Government decided on means of reducing emissions from road transport – emissions to be halved by 2030

On 6 May 2021, the Finnish Government made a resolution on reducing domestic transport-related greenhouse gas emissions, i.e. the roadmap for fossil-free transport. The three-stage plan aims to halve transport-related emissions by 2030.

In particular, the plan concerns greenhouse gas emissions from road transport. The Government also made resolutions on reducing greenhouse gas emissions from maritime transport and aviation.

"We are living in a global transition period in which mobility and transport are becoming more climate-friendly. Finland, too, is developing new technologies and smart practices, up to the point of exporting them. In fact, emission reductions are the outcome of efficient solutions, for which the state offers diverse subsidies and incentives to businesses and citizens," says Minister of Transport and Communications Timo Harakka.

"While boldly deploying new solutions, we must see to social justice. If transport is electrified according to the goals, the impact on the price of fossil fuel will also remain unnoticeable. The costs of transports are carefully monitored," Harakka says. 

The goal of halving transport-related greenhouse gas emissions by 2030 compared to 2005 was set in Prime Minister Juha Sipilä's Government's National Energy and Climate Strategy in 2016 as part of Finland's commitment to the EU emission reduction targets.

Zero-emission transport should be achieved by 2045. In 2005, carbon dioxide emissions from road transport totalled approximately 12.5 million tonnes, meaning that in 2030 these emissions should not exceed approximately 6.25 million tonnes. The actions of the resolution pursue an additional reduction of 1.65 million tonnes of carbon dioxide to halve the emissions. The base forecast of greenhouse gas emissions from transport will be updated during spring and summer 2021.

The roadmap is comprised of three separate phases, the first of which includes several subsidies and incentives to promote low-emission transport. The costs of the first phase would mainly take place in 2022-2026, totalling approximately EUR 360 million during that period. The means of the first phase and their costs were reviewed by the Ministerial Finance Committee on 6 May before the resolution was made. The appropriations to promote the actions are to be reviewed in conjunction with the budget for 2022 and the general government fiscal plan for 2023-2026. 

Transport causes one-fifth of Finland's emissions. Road transport accounts for approximately 94 per cent of emissions in domestic transport. Passenger cars account for approximately 54 per cent and vans and heavy-duty vehicles for approximately 41 per cent of emissions in domestic transport. Rail transport accounts for less than one per cent of the transport emissions.

First phase - subsidies for abandoning fossil fuels

The first-phase subsidies and incentives replace fossil fuels with e.g. electricity and biogas, renew the vehicle stock and increase the energy efficiency of the transport system. A total of 20 actions are to be taken that will reduce carbon dioxide emissions by an estimated 0.62 megatonnes, which is more than one-third of the objective set in the roadmap.

Actions to replace fossil fuels

1) Including biogas and electric fuels in the distribution obligation

2) Distribution infrastructure support for public charging and gas filling stations

3) Charging infrastructure support for housing companies and workplaces

4) Assessing the need for regulating charging points at service stations

5) Co-use and roaming of charging services

Actions to renew the vehicle stock 

6) Updating the CO2 threshold that is binding on vehicle manufacturers

7) Procurement support for fully electric vehicles

8) Conversion support for ethanol and gas vehicles and, possibly, electric heavy-duty vehicles

9) Scrapping premium campaigns

10) Procurement support for electric and gas-operated vans

11) Procurement support for electric and gas-operated heavy-duty vehicles

12) Clean vehicle procurement by the public sector

13) Research into clean vehicles and alternative power sources

Actions to increase the efficiency of the transport system

14) Transport system plans (Transport 12 plan and cities' plans)

15) Cycling and walking investment programme and improving the conditions

16) Public transport subsidies

17) Support for mobility management

18) Large vehicles in road transport

19) Maintenance of transport infrastructure

20) Digitalisation of logistics 

Some of the actions, such as procurement subsidies for gas-operated heavy-duty vehicles and fully electric cars, are already in progress, and it is proposed that they be continued. Increased funding has also been proposed for some of the actions to be continued. 

Second phase - remote work, new transport services and increasing the obligation to distribute

On-going projects assess the impacts of e.g. remote work and new transport services on greenhouse gas emissions. In addition, the impact of increased fuel prices on companies in different sectors is being reviewed. Assessments are being made regarding a stricter obligation to distribute renewable fuels and the availability of electric fuels and their costs and impacts on fuel prices. The impact assessments will be completed by autumn 2021. The results will be utilised in deciding on the third-phase actions of the roadmap for fossil-free transport.

Third phase - decision on supplementary actions, if necessary

The third phase is conditional. By autumn 2021 more information will be available from the above-mentioned reviews, solutions found in Finland's sustainable growth programme and by the Ministry of Finance working group on transport taxation, and EU initiatives to be published in the summer. The European Commission is expected to issue a proposal for linking transport to emissions trading in June.

If it seems that the goal of halving emissions will not be reached, the Government will make the decisions on other required actions. For this purpose, the Government will continue to prepare diverse actions, such as national emissions trading of fossil fuels and road transport tax based on kilometres driven and road categories. 

What will transport look like in 2030?

The roadmap specifies sub-goals for different areas of the transport system for 2030 and 2045. 

1) In 2030, there would be approximately 700,000 electric cars and approximately 45,000 electric vans, at least 50 per cent of which would be fully electric. In 2020, there were 55,318 electric vehicles, of which 9,697 were fully electric. 

2) There would be approximately 130,000 gas-operated vehicles in 2030. In addition, there would be some 4,600 electric and approximately 6,200 gas-operated heavy-duty vehicles and buses operating in Finland. In 2020, there were 12,355 gas-operated cars and approximately 300 gas-operated heavy-duty vehicles and buses in Finland. Electric heavy-duty vehicles and buses numbered approximately 100. 

3) Travel kilometres would be close to the level of 2019 in 2030 and 2045.

4) The energy consumption of transport would significantly decrease. The remaining energy consumption would be covered with electricity, hydrogen, biogas, biofuels and other renewable fuels in 2045.

5) Walking, cycling and the use of diverse mobility services would increase significantly from the current level in urban regions in 2030 and 2045. In rural areas, cars would remain as the primary mode of transport, but their power sources would change considerably.

What next?

The preparation of legislation will start in different ministries. The appropriations to promote the actions are to be reviewed in conjunction with the budget for 2022 and the general government fiscal plan for 2023-2026.

In autumn 2021, the Government will assess whether additional actions will be required to reduce transport emissions.

Inquiries

Requests for interviews with Minister Timo Harakka: Susanna Niinivaara, Communications Director, tel. +358 40 081 6187, susanna.niinivaara(at)lvm.fi

Sabina Lindström, Director General tel. +358 40 527 6103, sabina.lindstrom(at)lvm.fi, Twitter @LindstromSabina

Päivi Antikainen, Director of Unit, tel. +358 50 382 7101, paivi.antikainen(at)lvm.fi, Twitter @PaiviAntikainen