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Finnish border guards check cars at the Russian border as men fled Russia after Putin announced a partial mobilisation AP/PA Images
net zero

Finland pushes forward with ditching fossil fuels in face of Russia's war and energy crisis

Decades of diversifying energy has meant Russia’s war on Ukraine hasn’t left Finland as vulnerable as other countries – but prices have still jumped.

Lauren Boland reports from Finland:

FINLAND IS PUSHING forward with plans to dramatically cut down on fossil fuels and reach net-zero emissions by 2035 despite the effects of the current energy crisis.

Since February, Russia’s war on Ukraine has sent the energy sector into a spin across Europe.

In neighbouring Finland, the country’s energy grid operator has warned that war has increased uncertainties about the availability of electricity.

Decades of diversifying its energy sources, especially by developing biofuel and nuclear, has meant that Finland has not been left as vulnerable as other European countries – though prices have still jumped.

From Ireland’s perspective, Taoiseach Micheál Martin said this week that “all countries in Europe are grappling the consequences of the war, not least elevated energy prices and supply constraints”, while Minister for Environment Eamon Ryan has said that fighting the climate crisis and energy crisis go hand in hand.

The Journal spoke to experts on a trip to Finland about how the war is affecting its nordic neighbour, the implications for its energy sector, and how it links to climate action.

‘We’ve tried to get rid of gas’

Sharing the second longest and most northerly of Russia’s European borders, Finland is acutely aware of the fallout from Russia’s invasion of Ukraine.

Most recently, the closure of the Nord Stream 1 gas pipeline from Russia to Europe due to leaks – which the EU blames on Russia, something the latter denies – have tightened Finland’s effort to protect its critical energy infrastructure.

Several leaks were found in September, with a Swedish seismological institute reporting that it recorded two underwater blasts prior to the discovery.

The pipeline, which is the longest from Russia to Europe, does not run through Finland’s territorial waters but the event still prompted the country to reinforce surveillance of its infrastructure, particularly in the Gulf of Finland, which is shared by Helsinki, Russia’s St Petersburg and Estonia’s Tallinn.

AFP reported that Finance Minister Annika Saarikko said an order was issued to “all branches of government to ensure the preparedness and enhancement of security measures for various critical infrastructure”, which includes power grid networks and water supplies as well as the Baltic Connector gas pipeline between Finland and Estonia.

In the face of energy security fears, democratic leaders must work closely with their societies to fend off external attempts to undermine governments’ efforts in areas such as climate action, according to Raili Lahnalampi, Finland’s ambassador to Ireland.

“You need to try very hard to get the buy-in from people so that you have the people with you in open and democratic societies in issues where, for example, in energy security, it is for our benefit,” Lahnalampi said.

“Today, a lot of other actors would like to confuse the role of open societies and democracies and the government’s capabilities to grant the governance for a more sustainable, non-fossil future.” 

Although most of the gas that Finland uses for energy comes from Russia, it is a minor part of the country’s energy supply – around 7% in 2020.  

Oil, coal and, to a lesser extent, natural gas still collectively make up a significant, but declining, proportion of Finland’s energy, while the use of biofuels and nuclear power has increased. Wind, solar and hydro power remain relatively minor, but growing, sources.

Its electricity sector is increasingly turning away from fossil fuels – approximately 40% of the country’s electricity production comes from the Olkiluoto Nuclear Power Plant, located around 280km northwest of Helsinki – but heating has been slower to ditch sources like oil and coal, as well as peat.

Fingrid, the country’s energy grid operator, warned in August that war and the “exceptional situation” on the energy market had increased uncertainties about the availability of electricity and that people should be prepared for possible power outages. 

However, its diversity of supply has meant that Finland hasn’t been hit as hard as other countries that were more dependent on Russia for energy.

“We used to be more dependent but we have already in the past ten years tried to get rid of gas,” said Riikka Yliluoma, a special advisor to Finland’s Minister for Environment.

“Also, because we quite early started to decarbonise our energy sector, we have quite a lot of clean energy infrastructure,” she said.

“Not yet maybe enough for all occasions but we already have quite a lot, so I think we are maybe in a better position than central Europe which has been very dependent on Russian gas.”

The pressures on the European market, though, have seen households and businesses still faced with substantial increases in their energy costs.

Economy Minister with responsibility for energy Mika Lintilä told Finnish media in August that the cost of his home’s electric heating system (already an expensive form of heating) had risen from 8.7 cent to 49 cent per kilowatt hour.

In Lahti, a small city that was named the 2021 European Green Capital, energy provider Lahti Energia ceased using coal in 2019. 

Its power plants generate energy from biofuel and recyled fuel to produce electricity and district heat.

CEO Jouni Haikarainen said that the cost of heating during the winter for its household customers is around €80 to €90 per megawatt hour.

He said prices have increased for the coming winter by about 15%, driven by increases in the cost of gas and oil.

Additionally, “the demand for biofuels and also for the recycled fuels has increased so that we have to work much harder to get our fuel mixture for the next winter”, he said.

IMG-53161 A power plant in Lahti. From left to right: Kymijärvi II (recyled fuels), Kymijärvi III (biofuel) and Kymijärvi I (coal, no longer operating) Lauren Boland / The Journal Lauren Boland / The Journal / The Journal

The Finnish government is planning to use a mix of subsidies and tax reductions to try to ease the cost of households’ energy bills.

Additionally, VAT on electricity will be reduced from 24% to 10% between December and April.

“That is the most burning question in Finland at the moment, the rising electricity prices,” said Riika Yliluoma, Special Advisor to to Minister for Environment.

“Next year, it will be possible to have direct support for your electricity prices if you have a low income and if you have a higher income then you can have tax reductions from your electricity bill,” she said.

“Also, we have put more money to the basic social security system so that we could support those who really struggle with the high electricity prices.

“We already have quite a good social security system. I think this crisis but also the Covid-19 crisis showed that when you already have a good underlying system, you can put more support there and you already have the tools to help people who really struggle.”

She said it’s important that the energy crisis doesn’t push efforts to tackle the climate crisis to the side.

Finland has set targets of reaching net-zero emissions by 2035 and to absorb more carbon dioxide than it emits by 2040.

Its plans include producing electricity and heat with almost no emissions by the end of the 2030s, as well as a focus on cutting down waste and emissions from buildings. 

“Some people say the energy prices are high because of the green transition but in reality it’s the fossil fuels that are driving this crisis and we need to keep our heads straight and see the root causes,” Yliluoma said.

A core element of Finland’s sustainability policy is creating a circular economy where resources and materials are diligently used, re-used and recyled rather than a system of mass production, consumption and waste.

Senior Ministerial Adviser Anna-Maija Pajukallio said that Russia’s war means a circular economy is “more important than ever” because it shores up the country’s resilience.

She said limited natural resources must be used with caution.

“We have to circulate more to be self-sufficient.”

Culturally, the relationship between Russia and Finland – already complicated by the Soviet Union’s annexation of Finland from 1809 until 1917 and subsequent wars – is once again tense.

Finnish towns near the border that once relied on tourism from Russia quietened, with the loss dealing a hit to their local economies.

Vladimir Putin’s recent announcement of a partial mobilisation prompted an influx of people crossing the border from Russia into Finland, but Finland quickly imposed restrictions on Russians entering the country with Schengen tourist visas – though not against those travelling for work, study, meeting family or on human rights grounds. 

Asked this week about what an ‘off-ramp’ for Russia to end the conflict could look like, Finnish Prime Minister Sanna Martin had a short answer: “The way out of the conflict is for Russia to leave Ukraine. That’s the way out of the conflict.”

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