Carbon neutrality in the Finnish energy sector: prospects for a fossil-fuel phase out
Abstract
The Finnish government has set a target of reaching carbon neutrality by 2035 and renewable energy is playing an increasingly important role in the Finnish energy sector. Bioenergy from forest biomass is currently the most utilized renewable energy resource. European Union regulations are imposing limitations on the use of forest biomass for environmental reasons, however, and the energy sector is having to look for alternative renewable energy options to reach carbon neutrality. This paper reviews the latest changes in the energy industry in Finland and evaluates prospective renewable energy development and fossil fuel replacement in the future Finnish energy system. The study shows that only a combination of all available renewable energy forms can enable the carbon neutrality target to be achieved by 2035. There is a good possibility that Finland can replace fossil fuels fully in the energy sector; wind energy will increase its share of electricity production, and biomass will continue to play a crucial role in the heating sector. Industry and the transport sector, however, face greater challenges and should be studied in more detail.
Introduction
Renewable energy (RE) plays a vital role in the EU energy markets. The importance of RE is set to grow further as European countries transition from fossil fuels to more sustainable alternatives.1 In addition to benefits related to greenhouse gas (GHG) emissions reduction, renewable energy can contribute to energy security and stimulate economic growth.2 Furthermore, the transition from traditional energy sources to renewable energy can combat growing environmental degradation3 and allows sustainable mitigation of environmental pollution and associated health risks.4 The European Commission has thus set a target that the EU should be climate neutral by 2050, which means that the EU economy should attain net-zero GHG emissions.5 According to the Renewable Energy Directive (RED II), which sets out policy measures for the development of RE in the EU, the EU aims to reach a level of 32% energy generation from renewable energy sources by 2030.1
Finland is one of the leading countries in RE, with RE taking a share of about 42% of total energy consumption in 2022. The country has a target to reach carbon neutrality by 2035.6 In recent decades, about one third of the energy used in Finland has been imported from Russia, but energy imports from Russia are currently close to zero as Finland has ceased imports of wood fuels, pipeline gas, electricity, oil, and coal from Russia in line with sanctions imposed by the EU and measures introduced by the Finnish government.7 This dramatic change is spurring the country to take more active steps on the path towards green transition, including in the area of renewable energy development.
The drive to climate neutrality in Europe is not without its critics and it is important to be aware of the complexity of the challenge and the many different aspects involved. For example, Ulpiani and Vetters (2023)8 discussed risks associated with the concept of climate neutrality, such as financial, operational, and social risks. The study concluded that there is a lack of supportive scientific literature regarding the non-technological aspects of the transition to climate neutrality.8 Moreover, 100% renewable energy system scenarios differ and can vary greatly depending on the region.9 Clearly, a one-size-fits-all approach is inappropriate and different countries will follow different paths depending on the availability of resources, the status of economic development, and the prevailing energy system.
Bioenergy is the main renewable energy source in Finland. In 2020, almost 420 PJ of bioenergy was used, of which wood energy accounted for 80%.10 By 2035, it is expected that bioenergy use will grow to 500–518 PJ; wood-based energy use will increase to 450–470 PJ and the rest will come from agrobiomass, biowaste, and imported biomass. After 2035, it is expected that the use of wood-based energy will remain stable. It is predicted. however, that from 2035, the role of bioenergy in total renewable energy production will decrease from the current 80% to 60%.11 This reduction can be explained by environmental limitations on biomass usage, by the development of other alternative fuels, and by EU regulations within the framework of the EU's Renewable Energy Directive. Within a context of limits to bioenergy use, it is thus important to look at future prospects for the energy system in Finland, examining different options for fossil fuel replacements, such as wind, solar, and second-generation biofuels.
Hakkarainen et al. (2022)12 analyze bioenergy RES hybrids statutes in several countries including Finland. Although the use of bioenergy with other renewables such a solar and wind is not popular in Finland, in the long-term perspective it can be more visual thanks to technical potential development considerable. The aim of this paper is to explore the role of, and prospects for, renewable energy in the attainment of carbon neutrality and to examine how fossil fuel use in Finland can be replaced by renewable energy by 2035 and beyond. The paper reviews the current status of different fuels with a focus on future perspectives for development.
