to cost around EUR 0.45 billion(Fortum,2022b).In April 2022,the Ministerial Working Group on Preparedness agreed on a set of urgent measures to ensure affordable energy,including increasing the availability of forest chips an
218、d ensuring peat production.In addition,the National Emergency Supply Agency decided to establish an emergency reserve for peat that can cover six months of Finlands peat demand,which comes mainly from large-scale co-generation plants(see Chapter 6).In September 2022,following Russias unliteral decis
219、ion to stop supplying gas via Nord Stream 1,the government offered EUR 10 billion in liquidity guarantees to Finnish electricity companies.This is intended as a last-resort financing option for companies that would otherwise be threatened with insolvency because of ballooning collateral requirements
220、 for operation on key energy-trading platforms.A consumer awareness campaign(“Down a Degree”)was launched in August 2022 following the energy crisis due to Russias invasion of Ukraine.The government will provide regions with funds to support this campaign,with an estimated budget of approximately EU
221、R 1 million per year.The campaign led to significant electricity savings from August to December 2022.Finland has taken other notable steps in response to Russias invasion of Ukraine.In May 2022,Finland(and Sweden)applied to become members of the North Atlantic Treaty Organization(NATO).As of Septem
222、ber 2022,Finland had supplied at least EUR 92 million in defence and military aid to Ukraine.Finlands budget for 2023 proposes an additional EUR 30 million in aid for Ukraine.The budget also includes an additional EUR 1.0 billion for Finlands Ministry of Defence to boost personnel capacity,increase
223、refresher training and procure defence material.EUR 59 million will go to improving cybersecurity preparedness(including for energy infrastructure).EUR 791 million is proposed to assist the integration of Ukrainians fleeing the war.As of August 2022,37 000 Ukrainians had filed applications for tempo
224、rary protection in Finland.Energy taxation Finland aims for energy taxation to drive energy transition in a socially fair manner while ensuring a competitive position for domestic industry.Energy taxation comprises a tax based on energy content,a carbon tax based on lifetime CO2 emissions(77 EUR/ton
225、ne for transport fuels and 53 EUR/tonne for heating fuels in 2022)and a security of supply payment(Table 1.2).Revenue from Finlands energy taxes was EUR 4.5 billion in 2020(Finland,Ministry of Finance,2022a).VAT is 24%for all energy products.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 30 Table 1.2 Energy
226、tax rates in Finland,2022 Sector Fuel/user Unit Energy content tax Carbon tax Security payment Total*EUR/GJ*Transport Diesel EUR/litre 0.3457 0.2456 0.0035 0.5948 16.1 Gasoline EUR/litre 0.5379 0.2149 0.0068 0.7596 23.0 Heating and mobile machinery Heavy fuel oil EUR/litre 0.1159 0.1867 0.0028 0.305
227、4 7.9 Light fuel oil EUR/litre 0.1033 0.169 0.0035 0.2758 7.1 Natural gas EUR/MWh 10.33 12.94 0.084 23.354 6.5 Coal EUR/tonne 71.45 147.81 1.18 220.44 8.5 Electricity Household EUR/MWh 22.4 0 0.13 22.53 6.3 Industry EUR/MWh 0.5 0 0.58 0.2 *Excluding value-added tax.*Estimate based on:fuel oil 0.039
228、GJ/L,diesel 0.037 GJ/L,gasoline 0.033 GJ/L,coal 26 GJ/tonne.There are reductions and exemptions on energy taxation depending on the energy product,sector,end use and type of consumer,among other factors.Notable changes were made to energy taxation in 2021 as part of an ongoing process to align taxat
229、ion with Finlands 2035 carbon neutrality goal and address the impact of high energy prices on economic competitiveness.Finlands energy taxation will likely need to be updated to meet the new requirement under the EU Tax Directive being developed to support the Fit-for-55 package.This includes a pote
230、ntial requirement for the taxation of wood as an energy fuel.Finlands tax policy aims to encourage the use of bioenergy and discourage the use of fossil fuels.Biogas used in transport and liquid biofuels are subject to the energy content tax and the security of supply payment.Since January 2022,biog
231、as used in heating has been subject to the energy content tax at the same rate as natural gas(10.33 EUR/MWh).As with all other fuels,the carbon tax for biofuels and biogas is based on their lifetime CO2 emissions,resulting in carbon tax rates that are 50-100%less than those for fossil fuels.Solid bi
