Transport emissions can be halved by 2030 through national and EU measures

The national goal of halving greenhouse gas emissions from transport by 2030 is achievable. This requires that the subsidies and incentives outlined in the roadmap for fossil-free transport are implemented in full and that every aspect of the emissions reduction potential is realised as expected. Measures at the EU level are also required, as is a greater obligation to distribute renewable fuels.

"We are in the midst of a transition period towards more environmentally friendly transport. This is the moment of truth, and funding is also required," says Timo Harakka, Minister of Transport and Communications.

"To ensure that we achieve our climate targets for transport, we must focus on three aspects. Firstly, government funding must be raised to the level specified in the roadmap for fossil-free transport so that all the subsidies and incentives can be implemented. Secondly, the EU Commission's proposals for stricter emission targets applied to vehicle manufacturers and for an emissions trading scheme for road transports concerning all Member States should be put into practice. Finland is participating actively in the preparation of EU legislation," says Minister Harakka.

"Thirdly, we must consider raising the obligation to distribute renewable fuels to match the increase in biogas production by 2030," Harakka adds.

Specified measures for halving transport emissions

In May 2021, the Government made a resolution on reducing transport-related emissions, known as the roadmap for fossil-free transport. The goal of the roadmap is to halve domestic greenhouse gas emissions from transport by 2030, compared to 2005, and to achieve zero emissions by 2045.

In 2005, carbon dioxide emissions from transport totalled 12.5 million tonnes, meaning that in 2030, the permitted upper limit for these emissions is approximately 6.25 million tonnes. Taking into account the emissions reduction achieved to date, the need for new emissions-reducing measures is equivalent to 1.25 million tonnes.

The measures for halving emissions by 2030, approved by the Government in the roadmap for fossil-free transport, are divided into three phases, which will reduce carbon dioxide emissions by 1.17-1.53 million tonnes overall.

Measures in the first phase - subsidies and incentives

The first phase includes 20 different subsidies, incentives and other actions, aimed at supporting the procurement of electric and gas-powered vehicles, the construction of distribution infrastructure, as well as pedestrian and bicycle traffic and public transport. The first-phase measures will reduce transport-related carbon dioxide emissions by 0.41-0.51 million tonnes.

For the results from the first phase to be fully achieved, funding must be raised to the level specified in the roadmap for fossil-free transport. The costs for the first phase will mainly arise during the period 2022-2026. In 2022-2024, the need for new subsidies is around EUR 96 million annually, but the funding allocated for 2022 in the state budget only amounts to some EUR 33 million.

Measures in the second phase

For the second phase, assessments have been carried out to determine the impacts of a stricter obligation to distribute renewable fuels, as well as the impacts of remote work, new transport services and combined transports in freight traffic.

Raising the obligation to distribute biofuels by four percentage points to 34 per cent would reduce transport emissions by 0.3-0.4 million tonnes. Such an increase could be carried out fully or at least mostly by using biogas, provided that approximately 2.5 TWh of biogas will be available for traffic use in 2030. Raising the level of obligation to 34 per cent would also raise fuel prices, but only moderately compared to the price increase already expected due to global market trends and the existing distribution obligation.

Remote work and new transport services can help reduce carbon dioxide emissions by 0.13-0.2 million tonnes overall in 2030. The realisation of the full potential depends largely on the choices of companies and individuals.

EU-wide emissions trading scheme for road transport

In July 2021, the European Commission submitted a proposal for the EU's climate package, known as the Fit for 55 package. It contains various initiatives concerning transport. Among other things, the Commission proposed stricter carbon dioxide emission standards for cars and vans and the deployment of infrastructure for alternative transport fuels.

The Commission also submitted a proposal for the establishment of a new emissions trading scheme. The new scheme would be independent of the existing trading scheme and would cover the fossil fuels used for buildings and road transport.

According to VTT Technical Research Centre of Finland, the EU's emissions trading scheme would reduce carbon dioxide emissions from Finnish road transport by approximately 0.3-0.4 million tonnes in 2030. Stricter carbon dioxide standards concerning vehicle manufacturers would also lead to a substantial reduction in emissions. The latter emissions reduction has already been included in the first phase of the roadmap.

The Commission has also proposed amending the EU's Energy Taxation Directive, but this has not been taken into account in the assessments. The Commission's proposal calls for the harmonised taxation of petrol and diesel, used as transport fuels, for example. The approval of the proposal requires a unanimous decision by the EU Member States.

The next steps

The Government will carry out an overall assessment of the adequacy of measures concerning transport and burden sharing in March 2022, in accordance with the climate policies outlined in the government budget session.

Transport-related measures will also be discussed in the medium-term climate policy plan, which is currently being prepared under the lead of the Ministry of the Environment.

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, Twitter @PaiviAntikainen