Models and Systems

Development of Energy System Models for Finland in Co-Operation
with the IEA ETSAP Programme
Suomen energia-päästömallien kehittäminen IEA:n ETSAP-yhteistyössä

Antti Lehtilä, Eero Tamminen
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Jussi Mäkelä, Pekka Pirilä
Helsinki University of Technology, Espoo, Finland
Teknillinen korkeakoulu, Espoo
Abstract
The main objectives of the ETSAP project were
threefold. Firstly, an important subtask of the project consisted of activities related to the Finnish national contribution and collaboration within the
Energy Technology Systems Analysis Programme(ETSAP) of the International Energy Agency. The
collaboration activities include the exchange of experiences, approaches and databases related to energy system modelling, as well as the development
and dissemination of new modelling tools within
the research community. Secondly, an important
concrete goal was to take into use at VTT the newgeneration energy system modelling environment
TIMES, which has been recently developed within
ETSAP. Finally, another important objective wasto apply the new modelling system to the analysis
of future energy technology scenarios, by extensively utilizing the up-to-date technology characterization data produced by the Climtech Programme.
Participation in the ETSAP Programme has proved
to be an effective means to take part in international
collaboration on energy system studies. The regular semi-annual workshops provide an outstanding
forum for the exchange of modelling experiences
and results from national studies. As the ETSAP

participants are among the leading international
experts of bottom-up energy system modelling
methodology, ETSAP provides a good referencegroup for coherent national modelling studies. The
members of the project team had wide contacts
with some of the core participants of the programme, and made notable contributions to the development of the TIMES modelling system. However, the implementation of the national TIMES
model for Finland suffered from a number of initial
deficiencies and shortcomings of the new modelling system, all of which were nevertheless overcome during the project. The completion of the
full-scale national model was, however, delayed.
Therefore, the Climtech scenario analyses were
eventually made by using the EFOM model, which
is a direct predecessor of TIMES. Detailed resultsfrom the scenario study are reported in the final report of the project.
Tiivistelmä
Projektilla oli kolme tärkeää, mutta toisistaan melko erillistä päätavoitetta. Verrattain pieni, mutta
silti tärkeä osa projektin resursseista oli varattu osallistumiselle IEA:n (International Energy Agency)
ETSAP-ohjelman (Energy Technology Systems
Analysis Programme) toimintaan. Yhteistyö ohjelmassa käsittää mm. osallistumisen työseminaareihin, mallinnuskokemusten ja tietokantojen
vaihdon, sekä uusien mallinnustyökalujen kehitystyön ja levityksen. Toinen päätavoite oli ottaa käyttöön ETSAP-ohjelman piirissä viime vuosina kehitetty uuden sukupolven energiajärjestelmien
mallinnusympäristö TIMES. Lopuksi tavoitteena
oli soveltaa uutta mallijärjestelmää vaihtoehtoisten energiateknologian kehitystä koskevien ske157

naarioiden analysointiin käyttäen hyödyksi Climtech-ohjelman projektien tuottamaa tuoretta tietoa
eri teknologioiden kehityksestä ja markkinapotentiaalista.
Osallistuminen ETSAP-ohjelmaan on osoittautunut hyödylliseksi keinoksi päästä mukaan laajaan
kansainväliseen yhteistyöhön teknologialähtöisen
energiajärjestelmätutkimuksen alalla. Kaksi kertaa vuodessa järjestettävät ETSAP-työseminaarit
ovat erinomainen tilaisuus vaihtaa mallinnuskokemuksia ja saada tuoretta tietoa eri maissa tehdyistä
analyyseistä. Koska ETSAP-ohjelmaan osallistuvat tutkimusorganisaatiot edustavat teknologialähtöisen energiajärjestelmätutkimuksen kansainvälistä huippuasiantuntemusta, ohjelma tarjoaa hyvän tukiverkoston yhtenäisin menetelmin ja lähtökohdin tehtäville kansallisille analyyseille. Projektiryhmällä oli runsaasti yhteyksiä keskeisiin ETSAPohjelman jäseniin, ja ryhmä kykeni antamaan näkyvän panoksen itse TIMES-mallijärjestelmän kehitystyöhön. Suomen TIMES-mallin rakentaminen tuotantokäyttöön soveltuvalle tasolle valitettavasti viivästyi mallijärjestelmässä vielä olleiden
puutteiden ja ohjelmavikojen takia. Kaikki merkittävät ongelmat kyettiin kuitenkin projektin aikana
ratkaisemaan, joten mallin viimeistelyssä ei tämän
jälkeen ole enää odotettavissa vaikeuksia. Climtech-skenaarioiden mallinnus jouduttiin kuitenkin
tämän vuoksi suorittamaan käyttäen TIMES- mallijärjestelmän erästä edeltäjää, EFOM-mallia. Skenaarioanalyysien tuloksia raportoidaan yksityiskohtaisesti projektin loppuraportissa.

technology studies since the early 1990s (van der
Voort et al. 1984, Lehtilä and Tuhkanen 1999,
Kemppi et al. 2001). However, the EFOM modelling system is actually becoming quite aged, and it
lacks the scalability, user-friendliness, and a number of very useful modelling capabilities that arepresent in the newest generations of energy systemmodelling environments.
Originally, the ETSAP collaboration was planned
to be funded through a new energy systems research programme. Due to the withdrawal of that
programme, the ETSAP project was organized under the Climtech programme. In order to havesome concrete benefits to the overall goals of the
programme, the project plan was augmented withthe application of energy system modelling totechnology scenarios constructed on the basis of
the results from the Climtech programme. The
main objectives of the ETSAP project within the
programme can thus be summarized as follows:• To promote the use harmonized energy systemmodelling methodologies by active participation in the IEA ETSAP Programme;• To participate in the development of new modelling tools within ETSAP;• To introduce ETSAP’s new modelling environment TIMES in Finland;• To apply the most current energy system modelling tools available (TIMES, if possible) to theanalysis of technology scenarios for the Climtech programme.

