Finland faces potential costs in climate goals as transportation emissions remain high

Finland could face costs amounting to hundreds of millions of euros if transportation emissions do not decrease quickly enough, according to a report released by the Climate Panel on Thursday. These costs are linked to EU obligations, as Finland has committed to halving its greenhouse gas emissions by 2030 in the so-called burden-sharing sector, with road transport being the largest source of emissions within this sector.

The panel warns that failing to meet EU targets could ultimately be more expensive for consumers than domestic efforts to reduce transportation emissions. High costs would arise from purchasing emission allowances if Finland cannot achieve its climate goals in the burden-sharing sector on its own. “Progress toward the burden-sharing targets largely depends on transportation; the risk of exceeding emissions is substantial. This could be very costly for Finland,” stated Jyri Seppälä, chairman of the Climate Panel.

The report evaluates climate actions taken by both the current government led by Petteri Orpo and the previous administration under Sanna Marin. Although Marin’s government implemented several emission-reducing measures, it left Finland an estimated 1.3 to 1.4 million tons short of the EU’s target. Meanwhile, Orpo’s government has not introduced new measures to bridge this gap and instead proposed rolling back previous initiatives.

Additionally, the government plans to reduce the distribution obligation, which is crucial for decreasing transportation emissions. This obligation requires fuel distributors to supply biofuels, which are considered emission-free in climate policies. The Climate Panel estimates that reducing this obligation could lead to a further increase in emissions, potentially leaving Finland nearly two million tons short of its climate goals by 2030.

The estimated costs of these decisions could lead Finland to spend between 100 million and one billion euros on emission units, depending on their availability and pricing dynamics among EU countries. The panel emphasizes that, although immediate corrective actions are needed, Finland still has the opportunity to meet its climate targets, particularly in readjusting policies around electric vehicle adoption and emission reductions.