Annual Climate Report 2022: Total emissions about same as before, land use sector turned from sink into source of emissions

The Government submitted its Annual Climate Report to Parliament on 27 October. Emissions from Finland’s effort sharing sector decreased in 2021, but those from the emissions trading sector increased. For the first time ever, the land use sector turned into a source of emissions instead of serving as a sink that sequesters emissions.

Finland’s target is to be carbon neutral in 2035. The Government submits Annual Climate Reports to Parliament on the trends in emissions in Finland and progress towards the emission reduction targets that have been set.
“In terms of reducing emissions, we are making progress towards a carbon-neutral Finland in 2035. In terms of sinks, however, the situation is more difficult. According to preliminary data, Finland’s land use sector, such as forests and fields, has for the first time turned from a carbon sink into a source of emissions. This is a serious warning because Finland’s carbon neutrality in 2035 depends on our ability to reduce emissions and increase sinks at the same time. We can already say that a rescue package for carbon sinks will be needed,” Minister of the Environment and Climate Change Maria Ohisalo says.

Finland’s emissions below emission allocation for effort sharing sector

Finland’s total emissions, i.e. the sum of emissions in the effort sharing and emissions trading sectors, were about the same as in the previous year. Compared to the 2005 levels, the total emissions have decreased by 32%. 

According to the proxy estimate of Statistics Finland, emissions from Finnish installations within the scope of the emissions trading scheme increased by 4% in 2021. Emissions trading covers e.g. emissions from electricity generation, most of district heat production, metal manufacturing, pulp and paper industry, chemical industry, construction product industry and aviation.
The increase in emissions was due to the higher consumption of coal compared to the previous year. The main reasons for the increase in coal consumption included the colder weather conditions and the high market price of natural gas. However, from 2005 the emissions of the emissions trading sector have decreased by 42.5%.

Emissions from the effort sharing sector decreased by about 3 per cent in 2021. Finland’s emissions were clearly below the emission allocation for the Finnish effort sharing sector set by the EU. The effort sharing sector comprises emissions from e.g. road transport, agriculture and heating of individual buildings.

The land use sector comprises agriculture, forestry, other types of land use and changes in land use. The land use sector was for the first time a source of emissions instead of serving as a sink. The large harvesting volumes and slower forest growth are assumed to be the main reasons for this. The transformation of the land use sector from a sink into a source of emissions increases the net emissions, which means more pressure to reduce emissions and increase sinks.

The harvesting volumes in 2021 were higher than in the previous year and the second largest during the time when the volumes have been measured. It seems that trees are being harvested at a younger age than before. At the same time the growth of forests has slowed down, which may have impacts on the size of the carbon sink in the coming years as well.

Electrification of transport progresses faster than expected

From 2020 to 2021 emissions from transport decreased by about 4%. The electrification of transport has progressed faster in Finland than was expected. In 2021 emissions from transport accounted for a little more than 20% of Finland’s total emissions and almost 37% of emissions in the effort sharing sector.

The number of kilometres driven in 2021 was 0.5% smaller than in 2020. The higher fuel prices will very likely have an impact on the demand for fuels. Among the positive trends is that the share of renewable fuels of all fuels used grew by about 6 percentage points, which is a significant improvement compared to 2020.

The distribution obligation is a key emission reduction measure in the transport sector. The purpose of the obligation is to promote the use of sustainable, renewable fuels to substitute for motor petrol, diesel oil and natural gas. Parliament has approved a legislative amendment that will ease the distribution obligation to slow down the rise in fuel prices. The aim is to compensate for this easement of the obligation by raising the obligation later on.
Emissions from transport depend a great deal on the age of the vehicle fleet. The renewal rate of the vehicle fleet is too slow, not enough new cars are being sold and there are problems in the supply of electric cars.

Emissions from agriculture about same as before

Within the effort sharing sector, emissions from agriculture have been about the same for many years. This was the case in 2021 as well. Agriculture is not only a source of emissions but also a carbon sink. When using sustainable cultivation practices, croplands can also sequester carbon.
Efforts are made to reduce emissions from agriculture without compromising domestic food production. According to the Ministerial Working Group, the security of supply of Finnish agriculture must be strengthened by supporting a fast transition from fossil fuels to sustainable forms of energy. Nutrient self-sufficiency is supported by improving the recovery of nutrients. The trend is in the right direction: biogas production on farms increased by 50% between 2020 and 2021.

Climate Act boosts climate work in municipalities

Municipalities and local governments have a key role as Finland aims to be carbon neutral by 2035. Finland’s emissions in the effort sharing sector decreased by 19% between 2005 and 2020, but there are considerable differences between municipalities. The decrease in total emissions has been faster but the pace is still too slow relative to the targets set by municipalities. There is an obvious need to further boost the climate work of municipalities.
According to the Government proposal supplementing the Climate Act, from the beginning of 2023 all municipalities are obliged to draw up a climate plan either alone or together with other municipalities.

Annual Climate Report is based on Climate Act

The provisions on the Annual Climate Reports are laid down in the Climate Act. This is the fourth report that has been published. The Annual Climate Reports describe the progress towards meeting Finland’s emission reduction targets. The report summarises the trends in Finland’s emissions and sinks. It also deals with climate change adaptation and the impacts of policy measures that are being planned on emissions, and discusses the need for additional measures to reach the targets.