2 The IEA ETSAP programme
1 Introduction
The need to participate in international collaboration related to energy system modelling was fullyrecognized in Finland after the agreement on the
Kyoto Protocol in 1997 and the subsequent burden
sharing discussion in the European Union. The
IEA ETSAP Programme appeared to represent oneof the most successful collaboration forums in thisarea, which led to the decision of joining the programme in 1999. Another good reason for participation in the ETSAP Programme was the need for
improved energy system models. At VTT, the national EFOM energy system model has been regularly used for various national energy policy and
158

The International Energy Agency (IEA) maintains
a wide energy technology and R&D collaboration
programme. The purpose of the programme is tofacilitate co-operation among IEA Member andnon-Member countries to develop new and improved energy technologies and introduce theminto the market. Research activities are set up under Implementing Agreements, which provide thelegal mechanism for establishing the commitmentsof the Contracting Parties and the management ofactivities.
The objective of the Implementing Agreement on
Energy Technology Systems Analysis Programme

(ETSAP) is to support the development of constructive, economically and technologically informed, policy options. The support is provided byestablishing, maintaining and expanding a consistent analytical capability for single and multi- country energy/economy/environment studies, serving
both national analyses and work in international forums. Key features are individual national teams,
and a common, comparable and combinable methodology that permits in-depth national and multinational evaluations. The objectives of the ETSAPProgramme can be summarized as follows:• to perform comprehensive, consistent andcomparable system analysis of energy/
economy/environment (E3) issues;• to provide information to national andinternational bodies;• to promote and support global coverage ofconsistent analyses;• to develop methodologies and tools forenergy system analysis.
The core activities within ETSAP concern the application and ongoing development of a family ofenergy system models, named MARKAL (forMARKet ALlocation) (Fishbone et al. 1983, Goldstein and Greening 2001). These type of models allow policy analysts and decision-makers to identify and explore feasible energy technology scenarios that meet a range of constraints at the minimum overall cost over extended periods of time.
The models can deal with various constraints anduncertainties, whether they concern eventual envi-

ronmental requirements, the availability or acceptability of certain technologies, the availability andprice of resources, or the future demand for energy
services. Recently, a new generation modellingsystem, TIMES, has emerged within the ETSAP
programme (ETSAP 2000).
With respect to future changes in the patterns of energy production, consumption, and the associatedenvironmental impacts, technology is recognized
to have a leading role. In order to capture the fullpotential of technology, the ETSAP methodologies and tools are accompanied by rich country-specific technology databases that are underconstant revision and updating, and exchange between ETSAP participants to enhance harmonization and sharing of resources.
The ETSAP Programme has a long-standing tradition. It was founded in 1980 as the successor to a
joint project launched by the IEA as early as 1976
with the aim to develop capabilities to analyze
long-term energy futures and related R&D programmes. Currently, 14 active IEA member countries and the European Commission participate in
the research programme: Australia, Belgium, Canada, Germany, Greece, Finland, Italy, Japan, theNetherlands, Norway, South Korea, Sweden, Switzerland, and the USA. Through collaborative projects, the ETSAP tools are used by over 75 teams in
more than 35 countries for a variety of purposes,
including preparation of national communications

Table 1. ETSAP annexes between 1980 and 2003.
Title or main subject

Years

I

Increase capabilities to analyze energy systems

1980–1983

II

Exchange data; promote and support common analysis

1984–1986

III

Energy and environment: Acid gases

1987–1989

IV

Energy and environment: Carbon dioxide

1990–1992

V

New directions in energy modelling

1993–1995

VI

Dealing with uncertainty together

1996–1998

VII

Contributing to the Kioto Protocol

1999–2002

VIII

Exploring energy technology perspectives

2002–

159

and related policies for the UN Framework Convention on Climate Change.

3 The TIMES modelling system
The Integrated MARKAL-EFOM System (TIMES)
is a bottom-up (i.e. technology-oriented) energy
system modelling system based on the minimization of the overall discounted total system costs
over a user-defined time horizon. Implicit assumptions in the model include perfect competition andperfect foresight. First versions of the modelingsystem are based on linear and mixed integer programming. Integer programming is needed for including endogenous technological change in themodel. In a later phase other model versions using
either non-linear programming of mixed complementarity formulation are planned to be supported.
The model can be used for various analyses related
to energy policies, energy technologies, and environmental implications.

Despite its relatively low budgets the programme
has achieved impressive results. As an international group of systems analysts, ETSAP wasamong the first to analyze energy-related environmental issues. ETSAP contributed to the acid deposition debate, and started to evaluate climatechange mitigation costs already before the Rio
conference. It provided environment policy analyses that were instrumental to the preparation of the
Kyoto Protocol, and made a substantial contribution
to the Third Assessment Report of the IPCC
(WGIII). The current research focus includes theanalysis of different international mitigation
schemes by using regional and global models. On
the whole, the programme provides a network of experienced analysts, each of which understand andrecognize their national options and concerns. Consequently, ETSAP can be, and has proven to be, avery useful platform for international collaboration.

Possible application areas of the model include thefollowing:• Least-cost strategies for achieving energy
and emission policy targets;• Economic evaluation of environmental andenergy measures and actions;• Examination of the collective potential of
key technologies and resources;• Evaluation of different R&D strategies;• Evaluation of different energy policy options;

The programme has been organized into three-year
subprogrammes or Annexes, which are listed inTable 1. Finland joined ETSAP in 1999, and thefunding of the Finnish national collaboration was
arranged through the Climtech programme.

Model horizon
Period 1

Period 2

WD

D

WE

N

Period 3

SP

SU

FA

WD

WE

WD

D

N

D

Period 4

Seasons

WI

WE

N

WD

M

A

WE

WeeklyN

DayniteFigure 1. Example of a user-defined timeslice tree hierarchy in the TIMES model.

160

PriceInversedemand curve

Fixed demand
curve

Equilibrium priceInversesupply curve
Consumer
surplus
Producer surplus

Production costs

Equilibrium demand

Quantity

Figure 2. Principle of step-wise linear demand elasticities in the TIMES model.

• Assessment of alternative burden sharing
systems (multi-country models).
In comparison with the EFOM model, which has
for long been used at VTT, the TIMES system includes the following important enhancements:• Flexible user-defined sub-annual time-slice
hierarchy (see Figure 1);• Genuine technology vintages and age-dependency of process characteristics;• Various tools for describing inter-regional
exchange of commodities;• Genuine partial equilibrium modelling withelastic demands (see Figure 2);• Endogenous technological learning (requires
a MIP solver).
In addition, the TIMES system provides muchbetter scalablility compared to EFOM, in terms ofe.g. extended time horizons and regions, processes, commodities and emissions included in themodel. Current plans for further enhancements include a macroeconomic linkage similar to MarkalMacro (Manne and Wene 1992), and multi-stage
stochastic programming. In the future, a modelversion based on mixed complementarity formula-tion has also been considered to enable seamlesslinking with macroeconomic models.