232、ofuels used in heating are exempt from all energy taxation.In line with energy transition goals,rates for all taxed heating fuels were increased at the beginning of 2022.There are tax exemptions to reduce the energy cost of commercial activities.Fuels used in marine shipping and commercial aviation
233、are exempt from energy taxation(as required under the EU Tax Directive).Electricity used in rail is exempt from energy taxation,diesel used in rail pays the heating fuel rate(lower than the transport rate).For professional agriculture,the energy content tax for light fuel oil,heavy fuel oil and liqu
234、id biofuels is refunded.To encourage the adoption of lower emission vehicles,there are exemptions or lower rates for taxes paid at the purchase and annual registration of battery EVs(BEVs),plug-in hybrid EVs and natural gas vehicles(see Chapter 3).To ensure that increased adoption of low-emission ve
235、hicles does not result in a strong drop in tax revenue,these vehicles are charged an annual fee of 0.015 EUR per 100 kilogrammes of vehicle mass for BEVs,0.005 for plug-in hybrid EVs and 0.031 natural gas vehicles.Finlands energy-intensive industrial facilities and large electricity and heat generat
236、ion plants are regulated under the EU ETS and must purchase allowances based on their IEA.CC BY 4.0.1.GENERAL ENERGY POLICY 31 ENERGY INSIGHTS GHG emissions(see Chapter 2).In October 2022,the ETS carbon price was around 79 EUR per tonne of CO2(t CO2).Under EU rules,fuels used by electricity generati
237、on plants are exempt from national energy taxation.For co-generation plants,a calculation is used to determine what share of fuels contributes to electricity generation and what share contributes to heat production.The share of fuel contributing to electricity is tax-exempt.The share contributing to
238、 heating is subject to the energy content tax(but with a reduction of 7.63 EUR/MWh),the carbon tax and the security of supply payment.In 2021,the calculation was updated to increase the taxation of the share of fuels used for heating and ensure that the use of heat pumps used in co-generation would
239、not increase taxation.The lower energy content tax for heating fuels used in co-generation was maintained.Electricity use is subject to an energy tax and the security of supply payment but exempt from the carbon tax.The energy tax has two brackets for electricity.The first bracket(22.4 EUR/MWh in 20
240、22)applies to households,the service sector,the public sector,forestry and construction.The second bracket gives a lower tax rate to industry,mining,professional greenhouse cultivation and data centres.Agriculture other than greenhouses is subject to the first tax bracket but is refunded the differe
241、nce between the first and second tax brackets.In 2021,the second bracket was reduced to the lowest rate allowed by the EU Tax Directive(0.5 EUR/MWh).In 2022,several activities were moved to the second bracket,including heat pumps used to support DH or that meet certain efficiency standards,water pum
242、ps supporting geothermal power and electric boilers.The second bracket already included data centres with peak demand above 5 megawatts(MW).In 2022,smaller data centres that meet certain efficiency standards or where waste heat is used productively were moved to the second bracket.Finland provides a
243、 refund of 85%of the energy content tax on electricity to certain energy-intensive industrial companies where total energy taxation(other than electricity)exceeds a certain share of the companys value added(1.7%in 2022,3.7%in 2023).The refund is provided only on energy taxation exceeding EUR 50 000
244、per year.The refund for energy-intensive companies is being phased out and will end in 2025.Tax policy is also used to drive investments that support energy transition.To encourage the deployment of small-scale renewable energy projects,electricity generation from these projects is exempt from energ
245、y taxation.To encourage the deployment and higher use of energy storage,the double taxation on energy storage was eliminated in 2019(see Chapter 6).There is an income tax deduction for private households that invest in improved heating systems and home renovations that reduce energy demand.The gover
