Finland
Table 5: Key renewable and biomass energy statistics, Finland
|
Electricity from biomass |
Heating and cooling from biomass |
% of total energy |
||||||
|---|---|---|---|---|---|---|---|---|
|
Mtoe |
% of total electricity |
% of ren electricity |
Mtoe |
% of total heat/cool |
% of ren heat/cool |
Biomass |
All renewables |
|
|
2009 |
0.72 |
10.0% |
36.5% |
5.34 |
40.6% |
94.1% |
24.4% |
31.3% |
|
2016 |
0.91 |
12.1% |
36.7% |
6.90 |
48.8% |
91.0% |
29.5% |
38.7% |
|
Annual average growth |
3.4% |
3.7% |
2.8% |
3.1% |
||||
|
2020 target |
38.0% |
|||||||
Source: Eurostat SHARES database, http://ec.europa.eu/eurostat/web/energy/data/shares.
Note: Biomass as a percentage of total energy does not include solid biomass used for transport fuel (volumes are not yet significant).
Demand for woody biomass
Finland is a significant user of biomass for energy; in 2016, the country generated the largest proportion of electricity from biomass of any EU member state (the fourth largest quantity in absolute terms) and the third highest proportion of heat, behind Sweden and Latvia (the fifth largest quantity in absolute terms). It has the highest consumption of biomass energy per inhabitant in the EU.57 In total, biomass is Finland’s largest energy source (including energy for transport), even surpassing energy from the consumption of oil. Woody biomass comprises about 80 per cent of the bioenergy consumed, while much of the rest is provided by peat, often co-fired with woody biomass. In 2017, an estimated 70 per cent of Finland’s coal or peat use was in power plants co-fired with at least 10 per cent biomass.58
Table 6: Finland’s total energy consumption by fuel, 2010–16
|
Petajoules |
|||||||
|---|---|---|---|---|---|---|---|
|
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
|
Wood fuels |
324 |
318 |
332 |
338 |
339 |
331 |
349 |
|
Oil |
350 |
334 |
325 |
318 |
310 |
312 |
317 |
|
Nuclear energy |
239 |
243 |
241 |
247 |
247 |
244 |
243 |
|
Coal |
186 |
145 |
123 |
151 |
126 |
103 |
127 |
|
Natural gas |
149 |
130 |
115 |
107 |
96 |
82 |
73 |
|
Net imports of electricity |
38 |
50 |
63 |
57 |
65 |
59 |
68 |
|
Hydro power |
46 |
44 |
60 |
46 |
48 |
60 |
56 |
|
Peat |
98 |
86 |
66 |
58 |
61 |
58 |
56 |
|
Wind power |
1 |
2 |
2 |
3 |
4 |
8 |
11 |
|
Other energy sources |
35 |
37 |
45 |
50 |
54 |
53 |
61 |
|
Total |
1,466 |
1,389 |
1,371 |
1,375 |
1,349 |
1,309 |
1,362 |
|
Renewable energy sources* (%) |
27.2% |
28.5% |
31.5% |
31.2% |
33.1% |
34.7% |
34.2% |
Source: Statistics Finland, http://tilastokeskus.fi/tup/suoluk/suoluk_energia_en.html (accessed 20 Feb. 2018).
* Includes, inter alia, wood fuels, hydro and wind power, and the biodegradable proportion of recycled fuels.
Total heat consumption accounts for about twice as much energy as electricity generation. Industry is the largest consumer, accounting for about 60 per cent of all the heat produced from biomass; the remaining 40 per cent is supplied as district heat.59 The pulp and paper industry is a substantial producer and consumer of black liquor, a by-product of the pulp-making process, which is burnt on-site to generate energy.