4 Enhancements to theTIMES
model generator
The core component of the TIMES modelling environment is the model generator. The generator
transforms the structural and numerical data that
describe the model into variables and equations
that formulate a mathematical programming problem (see Figure 3). As an energy system model
may consist of even hundreds of thousands of variables and equations, an efficient language isneeded for the specification of the model.
In the TIMES system, the model specification language is based on the commercial General Algebraic Modelling System, GAMS. The TIMES
model generator provides a good amount of predefined sets and parameters that are used for describing both model structure and numerical characteristics of technologies and commodities. The bulkof the data consists of time-series that describe thedevelopment of each characteristic parameter overtime. Therefore, efficient tools for the specification
161

User data:
Sets, Parameters

Preprocessorof data
Processtransformation
coefficients

GAMS

Management ofparameter time-series

Preprocessing ofspecific parameters

Objective function
coefficients

TIMES
Main driver ofmodelgenerator

Declaration anddefinition ofvariables andequations

Detailed computationof coefficients for
specific equations
and bounds

Generation ofmodel and solution

Interface toexternal model solver

Generation of
Result Reports

Interface toexternal spreadsheets

Figure 3. Functional relationships between components of the TIMES model generator.

and management of time-series data constitute an
essential part of the model generator.
Within the Climtech project, the project team realized that the original tools included in TIMES fortime-series management could be considerably enhanced by providing the user a set of additional options for the specification of time-series data.
Therefore, a completely revised time-series management system was implemented for TIMES. The
new facility greatly improves the independency of
the years used for the specification of time-series
data from the study years of individual model runs.
As an additional bonus, the new system proved to
be much more efficient in terms of computing
speed.
On the basis of the experiences gained from using
the EFOM model system, further improvements
were introduced also in the set of predefined parameters and equation types in the TIMES model generator. These additions include e.g. the following:• Generalized bounding constraint on process
flows;• Powerful new parameter and equation type forgeneralized relations between process flows;
162• New parameter and equation type for the
spcification of constraints on the market share ofindividual technologies in total commodity production;• New parameter and equation type for the specification of by-products or ancilleries related toany flows tied to a process;• New parameter for the spcification of bounds on
the realative load within any individual timeslice;• A set of ‘metadata’ parameters, which can be effectively used for automatic bulk generation ofmodel data from fewer ‘master’ parameters, aswell as a parameter for the easy specification of
investment subsidies as percentages.
Moreover, the project team identified dozens ofbugs in the TIMES code. Still further enhancements were also made in many parts of the code.
For example, the calculation of the objective function was for major parts revised, the options for describing vintage-dependent availabilities weregeneralized, and the overall performance of themodel generator was much improved. Proposedchanges have been submitted to the ETSAP Software Coordinator for subsequent adoption into thestandard version of TIMES.

5 The TIMES user shell
The amount of data needed for a full-size energy
system model can very large, even in the case of asingle-country model. In addition, model applications often require the running of a number of scenarios, or cases, based on different assumptions on
the development of various technologies, energy
prices, taxes, emission quotas etc. Consequently,
the efficient management of all the data for different model cases, as well as model results, can be avery demanding task, and requires dedicated software tools.
Due to its high flexibility, the TIMES model is basedon much more complex data structures than e.g. theEFOM model. Under the ETSAP Programme, anumber of different solutions for a TIMES user shellhave been prototyped, all of which are GUI applications running under Microsoft Windows:• ANSWER-TIMES – Based on a widely used
MARKAL user shell ANSWER developed by
ABARE, Canberra, Australia;• TIMESAP – Based on the Modular Energy System Analysis and Planning system MESAP developed at the IER, Stuttgart, Germany;• VEDA – VErsatile Data Analyst developed by
Haloa Inc., Montréal, Canada.
Unfortunately, none of these systems evolved to reliable production level shells during the Climtech
project. Furthermore, the two shells that weremade available to ETSAP partners, ASWER andUser
constraint

VEDA, did not support all TIMES features, andwere not extensible by design. In the end, it turned
out necessary to develop a TIMES shell of own design at VTT. A fully working version of the VTT
user shell was completed in May 2002. Relationships between major data objects of the shell are
shown in Figure 4.

6 Model development
During the Climtech project, first modelling experiences with the TIMES model were obtained
through a thesis project focusing on the construction of a pilot TIMES model for the electricity andheat generation systems of the Nordic countries.
The thesis project was carried out by one of theteam members at the University of Stuttgart, Institute of Energy Economics and Rational Use of Energy (IER), one of the most active participating organizations of ETSAP. While the pilot project itself was quite successful, it suffered from the factthat the TIMES system was still in its beta testing
phase, and had to be operated without a user shell.
The insights gained from this modelling exercise,and the results from the scenarios run with theNordic model, have been reported in a Master’s
Thesis (Mäkelä 2001).
The problems related to the lack of a satisfactory
TIMES user shell were evident practically throughout the Climtech project. While the various ongo-

TIMES
ParameterCasehypothesis
Timeslice

Commodity
Process

Parameter
instances

Scenario

TIMES
Model Case

RegionUnit
Unit
conversion
Topology

Time-series
Data

Figure 4. Main relationships between TIMES data objects in the VTT user shell.

163

ing shell development activities seemed to be very
promising, the project team could not seriously
start designing the tools necessary for data management without prior knowledge of the interfaces
to the shell that would eventually be used. Therefore, for a large part the modelling work in the project was focused on the improvement of the current
technology databases utilized for the EFOM
model, so that the same database would be as upto-date as possible, and readily disposable for the
TIMES model. In this way the updated databases
could be immediately utilized for long-term scenario analyses (Lehtilä 2001). This work could befully used for the benefit of the Climtech scenarios
irrespective of the model used. The database development work involved e.g. the following tasks:• Further update of the earlier Climtech data for
combustable fuel power and heat generation
technologies (Savolainen et al. 2001), including
REF plants;• Extension and update of the database for windand solar energy technologies;• Update and collection of new data on space heating systems;• Update of the data for the submodels of agriculture and waste management;• Gathering of new data on energy conservation
measures from Motiva databases and from theresults produced by the Climtech programme;• Collection of techno-economic data on CO2 capture and disposal.
Even without an appropriate TIMES user shell, theproject team managed to build a full-scale andfunctional power and heat generation model for
Finland. In addition, prototype designs for the remaining sectors (e.g. industrial processes, households, space heating and transport) were completed. Other significant modelling work included
the modelling of technical measures for reducing
the F-gases and the introduction of the new dynamic emission model for the landfilling of waste.
All of these tasks were directly serving both the
Climtech scenarios and the forthcoming full-scale
TIMES model.