246、nment is examining the extension of this deduction beyond private households(see Chapter 3).In 2021,the government introduced a 50%tax deduction for companies investing in R&I activities;this deduction was increased to 150%in 2022(see Chapter 5).The security of supply payment supports the National E
247、mergency Supply Fund,which funds Finlands National Emergency Supply Agency(NESA).NESA is tasked with planning and operations related to the maintenance and development of Finlands security of supply(energy and other critical materials and services).In the energy sector,NESAs duties relate primarily
248、to Finlands oil stockpiles for emergency response.The revenue from the security of supply payment is around EUR 42.5 million per year.In 2022,the National Emergency Supply Fund held around EUR 2.0 billion,mostly as physical oil stocks(see Chapters 6,8 and 9)(NESA,2022).IEA.CC BY 4.0.1.GENERAL ENERGY
249、 POLICY32 Fossil fuel subsidies The government has indicated that it aims to cut environmentally harmful subsidies and redirect these funds to support the clean energy transition.As an EU member state,Finland has committed to eliminate fossil fuel subsidies.The NECP includes a list of environmentall
250、y harmful energy subsidies(based on OECD definitions).The NECP does not distinguish fossil fuel subsidies,but the vast majority of environmentally harmful energy subsidies listed in the NECP are tax breaks related to fossil fuel use in industry,transport and agriculture,primarily for oil and natural
251、 gas.Subsidies distributed through the tax system are regularly monitored and reported in the state budget proposal and the governments financial statements.The list of tax subsidies is published annually and submitted to the parliament with the state budget proposal.In addition,annual reporting on
252、tax subsidies is supported by a steering group appointed by the Ministry of Finance,whose tasks include monitoring,evaluating and developing tax subsidy reporting.Energy poverty Finland does not have an official definition for energy poverty and no subsidies specifically target energy poverty.The go
253、vernment indicates that energy poverty is addressed through Finlands comprehensive social support system,which guarantees a minimum income for all and includes direct payments that can mitigate energy poverty.These include a housing allowance to reduce housing expenditures and meet basic needs such
254、as energy costs.In addition,households can deduct home renovation costs from their income tax,including investments that could reduce energy poverty,such as insulation and improved heating and cooling systems.Finland also places obligations on electricity suppliers to prevent them from cutting off e
255、lectricity,especially for households with electric heating.The most recent data from the EU Energy Poverty Advisory Hub show that energy poverty is a relatively minor problem in Finland,with only 1.9%of the population unable to keep their homes adequately warm in 2019.However,several studies have in
256、dicated climate change is increasing the risk of energy poverty in Finland,and that the focus on wintertime heating ignores energy poverty risk related to the inability to keep homes adequately cool in the summer,as most buildings in Finland were designed for a cold climate(Castao-Rosa et al.,2022).
257、The risk of energy poverty has also increased due to the recent sharp increase in global energy prices.Critical minerals and batteries The government sees critical mineral mining and processing and the battery supply chain as promising areas to deliver strong economic returns while supporting a secu
258、re energy transition.Finland has large deposits of cobalt,nickel,lithium,graphite and other critical minerals and is already a major producer of several of these.In 2021,Finland refined around 10%of global cobalt output.The Finnish company Freeport Cobalt is the only producer outside China supplying
259、 the cobalt for lithium-ion batteries.The Finnish companies Terraframe,Keliber and Nornickel are currently expanding the production of nickel,cobalt and lithium.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY33 ENERGY INSIGHTS Finland is also active across the battery supply chain,from mining and processing r
260、aw materials to battery manufacturing,charging technologies and battery recycling.The government aims to increase Finlands role in the global battery supply chain through increased innovation,with a focus on developing higher value-added products.The National Battery Strategy 2025,published in June
