It's Finland's turn to edge policy forward
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Recent weeks have seen Denmark (especially) and Norway move their climate policies forward. This week it was Finland’s turn. Sweden also contributed, but without wanting to make a fuss over policy that will likely be a political hand grenade for the government.?
For Finland, it is about making the most of its natural resources. Firstly, with wind, where the Government has summarily decided that it will reject the applications for offshore wind licences of 16 projects. One would expect that a new regime, where licences are put out for tender will follow. Also this week, a Finland-led coalition asserted that it wanted to put the bioeconomy at the heart of EU policy.
Meanwhile, the Swedish Government snuck out a decision that it wanted to put transport fuels within the scope of the EUs ETS2. Road users, as well as the agriculture, forestry and fishing industries could be in for a surprise after the next election, although the government says that it will compensate them. ?
Globally, much noise is being made about China’s green trading, and Europe may have its mind set on tariffs to prevent its vehicle industry being decimated by Chinese EVs. Whether or not this can be successful is questioned, with analysts underlining the extent to which European car firms have fallen behind. The rights and wrongs of this will be debated for some time, but those with a decent memory will recall that some parts of the European industry were putting more effort into defeating EU emissions legislation than innovating to produce winning new products. ??
Coincidence or not? This week we saw Sweden’s Vattenfall announce that it had completed the sale of its Berlin district heating business, while its Norwegian neighbour Statkraft said that it was putting its business up for sale.
Another trend to note is the results of cleantech firms. A quick scan of our financial reporting section highlights that it is a challenging time for the industry.
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The Finnish government has rejected 16 applications for offshore wind power exploitation rights in its exclusive economic zone, primarily in the Gulf of Bothnia, citing overlapping areas and a need for clear regulatory frameworks. The decision aims to establish a predictable investment environment and consider societal interests.
The rejection does not hinder offshore wind projects' development, but emphasises the necessity for defined rules, which will be outlined in a legislative project. The government aims to select areas for wind projects and initiate tendering processes based on clear regulations by the end of next year.
Applicants, including companies like Halla Offshore Wind Oy and Ilmatar Energy Oy subsidiaries, sought exclusive rights for 40–70 years. The Ministry notes varying project stages, with some having research permits pending and others undergoing environmental assessments.
The current legislation lacks specificity for offshore wind projects, allowing the government discretion in granting exploitation rights. A legislative project led by the Ministry of Economic Affairs and Employment seeks to address this, defining permit processes, compensation, and tax matters for the exclusive economic zone.?
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A coalition of 16 EU member states, led by Finland as Chair of the For Forest group, is advocating for sustainable bioeconomy to be prioritised in the next EU Commission's work program. The 4 country core coalition consists of Finland, Sweden, Austria, and Slovenia, and is supported by Bulgaria, the Czech Republic, Estonia, Hungary, Ireland, Italy, Latvia, Lithuania, Poland, Portugal, Romania, and Slovakia.? ?
The coalition argues that promoting the bioeconomy is vital for the EU's overall success, offering solutions to reduce dependencies, meet climate and sustainability goals, and drive innovation across various sectors. For Forest urges the Commission to incorporate the sustainable forest-based bioeconomy into industrial policy, supporting private investments and innovations. They call for an updated EU bioeconomy strategy to reflect changing needs and environments.
Furthermore, they advocate for streamlined licensing procedures, enhanced policy coherence, strengthened collaboration between private and scientific sectors, and improved funding for bioeconomy development in EU programs. Emphasising the role of bio-based products in replacing non-renewable resources, they aim to boost their market position and reduce regulatory barriers. Overall, the coalition seeks to ensure that forests and sustainable bioeconomy play a central role in shaping the EU's future competitiveness, growth, and self-sufficiency.
The Swedish government, with support from the right-wing Sweden Democrats, plans to implement measures leading to increased pump prices by 2027. According to a proposal, the implementation of the EU ETS2 will cover fossil fuel use in road transport, heating, and industrial activities. This includes sectors like agriculture, forestry, and fishing, previously exempt from taxation. Companies selling affected fuels must submit ETS2 emission allowances for each tonne of CO2 produced, which will likely then be reflected in the market price of the fuels. ?
The potential price increase depends on the cost of these allowances, with estimates ranging from modest to significant rises in fuel prices. The revenue generated from the auctioning of allowances will flow to the Swedish treasury. However, the government promises full compensation for the price increase's impact.
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