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Annual Climate Report 2021: Emissions in Finland declined in the exceptional year

Ministry of the Environment
Publication date 23.6.2021 12.37
Press release

The Government submitted its Annual Climate Report to Parliament on Wednesday 23 June. According to the report, Finland's emissions declined in the exceptional year, but achieving carbon neutrality by 2035 will require more and faster action also after the pandemic.

“We are going in the right direction, but new climate measures are needed. We are currently preparing our most important climate plans: the Medium-term Climate Change Policy Plan that extends until 2035, the Climate and Energy Strategy and the climate change plan for the land-use sector. In this work, we must find measures that will enable us to achieve Finland's goal of being carbon neutral in 2035. It is also important to ensure that the climate measures are implemented in a way that is fair,” Minister of the Environment and Climate Krista Mikkonen says.

The Government’s objective is that Finland will be carbon neutral by 2035 and carbon negative shortly thereafter. Carbon neutrality means that emissions and the sinks that sequester carbon are in balance, i.e. emissions caused by human activity are calculated to be as high as greenhouse gas removals. Carbon negativity means a situation in which greenhouse gas removals are higher than greenhouse gas emissions.

A key factor for the carbon neutrality target is the expected number of carbon sinks in 2035, which determines the magnitude of the required emissions reductions. If a net sink of 21 million tonnes is aimed for in the land use sector in 2035, emissions should likewise decrease from the current 48 million tonnes to 21 million tonnes. The current measures are estimated to cover about 16 million tonnes of the necessary emissions reductions of 27 million tonnes, which means that 11 million tonnes will remain as an emissions gap. 

Considerable reductions in emissions trading sector in 2020, small reductions in other sectors

According to the preliminary data of Statistics Finland, the total emissions in Finland declined by about 9% from the previous year. In the emissions trading sector the reduction was almost 16% and in the non-emissions trading sectors the emissions decreased by 3%, which slightly exceeded the EU’s annual emission allocation for Finland in 2020.

The emissions trading scheme covers electricity production and the majority of district heat production, metal production, pulp and paper industry, chemical industry, construction industry and air transport. Sectors and operations not covered by the scheme include road transport, agriculture and heating of individual buildings.

The decrease in emissions was a result of the warm winter, recent structural changes in electricity production and a decrease in emissions from the transport sector. The land use sector’s carbon sinks increased while felling of forests declined, which was also relevant for the climate.

Finns are consuming more

According to the calculations of the Finnish Environment Institute, emissions from household consumption declined between 2010 and 2015, but have remained at around the same level since then. Consumption-based emissions include emissions arising in Finland from the production of goods and services as well as overseas emissions from the production chains of imported goods. Emissions from export production chains are deducted in the calculation of consumption-related emissions. 

There has been an overall increase in emissions from consumption of 4% since 2000. The primary factor explaining this rise is income level: the more money people have, the more they usually consume. The increase in consumption expenditure has been partly compensated by lower-emission products and services.

Decline in transport sector emissions

In 2020, emissions from the transport sector in Finland decreased by 6% from the previous year. The coronavirus pandemic, in particular, contributed to the decline in emissions from the transport sector as there was a decrease in driving distances. 

The target set in the Government Programme is for transport sector emissions to be halved from 2005 levels by 2030. Transport sector emissions are declining too slowly in relation to the target: the existing measures are expected to reduce emissions to 7.9 million tonnes, but emissions should decrease to 6.3 million tonnes. In May 2021, the Government adopted a resolution on a roadmap for fossil-free transport to achieve this target.

Emissions from agriculture remain unchanged

According to preliminary data, emissions from agriculture in 2020 remained the same as the previous year. The current measures included in the Medium-term Climate Change Policy Plan are expected to lead to a slight downward trend in emissions from the agriculture sector. 
The EU Common Agricultural Policy is currently being revised for the next funding period. Measures to reduce emissions will be re-examined in connection with this. The EU’s obligation to Member States is to allocate 30% of rural development funds to environmental and climate measures at the national level.

Discontinuation of oil heating will drive down emissions caused by heating of individual buildings 
Emissions from the heating of individual buildings have been on a downward trend in recent years due to the reduction of oil heating and improvement in the energy efficiency of buildings. Emissions from individual buildings are mainly caused by oil heating. 

The action plan for phasing out fossil fuel oil in heating was on a consultation round in spring 2021. Newly introduced subsidies will be used to speed up discontinuation of oil use in residential properties.

Adaptation measures need to be expedited 

Accelerating global warming highlights the need to expedite the measures to prepare for change. An update to Finland’s National Climate Change Adaptation Plan will be launched under the leadership of the Ministry of Agriculture and Forestry in 2021. The aim of the implementation of the adaptation plan is to reduce the harmful effects of climate change on people’s safety, health and living conditions, nature and other environments, livelihoods, infrastructure and society’s important functions.

A knowledge base of the impacts and risks of climate change and methods to prepare for these are being developed in several currently ongoing research projects. Finland’s ability to prepare for climate change will improve by strengthening broad-based cooperation, forging partnerships and developing climate-resilient solutions.

Annual Climate Reports are based on the Climate Change Act

The Annual Climate Reports are based on the Climate Change Act that entered into force in 2015. This is the third annual report. 

The Annual Climate Reports follow the achievement of Finland's emission reduction targets. They contain information on the trends in the emissions and sinks in Finland. They also deal with climate change adaptation and the impacts of the envisaged policy measures on emissions. The reports also consider whether new measures are needed to achieve the objectives set.

To make it more comprehensive, the content of this Annual Climate Report has been developed on the basis of reports issued by Parliament and feedback received from various stakeholders. The Annual Climate Report provides extensive information on emissions trends and topical issues related to climate policy. In addition to the effort sharing sector, the emissions trading and land use sectors are also examined.

Parliament will start the discussions on the Annual Climate Report after the summer holidays.


Riikka Yliluoma 
Special Adviser to the Minister of the Environment and Climate Change
+358 50 414 1682
[email protected] 

Magnus Cederlöf
Senior Ministerial Adviser
Ministry of the Environment
+358 29 525 0060
[email protected]

Institutional Repository for the Government Valto: Annual Climate Report 2021