Minister Harakka on EU climate package: emissions reductions in transport necessary – attention must be paid to costs

The Government of Finland has outlined its positions on the legislative proposals of the EU Commission aiming to reduce greenhouse gas emissions from road, maritime and air transport.

The proposals in respect of transport involve including the sectors of road and maritime transport in emissions trading and enhancing the current emissions trading scheme in aviation, introducing tighter emissions limits for new vehicles, improving the alternative fuels distribution infrastructure, and increasing the use of alternative fuels in aviation and maritime transport.

"Rapid reductions in emissions are required in all sectors. This applies not only to transportation but to all areas of human production.In the EU, as in Finland, road transport accounts for around one fifth of greenhouse gas emissions," says Minister of Transport and Communications Timo Harakka.

"It is important to observe that EU Member States, especially those more progressive on climate policy, now have an excellent opportunity to reform their economy and improve their competitiveness. For businesses, the Fit for 55 package provides predictability. In conjunction with Finland's sustainable growth programme, we can expect a real wave of eco-investment, a breakthrough of the first order on climate action," Minister Harakka says.

"This is our zero hour to leverage the potential of the ongoing energy transformation and develop sustainable solutions, technologies, products and services that also have global appeal," he adds.

As part of the European Union, Finland is committed to the Paris Agreement. The aim requires the EU to reach carbon neutrality by socially, economically and ecologically sustainable means by 2050. Consequently, the Government of Finland sets out from the premise that the negotiations now being initiated will result in reaching, by 2030, the emissions reduction target of at least 55%.

EU-wide road transport emissions trading would be fair but questions still remain

The Commission is proposing a joint emissions trading scheme for road transport fuels and buildings that will be separate from the current EU emissions trading system. The auctioning of allowances would begin in 2026. By and large, the Government of Finland views the proposal for a new emissions trading scheme favourably.

"The proposed scheme would guide towards emissions reductions throughout the EU. However, it is still early days in the negotiations and many important questions are yet to be resolved," Minister Harakka says.

Tighter CO2 limits for new cars find support

Finland supports the Commission's proposal on carbon dioxide emission limits for cars and vans. The year 2030 limit for new passenger cars, for example is to be set at 55%, meaning that automotive manufacturers will have to reduce their CO2 emissions by 55% of the 2021 level. The current target is 37.5%.

"The initiatives includes in the Fit for 55 package help to underpin Finland's national climate targets. The current Government headed by Prime Minister Marin has located the means to implement the decision taken by the previous Government under Prime Minister Sipilä to halve transport emissions in the current decade. What kinds of vehicles become available in the domestic market, how clean they are and when they become available are issues directly impacted by the regulation of vehicle carbon dioxide emission limits, for example. Understanding the potential of biogas in road transport is an aspect of particular importance, as is clearly stated in Finland's position," Minister Harakka says.

The Commission also wishes to enhance the EU-wide alternative fuels distribution infrastructure. In the main, the Government of Finland supports the aims of this proposal. The viability of electric cars across the country regardless of travel route is a priority for the Government. Flexibility may be required for heavy-good vehicles in sparsely populated areas.

Emissions trading in shipping must take into account winter navigation and competitiveness impacts

The Government of Finland supports the inclusion of maritime transport in the emissions trading scheme as well as measures at the EU level to increase the use of alternative fuels in maritime transport. Such measures should be effective in reducing emissions while also taking into account the competitiveness of the Member States. Continued assessment of the combined effects of the legislative proposals is vital.

"Geographically speaking, the circumstances in Finland are different - we are a sparsely populated nation situated far away from the Central European markets. Our foreign trade relies almost wholly on transport by sea, and seas freeze over in winter. Consequently, our transportation costs are higher to begin with than those in many reference countries. Taking into account the demands of winter navigation in the maritime transport emissions trading scheme will be a particular challenge for us. This theme is clearly addressed in Finland's position," Minister Harakka says.

Emissions trading in aviation must be enhanced

The Commission is seeking to improve the efficiency of aviation emissions trading by reducing the number of allowances allocated free of charge to airlines. The proposal envisages all allowances becoming subject to auction in 2027. The Government of Finland supports the enhancement of emissions trading in aviation.

In further negotiations, attention must be paid to the effects of such enhancement on the regional availability of access to air traffic. The risk of air traffic being diverted outside the EU in a bid to evade emissions trading must also come under assessment.

The Emissions Trading Directive would also be amended to implement the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) developed by the International Civil Aviation Organisation (ICAO). The reconciliation of EU emissions trading and CORSIA must be assessed in further negotiations with an eye to the effective advancement of worldwide climate action.

The Commission proposes increased use of renewable fuels in aviation as well. The Government of Finland supports measures at the EU level to move towards this goal. At the same time, however, the operating conditions for air transport must be taken into account.

What Union communication?

The Government submitted to Parliament on 30 September and 7 October 2021 Union communications on the legislative proposals of the Commission concerning the transport initiatives in the Fit for 55 package. The Union communications outline the positions of the Government.

What next?

The Union communications will be considered by the Grand Committee of Parliament. The legislative initiatives of the EU concerning road transport will be taken into account in the implementation of the roadmap for fossil-free transport.

The working groups of the Council of the European Union have started deliberations on the proposed legislation and their conclusions may be expected in around 2023.Entry into force of the first legislative acts could be estimated to take place in 2024.

Inquiries:

Johanna Juselius, Special Adviser to Minister Timo Harakka, tel. +358 50 372 7062, johanna.juselius(at)gov.fi

Päivi Antikainen, Director of Unit, Ministry of Transport and Communications, tel. +358 50 382 7101, paivi.antikainen(at)gov.fi