Finland Approves 2029 Coal Ban For Energy Use

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Finland has brought forward its coal phase-out date by one year, according to reports, with the new deadline set for May 1, 2029, after which coal will be banned from use as an energy source except in an emergency.

Reuters reported last Friday that the Finnish Parliament approved on Wednesday a government proposal to ban the use of coal to produce energy from May 1, 2029. This will not have a dramatic impact, considering that coal represented only 8% of Finland’s total energy consumption over the first 9 months of 2018, but it is nevertheless a significant step as it highlights the growing consensus around coal’s usefulness moving forward.

“It has been planned for quite some time,” said Lauri Tenhunen, a senior adviser to the Finnish Parliament’s commerce committee, which prepared the legislation, speaking to Reuters last week. “Yesterday it was approved. The effective date is May 1, 2029. It is a legislation to ban the energy use of coal.”

The parliamentary vote followed the unveiling of a new suite of measures put forward by Environment Minister Kimmo Tiilikainen which outlined exactly how Finland would pull forward its previous 2030 coal phase-out deadline. Reports suggest the suite of policy measures could include a new subsidy scheme to incentivise energy firms to phase out the use of their fossil fuels. However, Greenpeace Nordic’s Kaisa Kosonen explained to me that “this law does not provide compensation for utilities with coal plants. The parliament’s constitutional committee did not see grounds for it, and instead saw that the measures taken are in right proportion and that the transition period in itself is sufficient for rearranging ones business.”

In April 2018, Tiilikainen explained that “greenhouse gas emissions must be reduced much sooner than initially planned to mitigate climate change.” At the time, Tiilikainen’s proposed measures included the possibility of a subsidy package worth around €90 million to support firms willing to transition away from coal by 2025, and an effort to boost investments in renewable energy and make better use of Finland’s sizeable district heating network — a network which has the potential to increase the share of hydro, solar, and wind power in the heating sector.

“Already, most EU member states have banned new coal power plants,” explained Gerard Wynn, an Energy Finance Consultant with the Institute for Energy Economics & Financial Analysis (IEEFA) who spoke to me via email. “By approving a coal phaseout plan, Finland joins 10 other EU countries planning to eliminate existing coal power plants as well. France and Sweden lead coal phaseout plans in 2022, followed by Austria, Ireland, Italy, and Britain in 2025, and then Finland, the Netherlands, Denmark, and Portugal. Besides government-led coal phaseout plans, coal utilities face other headwinds including the falling cost of renewables and rising carbon prices, as well as pressure from investors, creditors and insurers. That could see coal come off the grid much sooner than expected in other countries, for example in Germany which recently agreed a phaseout by 2038 at the latest.”

Last week’s vote came at the same time as a report was finalized and presented to the Finnish Government, which explained that Finland can achieve carbon neutrality sometime in the 2030s, but that it will require Finland’s “decision-makers to pursue a determined, long-term, and consistent energy and climate policy.” The study was carried out by the VTT Technical Research Center of Finland and the Finnish Environment Institute (SYKE).

“We are happy that the coal ban is finally true,” crowed Olli Tiainen, a Climate and energy campaigner with Greenpeace Nordic, who spoke to me via email. “2029 is however not fast enough but it is definitely the right direction. This opens up the possibility to ban other fossil fuels as well and the next step is to ensure that this will happen. At the same time, we want to make sure that coal is not replaced only with biomass as it is not climate-neutral and poses a threat to Finnish biodiversity. When we do that, phase out coal without replacing it with biomass, we truly can show the rest of the world how to decarbonize the heating sector since the main product of all the coal plants we have left in Finland are mainly producing district heat.”