The revised Climate Change Act entered into force in 2022 and sets a climate neutrality goal for 2035, defined as a balance between all anthropogenic greenhouse gas emissions and removals by sinks.

Finland’s Climate Change Act sets binding targets for sectors covered by the EU Effort Sharing Regulation and the EU Emission Trading System for 2030, 2040 and 2050 with gross emission reductions of 60%, 80% and 90% to 95% respectively compared to 1990 levels.

Flowing from requirements set out in the EU Effort Sharing Regulation (ESR) and LULUCF Regulation, Finland also has another set of national targets for 2030 for sectors covered by the two regulations.

Under the European Climate Law, the EU as a whole must reduce its emissions by 55% by 2030. This commitment is reflected in the EU’s Nationally Determined Contribution to the Paris Agreement.

The intermediate targets set by the Climate Change Act are gross emission reduction targets. Given that gross emissions need to be reduced by 60% in 2030 and 80% in 2040 and that climate neutrality needs to be achieved by 2035, CDR needs to account for at least 20% of 1990 levels in 2035. Finland could add clarity to this ambition by setting separate targets for CDR.

Finland has a legally binding LULUCF target for 2030 through the EU LULUCF Regulation aiming to deliver an additional net removal capacity of 2.8 MtCO₂ by 2030. Achieving this target would bring Finland’s total LULUCF CDR target for 2030 to 17.8 MtCO₂/year.

In the 2023 Government programme, the government announced its intention to set a target for technological carbon sinks. However, no significant developments have taken place since then.

The Climate Change Act mandates that removals by sinks continue to increase, and GHG emissions, decrease after reaching climate neutrality in 2035, thereby constituting a net negative target. This target has not yet been quantified in terms of the level of net negativity to be reached.

At the EU level, the latest version of the European Climate Law states that the EU as a whole shall reach climate neutrality by 2050, and aim for net negative emissions thereafter, establishing the legal basis to introduce a quantified net negative target in the future.

Biomass sustainability

Finland acknowledges the crucial role of biomass, particularly wood-based fuels, in achieving its renewable energy targets. In its updated NECP, the country emphasises the use of industrial side streams and residues from forest management and felling for energy production. The sustainability of biomass production is regulated by the EU Renewable Energy Directive (RED), which Finland implemented in its national law in 2021. Finland's Forest Act ensures sustainable forest management, with sustainability requirements for legal harvesting and regeneration. Additionally, environmental legislation plays a key role in protecting biodiversity and soil. Monitoring systems such as the National Forest Inventory (NFI) are used to assess the sustainability of forest management practices. Finland adheres to the cascading principle of biomass use, prioritising its use based on economic and environmental value.

Mitigation deterrence

To prevent mitigation deterrence, Finland’s updated National Energy and Climate Plan establishes that direct emissions reductions must be prioritised over reliance on carbon removals. The Climate Change Act provides a framework for reducing emissions across all sectors, with specific milestones to prevent over-dependence on carbon sinks. The 2023 Government Programme also emphasises that emission reduction should be the priority.

Note: Mitigation deterrence is explained in a separate report by Carbon Gap.

Like-for-like principle

In 2023, the Finnish Government published a guide to good practices in voluntary carbon markets. The document indicates that a 100-year permanence should be regarded as a minimum benchmark for any removals used in compensation and offset claims.

Note: The like-for-like principle is a precondition to reach a state of durable net zero, in which all fossil GHG emissions are compensated by durable removals.

At the EU level, the Carbon Removal and Carbon Farming Framework (CRCF), an EU-wide certification mechanism, entered into force in November 2024. Methodologies for each CDR method will be developed by the EU Commission and will be applicable across EU member states. 

At the EU level, the Green Claims Directive, combined with the Directive on Empowering Consumers for the Green Transition, is expected provide a comprehensive framework for climate-related claims, including what is defined as a compensation claim. 

In 2023, the Finnish Government published a guide outlining good practices for voluntary carbon markets, taking into account current and developing EU and international standards for climate claims. The guide emphasises the importance of prioritising organisational emission reductions and using carbon credits only as a supplementary tool, which is in line with frameworks such as the Oxford Offsetting Principles.