Status and outlook for different energy sources
Although renewable energy already accounts for quite a large part of energy production in Finland (41.8%), fossil fuels still play an important role in the energy mix (Fig. 1). This section reviews the current status and future prospects of the most important energy sources in the Finnish energy sector.13
Biomass
Finland has good biomass resources available, which are mainly in the form of forest biomass. With around 22.5 million hectares, about 75% of total land area, Finland is the second most forested region in the EU after Sweden with 26.5 million hectares.14-17 As in the rest of the world, by far the most commonly used biomass type is solid biomass, and forest fuels, wood residues, and recycled wood account for the largest share of Finnish bioenergy production (Fig. 2). Other types of biomass, such as liquid biofuels, biogas, and renewable waste, are increasing their shares but are still relatively minor compared to solid biomass.
In 2020, total bioenergy energy use was 116 TWh, of which wood energy use was 93 TWh. According to scenario analyses by the national HIISI project,19 bioenergy use can be increased to 139–144 TWh by 2035, after which it will stabilize.20 Wood energy use is estimated to grow to 128–131 TWh by 2035, making it the most important contributor to bioenergy growth. Growth will also be seen in use of agrobiomass, imported biofuels and bio-components of waste fuels.21
Looking at wood energy in more detail, estimates by the Finnish Ministry of Economic Affairs and Employment (2022)22 forecast that the use of wood fuels, depending on the scenario, will increase by just under 20% by 2050 (the base scenario) or slightly more (the policy scenario). According to both scenarios, roundwood removal will increase from 70 Mm3 (2016–2025) to slightly over 80 Mm3 (2036–2045).22
Wood pellets are produced and used mainly in southern Finland (Fig. 2). Although wood pellet consumption is increasing, primarily due to the use of wood pellets in large combined heat and power (CHP) plants, significant growth in wood pellet usage is not expected. Finland has a long tradition of wood chip usage, and, for economic reasons, wood pellets are not very largely used.23 Analyzing capital costs of using chips, pellets, and oil in heating systems, Raghu et al.24 concluded that wood pellets are the most expensive option and not economically competitive, especially in rural areas where utilization of forest wood is the most attractive option. In 2022, wood pellet production and consumption in Finland was 360 000 tons and 530 000 tons, respectively. It should be noted that in some other EU countries, wood pellet consumption and production are calculated in million tons. For example, Italy consumes about 3.4 Mtoe, and the Netherlands and Germany consume about 1.9 Mtoe. The greatest production of wood pellets is recorded in Germany (3.3 Mtoe), Latvia (2.3 Mtoe), and Sweden (1.9 Mtoe).25
Biogas production (including biomethane) accounted for 1 TWh in 2019, which is about 0.5% of renewable energy production. It is expected that biogas production can be 4–7 TWh in 2030, and 0.4–2 TWh of biogas will be used for heat and electricity production in Finland.26 There are a number of small plants around the country. Most biogas production is from biowaste and sewage sludge. Half of the biogas was used for heat and electricity production and about 15% for road transport in 2019. The share of biomethane in biogas production in 2021 was around 20%. In the Finnish context, biomethane purified from biogas is mainly used for road transport. The Finnish Biocycle and Biogas Association27 estimates that the potential for the production of biogas from waste materials is 11 TWh annually. In 2021, Finland had 33 landfill gas collection sites and 69 biogas production reactor plants.26
The biogas growth in coming years will be driven partly by Finland's National Climate and Energy Strategy, which, along with other measures, outlines greater use of biogas and electro fuels. From the beginning of 2022, Finland has the obligation to use the biofuels and increase its usage to 34% by 2030 in transport sector.6 Some biogas is produced from waste in Finland. Regarding waste in general, a few larger plants produce energy from waste incineration (Fig. 2). There is little potential for increase, however, as Finland's waste incineration potential is nearly fully exploited.28
Hydrogen can be important in the future energy system in Finland because most hydrogen (88%) is used for processing oil and biofuels. However, hydrogen issues seem complicated due to the fact that Finland currently produces about 140–150 knots (4.7–5.0 TWh) of hydrogen per year and this production is mostly (99%) from natural gas. Major users of hydrogen include Neste's offices in Porvoo and UPM's biofuel generation plant in Lappeenranta. In Finland, hydrogen is also produced as a by-product at various generation plants within the woodland and chemical businesses.29 Low-emission hydrogen production will be 3.7–7.8 TWh by 2030 and 6.4–132.9 TWh by 2050 based on five different scenarios, some of which include significant exports of hydrogen and electro fuels. The National Hydrogen Strategy sets a target for hydrogen production by electrolysis of at least 0.2 GW capacity by 2025 and 1 GW capacity by 2030. The focus is on the development of both the value of the domestic hydrogen supply chain and the export potential.30
The use of algae for biomass production in Finland is the subject of research, and its commercialization poses technical challenges in terms of economic viability. Algae have good carbon sequestration potential, which is advantageous from a climate-change mitigation perspective. Business Finland is funding the Robust Algae Systems (ROBA)31 project, which aims to develop economically viable processes for algae cultivation. For example, the Finnish fuels producer Neste is a partner in the project and aims to expand its range of renewable feedstocks to include microalgae as one potential option for oil production.31 However, algae production projects are not envisaged in Finland in the near future.
