Towards fossil-free transport

The Finnish Association of Purchasing and Logistics, LOGY, started a close cooperation with German Association for Supply Chain Management, Procurement and Logistics, BME, in 2019. Therefore please find here a short update what is currently actual in Finland.

Dear Readers of BME International Newsletter,

Greetings from Finland. Next to Covid-19 challenges in Europe is also currently struggling to decrease the fossil emissions in order to meet the 2030 climate target plan. In Finland the principles of sustainable development have been taken seriously and Government’s programme includes many ambitious goals. One to mention is to become the world’s first fossil-free welfare society.

Transport causes approximately 20 % of Finland’s CO2 emission. Out of this 94 % is caused by road transport. Finland’s Ministry of Transport and Communications has just given their recommendations for transportation sector for emission reductions. “Road map for fossil-free transport” report (October 27, 2020) gives recommendations on how greenhouse gas transport emission can be reduced by half by 2030, and entirely nullified by 2045 in Finland. The report’s recommendations are divided into four models of transport: road, rail, water and air. They concern alternative power sources, the energy efficiency of vehicles and the transport system, and the pricing and taxation of transport.

Report’s recommendations concerning road transport has been summarised below.

1. Alternative power sources – biogas and electric cars into the mainstream

Policy instruments for production, consumption and distribution infrastructure are required to promote the use of biogas in transport. Finland’s electric 2030 car target should be revised to as many as 700,000 cars, of which the majority will be fully electric.

2. Energy efficiency of vehicles – incentives for zero-emission technology and fuels

According to the working group, key methods to renew the car fleet include a stronger pricing of carbon in transport than currently, possible changes to taxation, and other economic policy instruments such as scrapping rewards and procurement support. While promoting electric transport, the attention must be paid to the ecological and social sustainability of battery production.

3. Efficiency of the transport system

Public transport, walking, cycling and other sustainable modes of transport must significantly increase their share of travel kilometres by 2030. According to the working group, the most significant ways to enhance the transport system are solutions such as the coordination of transport and land use, sustainable infrastructure investment, the coordination of sustainable travel services, and the utilisation of digital technology and automation.

4. Transport pricing and taxation

Based on the literature and expert assessments, an emissions trading scheme and increase in fuel taxation would be the most efficient ways to reduce emissions. The final report recommends a more indicative pricing of carbon than currently if the other options are insufficient to reach the emission reduction target in transport. In an emissions trading scheme for transport, the government would auction distribution rights for petrol and diesel. Their limited quantity could increase the price of fossil fuels in the long run. The working group emphasises that the potential increase in fuel prices should be compensated for low-income households, residents of rural areas, and companies in the export market. In addition to compensation, the government should support and promote the fair transfer to zero-emission transport throughout Finland.

“The recommendations from Finland’s Ministry of Transport and Communications towards fossil-free transportation sector are highly demanding and ambitious but same time feasible. It will be great to see some concrete steps towards more sustainable and environment friendly society”, says Mr. Markku Henttinen, CEO of the Finnish Association of Purchasing and Logistics.

The full press release “Transport emissions halved by 2030 – requires an extensive range of options” (27.10.2020) can be found: https://www.lvm.fi/en/-/transport-emissions-halved-by-2030-requires-an-extensive-range-of-options-1239247

The full report “Road map for fossil-free transport – Working group final report 27 October 2020” (in Finnish) can be found: The Institutional Repository: The final report of the working group on the roadmap for fossil-free transport. Publications of the Ministry of Transport and Communications 2020:17. (published on 27 October)