In the residential sector, the consumption of wood fuel and wood chips for heat has steadily increased over the last three decades, largely due to a shift away from fossil fuels following the oil crises of the 1970s. In 2013, about 60 per cent of single-family houses used wood for at least some of their heating; an estimated 4.7 million m³ of wood in the form of logs were burnt, as well as 1.3 million solid m³ of wood residues and 0.7 million solid m³ of wood chips.60
Larger-scale boilers, however, consume more woody biomass in total; 80 per cent of biomass burnt for heat in 2012 was used in boilers whose capacity exceeded 20 MW. District heating is one of the most common forms of space heating in Finland, and roughly 70 per cent of total district heat production in 2012 was supplied from CHP plants.61 While these still mainly use fossil fuels, CHP facilities that co-fire or solely fire with woody biomass are increasingly common, particularly further inland. In 2015, Finland had some of the largest biomass-fuelled CHP facilities in Europe, including, for example, the Alholmens plant, which claims to be the world’s largest bio-fuelled power plant.
Nuclear power is the main source of electricity, but renewables accounted for about a third of the total in 2016. Hydropower is the main source, accounting for about half of this, while biomass is the second largest, supplying about 12 per cent of total electricity (see Table 5).
Biomass was a key component of Finland’s National Renewable Energy Action Plan drawn up in response to the 2009 Renewable Energy Directive; in particular it was projected to provide the bulk of the target of 47 per cent of heat consumption from renewable energy by 2020.62 In fact the contribution from biomass has grown faster than forecast, and in 2016 it supplied 49 per cent of total heat consumption (see Table 5).
In November 2016, the government published a new energy and climate strategy, aiming to fulfil the commitments Finland is likely to make under the EU’s 2030 package and the Paris Agreement.63 The strategy includes proposals to phase out the use of coal for energy by 2030, reduce oil imports in the 2020s to 50 per cent of the 2005 level (including by increasing the use of transport biofuels and electric and gas-powered vehicles) and raise the overall share of renewable energy to 50 per cent and energy self-sufficiency to 55 per cent in the 2020s.
The overall aim of the strategy is to achieve an 80−95 per cent reduction in greenhouse gas emissions by 2050. Since this relies heavily on the continued expansion of biomass energy, however, it is expected to be achieved at the cost of a considerable impact on Finnish forests. As the government’s impact assessment of the new strategy observed, ‘Forest biomass is the largest growing renewable energy source from 2015 to 2030. Existing felling potential in the Finnish forests will be large enough to supply the estimated needs of both forest and energy industries. Finnish forests will remain a carbon sink, but the carbon sink will be reduced to half of the current levels if the logging increases to an estimated 80 million cubic meters by 2030.’64 As a result, net emissions would not fall until 2030 at the earliest.
Biomass supply
Finland’s forests cover an estimated 87 per cent of the country – about 30 million hectares – and contribute to a thriving timber industry. Within the EU, Finland comes second only to Sweden in terms of total roundwood production, which is estimated at 61 million m3 (under bark) in 2016, including 7 million m3 of wood fuel.65 In turn this industry generates substantial volumes of wastes and residues, which can be used for energy, though wood chips are also used to replace fossil fuels in CHP and heating. The 2016 Energy and Climate Strategy includes proposals to use energy taxation and operating aid schemes to provide incentives for the use of forest industry by-products and wood chips, though this would be reduced if the chips were produced from logs or pulpwood suitable for industrial raw material. In total the strategy aimed at the production of 48 terawatt-hours (TWh) of energy from the waste liquors of the wood-processing industry and 66 TWh from solid wood fuels, including 29 TWh from wood chips, by 2030. This corresponds to 14–18 million m3 per year of wood chips.
Although pulp and paper production in Europe has still not recovered to the levels of 2007 (before the global financial crash), Finland’s pulp and paper industry is set to expand.
