HS Environment | The collapse of coal sinks could cost Finland billions of euros in just three years

Policy|HS Environment

This week the confirmed collapse of carbon sinks could be expensive for Finland.

The price will easily rise to billions of euros, although many variables are still open, estimates the climate panel member, professor Jyri Seppälä from the Finnish Environment Centre.

“We are talking about tens of millions of tons of carbon dioxide equivalent. When you multiply that by the price of the emission right, you get quite a sum. Let’s go there to the billions,” he says.

The expenses would become relevant in about three years.

The situation in the background is the EU’s so-called Lulucf setting. It defines binding targets for preserving the EU’s carbon sinks by 2030.

Different EU countries have received different goals depending on their gross national product and the starting situation of the sinks in the early 2000s.

The review is divided into two five-year periods. The first season covers the years 2021–2025. If Finland does not reach its sink target in 2025, it must remedy the situation by buying land use sink units from other EU countries that have exceeded their target.

Another option is to make even more emission reductions in e.g. traffic and district heating, but that is also very expensive.

Statistics Finland published confirmed preliminary data on Wednesday, according to which Finland’s land use will change from a sink to a source of emissions in 2021. The situation is caused by the slowing down of forest growth and large amounts of felling.

Read more: The collapse of the forests’ carbon sink was confirmed – The reason is record-breaking logging

The information was the shock news of climate policy, which was also influenced by the refinement of calculation methods.

According to Seppälä, it follows from the situation that Finland will not practically reach the sink level in 2025 that it has committed to in the EU regulation.

“Yes, here we are blatantly violating what we have committed to,” says Seppälä. “If logging continues like this, the target debt will become really large.”

According to new figures, forests are still a carbon sink in Finland, but actually much smaller than expected. Other emissions from land use, such as the clearing of peat fields, reversed that reduced sink in 2021, leading to the fact that land use as a whole became an emission.

Last year the sink was 18 million carbon dioxide equivalent tons less than what would be needed on average in the area of ​​forests and wood product sinks to achieve the EU target. In addition, deforestation causes emissions of three million tons annually in Finland.

If the pace continues at roughly the same rate this year and also in 2023, 2024 and 2025, we will end up exceeding the tens of millions of tons mentioned by Seppälä.

In 2025, the accounts should then be balanced by buying Lulucf sink units from other EU countries. Seppälä points out that it is difficult to accurately estimate the price of those units now.

“And you can’t even know how many of them are available at that time.”

Land use sink units will only enter the market if other EU countries exceed their sink targets. If there are not enough of them available, the situation becomes unclear.

“Then there may be an infringement procedure. What that means then, no one knows.”

The Lulucf regulation does not specify any “fines” for exceeding one’s quota. If many other countries also fail in their goals, further measures should be agreed upon among the EU countries.

Finland too the Ministry of Finance warned at the beginning of December about the financial risk of collapsing coal sinks.

“After Finland’s land use sector changes for the first time from a significant net sink to a source of emissions in 2021, there is a high risk that the EU obligations of the land use sector will not be met with the current measures”, the ministry’s in official speech was said.

The Ministry of Finance calls for action.

“For this reason, the prerequisites for the use of control measures that price emissions and sinks in sink policy must be clarified quickly.”

Finland negotiated harshly to make Lulucf goals favorable to him. However, the changed information about the collapse of the pharynx was no longer included in the negotiations.

In Finland, you often hear comments that Finland is the only country in Europe where there are even forests left. That is not true, even though Finland is the most forested country in Europe relative to its surface area. Two-thirds of Finland’s land area is forested, and 94 percent of it is felled.

Read more: Can the loss of nature still be stopped?

Seppälä reminds that many other European countries have also committed to significant sinks by 2030. For example, France, Germany, Spain, Poland and even Italy, which is not really known as a land of forests, got the sink target for a land use sector larger than Finland.

Sweden’s goal became double compared to Finland’s.