The Finnish Government has decided that the use of coal in energy production will be prohibited by law in 2029. The Government will also prepare an incentives package, amounting to EUR 90 million, for district heating companies that commit to phasing out coal use already by 2025.
“We must accelerate our efforts to reduce greenhouse gas emissions to mitigate climate change. By phasing out coal-based energy production, we can significantly reduce the emissions from heating,” says Minister Tiilikainen.
“The incentives package, designed for cities who phase out coal already by 2025, will support investments in energy technologies to replace coal. Half of the package will be reserved for renewable combined heat and power (CHP) generation and the other half for other, new technologies needed in the conversion from coal. Support to renewable CHP will also help to ensure a sufficient level of electricity production capacity in peak load conditions,” Tiilikainen says. The incentives package will comply with the EU state aid rules.
“The incentives package will be financed by lowering the required annual production level, proposed for the tendering scheme for renewable electricity, from 2 TWh to 1.4 TWh. Redirecting support from renewable electricity to renewable heating is justified on the grounds that while nearly 80 per cent of electricity production is already emission-free, only 36 per cent of district heating uses renewable energy sources,” says Tiilikainen.
These readjustments will not require any changes to the Government proposal, already submitted to Parliament that includes a premium scheme for renewable energy that is based on competitive tendering.
The Government intends to submit its legislative proposal to ban coal use for energy to Parliament during the autumn session.