Minister Mykkänen: Work on voluntary carbon markets continues – Finland has potential related to technical carbon sequestration solutions
The Government has set the target to promote voluntary carbon markets. The aim is to create long-term business opportunities related to carbon sequestration, which would also contribute to Finland’s efforts to reach the climate targets.
Through voluntary climate actions companies and other entities can supplement the binding targets and compensate for emissions that cannot be reduced. Carbon credits bought from the voluntary carbon markets can be used to make contribution claims in the marketing of companies, products and services.
“When implemented in a way that is correct and responsible, voluntary carbon markets can be a significant driving force for effective climate actions. Technical carbon sequestration solutions are an important part of the Finnish industrial and climate policy, and Finland has potential related to matters such as the capture and utilisation of biomass carbon. The long-term nature and stability of the solutions make them particularly interesting for the voluntary carbon markets. At the same time it is quite obvious that, because of the high investment costs, public and private financing must be combined to ensure that the developing technologies can be scaled up for use,” Minister of Climate and the Environment Kai Mykkänen says.
“The land use sector has a lot of potential in this regard as there is a special need to promote climate actions. Sinks in forests and soils must be strengthened in order for Finland to reach its climate targets and meet the EU obligations. However, the special characteristics of the land use sector, including the need to ensure the stability of carbon sequestration, increase the challenges related to the use of the markets,” Mykkänen says.
As a new opening and part of the work to develop voluntary carbon markets, the Government is planning to introduce a flexibility mechanism for the distribution obligation. With this mechanism, fuel distributors can fulfil the distribution obligation by funding other emission reductions.
“At the first stage it is easiest to use the flexibility mechanism of the distribution obligation for emission reductions in the effort-sharing sector, but we are planning to adopt a separate decree that will specify reliable rules for using this new mechanism to finance actions in the land use sector as well,” Mykkänen says.
Recent study explores the role of voluntary climate actions and the international framework of carbon markets
A recent study under the Government’s joint analysis, assessment and research activities (VN TEAS) assessed the development pathways of the carbon markets, which from the Finnish perspective are for the main part expected to have positive impacts. However, the development of the domestic carbon markets depends on the ability of the buyers and sellers of the credits to trust the common rules of the game in the markets.
“In Finland the discussion on carbon markets is well informed and of a very high standard. Finland must stay among the leaders in this regard and contribute to developing the voluntary carbon markets towards even greater climate impact. As the decision-makers, our task is to develop common rules and incentives that will promote and boost the projects,” Mykkänen says.
In recent years efforts have been made to promote the clarity and good practices related to the marketing claims based on carbon credits through EU legislation and voluntary standards and guidelines. According to the study, besides the increasingly detailed regulation and international guidelines, the public authorities can contribute to creating stability in the markets by providing readily accessible information on the market trends to the operators.
Inquiries:
Lyydia Ylönen
Special Adviser to the Minister
tel. +358 50 476 1341
[email protected]
Karoliina Anttonen
Senior Ministerial Adviser, Legislative Affairs
tel. +358 29 525 0065
Ministry of the Environment