Wind power, solar power, and hydropower
Finnish electricity consumption is forecast to rise from the current 86 TWh to about 128–188 TWh by 2035.32 According to the Finnish national electricity transmission grid operator, Fingrid,33 people are increasingly looking to wind and solar energy as options for electricity production.
Finland began to develop wind energy actively in 2012 and currently has 1393 installed wind turbines with a combined capacity of 5677 MW. In 2022, 14.1% of Finland's electricity consumption was met by wind energy. According to the Finnish Wind Power Association (FWPA), about 66 000 MW of wind power projects are under development in Finland. It should be borne in mind that not all projects may be realized but it is nevertheless estimated that Finland will have 100 TWh of annual onshore wind power production and 100 TWh of annual offshore wind power production by 2040.32
In Finland, depending on the installation site and the year, the solar electricity production per installed kilowatt is around 800–1000 kWh/kWp. Finland had more than 300 MW of grid-connected photovoltaic (PV) in 2022.34 As with wind energy, many solar power projects are at the planning stage. For example, an industrial-scale solar power park with a total rated capacity of up to 230 MWp is under development in the municipality of Joroinen, Finland. Solar farms are also planned in Huutokoski and Vuotsinsuo, with a capacity of 55–70 and 160 MWp, respectively.35
Finland has long, cold, and dark winters, which makes the country a difficult environment for large-scale solar energy development. However, Child et al.36 suggest that energy storage technology could facilitate high penetrations of solar PV and other forms of variable RE. These solutions include electric and thermal storage systems in addition to a robust role for power-to-gas technology.36
Solar power in Finland has been increasing at a rate of around 80–90 MW p.a. in recent years, with the majority of the panels being installed on buildings. At the end of 2021, there were an estimated 40 000 mainly small-scale solar power installations connected to the electricity grid. If Finland built the first tens of megawatts of ground-mounted power, the country will reach the maximum annual installed photovoltaic capacity.21
Regarding the future of hydropower, large progress in hydro energy is not expected. Hydro requires deep drilling technology and comprises risk such as earthquakes in Finland.37
Peat and nuclear energy
Peat production and consumption have a long tradition in Finland, and peat is used for heat and power generation in many municipalities and industrial plants in central and northern parts of the country (Fig. 2). However, to reach carbon neutrality, the use of peat must be discontinued. Analyzing the status of peat and the outlook for the future, Mölsä (2023),38 based on replies to a questionnaire sent to peat companies, concluded that in the next 3–5 years many Finnish companies will replace peat with more sustainable alternatives, and peat as a fuel will be phased out rapidly. Peat is currently being replaced mainly by wood fuels, energy generated from industrial by-products, the use of waste heat, and heat pumps and electric boilers. The price of fuel peat increased by 70% from 2019 to 2022 as a result of changes in the peat tax and the price of carbon permits. The price of emissions allowances increased from €8/tCO2e (2018) to a carbon permit value of €90/tCO2e (2023) (see below). The cost of using fuel peat is consequently greater than that of other biofuels. The price of domestic wood fuels increased in 2022 due to the lack of biomass imports from Russia, and slightly less peat was used than forecast. Despite changes in the business environment, ongoing investments and targets for carbon neutral energy production will likely lead to peat being replaced within 5 years.38 It seems that the end of peat usage is close due to lack of policy support and investment as well as for other economic reasons.
