In a Nutshell
- The achievement of carbon neutrality by 2035 will require significant contributions from carbon dioxide removal (CDR) due to Finland’s weakened sinks in the land use sector (LULUCF) sector.
- A recent landmark report provides recommendations about what the government could do to help promote carbon capture utilisation and storage (CCUS) and CDR.
- Currently, due to the absence of suitable geological storage sites, domestic CO2 storage is only allowed for research purposes.
- The Finnish government and several forerunner organisations are spearheading support for R&D and Innovation in the CDR space.
- Under the new government programme, Finland will implement measures to strengthen its carbon sinks and support the development of technological CDR and negative emissions.
Role for carbon removal in national climate policy
Finland has the world’s most ambitious legally enshrined carbon neutrality target, committing to achieve neutrality by 2035. Finland’s Climate Change Act sets greenhouse gas (GHG) emissions reductions targets of -60% by 2030, -80% by 2040 and -90% but aiming at -95% by 2050 compared to 1990 emissions levels.
Even though the Climate Change Act does not set binding targets for carbon sinks, achieving carbon neutrality by 2035 will likely require contributions from technological CDR due to Finland’s weakened sinks in the land use sector (LULUCF), which were a net source of emissions since 2021. The Finnish Climate Panel estimates that to support the national goal of carbon neutrality, it is necessary to produce negative emissions of approximately 6 Mt by 2035. It further estimates Finland’s greenhouse gas emissions in 2035 to be around 17-18 MtCO2e. In order to reach its carbon neutrality target, Finland needs to increase LULUCF-based net removals from 1Mt in 2022 to 17.8Mt CO2 in 2030. If the sink fails to deliver these targets, the shortfall will need to be covered by technological carbon sinks.
The Finnish government mandated the Finnish Technical Research Center (VTT) to write a report on “Carbon dioxide use and removal”, which was published in March 2023. The report explores the state of CCUS, CDR and related aspects, identifying several policy instruments that could accelerate the deployment of CCUS and CDR methods. It also provides recommendations about what the government could do to help promote CCUS and CDR.
In addition, another government-funded entity, The Finnish Innovation Fund Sitra published a paper on negative emissions or “miinuspäästöt”, where they recommended that Finland:
- Promote the EU policies and measures needed for negative emissions;
- Set a quantitative target for negative emissions in Finland;
- Define a national strategy for negative emissions;
- Allocate sufficient funds to develop and deploy solutions for negative emissions;
- Introduce financial incentives to stimulate investment in negative emissions.
Finland also has a “Climate Change Plan for the Land Use Sector” aimed at reducing land use emissions and strengthening carbon sinks. If implemented, the measures in the plan would result in an annual net impact of more than 3 Mt CO2e by 2035.
Finland already has several bioenergy plants alongside pulp and bioproduct factories where biogenic CO2 could be captured and potentially used to generate negative emissions as part of BECCS. Finland lacks suitable geological formations for the durable storage of CO2 and will need to export CO2.
The new Finnish government formed in June 2023 has published its government programme, which states that the government will advance Finland’s position as a frontrunner in climate mitigation by developing a new energy and climate strategy aimed at carbon negativity and promoting the clean transition.
Relevant legal frameworks
Finland’s Climate Change Act sets a legally binding carbon neutrality goal by 2035 and a target for net negativity thereafter. A target to strengthen carbon sinks is also included in the Act.
The Climate Change Act also sets out a planning system for climate change policy that consists of multiple plans, such as the Medium-Term Climate Change Policy Plan and a plan for the LULUCF sector.
The transposition of the EU CCS Directive into Finnish national legislation (Law on the capture and storage of carbon dioxide) does not allow for domestic geological storage of CO2, except for research and development purposes. The Act states that this specification is due to the absence of suitable geological storage sites but notes that it might be reconsidered in the future.
The Forest Act aims to promote the economically, ecologically, and socially sustainable management and use of forests. The Forest Act is Finland’s main tool to increase carbon sequestration through the forestry sector.
Support for R&D and Innovation
As part of the plan for the LULUCF sector, the “Catch the Carbon” programme was launched. The programme explores multiple measures to increase carbon sinks in the agriculture, forestry and land-use change sectors.
The Finnish Climate Fund invests in various climate solutions. While it has not yet supported any CDR companies, a few investments were made in bioenergy companies. The eligibility criteria for the fund do not exclude CDR.
The City of Helsinki has a carbon neutrality target for 2030. As part of this programme, it is researching, among other things, the possible uses of biochar in the city.
The Sustainable Growth Programme for Finland, which is directly linked to the Resilience and Recovery Plan for Finland, provides EUR 136 million to clean hydrogen and CCS/CCU in industry. While most of this funding does not apply to CDR, there is a mention of bio-CCS within the plan. It is labelled as the ‘only carbon-negative technology usable on an industrial scale’.
On the horizon
The new government programme announces a target for the use of technological sinks to be set during the 2020s, without providing further details. The government also plans to introduce incentives to advance investments in CDR, foreseeing that funding could be done through a reverse auction or a similar mechanism, potentially funded by a carbon sequestration market. The new government programme also discusses pilot projects to support the development of a carbon sequestration and emissions reductions market. It remains to be seen to which extent the programme will be translated into policies.
In September 2023, Minister of Environment and Climate Kai Mykkänen outlined that “one of the priorities of the government’s climate policy is even faster development of solutions that reduce emissions and capture carbon in industry and energy production. Forest industry, a high level of expertise in technology, and the energy use of biomass create opportunities for Finland to lead the way in the capture and utilisation of carbon dioxide”. Furthermore, he highlighted that the term technological sinks in the Finnish context refer to not only traditional CCUS but also carbon removal solutions based on technologies, such as bioenergy with carbon capture and storage (BECCS), direct air carbon capture and storage (DACCS) and biochar.
The Forest Act is under assessment until about the end of 2023 to determine whether reform is needed to maintain the growth of the carbon sink.
- Net zero target: 2035
- Net Negative Target:
- First interim target: 2030
- Type of interim target: Emissions reduction target
- GHGs covered: Carbon dioxide and other GHGs
- Separate target for emission reduction and removals: No
- Comprehensive CDR Target: no
- CDR Target for Conventional Removals: yes
- CDR Target for Novel Removals: no
- Historical emissions: No
- Annual reporting mechanism: Annual reporting
- Plans for carbon removal (CDR): Yes (unspecified)
- Planning to use external carbon credits: Not Specified
- Conditions on use of carbon credits:
- Ministry of the Environment – Responsible for policies regarding climate issues, communities, the built environment, housing, biodiversity and sustainable use of resources and environmental protection.
- Ministry of Agriculture and Forestry – Responsible for policies regarding domestic food production and the sustainable use of renewable natural resources.
- Ministry of Finance – Responsible for ensuring the stability of government finances and creating the foundation for sustainable growth.
- Ministry of Economic Affairs and Employment – Responsible for, among others, industrial policy, innovation and technology policy, and employment and unemployment matters.
- Natural Resources Institute Finland (LUKE) – Research institution operating under the Ministry of Agriculture and Forestry responsible for promoting competitive business based on the sustainable use of renewable natural resources.
- Finnish Environment Institute (SYKE) – Research institute providing open data and information on, among others, water resources, land cover and the built environment.
- The Finnish Technical Research Center (VTT) – Research institute owned by the Finnish state, advancing the utilisation and commercialisation of research and technology.
- SITRA – Finnish innovation fund focusing on three main themes: climate and environmental solutions, fair data economy and strengthening democracy and participation.