164

7 Climtech scenarios studied
The coordinating group of the Climtech Programme specified the scenarios to be modeled andstudied. The total study horizon was set to cover
the years 2000–2040, of which the focus was set on
the years years 2010, 2020 and 2030. Two possible
future development paths were characterized forthe scenarios:• ‘Conventional’development: International measures for climate change mitigation evolve
slowly. There is no major push for the development and commercialisation of cleaner technologies. As a result, the penetration of new energy
technologies depends highly on economic policy instruments.
• ‘Optimistic’ development: Accelerated climatechange mitigation measures lead to rapid development and employment of cleaner technologies, both internationally and within Finland.
Increased funding for both R&D and promotionof technologies reducing emissions has to be
thereby assumed.
Emission reduction targets were assumed both for
the Kyoto period in 2008–2012 and for the year
2030. The abatement levels studied for the year
2030 were 0%, –10%, –20% and –30% from the1990 level. Scenarios were calculated considering
all the six greenhouse gases included in the Kyoto
protocol. The energy system model EFOM wasused to find the least-cost allocations of greenhouse gas emission reductions in the alternativetechnology scenarios. Furthermore, the effects ofcarbon dioxide emission trading was considered in a
few scenario variants. The model was also used for
calculating other air pollutant emissions (SOx, NOxand particulates) under the cost-effective greenhouse gas reduction solutions. The results from thescenario studies are reported in the final report ofthe project as well as in the summary report of the
Climtech Programme.

8 Discussion and conclusions
The ETSAP Programme has proven to be a very
important and productive forum for international
collaboration in the field of energy system analysis. Members of the project team participated in all
but one regular ETSAP workshop during 1999–
2002. The new generation TIMES modelling system developed under the ETSAP Programme combines the strengths of two most widely used energy
system models, MARKAL and EFOM. Perhaps
the most important methodological advantages of
the TIMES system compared to EFOM are theflexibility regarding both the representation oftime segments and technology characteristics, andthe capability of including demand elasticities,
thereby reaching a genuine partial equilibrium
model. By using the new TIMES system, the project team made various modelling experiments related to specific features of the Finnish energy system. In addition, a fully functional base model was
implemented for the electricity and heat generation
system. However, several serious obstacles for thedevelopment of a full national TIMES model
emerged during the project:• The former modelling environment used at VTT
is the EFOM system, while the basic design of
the TIMES system is largely inherited directlyfrom the MARKAL model. The differences in
the approaches rendered the task of convertingan EFOM model into TIMES both difficult andprone to errors.
• The TIMES model generator was still under avalidation stage. During the project, the Finnish
ETSAP team disclosed a number of coding errors that had not been discovered by the primary
software coordinators of ETSAP. VTT’s new
Quality System would not allow any deviations
from high quality principles.
• Within the ETSAP Programme, many promising approaches for a TIMES user shell havebeen prototyped over the past years. However,as yet none of the systems has evolved to thelevel of flexibility and reliability needed for serious modelling work. Consequently, the Finnish
team was finally forced to the development of a
TIMES user shell and data management systemfrom scratch.

As a consequence of these setbacks, the team could
not reach the objectives originally set for real productive modelling work with the TIMES system.
On the other hand, due to the difficulties faced withTIMES, considerable efforts had to be invested in
the gaining of in-depth understanding of the
TIMES model generator, as well as in the design
and implementation of a fully functional user shell.
Considering that the team had hardly any prior experience of building either GAMS or Microsoft
Access applications, the results concerning thebuild-up of essential infrastructure for the TIMES
modelling environment can be regarded quite satisfactory.
The completion of the full national TIMES model
would still need a successive continuation project.
As a consequence, the Climtech technology scenarios had to be eventually analyzed by using theEFOM model, which was nevertheless thoroughly
updated with all the new technology data producedin the programme. For apparently similar reasons,the IEA Energy Technology Perspectives undertaking initiated in 2001 fell eventually back on using MARKAL, while it was originally planning to
use the TIMES model.
Due to the ETSAP Programme having a major
stake in the completion of the large ETP project,further development of the TIMES modelling system was practically frozen during 2002, but willdefinitely be resurrected in the near future. At all
events, all the prerequisities for the successful final
construction of the full-scale national TIMES
model for Finland are now fulfilled. The completion of the model and subsequent model applications will greatly benefit from the ground work
done related to quality assurance and model infrastructure, and from all the insights gained during
the Climtech project.

165

Publications and reports made under
the project

Lehtilä, A. 2001. Possible energy futures for Finland. In:
Energy Visions 2030 for Finland. Helsinki: VTT Energy, Edita. 238 p.

Lehtilä, A. 2001. Possible energy futures for Finland. In:
Energy Visions 2030 for Finland. Helsinki: VTT
Energy, Edita. P. 193–226.

Lehtilä, A., Tuhkanen, S. 1999. Integrated cost-effectiveness analysis of greenhouse gas emission abatement.
The case of Finland. Espoo: Technical ResearchCentre of Finland, VTT Publications 374. 145 p.
Http://www.inf.vtt.fi/pdf/publications/1999/
P374.pdf

Mäkelä, J. 2001. Development of an Energy System
Model of the Nordic Electricity Production System.
Helsinki University of Technology, Department ofEngineering Physics and Mathematics, Diploma
thesis.

References
ETSAP 2000. The New TIMES: a Model for the Millennium, ETSAP news, Vol. 7, No. 1, pp. 1–4, ECN Policy Studies, Petten, The Netherlands. ftp://ftp.
ecn.nl/pub/www/library/news/etsap/etsap71.pdf
Fishbone, L. G. et al. 1983. User’s Guide for MARKAL;(BNL/KFA Version 2.0). Brookhaven National
Laboratory. Upton, Long Island, New York, USA.
Goldstein, G., Greening, L.A. 2001. Energy planningand the development of carbon mitigation strategies– Using the MARKAL family of models. Washington: International Resources Group. 41 p. http://www.ecn.nl/unit_bs/etsap/reports/markal-irg.pdf
Kemppi, H., Lehtilä, A., Perrels, A. 2001. Assessment of
the Macro-Economic Effects of Domestic Climate
Policies for Finland [Suomen kansallisen ilmasto-ohjelman taloudelliset vaikutukset]. Helsinki:
Government Institute for Economic Research, Publications 75. 130 p. (In Finnish) http://www.vatt.fi/julkaisut/t/t82.pdf

