FINLAND PUBLISHES NATIONAL CLIMATE STRATEGY

UNCLAS HELSINKI 000519


COPENHAGEN TO EHALL

E.O. 12958: N/A
TAGS: ENRG EPET TRGY FI
SUBJECT: FINLAND PUBLISHES NATIONAL CLIMATE STRATEGY

REF: HELSINKI 419



1. SUMMARY: The Government of Finland (GOF) published its
long-awaited National Climate Strategy on November 6th, 2008.
The Strategy reviews the GOF's efforts to date in meeting
Kyoto Protocol and EU greenhouse gas (GHG) reduction targets,
and provides a detailed plan of action to meet GHG emission
targets beyond 2012. The strategy emphasizes increased
utilization of economically and environmentally viable
renewable resources such as biomass and wind power, but also
raises the politically sensitive question of increased
nuclear power generation, albeit for domestic consumption
only, and not for export. The strategy also revitalizes
Finland's focus on energy efficiency. END SUMMARY.

EU TARGETS AND INCREASED ENERGY CONSUMPTION POSE CHALLENGES
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2. When the EU reallocated its 8% Kyoto emission reduction
goal among its members in 2002, Finland was required to
reduce GHG emissions to 1990 levels during the initial period
of 2008-2012. In 2006, Finland's emissions were 13% above
1990 levels, mainly due to coal combustion for public
electricity. Since this time, the GOF has implemented an
aggressive campaign to increase its use of clean fuels -
mainly via forest residues (see reftel),nuclear energy and
wind power, a strategy that will remain in place in the
future.


3. Although Finland has made progress, new challenges lie
ahead. Current trends project an increased demand for energy
- primarily from industry - over the next decade that could
negate the GOF's present emission reduction efforts.
Additionally, the EU has stipulated that to meet such demand,
38% of Finland's energy production by 2020 must come from
renewable sources. Finland must also meet the EU emission
reduction target of 16% below 2005 levels for the post-2012
period.


FINLAND FOCUSES ON EFFICIENCY, WIND AND BIOMASS
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4. To address these challenges, Finland will increase its
research efforts in improved energy efficiency and
alternative energy. The renewal of Finland's ten-year old
policy of improving energy efficiency will aim to halt and
reverse the growth in final energy consumption, a critical
element in meeting its targets.


5. To stimulate the use of renewable energy, the GOF will
increase its use of wood-based energy, waste fuels, heat
pumps, biogas and wind energy. The use of forest chips will
be increased by up to three times over the current levels.
By 2020, Finland will harness 6TWh of wind energy, requiring
the construction of a minimum of 700 new 3MW wind power
plants. Finland is also studying the implementation of a
cost-effective feed-in tariff system, operating on
market-like terms.


NUMBER OF NEW NUCLEAR PLANTS STILL IN QUESTION
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6. The Strategy also acknowledges the need for more nuclear
capacity to replace emission-producing power plants, and to
improve Finland's energy self-sufficiency. The document
recommends that the GOF decide on the number of new plants
before the 2011 general election. In a recent press release,
Minister of Economic Affairs and Centre Party member Mauri
Pekkarinen said that he was prepared to build more nuclear
plants, on the condition that no approved nuclear plant will
be used exclusively for electricity export. The Green Party
opposes any increase in nuclear generating capacity.


STRATEGY PREPARED BY MINISTERIAL GROUP
--------------


7. The National Climate Strategy was prepared by the
Ministerial Group for Climate and Energy Policy, chaired by
the Minister of Economic Affairs Mauri Pekkarinen. The
Strategy was presented to Parliament on November 12th for its
review. Officials at the Ministry of Economy and Employment
expect Parliament to make only minor changes, which would be
subsequently folded into the Strategy. The GOF is also
preparing the Foresight Report on Climate and Energy Policy,
which prepares climate change policies for the long-term
through 2050. The Foresight Report is due to Parliament in
Spring 2009.

8.COMMENT: Finland's National Climate Strategy provides a
committed and sensible approach to meeting GHG emission
targets. Finland is greatly concerned about the impact of
global warming on its environment, particularly as it affects
the health of the Arctic Circle and Baltic Sea. The country
is equally concerned about energy security. Eleven percent
of Finland's energy needs are now met by natural gas, 100% of
which is supplied by Russia's Gazprom. Over 50% of its
electricity imports also come from Russia. Increased nuclear
capacity will provide greater energy independence, but will
be met by some domestic resistance, particularly from the
Green Party. Full implementation of the strategy, with its
pragmatic focus on diversification and self-sufficiency, will
help mitigate Finland's energy security concerns, while
meeting its international climate commitments. END COMMENT.


BARRETT