261、2021,presents a road map for Finland to become a major player in the international battery industry(Finland,Ministry of Economic Affairs and Employment,2021b).The government has budgeted EUR 300 million to support the achievement of the battery strategys goals.In May 2022,the private company Feyer s
262、igned a lease with the municipality of Vaasa for land where it aims to develop a battery production facility with 43 gigawatt hours(GWh)of battery cell capacity by 2025 and up to 83 GWh capacity by 2028.If completed,this would be one of the largest battery cell factories in Europe(FREYR,2022).There
263、is also funding for battery projects in Finland from the EU Important Projects of Common European Interest(IPCEI).This strategic financing instrument provides grants to large-scale consortia undertaking projects that support the EU industrial strategy.Funding is awarded by the European Commission ba
264、sed on a competitive process and is expected to leverage large private investments.Finland is involved in two IPCEI projects that support R&D in all segments of the battery value chain(EC,2022c).Hydrogen The government sees a key role for low-emission hydrogen in Finlands hard-to-abate sectors and e
265、nd uses,especially in certain industrial processes and heavy transport.The government published a National Hydrogen Roadmap in November 2020.The road map provides an overview of the potential for the production and use of low-emission hydrogen in Finland,noting that through 2030 the focus will be on
266、 industrial uses.The road map defines qualitative goals relating to low-emission hydrogen production,transport,storage and its use in industry,mobility and other sectors(Laurikko et al.,2020).The government published a study in May 2022 on the opportunities and limitations of the hydrogen economy in
267、 Finland.The study considered five scenarios and estimated that production volumes of low-emission hydrogen would be 3.7-7.9 terawatt hours(TWh)by 2030 and 6.4-132.9 TWh by 2050.The large range results from scenarios that included notable exports of hydrogen and electro-fuels(Finnish Governments Ana
268、lysis,Assessment and Research Activities,2022).The NCES includes a national hydrogen strategy detailing the role hydrogen is expected to play in achieving Finlands climate and energy goals.Priority is placed on developing a domestic hydrogen value chain,with a secondary focus on the potential for hy
269、drogen exports.The strategy defines targets for electrolysis capacity to reach at least 0.2 GW by 2025 and at least 1.0 GW in 2030(compared to just 9 MW in 2021).The strategy details measures to promote the production and use of hydrogen and electro-fuels based on hydrogen and indicates that Finland
270、 will take a technology-neutral approach that welcomes all emission-free forms of hydrogen production.Support programmes for hydrogen production and use include EUR 156 million for low-emission hydrogen and CCUS projects from the national recovery and resilience plan,an update allowing electro-fuels
271、 to contribute to meeting the transport biofuels blending mandate,a target for electro-fuels to cover 3%of transport energy demand by 2030,and support for the development of hydrogen transportation networks and refuelling stations.IEA.CC BY 4.0.34 1.GENERAL ENERGY POLICYThe strategy also notes Finla
272、nds strong commitment to hydrogen R&D and international co-operation in developing markets,standards and safety rules for hydrogen.Finland will participate in international partnerships for hydrogen,including those through the IEA,the Clean Energy Ministerial and Mission Innovation.In December 2020,
273、Finland signed a hydrogen manifesto with 22 other EU member states to participate in hydrogen IPCEI projects,with the European Union setting a target of producing 10 million tonnes of low-emission hydrogen by 2030.There are numerous ongoing and planned projects in Finland related to hydrogen(see Ann
274、ex D).Support for hydrogen projects in Finland comes from the EU Recovery and Resilience Facility,with EUR 156 million for low-emission hydrogen and CCUS,and from the IPCEI.A project being undertaken by the Finnish company Neste for the production and use of low-emission hydrogen at one of its refin
275、eries was among the projects approved to receive IPCEI support(Finland,Ministry of Finance,2022a).This project has already been granted EUR 88 million in funding through the EU Innovation Fund(FuelCellsWorks,2022).Gender equality in the energy sector The NCES notes that gender equality in the energy
