Climate Leadership Coalition reminds that Finland has good prerequisites to create a significant carbon handprint and a low carbon export business with high added value. Finland has excellent opportunities to significantly increase exports of high added value through wind power and low carbon products in a hydrogen economy. In addition to this, demand for technology, services and research in the sector will provide a global market of interest to Finnish businesses and research institutes going forward. However, success would require a strong home market.
Finland’s strengths vis à vis countries in Central Europe are low-cost onshore wind power, abundant water resources, a large amount of bio-based carbon dioxide and a stable and developing electricity network. Our relative strengths combined with stable and predictable development in the operating environment make Finland a viable alternative, also in the eyes of investors, to the large volumes of green hydrogen and its downstream products that the EU is planning to import from outside Europe.
New wind power capacity many times Finland’s winter electricity need is in the pipeline.According to Fingrid, there are more than 200 GW in grid connection enquiries for wind and solar power projects. This is many times more than Finland’s winter demand of around 15 GW. Around one sixth of the enquiries concern solar power since despite low radiation levels, existing technology already makes it possible to build profitable industrial-scale solar power plants in Finland to balance fluctuations in wind power production. If there is no demand for this electricity, most of these investments will not take place.
Finland has the capacity to produce as much as 10% of hydrogen production targets set by the EU. As a whole, it is possible to create a significant low-carbon export business around a hydrogen economy which would attract as much as €50 billion in investments to Finland during this decade. This is about ten times the amount of annual investments[1] in industry.
In order to leverage our strengths, we should quickly strengthen the prerequisites for investments in the sector. Operators in the sector are preparing investments but without a supportive operating environment or any indication of its development, these investments will be redirected elsewhere. In addition to hydrogen the investment will be directed to green ammonium and methane.
CLC proposes that the current Finnish government takes the next steps forward.
in addition to the energy and climate strategy, a separate industrial policy strategy for a hydrogen economy should be prepared to strengthen the prerequisites for investments in a hydrogen economy and the export potential of hydrogen economy products. The strategy must be based on a shared vision to which actors broadly commit.
The strategy should be ambitious, setting a target of 6 GW in electrolysis capacity in 2030, and should strengthen the prerequisites in all phases of the value chains.
The prerequisites for international cooperation and interconnection as part of Central European markets should also be strengthened as part of the strategy. Strengthening Nordic cooperation, particularly with Sweden, is of paramount importance in this respect. It is also necessary to support the more extensive networking of domestic projects already approved as IPCEI[2]* projects with Central European actors.
It would be appropriate to start preparations to support this aim during this government term so that the investments are not channelled to other EU countries or to other actors. The timing of the aid is now at hand since the Commission will grant aid to those projects where investment readiness is most readily achievable.
The current government should urgently initiate preparations for such an industrial policy strategy for a hydrogen economy which the next government could continue without delay.
More information: Tuuli Kaskinen, CEO, Climate Leadership Coalition, tuuli.kaskinen@clc.fi, +358 50 5149752 and Juha Turkki, Development Director, Climate Leadership Coalition, juha.turkki@clc.fi, +358 45 3461925
[1] Annual fixed investments
[2] IPCEI = Important Projects of Common European Interest
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