166

Manne, A., Wene, C-O. 1992. Markal-Macro: a linked
model for energy-economy analysis. BNL-47161.
Brookhaven National Laboratory, Upton, NY. 1992
Mäkelä, J. 2001. Development of an Energy System
Model of the Nordic Electricity Production System.
Helsinki University of Technology, Department ofEngineering Physics and Mathematics, Diploma
thesis. 98 p. + App.
Savolainen, I., Tuhkanen, S., Lehtilä, A. (eds.) 2001.
Technology and Mitigation of Greenhouse gas
Emissions – Background Study for the Finnish Climate Change Action Plan. [Teknologia ja kasvihuonekaasujen päästöjen rajoittaminen – Taustatyö
kansallista ilmasto-ohjelmaa varten. (In Finnish,with English abstract)]. Helsinki: Ministry of Tradeand Industry, Publications 1/2001. 198 p.
Voort, E. van der, Donni, E., Thonet, C., Bois d’Enghien,E., Dechamps, C., Guilmot, J.F. 1984. Energy Supply Modelling Package EFOM-12C Mark I, Mathematical description. Louvain-la-Neuve, Cabay:
Commission of the European Communities, EUR8896. 430 p.

Greenhouse Gas Balances of Biomass and Bioenergy Systems– Participation in an International Collaboration
Osallistuminen IEA:n hankkeeseen ”Greenhouse Gas Balances of Biomass andBioenergy Systems” (IEA Bioenergy Task 38)

Kim Pingoud, Ilkka Savolainen,
Sampo Soimakallio
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Abstract
IEA Bioenergy is an organisation set up in 1978 to
improve international co-operation and information exchange between national bioenergy research, development and demonstration (RD&D)
programs. The work of IEA Bioenergy is carriedout through a series of Tasks, each having a defined
work programme. Currently there are 13 Tasks,
one of them being Greenhouse Gas Balances ofBiomass and Bioenergy Systems (2001–2003),
Task 38. 12 countries including Finland are participating in this Task. The goal of Task 38 is to investigate all processes involved in the use of bioenergy
systems on a full fuel-cycle basis with the aim ofestablishing overall GHG balances. Its main objectives are to 1) develop, compare and make available integrated computer models and other tools
for assessing GHG balances of bioenergy and carbon sequestration systems and perform such assessments; 2) make comparisons of bioenergy systems
with e.g. fossil energy systems, as well as comparisons of wood products with other materials such as
steel and concrete; 3) analyse the country-level andregional potential of bioenergy, forestation, andother biomass-based mitigation strategies; 4) aid
decision makers in selecting mitigation strategies
that optimise GHG benefits; 5) assist in the implementation of forestry, land-use and bioenergy options through methodological work and development of standards for carbon accounting and contribute to the work of IPCC/OECD/IEA.

Tiivistelmä
IEA Bioenergy on vuonna 1978 perustettu organisaatio, jonka tavoitteena on tehostaa kansainvälistä
yhteistyötä ja tiedonsiirtoa kansallisten bioenergiatutkimus- ja tuotekehitysohjelmien välillä. IEA
Bioenergyn työ jakautuu erillisiin tehtäväalueisiin(Tasks), joilla on kullakin omat erikseen määritellyt tehtävänsä. Tällä hetkellä on käynnissä 13 Taskia, joista yksi on Biomassa- ja bioenergiajärjestelmien kasvihuonekaasutaseet (2001–2003), Task
38. Kyseisessä Taskissa on mukana 12 osanottajamaata, näiden joukossa Suomi. Task 38:n päämääränä on tutkia kaikkia bioenergiajärjestelmien
käyttöön liittyviä prosesseja ja tarkastella koko polttoainekierron kasvihuonekaasutaseita. Sen päätavoitteita ovat: 1) kehittää, vertailla ja levittää tietokonemalleja ja muita apuvälineitä, joita voidaan
käyttää bioenergiajärjestelmien ja niihin liittyvien
hiilinielujen kasvihuonevaikutusten arvioinnissa
sekä analysoida tällaisia järjestelmiä, 2) verrata bioenergiajärjestelmiä fossiilisia polttoaineita käyttäviin ja puuperäisiä tuotteita kilpaileviin materiaaleihin kuten teräkseen ja betoniin, 3) analysoida bioenergia-, metsitys- ja muiden biomassan käyttöön
perustuvien ilmastostrategioiden potentiaaleja valtakunnallisella ja alueellisella tasolla, 4) auttaa päätöksentekijöitä biomassaan perustuvien optimaalisten ilmastostrategioiden valinnassa sekä 5) antaa
metodologista tukea metsitykseen, maan käyttöön
ja bioenergiaan perustuvien vaihtoehtojen toteutukseen sekä hiilitaseen laskennan standardien
muotoutumiseen vaikuttamalla mm. IPCC:n,
OECD:n ja IEA:n verkostoissa.

167

1 Introduction
IEA Bioenergy is an international collaborative
agreement, set up in 1978 by the International Energy Agency (IEA) to improve international co-operation and information exchange between national bioenergy research, development and demonstration (RD&D) programs. IEA Bioenergy
aims to realise the use of environmentally soundand cost-competitive bioenergy on a sustainablebasis, thereby providing a substantial contribution
to meeting future energy demands.
IEA was founded in 1974 as an autonomous bodywithin the OECD to implement an internationalenergy programme in response to the oil shocks.
Membership consists of 25 of the 29 OECD member countries. Activities are directed towards the
IEA member countries’ collective energy policy
objectives of energy security, economic and social
development, and environmental protection. One
important activity undertaken in pursuit of thesegoals is a programme to facilitate co-operation todevelop new and improved energy technologies.
IEA Bioenergy provides an umbrella organisationand structure for a collective effort where national
experts from research, government and industry
work together with experts from other member countries. Resources are provided in two main ways: Cost
Sharing – participants contribute to a common
fund for conducting research projects and information exchange. Task Sharing – participants devotespecified resources and personnel to conduct anagreed work programme.
The work of IEA Bioenergy is carried out througha series of Tasks, each having a defined work programme. IEA Bioenergy currently has 13 Tasks, allof which are supervised by the IEA Bioenergy Executive Committee. Each Task has a defined work
program and is led by one of the participating
countries (Operating Agent). A Task Leader, appointed by the Operating Agent, directs and manages the work programme. In each country, a National Team Leader is responsible for the co-ordination of the national participation in the task.
Each participating country pays a contribution towards the organisational requirements, and pro168

