Energy Policies of IEA Countries: Finland 2018 Review
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ENERGY POLICIES OF IEA COUNTRIES Finland 2018 Review Secure Sustainable Together ENERGY POLICIES OF IEA COUNTRIES Finland 2018 Review INTERNATIONAL ENERGY AGENCY The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more. Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its 30 member countries, 7 association countries and beyond. The four main areas of IEA focus are: n Energy Security: Promoting diversity, efficiency, flexibility and reliability for all fuels and energy sources; n Economic Development: Supporting free markets to foster economic growth and eliminate energy poverty; n Environmental Awareness: Analysing policy options to offset the impact of energy production and use on the environment, especially for tackling climate change and air pollution; and n Engagement Worldwide: Working closely with association and partner countries, especially major emerging economies, to find solutions to shared IEA member countries: energy and environmental Australia concerns. Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Secure Hungary Sustainable Ireland Together Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic © OECD/IEA, 2018 Spain International Energy Agency Sweden Website: www.iea.org Switzerland Turkey United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are also participates in available online at www.iea.org/t&c/ the work of the IEA. Foreword The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries’ energy policies since 1976. This process not only supports energy policy development but also encourages the exchange of and learning from international best practices and experiences. In short, by seeing what has worked – or not – in the “real world”, these reviews help to identify policies that achieve objectives and bring concrete results. Recently, the IEA has moved to modernise the reviews by focusing on FOREWORD some of the key energy challenges in today’s rapidly changing energy markets. One of the key topics of focus in this review is bioenergy. In a recently published article, Minister Tiilikainen and I wrote that bioenergy can play a crucial role as a transition fuel to a lower-carbon economy. This was also underlined by the findings of the recent IEA report, Renewables 2018. Finland is one of the global leaders when it comes to bioenergy. Its forest industry has paved the way by producing residues and wastes which can be utilised as energy sources, including as fuel in combined production of heat and power (CHP) and in transportation. It is impressive that Finland aims to halve oil consumption in the transport sector by 2030 through the use of biofuels. Our report offers insights into how the country can rapidly reduce its oil use, boost biofuels, and promote public transport and new mobility services. We recommend a three-way strategy based on a combination of electrification, higher energy efficiency and wood-based biofuels. Finland has also already demonstrated how to ensure the impacts of greater biofuel use on sustainability can be avoided, notably by promoting second-generation biofuels. We encourage the government to maintain and boost Finland’s innovation potential by pursing technology development for biofuel use in aviation, maritime, and heavy-duty road transport. It is my hope that this report will guide Finland in its energy transition and support its contribution to a cleaner, more sustainable and secure global energy system. Dr. Fatih Birol Executive Director International Energy Agency 2018 OECD/IEA, 3 © 2018 OECD/IEA, © TABLE OF CONTENTS ENERGY INSIGHTS 1. Executive summary .....................................................................................................11 Energy system transformation ...........................................................................................11 Energy security ..................................................................................................................13 Special focus 1: The future role of biomass ......................................................................14 Special focus 2: The future of combined heat and power .................................................14 Special focus 3: The transition to a low-carbon transport sector ......................................15 Key recommendations .......................................................................................................16 2. General energy policy .................................................................................................17 CONTENTS OF TABLE Country overview ...............................................................................................................17 Supply and demand ...........................................................................................................20 Institutions ..........................................................................................................................25 Energy policy strategy .......................................................................................................26 Reform of renewable energy support ................................................................................28 Energy taxation ..................................................................................................................29 Nordic collaboration ...........................................................................................................30 Assessment .......................................................................................................................31 Recommendations .............................................................................................................33 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change policies .........................................................................35 Overview ............................................................................................................................35 Institutions and regulatory framework ...............................................................................38 Climate change mitigation .................................................................................................39 Special focus: Forest biomass and land use ....................................................................42 Special focus: Transport ....................................................................................................43 Targets and pathways for 2050 .........................................................................................44 2018 Climate change adaptation ................................................................................................44 OECD/IEA, 5 © TABLE OF CONTENTS Assessment .......................................................................................................................45 Recommendations .............................................................................................................47 4. Industry .........................................................................................................................49 Overview ............................................................................................................................49 Institutions and policy framework ......................................................................................52 Energy efficiency in industry ..............................................................................................52 Energy audits .....................................................................................................................54 Assessment .......................................................................................................................54 Recommendations .............................................................................................................55 5. Buildings and district heating ....................................................................................57 Overview ............................................................................................................................57 Building stock.....................................................................................................................58 Energy and emissions .......................................................................................................59 Institutions, regulation and policy ......................................................................................64 Taxes and prices ...............................................................................................................67 Assessment .......................................................................................................................70 Recommendations .............................................................................................................72 6. Transport ......................................................................................................................75 Overview