Viewpoints on the EU climate and energy policy
The forest industry emphasises the importance of mitigating climate change. The relative CO2 emissions of the industry’s production have decreased by 64% since 1990.
Fossil fuels now account for only 13 per cent of the overall consumption of mills. As estimated by VTT Technical Research Centre of Finland, the global climate benefit from the industry’s products (>16 MtCO2) now exceeds over fivefold the fossil emissions from mills (3 MtCO2).
According to its climate roadmap, the forest industry mills can eliminate nearly all fossil fuels by 2035 as long as the investment environment in Finland is favourable. The EU must, through its climate and energy policy, stimulate the investment environment in the following ways:
• The move towards carbon neutrality must take place primarily through a reduction in fossil emissions.
• The recently concluded 2030 climate package should be reopened as little as possible to avoid a blurred future for investments.
• The sustainability criteria for biomass in the renewable energy directive (RED II) must not be reopened. Since the criteria are still being implemented, practice has not yet indicated any flaws in the criteria. Any Member State anticipating that the criteria are insufficient has the option of introducing stricter criteria at the national level. Since the criteria for guarantees of origin have not yet been fully implemented in Europe, legislative amendments must not be made at this stage.
• The competitiveness of European industry must be ensured when developing the emissions trading scheme (ETS). Regarding emissions trading, the prevention of carbon leakage is the core question for an industry facing tough international competition. Free emission allowances and ETS compensation are the best measures in this respect. The current emission trading scheme must not be extended in new sectors with possible higher marginal abatement costs, such as transport or energy use in buildings.
• The energy efficiency directive (EED) must encourage real efficiency instead of restricting energy use, seeing as emissions-free energy is not the problem but the solution. Moreover, the directive must not mandate specific investments. Generally speaking, companies are always in the best position to evaluate their investment needs and possibilities concerning energy effiency.
• The current moderate tax treatment of industrial electricity consumption must be maintained in the energy taxation directive (ETD). Since emissions trading already steers industrial emissions towards lower levels, there is no need for overlapping regulation through energy taxation. Phasing out fossil emissions require that bioenergy as renewable energy source remains free of energy tax.
• It is important to ensure that the carbon border adjustment mechanism (CBAM) planned by the EU does not replace the present carbon leakage protection of export industry or cause disruptions to international trade as a consequence of trade policy countermeasures by non-EU countries.
• Regarding carbon sink policy (LULUCF), the EU must take action to ensure that forests do not end up as storage for fossil CO2 emissions. Such a result would be detrimental to the climate in various aspects: forests are not a permanent carbon storage, climate-friendly wood-based products would not be produced, the potential of the circular bioeconomy would not be fully tapped and the main problem of climate change, i.e. the use of fossil-based raw materials, would receive an undeserved extension.