276、 sector will be promoted in education,career advancement and pay,and the reputation of the energy sector as an equal employer for everyone.In 2018,Finland joined the international Equal by 30 campaign,which aims to ensure equal pay in the energy sector,gender equality in the appointment of managemen
277、t,and uniform opportunities for all to study and choose careers by 2030.The campaign is part of the IEA Technology Collaboration Programme,which promotes the opportunities the clean energy sector provides as an equal working environment.Assessment Since the IEAs last in-depth review in 2018,Finland
278、has built upon its energy and climate policy leadership role by establishing a legally binding target,via reform of the Climate Change Act,to achieve carbon neutrality by 2035.This target is to be achieved while also ensuring energy security,reducing energy import dependency,promoting a sustainable
279、economy and protecting biodiversity.Under EU directives and national laws,Finland has 2030 targets for greenhouse gas emissions,renewable energy,energy efficiency and cross-border electricity interconnection capacity,which are intended to support the achievement of EU-wide targets.In December 2020,t
280、he 2030 EU-wide GHG emissions reduction target was increased from 40%to 55%.Under the Fit-for-55 package and the REPowerEU plan,the European Union is updating a wide range of energy-and climate-related regulations to reflect the European Unions increased ambitions on energy security and energy trans
281、ition.Finland is updating its climate and energy policies to reflect the ongoing changes to EU energy and climate policy.The NCES is the key document defining the measures by which Finland aims to meet the national and EU targets,achieve carbon neutrality by 2035,and reduce reliance on Russian energ
282、y.The Climate Change Act requires the development of additional climate change policy documents focused on the medium term,the long term(2050),climate adaptation and the land-use sector.The government has adopted the medium-term and land-use sector plans.The adaptation and long-term policies remains
283、 under development.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY35 ENERGY INSIGHTS Finlands plans to achieve carbon neutrality focus on maintaining a high share of nuclear energy,increasing the use of renewables,reducing the use of fossil fuels and peat,improving energy efficiency,and increasing the electri
284、fication of energy demand across the economy.Finland plans to further expand its energy and climate policy leadership role by driving the development,commercialisation and cost-reduction of new and emerging technologies to drive the energy transition in hard-to-abate sectors and end uses,especially
285、industry and heavy transport.Olkiluoto 3 is Europes first nuclear reactor in over 15 years.Finland wishes to develop the nuclear sector by facilitating small modular reactors.The IEA review team noted that a reform of the Nuclear Energy Act is required to fully facilitate the potential of small modu
286、lar reactors in Finland.The sustainable use of bioenergy is central to Finlands energy policy.Forestry biomass is a key source of electricity and heat,and biofuels play a major role in supporting energy transition in the transport sector.Finlands plan to achieve carbon neutrality by 2035 relies heav
287、ily on increasing carbon removal through LULUCF to 21 million tonnes carbon dioxide(Mt CO2)per year.LULUCF has historically offset a significant amount of GHG emissions,averaging 18.6 million tonnes of CO2-equivalent(Mt CO2-eq)in net GHG emissions reductions per year from 1990 to 2020.However,there
288、has been a declining trend in carbon removal through LULUCF since 2010,and in 2021,the land-use sector was a net source of GHG emissions for the first time.The dependency on the LULUCF sector represents a clear risk to Finlands 2035 ambition.Should the LULUCF sector underperform,additional measures
289、will likely be required in the energy sector to achieve the net zero by 2035 ambition.Finland expects that most of the investments needed to support the energy transition will be made by the private sector based on market forces.Finland has numerous programmes that direct national and EU funding to
