HELSINKI – Budget proposal boosts climate targets

Finland should become carbon neutral by 2025, announced the country’s green-red five-party coalition. Content for the promises made were provided as the government announced its budget proposal for 2021 on Wednesday (16  September).

Taking centre stage was a question on how to reduce peat burning for energy production as the process emits about 10% of the country’s total share of carbon emissions, despite it only covering 4% of Finland’s energy mix. Politically, this issue has been particularly difficult for rural-based Centre Party and the Greens.

In the budget negotiations the result was a compromise.

Tax on peat-burning will be doubled and the use of peat for energy should be halved by 2030. The government is planning to increase tax on peat energy by €2.70 per megawatt hour.

On top of that, a minimum energy price that is hoped to speed up a switch away from peat will also be launched.

Finland’s industry is the source of around 11% of the country’s carbon emissions. By reducing industry’s electricity tax to the EU minimum, the government is hoping to direct energy production towards less emissions.

Besides, taxation on natural gas, coal and fuel oil will also be increased by €105 million as of the beginning of next year. Other measures include subsidising electric cars and public transport.

(Pekka Vänttinen | EURACTIV.com)

Subscribe to our newsletters

Subscribe