vides in-kind contributions to enable the participation of national experts in a Task.
Interest in reducing emissions of greenhouse gases
to the atmosphere has increased largely due toawareness of the risk of climate change, and due tothe adoption of the Kyoto Protocol. Countries arepreparing to implement programs that aim at limiting emissions of greenhouse gases. Bioenergy is avery attractive option to pursue this goal. In particular, the IEA Bioenergy position paper (IEA
Bioenergy Task 25) on bioenergy and greenhousegases states: “Biomass can play a dual role ingreenhouse gas mitigation related to the objectivesof the UFCCC, i.e. as an energy source to substitute for fossil fuels, and as a carbon reservoir ...
Modern bioenergy options offer significant,cost-effective and perpetual opportunities towardmeeting emission reduction targets ... Moreover,
via the sustainable use of the accumulated carbon,
bioenergy has the potential for resolving some of
the critical issues surrounding long-term maintenance of biotic carbon stocks. Finally, wood products can act as substitutes for more energy-intensive products, can constitute carbon sinks, and canbe used as biofuels at the end of their lifetime”.
IEA Bioenergy Task 38 on Greenhouse Gas Balances of Biomass and Bioenergy Systems (2001–
2003), which continues work of the previous Tasks
XV and 25 (Greenhouse Gas Balances of Bioenergy Systems) brings together the work of national programs in 12 participating countries on
GHG balances for a wide range of biomass systems, bioenergy technologies and terrestrial carbon sequestration. The countries being involved
are: Australia, Austria, Canada, Croatia, Denmark,Finland, New Zealand, Norway, Sweden, theNetherlands, United Kingdom and United States.
The Task is lead by Bernhard Schlamadinger from
Joanneum Research, Austria. The Finnish National Team Leaders are Ilkka Savolainen and Kim
Pingoud.
The Task considers questions of carbon accounting
in the land use, land-use change and forestry(LULUCF) sector under the United Nations Framework Convention of Climate Change (UNFCCC)
and contributes to the work of the Intergovernmental Panel on Climate Change (IPCC). While Task

25 concentrated on scientific-technical and on
methodological issues, there was an increasing demand for information that aids decision-makers in
implementing programs to limit emissions or enhance removals of greenhouse gases. Therefore thescope of Task 38 is concentrating more on the application of methods, and on aiding the implementation of mitigation projects and programs. In addition, the work of Task 25 was increasingly looking
at activities that enhance carbon stocks, or limit theloss of carbon stocks, in the terrestrial biosphere.
Thus Task 38 attempts to reflect carbon sequestration issues by including the word “biomass” in its
title.

2 Objectives of the Task
Task 38 builds on the achievements of Task 25,
which concentrated on scientific-technical issues
and method development. Task 38 focuses more on
application of methodologies to GHG mitigation
projects and programs. Objectives of the Task arelisted in the following.
2.1 Scientific and methodologicalobjectives• To develop, compare and make available integrated computer models and other tools for assessing GHG balances of bioenergy and carbon
sequestration systems on the project, activity,
and regional levels, and address scaling issues
between these levels.
• To assess the life cycle GHG balance of such
systems, including leakage, additionality, anduncertainties. These analyses must integrate forest and agricultural sectors, bioenergy production and conversion, and carbon sequestrationconsiderations.
• To make comparisons of bioenergy systems
with e.g. fossil energy systems, as well as comparisons of wood products with other materials
such as steel and concrete.
• To analyse the country-level and regional potential of bioenergy, forestation, and other biomass-based mitigation strategies, including implications for atmospheric CO2 reduction.

• To identify and analyse the synergies between
afforestation and other land-based activities forcarbon sequestration and the enhanced use of
bioenergy.
• In pursuit of the listed above, collaborate withother Tasks of IEA Bioenergy, for example, on
conventional forestry, short-rotation forestry,techno-economic assessment, socio-economic
aspects. The Task proposed here is cross-cutting
in nature, and will rely heavily on exchange of information with these other Tasks
2.2 Objectives related to
implementation
The following objectives relate to implementationof projects and of GHG inventories at various levels (including corporate and national), and national/international environmental agreements
such as the Kyoto Protocol.
• To aid decision makers in selecting mitigation
strategies that optimise GHG benefits, e.g. allocating biomass to energy vs. use as raw material;considering costs and benefits, as well as thepracticalities of different mitigation strategies;• To assist in the implementation of forestry,land-use and bioenergy options through methodological work and development of standards
for carbon accounting in the energy and
LULUCF sectors.
• To contribute to the work of IPCC/OECD/IEA
related to GHG inventories of systems involving
carbon sequestration, wood products, bioenergy, baselines in LULUCF.

3 Work and outcomes of the Task
3.1 Basic activities
The basic activities of the Task include:
1. Task Workshops on a semi-annual to annual
basis.
The organisation of workshops is a key element of the Task. The following were held during the first two years of operation:
Canberra, Australia, 26–30 March 2001: Carbon accounting and emissions trading related169to bioenergy, wood products and carbon sequestration.
Edinburgh, U.K., 12–13 November 2001:
Successful strategies for biomass-based GHG
emissions reduction and mitigation: translating research into policy and implementation.
Graz, Austria, 22–24 April 2002: The economics of substitution management to reduce
net GHG emissions & Forest-based carbon mitigation projects: dealing with permanence,leakage, additionality, uncertainties, and socioeconomic and environmental issues.
Amsterdam, Netherlands, 19 June 2002: Biomass Trade: Economic and Greenhouse Gas
Considerations (biotrade).
2. Special seminars with limited participation /target audience.
3. Expansion and development of the website.
4. Collection and updating of the Task bibliography.
5. Dealing with external inquiries related to the
Task topic.
6. Design of a “Frequently asked questions”
page on the website, dealing with greenhousegases, bioenergy, land use, wood products andcarbon sequestration, and aimed at decision
makers and more generally a non-technicalaudience.
7. Collation and distribution of materials.
8. Special activities according to the short-term
needs of participating countries
9. Regular distribution of information relevant to
the Task topics.
10. Maintaining contact with the IEA Bioenergy
Secretariat and the Operating Agent; preparing contributions for the IEA Bioenergy Annual Report, and regular Task progress reports
for the Executive Committee Meetings.
3.2 Standard methodology
The work within the Task is based on the application of the developed standard methodology (seeIEA Bionergy Task 38 2002), which is a systematic
framework for estimating the net GHG emissions
for bioenergy systems and the energy systems theywould displace. There are complicated trade-offs
between carbon sinks in biomass and reduction of
170

