Finland

Finnish society has been characterised by long-term commitment to democracy and human rights, innovation and a high level of education. In terms of technological advancements, Finland has been a champion of digitalisation, renewable energy and bio-based products. Sustainability ideas such as the circular economy and bioeconomy have been highlighted in national policies, and Finland was the first Organisation for Economic Co-operation Development country to publish a climate adaptation plan. Furthermore, Finland has an ambitious policy to be carbon-neutral by 2035.

Despite the advanced social welfare system and progressive tax system, socioeconomic inequalities have grown since the 1990s. While the largest urban centres attract investments and new residents, rural areas struggle. Environmental awareness among Finns is relatively high, but the key challenge is the high consumption level typical of affluent economies. Furthermore, Finnish industry is dominated by the extractive, manufacturing and heavy industries. As a result, the Finnish environmental footprint is larger than the EU average. Efforts to reduce this footprint are manifold, including the development of sustainable procurement policies, environmental footprint calculations and sustainability pledges for the private sector. The full-scale implementation of the sustainability transition provides further opportunities, especially for the Finnish forest, mining and energy sectors and knowledge-intensive applications supporting sustainable consumption.

In terms of environmental pollution, point source emissions have been successfully addressed but nonpoint source pollution, particularly from agriculture and drained peatland, remains a major challenge. While being a leader in bio-based renewable energy, Finland has struggled to phase out the use of peat in energy production and reduce fossil fuel dependency in traffic. The economic turmoil caused by the COVID-19 pandemic and Russia’s war of aggression against Ukraine has led to increased subsidies for both households and companies. Sustainability concerns such as climate change have been partly suppressed due to growing concerns’ related to economic development and security concerns related to Russia.

The pressure to reduce both public sector spending and staff has emphasised the voluntary efforts of the private sector and the third sector (e.g. non-governmental organisations and producer organisations). Despite the cuts in public spending, there is a lack of consensus on implementing major changes on environmental taxation aiming to secure public revenues. Likewise, major progress on the removal of environmentally harmful subsidies is lacking, partly because of vested interests and partly because of difficulties in defining what is a harmful subsidy.

The food system

The Finnish food system is characterised by a short growing season and northern climate, agriculture dominated by relatively small and family-owned farms (many struggling with low profitability) and the oligopolistic structure of the food industry and retail sale. Finland is self-sufficient in the production of most domestic food products.

Policy measures to reduce the environmental and GHG emissions have been insufficient. Meeting the 2035 target of a 29 % reduction in GHG emissions would require simultaneous changes in land use, diets and production methods and technologies. For resilient and sustainable agriculture, there is a need to address the regional concentration of animal and plant production farms and peatland farming. However, this change will be difficult, for instance because farmers may see peatland as essential for their livelihoods.

The dietary patterns of Finns have changed dramatically. The consumption of beef reached its peak in 1975, pork in 2010, while the consumption of poultry has been increasing since the 1970s. The new Nordic nutrition guidelines recommend reducing the consumption of red and processed meat to 350 g per week. Men in particular consume more meat than what is recommended. At the same time, however, vegetarian options have become commonplace, including in lunch restaurants, gas station cafes and army canteens.

Public food services have emerged as a notable front runner in supporting the healthy and sustainable eating habits of children and young people through the universal school meals programme. Others include the city of Helsinki and restaurant chain UniCafe, which have made pledges to take red meat off their menus. Furthermore, the main retail chains in Finland (K-group, Lidl and S-group) have included the notion of sustainable diets in their responsibility strategies. Some food products currently display climate labels, and the first animal welfare label, Elviira, has also been introduced.

In recent years, the food industry has actively introduced new plant-based products to the food markets to meet the increasing demand. The turnover of plant protein products has been estimated at around EUR 30 million, and it has been estimated that, with active investments and policy support, it could be possible to increase the turnover of plant protein value chains significantlyHowever, the increasing consumer interest has only marginally benefited farmers so far. For example, most of the fava beans utilised in novel plant protein products are imported, and most of the domestic fava beans still go to feed. The turbulence in the food markets after the illegal annexation of the Crimean peninsula by the Russian Federation in 2014 has affected the Finnish food sector, highlighting the need to increase the resilience of the system. The dependence on Russia remains, however, as Finland still imports ammonia for nitrogen fertilisers.