Regarding nuclear energy, Finland currently operates four nuclear reactors with a gross total output of 2794 MW. The combined output of the power plants exceeds 20 TWh per year (22.6 TWh in 2021). The Loviisa nuclear power station houses the Loviisa 1 and Loviisa 2 pressurized water reactors owned by Fortum Power and Heat Oy. The total gross output of each reactor is 507 MW. The current operation permits for them expire in 2027 and 2030 respectively. Teollisuuden Voima Oyj (TVO) has two boiling-water power plant units Olkiluoto 1 and Olkiluoto 2, on Olkiluoto island in Eurajoki. Each unit has a gross output of 890 MW and their current operating license expires in 2038. The third nuclear power unit, Olkiluoto 3, started operation in 2022 with a capacity of 1600 MW.37
Small-scale nuclear power in the 20–200 MWth size range would be suitable for district heating. While having benefits such as lower production costs, simplicity, and good safety characteristics, few small modular reactors have yet been constructed worldwide and licensing issues remain to be resolved in many countries. To our knowledge, Finland has no any plans for unused ventures in atomic control. The Fennovoima Hanhikivi extension has been suspended due to sanctions against Russia, and its future is questionable. Fortum has applied for a permit to operate the two reactors at Loviisa until 2050. The assessed cost of the venture is €325 million.
Fossil fuel replacement
Finland has traditionally used a large amount of coal, mostly for energy production (Fig. 1) and in the metallurgical industry. Quality requirements for coal used in the metallurgical industry are strict, and coal for metallurgical use is mostly imported from the US and Australia. Coal from Russia has been used mainly for energy production.39 Coal use for energy production is decreasing significantly as coal-fired power plants are shut down – for example, the Hanasaari coal-fired power plant in Helsinki ceased operations in Spring 2023.40 The Finnish Ministry of Economic Affairs and Employment of Finland22 has given information about several coal replacement projects. The entire amount of aid given to three projects, in Espoo, Kirkkonummi, and Vaasa, was €22.8 million. In 2020, four projects were supported by the Ministry with €7.7 million.
As a result of these measures, it is expected that the reduction of the energy use of coal will be more than 1700 GWh per year and fossil CO2 emissions by more than 660 000 t per year. On May 1, 2029, a law forbidding the use of coal as a fuel for power and heat generation is planned to come into force.22
Analyzing coal replacement in Finland by 2029, Khosravi et al. (2020)41 suggest that, for large cities such as Turku, Tampere, and Helsinki, ending coal use will increase the electricity price. However, increasing wind and nuclear power production will mitigate electricity price increases and capacity deficit. Heat pumps can provide an alternative to coal-CHP, and wind and solar can cover peak electricity demand in wintertime.41 Coal would be the first fossil fuel to be phased out of the Finnish energy mix.
Natural gas consumption decreased by 50% in 2022 as a result of the cessation of Russian natural gas imports. Natural gas is mostly used in heavy industry and only 3% (Fig. 1) is used for energy production purposes. Finnish consumers of Russian gas are turning to alternative fuels (primarily coal, biomass, and propane) and implementing efficiency measures. The start of operations of the floating storage regasification unit (FSRU) in Inkoo may lead to increased consumption of natural gas, but this increase is expected to be short term only. Over the long term, natural gas consumption is expected to decline because of the availability of alternatives, including renewable gases and low-carbon hydrogen, which have policy support. In 2023, the Finnish government set a target to be a leader in the European hydrogen value chain by 2030 and identified 20 measures to build a vibrant hydrogen sector.42 A target has been set for electrolysis equipment use in hydrogen production of at least 200 MW in 2025, up from 9 MW in 2021, and at least 1000 MW in 2030.6 Current estimated annual production of hydrogen in Finland is 200 000 tons.43
Regarding oil production and usage, Finland has only one remaining crude oil refinery, the 206 kb/d Porvoo refinery.44 Oil use has decreased slightly but it is expected that demand will drop more strongly in the long term. Oil is mostly used in the transport sector. Replacement of oil with biofuels or use of oil blended with biofuels are the main options for the reduction and replacement of oil use. The blending mandate of Finland's biofuels changed from 19.5% to 12% in 2022, and the reduction in the blending mandate has been extended until the end of 2023. In addition to government support for electric vehicles, continuing until 2023, the government provides subsidies for compressed natural gas and liquefied natural gas vehicles, which can be powered with biogas, as well as subsidies for gas refueling stations. Oil consumption in heating and buildings is decreasing due to the compulsory use of light fuel oil for heating. By 2030 it could be possible to reach zero consumption of oil in the heating sector.45 Oil is currently still used in a very large number of homes. These houses are mostly old or located in the countryside. It seems that, for economic and technical reasons, they should be demolished and new ones should be built using other fuels; 30%–50% of the cost can be funded by government but not the full cost.
