The national energy and climate strategy has a considerable effect on the forest industry’s operating prerequisites in Finland

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Please see the three appendixes in the end of the text:
–  Appendix 1: Emissions trading must not direct the forest industry’s raw material into combustion
– Appendix 2: Overlapping energy policy measures should be simplified
– Appendix 3: Global, realistic solutions across a broad front must be found for the global problems of climate policy

It is important to Finnish forest industry that the guidelines of the Government report on energy and climate policy ensure the industry’s operating prerequisites in Finland as the success of the Finnish forest industry in international competition demands increased profitability and productivity. Emissions trading must not transfer the forest industry’s raw materials into fuel use. Overlapping energy policy measures should be simplified and taxes on electricity consumed by the forest industry should be abolished. The next emissions trading allocation plan must take the challenges of international competition into consideration. Global, realistic solutions across a broad front are needed to address the global problems of climate policy.

Emissions trading must not transfer the forest industry’s raw materials into fuel use.   Emissions trading is increasing the price of energy and making the procurement of raw materials more difficult for the forest industry. The high price of emission allowances is increasing the energy sector’s ability to pay for wood, leading to a distortion in the wood market and the burning of wood that could be used as raw material. Processing wood, which is suitable for raw material use, creates employment and increases the national product many times more than burning it does.

Overlapping energy policy measures should be simplified and taxes on electricity consumed by the forest industry should be abolished. Long-term energy policy has an effect on the equilibrium and structures of energy procurement, and thus also affects the national economy and industrial competitiveness. Energy taxation and emissions trading form overlapping burdens on industry. Taxes on electricity consumed by the forest industry should be abolished, as has been done in Sweden. The first step in the right direction could be exempting electricity that has been generated and consumed at an industrial facility from tax burdens. Encouraging factories to adopt combined heat and power (CHP) generation would increase the generation of bioelectricity in Finland, reduce greenhouse emissions, improve energy-efficiency and raise the level of investment in effective CHP production as well as reduce dependence on imported and bought electricity.

The next emissions trading allocation plan must take the challenges of international competition into consideration. The emissions produced by the forest industry are process-based and it is not in practice possible to reduce them any more without production cutbacks. The forest industry has made a significant investment in bioenergy, energy-efficiency and energy saving and now generates over 80% of the country’s bioenergy. These measures have kept the sector’s emissions at national target levels, even though production of, for example, paper has increased by over 40% since 1990. However, climate change is a global problem and in the current situation, which has been distorted by emissions trading, energy-efficient actors are forced to buy emission allowances from their competitors that have not carried out corresponding emission-reducing investments. The operating and investment prerequisites of Finnish forest industry should be safeguarded when emission allowances for 2008-2012 are being allocated.    

Global, realistic solutions across a broad front are needed to address the global problems of climate policy. The European Union accounts for a little over 10% of the world’s greenhouse gas emissions. The starting point of climate treaties in the future should be formed by considerably broader participation in the effort to curb emissions. Instead of allocating emissions quotas and setting limits, future treaties should reward efficient activities that produce little emissions. Global promotion of energy-efficient technology would be the correct alternative to country-specific emissions quotas favoured by models like the Kyoto Protocol that have caused numerous unforeseen problems for European industry.

Additional information:

Stefan Sundman, Manager, Energy and Environmental Policy, Finnish Forest Industries Federation
Tel. +358 9 132 6611, firstname.lastname@forestindustries.fi

Pertti Laine, Senior Vice President, Industrial Policy, Finnish Forest Industries Federation
Tel. +358 9 132 6633, firstname.lastname@forestindustries.fi

Emissions trading must not direct the forest industrys raw material into combustion.pdf
Overlapping energy policy measures should be simplified.pdf
Global realistic solutions across a broad front must be found for the global problems of climate policy.pdf
Pictures in the appendixes.pdf