Stemming from the EU Climate Law, only land-based removals from the LULUCF sector can be accounted for in the Finnish national inventory, and reported in Finland’s contribution towards the EU nationally determined contribution (NDC).

BECCS can be reported under the Effort Sharing Regulation, but not accounted for towards national emissions targets set by the Regulation, as per new guidelines by the European Commission. 

Furthermore, the CRCF states that all certified units should count towards the EU’s NDC. However, inclusion in the NDC might not take place prior to the publication of the IPCC’s methodology report in 2027, which will provide guidance as to how durable CDR should be accounted for.  

In the 2023 Government Programme, the government expressed its willingness to see Bio-CCS accounted for within the LULUCF Regulation.

The CRCF states that by 31 July 2026, the Commission needs to assess whether the CRCF and Article 6 of the Paris Agreement could be aligned. This would mean that Article 6 credits would be eligible to become CRCF units. For now, the EU’s NDC and its targets set in the European Climate Law are to be achieved only through domestic measures.

(a) Legal framework covering key aspects

Legality of CO₂ transport and storage

Under the Finnish CCS Act, the geological storage of carbon dioxide is prohibited in Finland and its exclusive economic zone (EEZ). The Finnish Government explained that this restriction arises because the subterranean geological formations in these areas are not suitable for the permanent and safe storage of carbon dioxide. However, storage sites with a total capacity lower than 100,000 tonnes of CO₂ used for R&D purposes are allowed.

The Finnish CCS Act provides some provisions around quality requirements for CO₂ streams and for access to transport infrastructure in case such infrastructure is built. The Finnish Energy Authority will be in charge of overseeing quality requirements and infrastructure access.

Finland is also subject to the EU TEN-E Regulation which provides the regulatory framework for establishing transnational CO₂ storage networks within the EU. Cross-border transport and storage projects are addressed under Swedish law, which requires collaboration with the regulatory authorities of other affected EU states, supporting alignment with EU-wide standards for cross-border carbon management.

Through the Industrial Carbon Management Strategy, the EU signalled the upcoming development of a dedicated regulatory package for CO₂ transport to cover remaining gaps in the CO₂ transport legal framework, including coordination between the many actors in the CCS value chain and standards for CO₂ purity.

Liability for CO₂

Finland has transposed the CCS Directive which contains key provisions on liability. However, these provisions are not implemented in practice due to the moratorium.

Environmental safety and remediation

The EU Environmental Liability Directive provides an EU-wide liability framework for environmental damages, including those induced by geological storage sites of CO₂.

London Protocol

As geological storage of CO₂ is prohibited in Finland, facilities planning to capture and remove CO₂ in Finland will need to use storage sites abroad. Therefore, agreements under the London Protocol are a key requirement to enable projects in Finland.

Finland is one of the few countries that has ratified the London Protocol’s amendment to Article 6, provisionally allowing contracting parties to transport CO₂ for geological storage across maritime borders, under the condition that an arrangement is in place between the countries concerned. Finland has also signed a memorandum of understanding with Norway in this regard, solidifying its intentions to engage in CO₂ transport activities.

In 2022, the European Commission released guidance on how to understand the amendment to Article 6 of the London Protocol. It concluded that the EU legal framework is well aligned with the London Protocol requirements and that the EU CCS Directive and the EU ETS Directive acted as a sufficient “arrangement” between countries in the European Economic Area (EEA). Therefore, according to the Commission, there is no need for bilateral agreements to implement the amendment to Article 6 of the Protocol. Bilateral agreements could be concluded only on issues that are not covered by the two directives.

(b) Legal framework covering all types of CO₂

The EU ETS Directive only recognises fossil CO₂ under its scope, as it only puts a price on emissions of fossil CO₂.

The EU TEN-E Regulation does not explicitly recognise all types of CO₂, causing confusion regarding whether projects transporting and storing biogenic and atmospheric CO₂ can be labelled as Projects of Common Interest or not.

Note: In the context of carbon management, there are three main types of CO₂, depending on their sources: atmospheric, biogenic and fossil CO₂. Atmospheric CO₂ is generally sourced from direct air capture, biogenic CO₂ from bio-energy with carbon capture and fossil CO₂ by point-source carbon capture in industrial facilities burning fossil fuels. Legal frameworks must cover all types of CO₂ to ensure equal access to CO₂ transport and storage infrastructure.