The contribution of woody biomass to meeting Finland’s renewable energy targets depends partly on the buoyancy of the pulp and paper industry, a major producer and consumer of black liquor.66 Although pulp and paper production in Europe has still not recovered to the levels of 2007 (before the global financial crash), Finland’s pulp and paper industry is set to expand, chiefly through the construction of Metsä Fibre’s new bioproduct mill at Äänekoski, which was completed in 2017.67 The new mill by itself should increase the consumption of pulpwood in Finland by approximately 10 per cent and burn sufficient woody biomass fuel to increase the share of renewables in Finland’s energy mix by 3 per cent.68
Domestic wood pellet production is small but growing, reaching 271,000 tonnes in 2016, virtually all for domestic consumption.69 About half is used in small heating boilers, though pellets are also increasingly competitive as fuel for large-scale power and heating plants. Finland has very little trade in wood pellets, and exports small quantities of wood fuel, wood chips and wood residues, almost all to Sweden. Imports of wood chips, mostly from Russia, are substantial, however, mostly for use either as pulpwood or in the manufacture of wood panels, though some is used directly as fuel (see Figure 10).
Figure 10: Finland’s imports of woody biomass potentially for energy, 2010–16
— Source: Generated from Eurostat data at http://epp.eurostat.ec.europa.eu/newxtweb/mainxtnet.do.
Note: Wood chips and residues are not only used for energy generation.
Note: Wood chips and residues are not only used for energy generation.
Figure 10: Finland’s imports of woody biomass potentially for energy, 2010–16
Note: Wood chips and residues are not only used for energy generation.
Although there are likely to be some concerns about the sustainability and legality of woody biomass imported from Russia, particularly given current tensions, leading companies in Finland’s wood-based products industry have long experience of applying systems of due diligence.
As indicated above, Finland’s direct imports are likely to supply only a small proportion of the woody biomass used for energy. A larger proportion is likely to derive from the by-products of mills that import large quantities of wood as log or sawnwood as their primary raw materials (‘indirect imports’).70 Figure 11, which shows Finland’s direct and indirect import and export balance for biomass fuels between 2004 and 2013, demonstrates a significantly higher amount of indirect imports, both in terms of the total amount and proportion.
Figure 11: Import and export balance of biomass fuels in Finland, 2004–13
— Source: Karhunen, A., Ranta, T., Heinimö, J., and Alakangas, E. (2014), Market of biomass fuels in Finland – An overview 2013, IEA Bioenergy Task 40 Country Report, http://www.bioenergytrade.org/downloads/iea-task-40-country-report-2014-finland.pdf (accessed 2 Aug. 2016).
Figure 11: Import and export balance of biomass fuels in Finland, 2004–13
In summary, the supply of biomass for power and heat in Finland is expected to increase substantially, mostly driven by domestic supply. Imports of woody biomass as fuel are expected to increase in the short term to supply the rising demand for biomass energy particularly in coastal cities, as coal is phased out, but decline over the longer term.71
Support for biomass energy
The Finnish government has long provided support for the use of biomass in power and heat generation, and has introduced several mechanisms to promote its production and use. This includes tax exemptions, a feed-in tariff scheme, and grants for private forest owners.
Similar to other Nordic countries, Finland imposes an energy tax on certain fuels (fossil fuels and liquid biofuels), and a tax on carbon dioxide emissions, from which wood and other solid biomass sources used for energy are exempted.72 In 2014, the carbon tax for fossil fuels was reduced by 50 per cent for those used in CHP production, with the aim of improving the competitiveness of CHP over separate heat production.
Feed-in tariffs have also been used to promote the use of biomass power. The feed-in tariff for electricity produced from wood fuels is guaranteed for 12 years at €83.5 per MWh minus the three-month mean market price of electricity; the tariff for plants using wood chips is variable and based on the cost-effectiveness of the fuel in power generation.73 From 1 January 2019, the feed-in tariff will be reduced by 60 per cent for plants using wood chips made from roundwood obtained from a logging site of large-sized timber suitable for processing.74
Small-scale CHP is also encouraged through a feed-in tariff for wood fuels used in new plants, especially benefiting those with a capacity less than 3 MW and a thermal input of about 20 MW.75 This feed-in tariff is expected to facilitate about 60 new investments by 2020, and to increase the use of wood fuel in small scale CHP plants by 1–1.5 TWh.