The energy system

Finland has experienced major changes in terms of energy, including a strong increase in wind power production, increased use of heat pumps, the deployment of a new Olkiluoto 3 nuclear reactor and the rapid reduction in the import of Russian fossil fuels. Efforts to improve energy efficiency have been ongoing since the energy crises of the 1970s. However, due to relatively low energy prices and the various energy needs of the affluent economy, the export-oriented heavy manufacturing industry and cold weather conditions, Finland has one of the highest per capita energy demands in the EU. The overall energy demand has decreased slightly since the peak in 2006.

Due to abundant forest resources, bioenergy has been the most important source of renewable energy. Over half of the wood is used for energy production, mainly as a side product of the forest industry and by municipal heat plants. Heating with wood is culturally important in Finland, and the use of wood for fuel is common in detached houses. There are also about 1 million wood-heated saunas in Finland.

The electrification of the fossil-fuel-based energy system and innovation in energy technologies are seen as key in meeting the carbon neutrality target. Government funding is targeted towards renewable energy projects, renewed energy infrastructure and electric vehicle charging points. The collaborative Hinku Network connects Finnish municipalities aiming for carbon neutrality and shares best practices. Most of the solar power is on a small scale, but the first industrial-scale systems are operational, and several new large ones are planned. Similarly, several large-scale onshore and offshore wind energy plants are upcoming. There are also high hopes for large-scale hydrogen production in Finland for both domestic use and export.

Electricity prices increased drastically during the 2022–2023 winter. This demonstrated the high potential of savings in energy consumption, as household electricity consumption fell over 10 %, typically just through more thoughtful energy use and without major investments. The crisis increased energy awareness among citizens and highlighted the need to develop smart energy applications, allowing demand-side flexibility and capacity for energy storage.

With support from the government, many homeowners have shifted away from oil heating and towards more sustainable and cost-effective heating solutions, including through the installation of heat pumps. Heat pumps have also complemented the district heating systems widely used in urban areas. However, opportunities to participate in the energy transition are not equal, as for instance the subsidies for energy renovations have been mostly applied by households with higher levels of income.

Energy security plays a major role in future development.  In the recent past, about one third of the energy used in Finland was imported from Russia. Consumer participation in the electricity market should be boosted. The prospects look promising, given the increased interest in decentralised energy solutions and the development of smart metering technologies and automated energy applications.

The mobility system

Finland’s northern geography, with only six cities exceeding 200 000 inhabitants, presents unique challenges for its transport system. Harsh winters demand robust transportation infrastructure, driving up resource requirements for construction and maintenance. Seafaring plays a vital role in exporting and importing goods, and Helsinki is among the busiest sea passenger ports in Europe. Finns are avid flyers, predominantly for leisure travel. Tourism to Finland is growing, as cool temperatures and clean nature attract foreign visitors.

Despite long-term growth in traffic volumes, congestion remains limited in Finland. Remote working trends amplified by the COVID-19 pandemic have further mitigated this. Only weak attempts to limit the growth of traffic have been implemented, apart from vehicle and fuel taxation aiming to both collect public revenues and address the environmental impact of transport. Improving fuel efficiency and increasing the share of electric vehicles reduce revenues from fuel taxes and put pressure on the renewal of traffic policies. The roadmap to fossil-fuel-free transport aims to stabilise the number of kilometres driven on fossil fuels in the 2020s, but lacks concrete implementation strategies.

In recent years, the biggest cities (i.e. Helsinki, Vantaa, Espoo, Tampere, Turku) have improved public transportation, including new tram networks. Outside urban centres, however, public transport is limited and personal vehicles are necessary. Other visible changes in the transportation system include the introduction of shared mobility services (e.g. e-scooters, city bikes, shared cars) in large and medium-sized cities. Furthermore, while public interest in cycling has surged and sales of electric bicycles have doubled, the national modal share of cycling remains stagnant. Winter maintenance of cycle lanes is crucial for enabling year-round cycling and, in this regard, the northern city of Oulu has excelled. There is a lack of public investment in physically active mobility, despite the targets set by the national programme for walking and cycling.

In Finland, the number of electric and hybrid vehicles has increased, supported by tax breaks and subsidies for building electric vehicle charging stations. Public charging networks at gas stations and shopping centres have also increased. Overall, however, the Finnish car fleet is old and dependent on gasoline. This presents a major challenge for the national policy target aiming to reduce transport emissions by 50 % by 2030 compared with 2005 levels. Furthermore, while new passenger car CO₂ emissions have declined significantly, overall road transport emissions remain relatively unchanged, partly due to heavier vehicles. The recent rollback of renewable fuel distribution obligations also jeopardises the achievement of the transport sector’s climate targets.