What Will Finland Look Like in 2040 in the Sectoral Low-Carbon Roadmaps?

By summer 2023, only three years had passed since the publication of the sectoral low-carbon roadmaps in 2020. A provision in Petteri Orpo’s government program from June 2023 mandated the Ministry of Economic Affairs and Employment and various sectors to revisit the roadmaps in light of the evolving operating environment. With this mandate, the update process began in autumn 2023. By autumn 2024, all 14 participating sectors had completed their updates.

The sectors involved include the chemical industry, forest industry, technology Industries, energy industry, Commerce, Food and drink industry, agriculture, Construction sector, Service sector, Building Owners (RAKLI), Sawmill Industry, hospitality sector, textile and fashion sector and Bioenergy. These sectors represent a vast majority of Finland's industrial emissions.

Updating the roadmaps is timely, given how the COVID-19 pandemic, Russia's invasion of Ukraine, the energy crisis, and economic uncertainties have altered the operational landscape. It’s also essential to maintain a clear view of the actions needed to meet Finland's emission reduction targets and obligations.

The pathways outlined in the roadmaps offer valuable insights into how emissions reductions across sectors are achievable and, conversely, the types of changes the green transition might entail and require in Finland. The government will utilize the results and assessments from the roadmaps in preparing both the energy and climate strategy and the industrial policy strategy.

The Ministry of Economic Affairs and Employment has now published a summary report on the roadmap process, which sheds light on the key insights and requirements identified by the sectors.

The Revolution of Clean Energy and Electrification is Underway

According to the roadmaps in 2040, industry in Finland is largely low-carbon. Emission reduction pathways for many sectors have steepened compared to the 2020 projections, although there are exceptions. New targets also emerged in this process, such as the Finnish Food and Drink Industries’ Federation’s  increased ambition compared to its 2020 roadmap, now aiming for carbon neutrality of scope 1 and 2 emissions by 2035.

A consistent theme across all sectoral roadmaps is the significant reduction of emissions from energy production, supported by emission cuts within the energy industry itself, leading to a decrease in indirect emissions across other sectors.

The availability of clean energy is driving accelerated electrification, particularly for emissions reductions in energy-intensive industries. While the hydrogen economy, relying on access to clean electricity, is a critical factor in the roadmaps, its the commercial rollout remains uncertain.

There is a vast uncertainty around the electrification of industrial processes, which relies on substantial investments. Compared to the roadmap process four years ago, rapid changes in the operating environment are now reflected as increased uncertainty in the roadmaps.

Investment is hindered by rising financing costs, regulatory unpredictability, and Russia's invasion of Ukraine. For all sectors, regardless of size, the launch of investment projects remains a significant question mark impacting the realization of emission reduction efforts.

The need for clean electricity has been estimated in the roadmaps, particularly by the technology industry and the chemical industry. In low-carbon scenarios, the combined need for clean electricity in the 2040s for just these two sectors is projected at around 60 TWh, compared to Finland's total electricity consumption of 79.8 TWh in 2023. In ambitious scenarios for the chemical industry, where the use of i.e. clean hydrogen and carbon capture and utilization, could transform the raw material base of the chemical industry, electricity demand could exceed even 100 TWh.

These projections contain significant uncertainties and various assumptions. However, the scale gives an indication of the potential impact of the low-carbon, growth-oriented industrial production outlined in the roadmaps on, for example, the electricity grid.

Skilled Workforce – Enabler or Bottleneck?

A common challenge across sectors is the availability of skilled labor. For instance, the energy industry estimates that the sector could employ up to 100,000 people in Finland by 2040 if ambitious clean energy production visions are realized. The technology industry, on the other hand, estimates that it will require 130,000 new workers over the next decade.

Several sectors have broadly outlined their skill needs in their roadmaps. However, more detailed mapping of the skills required for the green transition has emerged as a topic needing further work.

The Full Range of Emission Reduction Measures in the Roadmaps

The roadmaps outline the entire array of emission reduction measures across sectors: while the importance of traditional methods like energy efficiency measures should not be underestimated, newer themes, such as carbon capture, storage, and utilization, as well as the role of artificial intelligence in enabling emission reductions, are emphasized in this update round.

Thanks are due to the sectors, as many have addressed the challenging assessment of scope 3 emissions. Scope 3 includes all indirect greenhouse gas emissions generated within a company’s value chain but not directly controlled by the company. As emissions from energy production decrease, the importance of these “upstream” and “downstream” emissions throughout the value chain will become increasingly significant.

What, then, are the key requirements for implementing emission reduction actions, according to the sectors? Unsurprisingly, nearly all sectors highlight the importance of a predictable operating environment, a stable regulatory environment, and technological neutrality. They also emphasize several other specific actions as messages for decision-makers at both the national and EU levels.

Finnish Approach Also Gathering International Interest

The low-carbon roadmaps exemplify collaboration between the Finnish public and private sector, a voluntary process that yields results. It is commendable that all 14 sectors, both large and small, contributed to the update work with their respective inputs.

The Ministry of Economic Affairs and Employment has served as a coordinator for the update work, but with a light touch, posing questions to steer the work. The essential aspect of the process is that sectors retain ownership of their roadmaps. Only in this way can their results be effectively implemented at the grassroots level in companies.

The Finnish approach has also attracted interest internationally. It could serve as a model within the European Union, where the new Commission will focus on industrial and competitiveness agendas alongside the green transition. The Finnish approach could provide guidance for the EU level standard association, which is currently developing a standard for low-carbon roadmaps.

Katja Tuokko is a Senior Specialist in the Energy Department of the Ministry of Economic Affairs and Employment. She has been involved in coordinating the update of the Sectoral Low-Carbon Roadmaps.