Finnish Industries has identified five conditions that need to be in place to successfully achieve the 2030 target. Achieving a more ambitious EU 2030 target will however require companies to make unprecedented investments – and within less than a decade. Therefore, economic reconstruction, recovery funding and climate measures need to efficiently go hand in hand, stresses Jyri Häkämies, Director General of the Confederation of Finnish Industries (EK).
The European Commission will propose to update the EU’s 2030 GHG emissions reduction target from the current 40% to as high as 55% this week. The target is certainly challenging but acceptable, says Jyri Häkämies, Director General.
“Finnish companies want to be at the forefront of climate action and we will also take on the new challenge for 2030. It is an important milestone towards a carbon-neutral Europe in 2050. Ambitious emissions reduction target can be reached if companies’ massive climate investments are encouraged. This can be done by ensuring that the EU and national recovery funding is directed at accelerating the sustainable growth of companies. “
The practical implementation of climate and energy policy must be planned in co-operation with the business. A good example of excellent co-operation between public and private sector is the preparation of low-carbon roadmaps for different business sectors in Finland, Häkämies reminds.
5 conditions that need to be in place to successfully achieve the 2030 target:
- We need to quickly mobilize emission reducing pilot projects as well as invest in new technology. For this end, both the EU and national recovery funds need to be used efficiently. It is also essential to invest in electrification and other low-emission energy solutions as well as hydrogen and carbon capture and reuse as a raw material.
- The EU emissions trading scheme (EU ETS) and other market-based instruments are essential. The EU ETS includes means of ensuring that European companies can compete globally as the EU’s ambitious climate policy advances. Free allocation and the compensation of indirect electricity costs will continue to play a crucial role for business as the updated 2030 target is likely to raise the price of allowances. In the service sectors in Finland, emission reductions must be promoted by the reduction of the electricity tax and support for the small-scale renewable production. If competitiveness deteriorates in any business, the necessary support measures must be taken.
- Business investment should not be slowed down by regulatory uncertainty. A new EU- or national-level regulation or revision should be made only if it is inevitable for reaching the updated 2030 climate target.
- It is important for the EU to play an active role in international climate policy to involve other countries in tightening up their own targets in accordance with the Paris Climate Agreement. A system of international emissions reduction units needs to be introduced to help Europe to achieve its ambitious target by carrying out climate project outside Europe.
- Finland’s positive climate impact must be maximized through exports, via the so-called positive carbon handprint where Finnish companies’ low-carbon solutions and products reduce their clients’ carbon footprint. These solutions and products must be marketed as widely as possible, both in the EU and the rest of the world. The more we can export Finnish climate solutions, the higher the positive carbon handprint.
The proposed updated climate target for 2030 will become part of the EU’s climate law, which is currently debated in the European Parliament and the Council. The European Parliament is discussing on a 60% GHG emissions reduction target. Among the Member States, seven countries, Finland included, are supporting the 55% target.