Emissions production and allowance price
The continued reduction of emissions from the energy sector and energy system is essential in order to achieve carbon neutrality. In 2020, total annual emissions of CO2eq were about 48 million tons, of which the energy sector accounted for the majority, namely 34.6 million tons of CO2eq. According to IRENA (2020),46 total CO2 emissions were about 40 Mt CO2 in 2020 with a large share from electricity and heat production and then from transport and other industrial sectors (Fig. 3).46
In terms of CO2 emissions per capita, Finns produced more emissions (average 8.6 tCO2eq) than the average EU citizen (7.4 tCO2eq). The difference can be explained by the colder climate and the strong industrial sector. Food production and the transport sector are also responsible for high emissions. Private transportation is very popular in Finland. Total energy consumption for transport was about 170 PJ in 2021, of which road transport accounted for about 93%. The country is sparsely populated and there are long distances between cities and towns. The country also has a large rural population compared to other EU countries.14, 47, 48
Under EU law, Finland is obliged to reduce GHG emissions by 39% from 2005 levels by 2030. The main driver for Finland's climate policy is the national Climate Change Act, which entered into force in July 2022 and set emission reduction targets for 2030, 2040, and 2050. A carbon neutrality target for 2035 is also included in the Climate Change Act. The carbon neutrality target for 2030 is a 60% reduction from 1990 levels, with further reductions, respectively, of 80% for 2040 and at least 90%, with a target of 95%, for 2050. These emission reduction targets are based on recommendations of the Finnish Climate Change Panel. In addition, for the first time, the aim of strengthening carbon sinks is mentioned in the act (Fig. 4).49 Finland has also set intermediate RE targets by sector (Table 1).
| 2021 status (%) | 2020 targets (%) | 2030 targets (%) | |
|---|---|---|---|
| Electricity | 39 | 41 | 53 |
| Heating and cooling | 53 | 54 | 61 |
| Transport | 21 | 10 | 45 |
| Gross final energy consumption | 43 | 38 | 51 |
Another driver for carbon neutrality is carbon pricing, which is an instrument that captures the external costs of GHG emissions. Since 2021, emissions allowance prices have increased dramatically (Fig. 5). Predictions of high emission prices can encourage the development and implementation of prohibitively expensive emission reduction technologies but, on the other hand, they affect the results of future energy system scenarios significantly. The effect of the price of a certain emission right on the price of energy based on fossil fuels depends on the emissions of the production method. For example, an emission price of €50/tCO2 would have an additional cost effect of approximately €20/MWh on the production costs of a modern natural gas power plant.21
In response to climate-neutral targets, Finland has WEM (‘with existing measures’) and WAM-н (‘with additional measures’) scenarios. The WAM-н scenarios include additional measures to achieve carbon neutrality by 2035 and carbon negativity thereafter. In this case, measures taken before 1 January 2020 are included in the WEM scenario. The WEM scenario is a modified version of the WAM-н scenario, which includes the decisions made in the framework of the budget negotiations of the government in September 2021, as well as the action plans of KAISU medium-term climate policy plans (KAISU) and their explanations. The biggest difference is related to setting greenhouse effect emission targets, which are not set in the WAM scenario but are based on climate and energy policies. According to the WEM scenario, primary energy consumption could be a maximum of 1500 PJ in 2035, after which a gradual decline will begin. The WAM scenario is about 2% lower due to increased energy efficiency (Fig. 6).11
