Finland has one of the world’s most ambitious carbon neutrality targets and is in a strong position to achieve them given its already low reliance on fossil fuels. But to fully reach its climate targets while ensuring energy security and promoting a sustainable economy, greater efforts are needed to speed up the deployment of solar and wind, and to wean transport and industry off their reliance on oil and gas.
Finland plans to achieve carbon neutrality by maintaining a high share of nuclear energy, increasing the role of renewables in power generation and heat production, improving energy efficiency, and electrifying sectors such as industry and transport. Bioenergy also plays a key role in Finland’s climate and energy policies: forestry biomass is currently a key source of electricity and heat, and biofuels are set to play a central role in supporting the transport sector’s clean energy transition.
Nuclear energy plays a key role in Finland’s energy sector and is central to the government’s goals to achieve carbon neutrality and reduce energy import dependence. Nuclear amounted to 33% of total electricity generation in 2021, and this figure is expected to rise to more than 40% with the planned start of commercial operations at the Olkiluoto 3 reactor in 2023 – the first new nuclear plant in Europe in 15 years. Finland is also a global leader in nuclear waste management and disposal. The Onkalo nuclear waste disposal facility, under construction near Olkiluoto, is expected to start operating in 2025 and will be the world’s first permanent disposal facility for spent nuclear fuel.
Finland’s relatively large heavy industry sector and the high heating demand from its cold climate are the main reasons for the high energy intensity of its economy and energy consumption per capita. This makes energy efficiency a key pillar of Finland’s strategy to hit its climate goals, reduce energy costs and boost energy security.
Finland’s government sees critical mineral production and the battery supply chain as promising areas for economic development that also support energy transitions. Finland has large deposits of cobalt, nickel, lithium, graphite and other critical minerals – and is home to the only company outside China supplying cobalt for lithium-ion batteries. Finland is also active across other parts of the battery supply chain, from manufacturing of batteries and chargers to battery recycling.