(a) Physical storage capacities

Geological storage

No geological storage sites have been identified in Finland.

Mineral and product storage

Government-owned research institute VTT produced a mapping of potential transport, storage and utilisation options in Finland. It found several locations suitable for mineralisation.

There is also increasing interest in storing CO₂ in concrete as another destination for the captured CO₂. For instance, the CO2ncrete Solution research project explores the potential of storing CO2 in recycled concrete. About 1.5 million tonnes of recycled concrete are produced annually in Finland, which represents a storage potential of approximately 165KtCO2/year. Another example is the VTT spin-off Carbonaide, which stemmed out of a research project to bind captured CO₂ in concrete.

(b) Estimation of CO₂ storage needs

According to scenarios developed by VTT, up to 25.2 MtCO₂/year could be captured from point source emissions, of which 21.0 Mt is biogenic CO₂. This CO₂ would either be used, to produce e-fuels for instance, or stored domestically or abroad.

Ownership of infrastructure

According to the CCS Act, if a carbon dioxide capturer and a CO₂ transport system operator cannot agree on access to the transport system, the Finnish Energy Authority can intervene and grant the capturer the right to connect to and use the system. This right is approved if the network has sufficient capacity or can be expanded at a reasonable cost, the CO₂ meets technical requirements for transmission, and the requested use does not conflict with existing operations. The Energy Authority will set the terms for connection, determine the costs incurred by the network operator, and ensure that any compensation, including a return on capital, is fair and reasonable.

Cross-border cooperation

The framework for cross-border cooperation is set under the EU TEN-E Regulation through the “Project of Common Interest” (PCI) label. Cross-border projects that have been labelled as PCIs can apply for funding under the Connecting Europe Facility for Energy. Earning the PCI label can help projects reach a final investment decision, as the label adds a seal of assurance that the project is robust.

Indication of capture and storage volumes

The EU Net Zero Industry Act (NZIA) sets a mandatory injection capacity target of at least 50 MtCO₂/year by 2030 in the EU. However, given that CO₂ storage capacities have not been mapped yet and that no concrete CDR and CCS targets have been adopted at the Finnish level, indications of capture and storage volumes in Finland are unclear.

State support

No state support has been given to develop CO₂ infrastructure so far. Given the absence of suitable geological storage sites, the government of Finland is likely to focus on creating transport hubs and intermediate storage sites instead.

In general, given the current prohibition of geological CO₂ storage in Finland, several elements of this sub-indicator are missing in Finnish law and policy.

Regarding storage permitting, when transposing the CCS Directive, Finland amended its Environmental Protection Act to require permits for activities posing environmental pollution risks, including CO₂ capture for geological storage. The Act mandates compliance with Finnish CO₂ stream quality requirements, reflecting the CCS Directive. Actors capturing CO₂ must conduct composition analyses and risk assessments, ensure CO₂ stream content meets quality standards, and maintain records of the quantity, properties, and composition of CO₂ streams delivered for storage.

Regarding permitting for transport and intermediate storage, the Finnish Energy Authority can grant CO₂ capturers access to transport networks if an agreement with the operator cannot be reached and may require necessary network modifications. This aligns with the CCS Directive and includes special provisions for networks crossing other states’ territories. CO₂ captured in Finland can only be stored within an EU member state's territory, EEZ, or continental shelf, while the construction of transport networks must follow a binding plan under the Land Use and Building Act. Additionally, the Act on Pressure-Bearing Equipment regulates pipelines and systems that transport or store compressed CO₂ under pressure.

In 2023, the Finnish Government mandated VTT, a government-owned research institute, to produce a report to assess the status of CCUS and CDR technologies in terms of potential, markets, technologies and policies.

