Finnish government proposes €18 million peat subsidy to secure energy supply

The Finnish government has announced plans for an €18 million subsidy package next year to support peat production and safeguard the country’s energy security, reports national broadcaster Yle. While industry representatives welcome the move as a step in the right direction, they say the funding falls short of addressing deeper challenges in the struggling sector.

Of the total, €8 million will be allocated to energy plant investments and €10 million to the National Emergency Supply Agency to maintain strategic peat reserves until 2030. Ari-Pekka Niemi, a peat entrepreneur with 37 years in the industry, called the subsidy “a small sum in the grand scheme, but a positive signal after 35 years of neglect.” He stressed, however, that tax relief would have been a more effective solution, particularly after major energy plants announced last winter they would phase out peat unless tax incentives were introduced.

The Bioenergy Association, representing peat producers, criticised the subsidy’s narrow focus on energy peat, arguing the sector’s future lies in horticultural peat. “This money won’t drive major change,” said Hannu Salo, the association’s industry director. “Demand needs to grow through other means too.” Last year, Finland produced more horticultural and litter peat than energy peat, yet the government’s support targets only the latter.

Industry minister Sakari Puisto (Finns Party) defended the measure as essential for maintaining production capacity during crises, such as extreme winters or international energy disruptions. He also highlighted reforms to peat extraction permitting, which will now weigh energy security, regional vitality, and food production alongside environmental concerns.

Despite the uncertainty, Niemi has expanded operations, opening new peat fields and stockpiling fuel peat—largely at his own risk—amid weak advance sales for next season. Bright spots include rising global demand for Finnish horticultural peat, with exports to the Netherlands beginning last summer, and an influx of young workers. Noora Kalliosaari, a 23-year-old logistics specialist, is now in her fourth season operating machinery at Niemi’s Vesineva peat bog in Jalasjärvi. “I hope this work continues,” she said. “I can’t see myself doing anything else.”

Tags: energy policy, peat industry, finland