According to the WEM scenario, the use of fossil fuels in primary energy consumption will decrease by approximately 30% in 2030, 25% in 2040, and 20% in 2050. In the WAM scenario, the reduction is steeper because it considers stricter measures. The use of coal and peat, especially peat, will decline sharply by 2025 under both scenarios. The use of natural gas and oil is also decreasing, but more slowly. The transportation and industrial sectors may be the most difficult industries to transition to fossil-free operations. To achieve carbon neutrality in 2035, and negativity thereafter, Finland must rely on the increasing use of natural and technical carbon sinks. The WAM scenario aims to increase sinks by 3 Mt CO2 by 2035 compared to the WEM scenario (Fig. 7).11
In both scenarios, the use of fossil-free energy increases in proportion to the decline in fossil fuels. Nuclear power, wood-based fuels, and hydro and wind power are the main drivers of fossil-free energy production. In the WEM scenario, the share of renewable energy is assumed to be about 700 PJ in 2035 and about 730 PJ in 2050, in comparison with about 760 PJ in 2035 and about 840 PJ in 2050 in the WAM scenario. Relatively speaking, the strongest growth in renewable energy will be from wind power in the coming years. Solar energy is expected to continue to grow later in the 2030s and 2040s. An increase in the share of wood biomass is also expected, mainly as a substitute for coal and peat. The increase in woody biomass is mainly due to the increased use of forest industry production streams and increased use of raw wood.11
In 2020, almost 420 PJ of bioenergy was used, of which wood energy accounts for 80%. It is estimated that the use of wood-based energy will increase to 450–470 PJ by 2035 and will remain at the same level thereafter. Bioenergy is projected to grow by 500–518 PJ by 2035. The rest of the increase comes from agrobiomass, biowaste, and imported biomass. Wood imports can increase wood fuel supply but, for sustainability reasons, it is limited to 18 PJ compared to 14 PJ in 2020. Even if the amount of bioenergy would at least remain unchanged, its relative share of renewable energy would decrease. Especially in electricity production due to the increase in wind and solar energy. In 2035, the share of bioenergy in renewable energy is expected to be 60%, whereas today the share of bioenergy in renewable energy is more than 80%.11, 21
Discussion
Finland has a long history of using biomass for energy, mainly in the form of forest wood, specifically wood chips, and biomass use is greater than that of other renewables. This trend is likely to continue into the foreseeable future. The most recent program outlining the Finnish government's visions and principles, published in June 2023,50 states that the government, through its national decisions and by influencing EU decision making, intends to maintain an environment for bioenergy that is steady and predictable. Residues, by-products, and waste products should be used as a priority for feedstocks. According to the program, the government also considers efforts to make Finland a leading producer and developer of bio-based energy products important, as bioenergy is likely to play an important role in replacing fossil fuels. For example, progress in the development and use of biogas is supported by distribution obligations and capacity mechanisms. The government wants to create conditions for farm-based biogas production and to give opportunities to build biogas networks between farms and businesses.50 Biogas seems very interesting nowadays but the future seems unclear due to unclear future policy plans for 2050 regarding biogas. However, biogas can enable fossil fuel replacement in some applications from a short-term perspective.
The Finnish government believes that Finland has a competitive advantage in the area of carbon capture and utilization (CCU) due to its large forest industry and abundant use of bioenergy, and the government has stated that it will set targets for the use of carbon capture during the 2020s.50 Finland is focusing production and utilization of CO2 for renewable purposes development excluding fossil fuels.
Local targets for carbon neutrality set by the EU give the direction for bioenergy development and support the development of new ways to use biomass for energy production such as hydrogen production from biomass.