The report found that Finland has significant potential for CCUS and CDR due to its large point source emissions, particularly from coastal facilities emitting 14 Mt of fossil CO₂ and 10 Mt of biogenic CO₂, which could be cost-effectively transported by ship to storage sites. The high biogenic emissions, mainly from pulp mills (7.4 MtCO₂/year), make CCUS a promising method for medium- to long-term climate targets. Biochar production, however, is limited by the availability of biomass waste, including wood waste (3.1 Mt/yr) and other residues. The potential for CCUS-based products, such as plastics (0.6 Mt/yr) and cement (1.5 Mt/yr), is constrained by market demand, while energy-intensive methods face challenges due to the availability and price of low-carbon electricity. While the report acknowledged the role that DACCS could play globally, the lack of geological storage sites makes the technology unfavourable to deploy in Finland.

While the VTT report outlined above recommends that, from a risk management perspective, BECCS, biochar and DACCS technologies should be developed in parallel to ensure a sufficient removal capacity by 2035, it does not provide a roadmap for RD&I funding. The report provides several recommendations for follow-up studies. These include studies relevant to developing a CCUS and CDR strategy and further research on CDR solutions that are less mature, such as enhanced rock weathering and marine-based CDR.

Several research projects and programmes in Finland are directly or indirectly related to CDR, including:

• The Catch the Carbon programme, which provided EUR 15 million to solutions that reduce emissions from land use and maintain and supplement carbon sinks;
• The Natural Resources Institute Finland (LUKE) funded projects on the smart carbon cycle and bioeconomy;
• The Research Council of Finland’s Academy Programme for Climate Change and Carbon Neutrality Research, which funded a few projects related to carbon sequestration;
• BECCU, a research project funded by VTT, Business Finland and other organisations, which explores how to combine bioenergy and CCU.

In the 2023 Government Programme, the Finnish government announced its intention to introduce a reverse auction or a similar mechanism for CDR. The VTT report assessing the status of CCUS and CDR technologies also called for deployment incentives for CDR, and so did the Finnish Climate Change Panel. No further developments have been announced publicly.

Public financing for private forest owners - amounting around EUR 45–60 million annually - is based on the Act on the Financing of Sustainable Forestry (34/2015). The act states the four general objectives of forestry financing: increase the growth of forests, maintain road networks for forestry purposes, secure forest biodiversity and promote the adaptation of forests to climate change. Each objective contains several actions that can be supported by the fund, including peatland forest management and forest management projects. Individual projects can be supported up to EUR 400,000.

The EU Common Agricultural Policy sets up direct payments through ecoschemes aiming to support environmentally friendly practices. Some activities enhancing soil carbon sequestration are among the recognised practices.

The European Commission is due to publish a report by July 2026 examining the possible inclusion of CDR into the EU Emissions Trading System or another compliance regime.

Given the lack of geological storage capacity in Finland, storage in long-lived products such as construction and mining residues is garnering interest in Finland, including from governmental actors.

For instance, the Construction Act, which entered into force on 1 January 2025, stipulates that the Government will emit decrees with more detailed provisions on what are determined as low-carbon buildings. Decree 1027/2024, published in December 2024 and entering into force on 1 January 2026, specifies that carbon storage in building materials and carbonation can be included in the carbon footprint assessment of several building materials. Concretely, this means that some CDR methods can be used to reduce the carbon footprint of buildings.

Beyond the EU ETS, Finland has implemented carbon pricing measures on traffic and heating fuels and peat combustion. Other sectors, such as agriculture, are currently not covered by any carbon pricing measure.

While Finland has a robust framework for public involvement in environmental policy, practical engagement in CDR initiatives reveals several gaps. For instance, the national call for projects on low-carbon hydrogen and CCU, as outlined in Finland’s Recovery and Resilience Plan, highlights efforts to solicit input from industrial stakeholders. However, broader public participation — especially from non-expert citizens and marginalised communities — appears limited.

The EU Just Transition Mechanism makes funding available for member states to support the green transition in territories most at risk of losing jobs due to the transition.

Finland's use of the Just Transition Fund (JTF) aims to mitigate the socioeconomic and environmental impacts of transitioning to a low-carbon economy, particularly in regions affected by the discontinuation of peat use. The funding, totalling approximately EUR 466 million from the EU and an additional EUR 665 million in national funds, will support business diversification, workforce re-education, and environmental restoration across seven regions in Finland, following each region's specific transition plan. The initiative focuses on creating jobs in the green economy and developing new green technologies, with targeted support for those unemployed or at risk in the peat sector.

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