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Coal Phase-Out May Be Delayed Beyond 2025, Finnish Minister Says

Finland may miss its target to phase out coal-fired energy production by 2025 because of limited production of biomass output to replace fossil fuels, Economy Minister Jan Vapaavuori said.

The Nordic country, which lacks the oil and hydropower resources of neighbors Norway, Sweden and Russia, must boost the share of renewable energy in gross final energy consumption to 38 percent by 2020, an increase of 5.8 percentage points from 2010, according to binding European Union targets.

“Coal will be replaced mainly with biomass, although shrinking production from paper and pulp industries result in less spinoff products,” limiting the availability of substitutes for coal, Vapaavuori said today at an interview in Helsinki. The EU has yet to decide to what extent member states can replace fossil fuels with wood.

Finland seeks to boost the use of renewable energy and cut fossil fuel use by 2020, according to the national climate and energy strategy drawn up by the former government in 2008. A revised and updated policy document may gain final government approval tomorrow, Vapaavuori said.

“It’s an open question what kind of biomass qualifies as renewable, with the EU due to discuss sustainability criteria this year,” Vapaavuori said. “We can’t take for granted that the end result will benefit Finland.”

Finland imports all of its coal, mainly from Russia and Poland. In the past 15 years, it has shipped in an average of 5 million metric tons of coal annually at costs ranging from 70 million euros ($93 million) to more than 300 million euros, according to the Finnish Coal Info association’s website.

“We try to be at the vanguard in the combat against climate change, but there are limits to how far it makes sense to go for a sparsely populated country with a cold climate and energy-intensive industrial structure,” Vapaavuori said. “We simply need more energy per capita than other EU countries.”

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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