GHG emissions by bioenergy, where a dynamical
analysis is needed.
Factors to be considered in such an analysis are as
follows:
The carbon stocks in plants, plant debris and soils
can change when biomass is grown and harvested.
Such changes in carbon stock might extend overlong periods of time, after which a new equilibrium
is approached, thus necessitating time-dependent
analyses. Afforestation or forest protection measures can be effective measures for mitigating therise of CO2 in the atmosphere, but may competewith biomass production for limited land resources. In such cases trade-offs between biomass
harvest and carbon stocks in biomass must be considered. An example of synergy is that found in afforestation or reforestation with an integrated production system for wood and bioenergy, in which
the stand is thinned to maximise value of wood production, and thinnings are utilised for bioenergy.
Bioenergy provides an irreversible mitigation benefit when it displaces fossil fuels. Mitigation benefits of afforestation or forest protection will be lost
if deforestation occurs.
The net benefit of using biomass energy depends
on the carbon emission rates (amount of carbon
emitted per unit of energy) of the displaced fossil
fuels (e.g. oil or natural gas). For example, the net
emission reduction of switching from coal to biomass will be greater than that of switching fromnatural gas to biomass, assuming all other factors
such as conversion efficiencies remain unchanged.
The efficiency of bioenergy systems (e.g. energy
output per unit of feedstock energy or mass) may insome cases be lower than that of fossil energy systems. Recent technological developments have increased the efficiency of bioenergy systems considerably (e.g. Integrated Gasification Combined
Cycle – IGCC). Production, transport and conversion of biomass fuels require auxiliary inputs ofenergy, which must be included in the assessment,
as must the energy requirements for the supply offossil fuels on which the reference energy system
is based.
The use of biomass fuels does not always avoid theuse of fossil fuels to the extent suggested by theamount of bioenergy actually used, a phenomenoncommonly referred to as “leakage ”. Bioenergy isoften produced as a by-product. There are also
cases where bioenergy is the main product andother by-products have to be considered. The emissions and offsets associated with both products andby-products must be estimated and allocated.
Greenhouse gas emissions associated with bothfossil and bioenergy fuel chains include not only
CO2, but other gases such as CH4 and N2O.
3.3 Frequently asked questions“Answers to Ten Frequently Asked Questions about
Bioenergy, Carbon Sinks and their Role in Global
Climate Change” (F.A.Q. 2001) is a paper thataims to inform industry, researchers, policy makers and interested public about some key issues
surrounding these topics. The FAQ explain:
1. The difference between CO2 emissions frombioenergy and from fossil fuels;
2. How trees and forests act as a carbon sink;
3. The effect of harvesting on carbon sinks;
4. The area of land required to supply bioenergy
to a power station;
5. The area of forest required to offset CO2 emissions from a power station or from running acar;
6. The types of trees and crops that are best as
carbon sinks or for bioenergy and wood production;
7. Integrated land management for carbon sinks,
bioenergy and fibre production;
8. How the management of land as a carbon sinkor for bioenergy production affects biodiversity
and other environmental characteristics;
9. The potential to reduce greenhouse gas emissions by using bioenergy and through terrestrial carbon sequestration;
10. The current availability of technology to allow
bioenergy to play a role in reducing atmospheric CO2.

and programmes. Case studies are therefore conducted to assess and compare the GHG balances ofdifferent bioenergy and C sequestration projects inthe participating countries. For example:• In Australia GHG balances of two alternative
bio-energy conversion systems (30 MW woodfired power station, co-firing in a 500 MW blackcoal-fired power station) in North East New
South Wales are compared. The biomass is produced from conventional plantation forestry.
• The New Zealand case study assesses the GHG
balance of a sawmill in New Zealand, equippedwith a combined heat and power (CHP) plantutilising sawmill residues of bark and sawdust.
The current bioenergy system is compared to areference system based on natural gas.
• In Canada the emission reduction of a small pyrolysis plant, which uses both thinnings from ajuvenile spacing program and sawmill residues
as feedstock, is examined. The plant produces
bio-oil for subsequent use either in a pulp millline kiln or for export.
• The Finnish and Swedish case studies look at thelinks between increased use of construction
wood and the use of biomass-fired co-generation plants in comparison to fossil fuel use.
• The case study for the United Kingdom is targeted to compare small-scale bioenergy solutions for a rural community versus centralised
systems of energy and heat generation, andbioenergy crops versus short-rotation forests
versus long-rotation forests.
• In Croatia the GHG emissions reduction potential through biodiesel is assessed in the context
of a potential Joint Implementation project.
The case studies are still in a preliminary stage andmost of them will be carried out in an EU project
starting early 2003. The project team is collectedfrom the international research network formed
under the Task 38.
3.5 Special activities of the Finnish
team

3.4 Case studies
Task 38 is applying the standard methodology to
specific projects and helps increase experience thatis useful in implementation of mitigation projects

The Task contributes to work in the context of National Greenhouse Gas Inventories, for example regarding approaches for estimating and accountingof CO2 emissions from harvested wood products
171

and biomass fuels or the development of IPCC
Good Practice Guidance for national emissions inventories in the LULUCF sector. The Finnish teammember Kim Pingoud is one of the Lead Authors
in the above IPCC work and is responsible for the
harvested wood products reporting.
The Finnish team also took part in writing answers
to the 10 Frequently Asked Questions (F.A.Q.
2001). Presentations in the Task workshops often
form draft versions of manuscripts, which later on
have been published in international journals. Examples of such publications of the Finnish team arethose of Pingoud and Lehtilä (2002) and Korhonen
et al. (2002). The first one studies the secondary
flows of fossil carbon in the lifecycle of woodbased products and the second one an accounting
approach, which is aimed to describe the climatic
impacts of short-term forestation projects.
Pingoud and Lehtilä (2002) show by the case studyof the Finnish forest industries in 1995 that themain groups of wood-based products differ fromeach other substantially when considering the fossil C emissions of their manufacture in proportion
to the wood-based C sequestered in the products
themselves. These indices are useful measureswhen considering the possibilities of using various
wood products as C sequestration options. Korhonen et al. (2002) analyse the so-called tonne-

172

year approach, which has been strongly promotedin the debate on climate change mitigation. Theirresults show, however, that the approach applied to
C accounting might even provide perverse incentives to forestation projects aimed at short- term C
sequestration. In the long term this kind of project
activities could even make matters worse andcause global warming, although the tonne- year
measure would indicate a cooling impact.
References
F.A.Q. 2001. Frequently Asked Questions within IEA
Bioenergy Task 38. http://www.joanneum.ac.at/
iea-bioenergy-task38/publication/fpubl.htm
IEA Bioenergy Task 25 1998. The Role of Bioenergy inGreenhouse Gas Mitigation, http://www.joanneum.
ac.at/iea-bioenergy-task38/publication/fpubl.htm
IEA Bioenergy Task 38 2002. web-site: http://www.
joanneum.ac.at/iea-bioenergy-task38
Korhonen, R., Pingoud, K., Savolainen, I., Matthews, R.
2002. The role of carbon sequestration and thetonne-year approach in fulfilling the objective of
Climate Convention. Environmental Science andPolicy, Vol. 5, number 6, pp. 429-441, 2002.
Pingoud, K., Lehtilä, A. 2002. Fossil carbon emissions
associated with carbon flows of wood products.
Mitigation and Adaptation Strategies for Global
Change, Vol. 7, No.1, pp. 63-83, 2002.

