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Finland to shift biofuel and electric vehicle usage into high gear

To meet its commitments under the UN's Paris Agreement, Finland must briskly step up its adoption of electric cars and biofuels, government ministers tell Yle. That could lead to major investments and job creation.

Biogas Image: Petri Lassheikki / Yle

The government aims to cut Finland's use of fossil fuels for transport in half by 2030. This is part of the country's efforts to combat climate change as part of EU climate policy and the Paris Agreement, which came into effect on Friday. Road transport is responsible for about a fifth of Finland's greenhouse gas emissions.

The government's main tool for weaning the nation off fossil fuel is the biofuel distribution requirement. It obliges fuel distributors to mix a certain proportion of renewable biofuel into fossil-based fuels.

Prime Minister Juha Sipilä's government agenda calls for renewable fuels to account for 40 percent of transport usage by 2030. Basically that means that fuel content would be 23.5 percent renewable by then.

Yle has learned from various sources that the government will now have to significantly raise that target, perhaps by as much as 10 percentage points, to around 33 percent.

If this is realised then overall renewable fuel usage would exceed the government programme target of 50 percent. Last year biofuel made up an average of 13 percent of the transport fuel pumped in Finland, so this would be a major leap forward. The intended hike is partly being driven by tougher EU requirements, which in Finland particularly affect transport.

Yle has learned that the three-party cabinet will negotiate the biofuel distribution requirement level at a strategy session on Monday.

Billions in refinery investments?

The Ministry of Economic Affairs and Employment estimates that a 33 percent target would require three new billion-euro domestic bio-refineries, which could translate into a significant amount of jobs and tax revenue for Finland.

So far three companies are refining biofuels here: Neste, UPM and St1. Neste has told Yle will consider expanding its capacity if the distribution requirement is hiked.

Transport Minister Anne Berner confirms to Yle that the requirement must be raised to meet the target laid out in last year's government programme. She says the level will depend on how much traffic emissions can be cut through other means such as expanded use of electric, hydrogen and natural gas-powered vehicles and broader changes in the transport system.

Electric vehicles also crucial

The cabinet is also expected to lay out plans for accelerating the use of electric cars in Finland, which lags far behind neighbouring Norway and Sweden in this regard. The Ministry of Economic Affairs predicts that under current trends the number of electric cars in Finland will reach about 120,000 in 2030. About half of these would be fully electric.

The conservative National Coalition Party's energy point man, Minister of Foreign Trade and Development Kai Mykkänen, says that biofuels alone will not suffice to meet the country's emissions commitments. He is urging fellow ministers to approve a more aggressive programme to boost the use of electric vehicles.

"We must absolutely get hundreds of thousands of electric cars on the roads during the next decade," he tells Yle.

Transport Minister Berner also wants to see a quarter of a million electric cars on Finnish roads by 2030. That would be roughly one tenth of all cars.

The government is to present its climate and energy strategy to Parliament on November 29.

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