290、support the energy transition.Finland is moving away from providing operational subsidies towards an enabling framework system that includes limited investment subsidies for emerging technologies and small projects,with the aim to drive private investment.Finland has experienced a rapid deployment o
291、f renewables,dominated by onshore wind but more recently supplemented by solar.Since the closure of support schemes in 2018,the vast majority of onshore wind deployment has been on a market basis,with no investment or operational aid.Finland expects onshore wind to continue to grow,despite spatial l
292、imitations in the east,where turbines can interfere with the operation of military radar.A review has been commissioned to examine potential solutions to this issue.Offshore wind is also expected to grow significantly;however,some investment support is envisaged for a demonstration project,and regul
293、atory clarity is required to develop offshore wind in the Finnish exclusive economic zone.The government has indicated that it is working on eliminating environmentally harmful subsidies,but there is no full inventory of fossil fuel subsidies or any legally binding targets to phase them out.The most
294、 recent data from the EU Energy Poverty Advisory Hub show that energy poverty in Finland is currently a relatively minor problem,with only 1.9%of the population unable to keep their homes adequately warm in 2019 due in part to energy cost allowances provided to low-income groups.However,Finland has
295、no official definition of energy poverty.The risk of energy poverty has increased due to the recent sharp increase in global energy prices.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY36 Finlands high-quality education system supports the development of R&I skills and attracts foreign talent.The National Ro
296、admap for Research,Development and Innovation notes that the learning outcomes of Finlands education system are good by international standards but have deteriorated in recent years,with significantly fewer young adults completing a higher education degree than in peer countries.The IEA review team
297、notes that there are shortages in several sectors in the skills and expertise required to deliver the clean energy transition.In 2018,Finland joined the international Equal by 30 campaign,which aims to ensure equal pay in the energy sector,gender equality in the appointment of management,and uniform
298、 opportunities for all to study and choose careers by 2030.The NCES notes that gender equality in the energy sector will be promoted in education,career advancement and pay.In response to energy price increases driven by Russias invasion of Ukraine,Finland has introduced a range of measures to reduc
299、e the impact of higher energy prices.These measures include lower electricity network tariffs;reduced biofuel obligations;and several programmes that reduce the cost of electricity,heating and transport.There is also additional support for energy efficiency measures.The government continues to monit
300、or energy prices and has indicated it will take additional measures as needed to protect consumers from high prices.Also as a result of Russias invasion of Ukraine,Finland has dramatically reduced its reliance on Russian energy imports.In 2021,imports from Russia accounted for 34%of total energy con
301、sumption,comprised of 81%of Finlands crude oil net imports,75%of its natural gas,52%of coal and 51%of its electricity net imports.Finland also imported nuclear fuel from Russia in 2021,accounting for 35%of the total monetary value of its nuclear fuel imports.In March 2022,Russia unilaterally stopped
302、 supplying biomass to Finland and in May 2022 it stopped supplying electricity and gas.Finland and the European Union are taking strong steps to completely end reliance on Russian energy through the REPowerEU plan and national measures that aim to increase imports from other countries,increase renew
303、able energy and reduce energy demand.Finland operates a lean government;however,the IEA review team notes long lead times for the development of critical legislation to facilitate private investment in the clean energy transition.It was also noted that there can be significant delays and resource sh
304、ortages in the public authorities responsible for issuing the requisite permits for clean energy projects and supporting infrastructure.This conflicts with the REPowerEU goal of limiting permitting times to accelerate the deployment of renewables.Numerous experiences worldwide demonstrate that close
