Finland money

Finland aspires to become the world leader in hydrogen

A crisis like the corona pandemic calls for decisive action. The EU has released €723.8 billion with the aim of using the Recovery and Resilience Facility (RRF) to pull Europe’s economy out of the recession caused by the coronavirus. In order to qualify for a share of this big bag of money, member states must submit a plan to the European Commission. In the Decarbonising Europe series, we examine these plans under a magnifying glass.

Climate change is a top priority in Finland’s Recovery and Resilience Plan (RRP). The money, 2.1 billion, which the country received from the EU to pull the European economy out of the corona recession, comes at the right time. At the beginning of this century, Finland was still among the top five countries with the highest levels of greenhouse gas emissions. And on top of that, thanks to the rapidly accelerating logging of Finnish forests, carbon dioxide uptake is starting to decrease. The RRP aims to prepare the country for the future by becoming, among other things, a world leader in hydrogen.

No less than 50% of the budget is devoted to the green transition. This money should contribute significantly to the achievement of national climate goals: CO2 neutrality by 2035. By 2040, the country must absorb even more CO2 than it emits. In particular, sectors that currently have the highest levels of emissions will be addressed, such as the energy, mobility and industry sector. In total, 27% of the plan is reserved to support the digital transition.

Hydrogen chain

“I was pleasantly surprised when I saw the plan. We are committed to fossil-free transport and sustainable industry,” says Paula Kivimaa, professor of climate and society and member of the Finnish Climate Expert Group. The plan will support the green transition by investing €319 million in the decarbonisation of the energy sector, particularly in energy transport and distribution, and in new energy technologies.

What struck the professor the most: 156 million euros will be invested in hydrogen technology. “In Finland, the industrial sector needs to be greened. The large-scale deployment of a hydrogen network, as foreseen in the plan, will certainly contribute positively to this.

Hydrogen will play a particularly important role in Finland when it comes to making the steel and chemical industries more sustainable. It should allow the processing of minerals and metals. Hydrogen is well suited for this purpose due to its high combustion temperature. For example, production processes at SSAB’s Raahe steelworks (Finland’s largest source of emissions -7%) will start running on hydrogen.

Sustainable heating

In addition, the plan supports the sustainable heating of buildings. 70 million euros will be allocated to replacing oil-fired boilers with low-carbon or low-carbon heating systems. “A very good idea”, thinks Kivimaa. “Especially houses in rural Finland still use old oil systems. Alongside these plans, there are already policies to make home energy systems more sustainable, which have since been intensified due to Russia’s energy crisis and rising gas prices. For example, subsidies are already granted for sustainable heat pumps. I predict that these types of sustainable heating systems will begin to drive a rapid transition in the energy industry in the near future. »

Next Generation UE

The corona crisis is one of the biggest challenges of our time. The European Union, through NextGenerationEU – the largest recovery plan ever with 806.9 billion euros – aims to help its member states come out of the crisis stronger. The Recovery and Resilience Facility (RRF) is at the heart of this plan (723.8 billion euros).

The RRF has two objectives: first, to pull the European economy out of the recession caused by the corona pandemic. At the same time, it aims to give impetus to major forward-looking investments and measures to roll out reforms.

The original deadline to submit a plan was April 30, 2021, but that date has since been pushed back to June 2022. Currently, 26 out of 27 member countries have submitted a plan. The plans require member states to dedicate at least 37% of their budget to climate action and 20% to digitalisation.

Green mobility

Among other things, 40 million euros will also be invested to help provide private and public charging stations for electric cars. “The average age of vehicle fleets in Finland is high. We want to switch to electric mobility, however, the charging infrastructure has been a major obstacle. The RRP has increased the amount of government subsidies for the installation of electric car charging stations next to apartment buildings. This will make electric driving more accessible and affordable for people, while rising prices for electric cars after rising oil prices are still a barrier for many people,” Kivimaa believes.

“I think it may be some time before we can see an effect. But overall, the expansion of charging infrastructure combined with the electrified rail network already in place in the country, makes me very optimistic about the future of Finnish mobility.

No immediate response to serious environmental problems

However, the RRP does not provide answers to some of the other environmental problems facing the country, adds the climate professor in conclusion. “For example, I think it’s unfortunate that the plan pays little attention to biodiversity. In addition to this, there are few projects aimed at making agriculture more sustainable, which remains a very polluting sector.

“But considering the relatively modest budget of 2.1 billion euros allocated to Finland, I am satisfied. I hope the plan will serve as an example for future investments by the business community.