Under the 2007 Act on the Financing of Sustainable Forestry, the government has provided grants to non-industrial forest owners to encourage sustainable forestry and wood fuel production.76 In 2010, amendments were made to separate the financing of sustainable forestry and wood fuel production and harvesting from small trees. Support for wood chipping under the 2007 Act ended in June 2015, and a new focus on low-grade wood harvesting has been proposed.77
Under the 2016 Energy and Climate Strategy, the taxation and other measures outlined above to support the use of woody biomass will be reviewed to encourage the cost-effective use of wood chips and forest industry by-products and peat, though support will be reduced from 2019 onwards if chips are produced from logs or pulpwood that would be suitable for industrial raw material.
Finland possesses no national sustainability criteria for solid biomass.
57 Eurobserv’ER (2017), Solid Biomass Barometer 2017, http://www.eurobserv-er.org/solid-biomass-barometer-2017/ (accessed 23 Jan. 2018).
58 Sandbag (2017), Something Nasty in the Woodshed.
59 Karhunen, A., Ranta, T., Heinimö, J., and Alakangas, E. (2014), Market of biomass fuels in Finland – An overview 2013, IEA Bioenergy Task 40 Country Report, http://www.bioenergytrade.org/downloads/iea-task-40-country-report-2014-finland.pdf (accessed 2 Aug. 2016).
60 Ibid.
61 Ibid.
62 International Energy Agency (2013), Energy Policies of IEA Countries: Finland, Paris: International Energy Agency, https://www.iea.org/publications/freepublications/publication/Finland2013_free.pdf (accessed 2 Aug. 2016).
63 Ministry of Economic Affairs and Employment (2017), Government Report on the National Energy and Climate Strategy for 2030. http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/79247/TEMjul_12_2017_verkkojulkaisu.pdf?sequence=1 (accessed 27 May 2017).
64 Prime Minister’s Office (2017), Impact assessments of the Energy and Climate strategy: The summary report, p. 4, http://tietokayttoon.fi/documents/10616/3866814/21_Energia-+ja+ilmastostrategian+vaikutusarviot+Yhteenvetoraportti/40df1f5f-c99c-47d1-a929-a4c82 5f71547?version=1.0 (accessed 27 May 2017).
65 Eurostat data at http://ec.europa.eu/eurostat/web/forestry/data/database.
66 International Energy Agency (2013), Energy Policies of IEA Countries: Finland.
67 The Bioproduct Mill, ‘The Next Generation Bioproduct Mill’, http://bioproductmill.com (accessed 28 Feb. 2018).
68 Mäntyranta, H. (2016), ‘Will Finland use renewable energy only by 2050?’, Finnish Forest Association, 27 April 2016, http://www.smy.fi/en/artikkeli/will-finland-use-renewable-energy-only-by-2050-minister-olli-rehn-calls-for-a-scenario-to-see-what-this-would-require/ (accessed 7 Aug. 2016).
69 FAOSTAT data at http://www.fao.org/faostat/en/#data/FO.
70 Karhunen et al. (2014), Market of biomass fuels in Finland.
71 Ibid.
72 Ibid.
73 RES Legal (2016), ‘Legal sources on renewable energy: Finland’, http://www.res-legal.eu/search-by-country/finland/ (accessed on 4 Sep. 2016).
74 Ibid.
75 European Commission (2012), ‘National Renewable Energy Action Plan: Finland’, https://ec.europa.eu/energy/en/topics/renewable-energy/national-action-plans (accessed 9 Aug. 2016).
76 Karhunen et al. (2014), Market of biomass fuels in Finland.
77 Eurobserv’ER (2015), Country policy profile: Finland, http://www.eurobserv-er.org/pdf/res-policy/EurObservER-RES-Policy-Report-Country-Profile-2015-12-Finland.pdf (accessed 1 Aug. 2016).