305、 co-operation between all levels of government and civil society generates long-lasting support for clean energy transitions,including for the related infrastructure deployment.To achieve its energy and climate policy targets in a cost-efficient manner,Finland could gain from further aligning effort
306、s at the national,regional and local levels where municipalities are best placed to ensure engagement with citizens.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY37 ENERGY INSIGHTS Key recommendations The government of Finland should:Develop a contingency plan to achieve the 2035 net zero emissions target in
307、 case theland use,land-use change and forestry sector fails to deliver the needed carbon sinks.Ensure that temporary measures taken in response to energy price shocks do notundermine signals for long-term clean energy decisions and investments.Ensure that relevant ministries,agencies and other publi
308、c bodies are adequatelyresourced to expeditiously develop legislation,implement reforms,and facilitateaccelerated and streamlined permitting of clean energy projects and supportinginfrastructure.Strengthen co-operation between national,regional and municipal authorities onenergy and climate planning
309、.IEA.CC BY 4.0.1.GENERAL ENERGY POLICY38 ReferencesCastao-Rosa,R.et al.(2022),Energy Poverty in Finland:Reality and Challenges in the Face of Climate Change,Springer,Cham,https:/doi.org/10.1007/978-3-030-91084-6_8EC(European Commission)(2022a),Finlands Recovery and Resilience Plan(web page),https:/c
310、ommission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility/finlands-recovery-and-resilience-plan_enEC(2022b),REPowerEU:A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition,press release,https:/ec.europa.eu/commission/pres
311、scorner/detail/en/IP_22_3131EC(2022c),Competition Policy Important Projects of Common European Interest(IPCEI)(web page),https:/competition-policy.ec.europa.eu/state-aid/legislation/modernisation/ipcei_enFCCA(Finnish Competition and Consumer Authority)(2023),FCCA website,https:/www.kkv.fi/enFinland,
312、Ministry of Economic Affairs and Employment(2022),Carbon Neutral Finland 2035 National Climate and Energy Strategy,https:/julkaisut.valtioneuvosto.fi/bitstream/handle/10024/164323/TEM_2022_55.pdf?seque nce=4Finland,Ministry of Economic Affairs and Employment(2021a),Legislative proposal to cut electr
313、icity distribution prices and profits of distribution companies,press release,https:/tem.fi/en/-/legislative-proposal-to-cut-electricity-distribution-prices-and-profits-of-distribution-companiesFinland,Ministry of Economic Affairs and Employment(2021b),National Battery Strategy 2025,https:/julkaisut
314、.valtioneuvosto.fi/bitstream/handle/10024/162685/TEM_2021_6.pdf?s equence=1&isAllowed=yFinland,Ministry of Finance(2022a),Finland participates in creating a European value chain for the hydrogen economy,press release,https:/vm.fi/en/-/1410877/finland-participates-in-creating-a-european-value-chain-f
315、or-the-hydrogen-economyFinland,Ministry of Finance(2022b),Energiaverotus(webpage),https:/vm.fi/energiaverotusFinland,Ministry of Finance(2022c),Finland will update its recovery and resilience plan,press release,https:/vm.fi/en/-/finland-updates-its-recovery-and-resilience-planFinland,Ministry of Fin
316、ance(2022d),The report on the development of energy taxation in Finland was published,press release,https:/vm.fi/-/taustaselvitys-suomen-energiaverotuksen-kehitystyolle-julkistettiinFinland,Ministry of Transport and Communications(2021),Roadmap to Fossil-Free Transport:Government resolution on reduc
317、ing domestic transports greenhouse gas emissions,https:/julkaisut.valtioneuvosto.fi/handle/10024/163260Finnish Governments Analysis,Assessment and Research Activities(2022),Hydrogen Economy:Opportunities and Limitations,https:/julkaisut.valtioneuvosto.fi/bitstream/handle/10024/164081/VNTEAS_2022_41.
318、pdf?se quence=1&isAllowed=yFortum(2022a),The Finnish government has published its proposal for windfall tax law Fortum to assess the proposal,https:/ year%202023IEA.CC BY 4.0.1.GENERAL ENERGY POLICY39 ENERGY INSIGHTS Fortum(2022b),Finlands first floating LNG terminal to be placed in Fortums Inkoo po
319、rt,https:/ FREYR(2022),FREYR Battery begins preparatory work in Vaasa,Finland,press release,https:/ FuelCellsWorks(2022),Neste,European Commission sign USD 97 million grant deal for clean hydrogen“SHARC”project for Porvoo refinery in Finland,https:/ IEA(International Energy Agency)(2022),World Energ
