Climate targets and carbon neutrality

Fossil-based emissions have been reduced relatively quickly in Finland, thanks to effective policies and rapid progress in the energy transition. The generation of clean electricity offers a competitive advantage for Finnish industry and is drawing in new investment. While further action is needed to reduce emissions in other sectors too, the challenge of achieving Finland's carbon neutrality target will come to a head in the LULUCF sector, where climate action has not been promoted effectively. "Corrective measures must be implemented without delay, especially in the LULUCF sector. Fortunately, there is plenty of research data to support the planning and implementation of measures," says Chair of the Finnish Climate Change Panel and Research Professor Jyri Seppälä. The memorandum 'Suomen hiilineutraaliuspolku' ('Finland's carbon neutrality pathway') assesses achieving carbon neutrality and means to do so. The report 'Arvio Suomen maankäyttösektorin tilanteesta' ('An assessment of the situation in Finland's LULUCF sector') looks at the EU's LULUCF commitment periods 2021–2025 and 2026–2030. Forest use must change if we are to meet climate targets Achieving carbon neutrality by 2035 is possible, according to the Panel. Fossil-based emissions and those from sectors other than the LULUCF sector can be reduced to around 18 million tonnes (CO2eq) in ten years. Furthermore, a corresponding level of carbon dioxide removals is needed from the LULUCF sector and technological sinks. [caption id="attachment_6311" align="aligncenter" width="642"] The Finnish Climate Change Panel's estimate of the balance of Finland's carbon dioxide emissions and sinks in 2035.[/caption] New measures and policies are needed most in the LULUCF sector because recent developments have not been in line with the objectives set. Emissions from the sector could be significantly reduced by introducing additional measures, in particular in peatland and forest management, and by keeping deforestation in check. "There are many untapped opportunities in the LULUCF sector to strengthen the carbon sink and mitigate soil emissions. Unfortunately, their introduction has been delayed, which increases the need to reduce logging," says Vice-Chair of the Finnish Climate Change Panel and Research Professor Raisa Mäkipää. The Panel estimates that a logging volume of 61–64 million cubic metres, together with other measures in the LULUCF sector, would strengthen the sink balance relative to emissions. The amount of commercial timber coming from the forest industry would not decrease proportionally, as the proportion used for energy production is decreasing. "Increased logging volumes are the main cause of the loss of the carbon sink forests provide and the conversion of forests into a source of emissions. Reducing logging will reduce tree removal and increase tree biomass storage and growth, which will also maintain soil carbon stocks," says Panel Member and Leading Researcher Sampo Soimakallio. Further actions to reduce emissions from the effort sharing sector are also needed across the board. Transport is the largest source of emissions in the effort sharing sector. Reducing transport emissions through a shift in modes of transport and electrification of the car stock to meet the emissions targets of the effort sharing sector is also economically feasible. "The fastest way to reduce emissions from road transport is to expand the obligation to distribute renewable fuels and electrify the car stock. To accelerate the electrification process, we need consistent economic guidance and communications to ensure that only fully electric cars are purchased, both new and used," says Panel Member and Professor Heikki Liimatainen. Achieving the carbon neutrality target also requires clean investments from large emitters in the emissions trading sector to proceed at a favourable pace and technological carbon sinks to be realised by 2035. Finland is falling far short of the EU's LULUCF sector climate commitments A major challenge for Finland's climate policy is meeting the binding commitments for the LULUCF sector agreed jointly within the EU. "It is already clear that Finland will not meet its LULUCF commitments for the first period, and it is not on track to meet its commitments for the second period either with its current actions, but this can still be influenced and the course changed. Finland has the opportunity to take immediate corrective action and at the same time reduce the financial risks associated with failing to meet its obligations," says Jyri Seppälä. In the first commitment period, 2021–2025, the LULUCF sector should be, based on calculations, a zero emission sector. However, the Finnish Climate Change Panel's report estimates that Finland's accumulated deficit over the five years will be around 110 million tonnes. If a member state does not meet or is not credited with flexibility or purchased units towards its first period LULUCF obligation, the remaining calculated emissions will be transferred from the LULUCF sector to become part of the commitment of the effort sharing sector. If Finland can only partially offset the deficit in the LULUCF sector, the remaining deficit threatens to eat away at the achievements of the effort sharing sector and the intended flexibility benefits of the emissions trading sector. The costs of emission reductions are higher in the effort sharing sector than in the LULUCF sector. In the second commitment period, 2026–2030, Finland will have to remain within the LULUCF sector's limit values, which will be tightened linearly each year. If stemwood logging volumes remain at the levels seen in recent years, the deficit in the second commitment period will be as high as 46 million tonnes. If logging volumes increase in line with the baseline scenario set out in Finland's Climate and Energy Strategy, the deficit could be as high as 86 million tonnes. Finland can meet its 2030 commitment if logging is kept to well below 70 million cubic metres per year and other LULUCF sector measures are put in place without delay. Further information: Finnish Climate Change Panel publications 1/2025: Suomen hiilineutraaliuspolku – Arvio hiilineutraaliuden saavuttamisesta ja sen keinoista ('Finland's Carbon Neutrality Pathway – an assessment of achieving carbon neutrality and means to do so') Finnish Climate Change Panel Report 1/2025: Arvio Suomen maankäyttösektorin tilanteesta – Tarkastelussa EU:n LULUCF-velvoitekaudet 2021–2025 ja 2026–2030 ('An assessment of Finland's LULUCF sector – reviewing the EU LULUCF commitment periods 2021–2025 and 2026–2030') Finnish Climate Change Panel position paper: Carbon neutrality 2035 is a legitimate and achievable goal