In September 2023, more than 94% of total produced electricity was from renewables such as hydropower, wind, and nuclear.51 Thus, Finland is very close to reaching 100% renewables in electricity production by 2035. The share of biomass in electricity consumption is relatively smaller than for heat. Electricity production from biomass is found mainly in large CHP plants, where there still remains potential for greater use of biomass use. The unit costs of different forms of electricity generation vary depending on the region, time, conditions, and the calculation values used. The unit cost of wind power has fallen in recent years and, in many cases, wind power has become the cheapest option for adding new generation. It is very economical to operate nuclear power plants that are already operational. In Finland, the investment costs for bioenergy vary more from plant to plant, with average costs not reaching the affordability levels of wind power or existing nuclear power.21
When considering costs, it should be noted that the direct unit costs of the different forms of energy production are only part of the total costs of the energy system. A topic that often receives insufficient attention are integration costs and, although integration costs can be substantial, their estimates are hitherto uncertain and estimation methods are still evolving. To estimate the magnitude of integration costs in energy system development, a more comprehensive longer term study should be carried out, which would allow the cost impact of various solutions to be considered alongside sustainability and operational reliability.21
An interesting finding is that it seems to be easier to phase out fossil fuel use in the energy sector than in industries such as steel production. For example, SSAB's Raahe plant (North Ostrobothnia, Finland) plans to reduce emissions from steel production by 3–4 Mt CO2 eq by 2030 and to be fossil-free after 2035.6 Despite positive developments in the Finnish energy sector as a whole, several questions remain unanswered at present. For example, to develop a full picture of carbon neutrality, additional studies will be needed that establish, technically and economically, the feasibility of full fossil fuel replacement in the transport sector and industries such as steel and other metals production.
Conclusions
The aim of the present research was to review future perspectives for the fossil fuel phase out in the Finnish energy sector. The study finds that bioenergy will generally continue to play an important role in renewable energy in the country although it will have a smaller role than currently. The importance of wind and solar energy in Finland is expected to increase as a result of new technology such as energy storage facilities.
The transport and heating sector should be 100% renewables. It currently includes some challenges, due to existing old households and large number of old cars on Finland's roads. However, Finland has tendancy of the decrease of fossilfuel usage in these sectors, thus, perspective of renewble energy can be look optimistic in long term perspective. The electricity sector is close to reaching 100% renewables. The industry sector requires a lot of research and further investigation. Finland still produces plastic, metal, iron and steel, where fossil fuels have an important role.
Energy consumption based on fossil fuels in Finland is expected to decrease at the request of the EU. Peat and coal should disappear rapidly from energy production by 2030. Oil use is expected to drop by a third by 2050, but there will be no major changes in natural gas use, although some natural gas will be replaced by electrically generated gases such as hydrogen and e-methane. The use of wood biomass and black alkali increases slightly, by around 10%. Nuclear power will play an important role in the heating system. It is foreseen that both wind and solar energy production will increase substantially. Increased usage of heat pumps is a new growth area. A characteristic of the future Finnish energy system will be the increased role of wind and solar energy, especially wind energy, and with energy storage and a favorable cost structure it seems that Finland will not only be a bioenergy country but also a solar and wind energy country.
Biomass will continue to play an important role in Finland's energy system. As expected, bioenergy will increase in real volumes in short term perspective and slightly or stable in long term perspective. In 2035, the share of bioenergy in renewable energy is expected to decrease from current 80% to 60% due to development of other renewable energy options mainly wind energy. Biomass is limited resources in Finland and its price can increase in the future. The question how biomass usage will be in 100% renewables system is very debated topic.
The findings in this study provide a new understanding of how emissions regulations, production costs, and emissions allowance pricing will affect the future energy system. The energy system in Finland is undergoing a major structural transformation due to global carbon neutrality targets to mitigate climate change. Clearly, this change will have greater effects on some areas of the energy system than others. In particular, further work needs to be done to see how fossil fuels should be replaced in the transport and industry sectors from the technical and economical point of view. Moreover, new scenarios for Finnish energy by 2050 and after should be created.
Acknowledgements
We would like to thank Ramula Janina for data collection in her master's thesis titled ‘Replacing fossil fuels with biomass in Finland’; Timo Hyppänen Ahola J, Apajalahti E-L, Havukainen J, Honkapuro S, Horttanainen M for permission to use data from the internal LUT report ‘Kohti hiili-neutraalia Suomea,’ ISBN 978-952-335-829-4, and Peter Jones for valuable comments.
Biography
Svetlana Proskurina
Svetlana Proskurina is a postdoctoral researcher at the Lappeenranta-Lahti University of Technology (LUT). Her research interests include biomass usage and its economic, environmental, and policy aspects. Her work includes wood pellets and other solid biofuels, their markets, transportation, and applications, as well as sustainability and social aspects.