320、y Balances(database),https:/www.iea.org/data-and-statistics/data-product/world-energy-balances(accessed on 19 September 2022)Laurikko,J.et al.(2020),National Hydrogen Roadmap for Finland,Business Finland,https:/www.businessfinland.fi/4abb35/globalassets/finnish-customers/02-build-your-network/bioeco
321、nomy-cleantech/alykas-energia/bf_national_hydrogen_roadmap_2020.pdf NESA(National Emergency Supply Agency)(2022),Finances(web page),https:/www.huoltovarmuuskeskus.fi/en/organisation/funding-and-legislation/finances OECD(2023),Value Added by Activity(database),https:/data.oecd.org/natincome/value-add
322、ed-by-activity.htm(accessed on 20 February 2023).OECD(2020),OECD Economic Surveys:Finland 2020,https:/www.oecd.org/economy/surveys/FINLAND-2020-OECD-Economic%20Survey-Overview.pdf IEA.CC BY 4.0.41 ENERGY SYSTEM TRANSFORMATION 2.Energy and climate changeKey data(2021)GHG emissions with LULUCF:*49.0 M
323、t CO2-eq;+1%since 2005,-13%since 1990 GHG emissions without LULUCF:*48.0 Mt CO2-eq;-32%since 2005,-33%since 1990 Energy-related GHG emissions from fuel combustion:37.6 Mt CO2-eq;-33%since 2005 Energy-related GHG emissions by sector:electricity and heat generation 35%,industry 32%,transport 27%,build
324、ings 6%Energy-related GHG emissions per GDP:0.141 kg CO2/USD(IEA average 0.186 kg CO2/USD)Energy-related GHG emissions per capita:6.48 t CO2/capita(IEA average 8.28 t CO2/capita)*2021 greenhouse gas emissions data are from Statistics Finland.Overview Finland has set an ambitious and legally binding
325、target to achieve carbon neutrality by 2035,with binding targets to reduce GHG emissions(excluding LULUCF)by 60%by 2030,80%by 2040 and by at least 90%(with an aim for 95%)by 2050 versus 1990(Figure 2.1).From 1990 to 2021,Finlands GHG emissions excluding LULUCF fell by 33%,from 71 Mt CO2-eq to 48 Mt
326、CO2-eq,mainly due to a strong reduction in energy-related emissions(Figure 2.1).In 2021,71%of GHG emissions were energy-related,followed by 14%from agriculture,11%from non-energy related industrial processes(such as emissions from cement production or the use of fossil fuels as feedstocks)and waste(
327、3.5%).Figure 2.1 Greenhouse gas emissions by sector in Finland,1990-2021 and targets IEA.CC BY 4.0.Sources:IEA based on data from UNFCCC(2022);2021 data from Statistics Finland.-30-10 10 30 50 701990 1995 2000 2005 2010 2015 2020 2021*2025 2030 2035 2040 2045 2050Mt CO2-eqTargetWasteAgricultureIndus
328、trialprocessesEnergyLULUCF-60%-33%-80%-90%IEA.CC BY 4.0.2.ENERGY AND CLIMATE CHANGE42 Finlands plans to achieve carbon neutrality focus on maintaining a high share of nuclear and biomass generation,increasing electricity generation and heat production from renewables,improved energy efficiency and e
329、lectrification of most energy demand across the economy.There is also a push for commercialisation and cost-reduction of new and emerging energy technologies to drive energy transition in hard-to-abate sectors and end uses,especially industry and heavy transport.Finlands carbon neutrality target als
330、o relies on maintaining a high level of carbon removal through LULUCF.LULUCF has historically offset a significant amount of GHG emissions,averaging 18.6 Mt CO2-eq in net GHG emissions reductions per year from 1990 to 2020.However,there has been a declining trend in carbon removal through LULUCF sin
331、ce 2010,and in 2021 the land-use sector was a net source of GHG emissions for the first time(Statistics Finland,2022a).The main reasons for this were an increase in the total roundwood removals,which reached a record of 76.3 million cubic metres(mcm)in 2021(11%higher than in 2020),and lower than exp
332、ected forest growth.In addition,there was a trend of rising emissions from drained peat bogs.Most roundwood is used for industrial purposes.Energy-related greenhouse gas emissions From 2011 to 2021,Finlands energy-related GHG emissions experienced a significant overall decline from 56.1 Mt CO2-eq to
333、 37.6 Mt CO2-eq(Figure 2.2).Figure 2.2 Energy-related greenhouse gas emissions by sector and fuel in Finland,2005-2021 Greenhouse gas emissions by sector IEA.CC BY 4.0.Greenhouse gas emissions by fuel IEA.CC BY 4.0.Source:IEA(2023).0 10 20 30 40 50 60 70 802005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Mt CO-eqBuildingsTransportIndustryElectricity andheat gener