Finland’s energy and climate policies are centred on achieving carbon neutrality by 2035 while ensuring energy security, reducing energy import dependency, promoting a sustainable economy and protecting biodiversity. Finland’s Climate Change Act was updated in July 2022 with a legal obligation to reach carbon neutrality by 2035. In support of this obligation, the Act sets binding targets to reduce greenhouse gas (GHG) emissions, excluding land use, land-use change and forestry (LULUCF) by 60% by 2030, 80% by 2040 and 90-95% by 2050. The Act also requires the development of several documents defining the specific measures to achieve these targets.

Thanks to its nuclear reactors and large domestic production of renewable energy (mainly forestry solid biomass as well as generation from hydro and wind), Finland has one of the lowest levels of reliance on fossil fuels among IEA member countries. In 2021, fossil fuels covered 36% of Finland’s total energy supply (TES), the second-lowest share among IEA countries and much lower than the IEA average of 70%. Finland has no domestic fossil fuel production and all supplies of crude oil, natural gas and coal are imported. The energy intensity of the economy and energy consumption per capita are both very high due to the country’s relatively large heavy industry sector and the high heating demand from its cold climate.

The National Climate and Energy Strategy (NCES) is the key document defining the measures by which Finland will meet the European Union’s (EU) 2030 energy and climate targets and achieve carbon neutrality by 2035. Finland plans to achieve carbon neutrality by maintaining a high share of nuclear energy, increasing electricity generation and heat production from renewables, improving energy efficiency, and electrifying most energy demand across the economy. There is also a push for the development, commercialisation and cost reduction of new and emerging energy technologies to drive energy transition in hard-to-abate sectors and end uses, especially industry and heavy transport. Bioenergy plays a key role in Finland’s climate and energy policy. Forestry biomass is a key source of electricity and heat, and biofuels play a central role in supporting energy transition in the transport sector. Finland’s plan to achieve carbon neutrality also relies on increasing carbon removals from LULUCF to offset remaining emissions.

Finland has made notable progress in moving towards carbon neutrality. It deployed the first new nuclear reactor in Europe in over 15 years, which started full operation on 16 April 2023, and has seen strong growth in onshore wind generation. However, notable challenges remain. Imported fossil fuels still account for over a third of Finland’s energy supply and some areas of the economy, such as transport and key industrial activities, remain dependant on them. Also, while LULUCF has historically offset a significant amount of GHG emissions, there has been a declining trend in carbon removal from LULUCF since 2010. In 2021, for the first time, the land-use sector was a net source of GHG emissions.