Carbon sink of wood products
Puutuotteiden hiilinielut

Kim Pingoud
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Anna-Leena Perälä
VTT Building and Transport, Tampere, Finland
VTT Rakennus- ja yhdyskuntatekniikka, Tampere
Ari Pussinen
European Forest Institute, Joensuu, Finland
Abstract
This paper focuses on the issue how the carbon in
harvested wood products (HWP) can contribute to
the mitigation of climate change and how this canbe taken into account on country level carbon budget. Different approaches were tested using amodel developed in this study. Practical application of this study is that the model can be used in
the national greenhouse gas inventories. Furthermore, the effects of accounting methods on different countries were studied.
Atmospheric-flow approach favours exporting
countries, by providing them an excess carbon
sink, and the importing country gets an equalcalculatory carbon emission. This causes barriers
for trade, which could be harmful for wood use andforest industry. Production approach benefits producing countries and provides them incentives toexport as much as possible. In stock-change approach only the stocks and stock changes of acountry are taken into account. This approachseems to bring more benefits than the two other approaches and results in promoting of sustainableproduced woody products.

Lyhennelmä
Tässä tutkimuksessa tarkasteltiin puuperäistentuotteiden mahdollisuutta sitoa ilmakehän hiilidioksidia ja täten ehkäistä fossiilisten polttoaineiden ja maankäytön muutosten aiheuttamaa ilmastonmuutosta. Erityisesti tarkastellaan erilaistenlaskentaperiaatteiden vaikutusta maakohtaiseenraportointiin Kioton pöytäkirjan vaatimien velvoitteiden täyttämiseksi. Metsäteollisuustuotteillapaljon kauppaa käyvälle maalle, kuten Suomelle,on erittäin tärkeää, miten puutuotteiden viennin jatuonnin sisältämän hiilen virta lasketaan tuotteita
vievälle ja tuovalle maalle.
Virtaperiaatetta käytettäessä vievä maa hyötyy ja
tuova maa saa saman kokoisen päästön. Tällöin
puutuotteiden kaupalle voi muodostua vakavia esteitä, koska vievän maan täytyy yrittää kompensoida haitta jotenkin. Tuotantoperiaatteessa, jossa
puuperäisten tuotteiden nielu lasketaan puun tuottaneelle maalle, puuperäisiä tuotteita vievä maa
yrittää viedä mahdollisemman paljon, mikä voi aiheuttaa markkinahäiriöitä. Varastonmuutosperiaatteessa lasketaan vain kussakin maassa tapahtuvat varastonmuutokset. Tällöin maita rohkaistaan
käyttämään kestävästi tuotettuja ja uusiutuviin
raaka-aineisiin perustuvia puutuotteita. Yhden lisähankaluuden mahdolliseen Kioton pöytäkirjan
mukaiseen laskentaan tuo se, että velvoitteet eivät
koske kaikkia maailman maita.

173

1 Introduction
Forest ecosystems are a component of the terrestrial carbon (C) cycle and their management affects
the carbon dioxide (CO2) concentrations in the atmosphere. Wood-based products (in the following
referred as harvested wood products = HWP) constitute an integral part of the C cycle of managed
forest ecosystems. In sustainable forestry removals are in balance with forest growth in the longterm, and the wood removed from forest by harvest
can be viewed as a replacement for the natural mortality that would otherwise occur eventually.
HWP lifecycle can be utilised in mitigation of
global warming both directly and indirectly: HWP
form (1) a physical pool of C, (2) a substitute formore energy-intensive materials and, (3) raw material to generate bioenergy (IPCC 2001). In case (1)by growing the HWP pool itself, i.e. using it as C
sink, atmospheric C can be sequestered. In case (2)and (3) HWP have lower greenhouse gas (GHG)
emissions than the alternative material or fuelchain so that GHG emissions can be avoided indirectly by using HWP.
For the present the C balance of the physical poolof HWP is taken into account neither in the reporting included in the national GHG inventories under
the United Nations Framework Convention on Climate Change (UNFCCC) nor in the C accounting
due to the Kyoto Protocol. The main objective of
this study was to analyse approaches and develop
methods to estimate the carbon (C) balance in
HWP, which eventually could be used for above reporting or accounting. Another objective was toconsider HWP’ role in material substitution, theseresults to be presented separately in a comprehensive project report.

2 Method for assessing C balance
in HWP pools
At present the Intergovernmental Panel on Climate
Change (IPCC) is developing Good Practice Guid-

174

ance (GPG) for the Land-Use Change and Forestry(LUCF) sector to assist countries in performing
their GHG inventories under the UNFCCC. The
GPG is based on the IPCC 1996 Revised Guidelines (IPCC 1997a, b, c), but it provides detailed
methods to make inventories on the LUCF sector
that are neither over- nor underestimated as far as
can be judged, and uncertainties are reduced as far
as practicable. In the Revised Guidelines the basic
assumption is that there is no change in the size ofthe HWP stock (the so-called IPCC default approach). As the objective of the GPG is to provide
best possible estimates, however, a more advanced
approach is needed to describe the GHG balance in
HWP. These HWP approaches are discussed in thefollowing and calculation methods suitable forthese approaches are presented.
Several studies have been carried out on the impacts of these measures on the amount of carbon
sequestered in Harvested Wood Products (HWP).
Approximate estimates on global C stock in HWP
and their present growth rate can be found in theSecond and Third Assessment Reports (SAR and
TAR) of the IPCC (1996 and 2001). According to
the SAR (IPCC 1996), the global stock of C in forest products would be of the order of 4.2 Pg C andthe net sink 26 Tg C/yr. Other sources suggest astock of 10–20Gt C (Sampson et al. 1993) and a
global sink of 139 Tg C/yr (Winjum et al. 1998).
2.1 Accounting approaches
In the current IPCC default approach only emissions and removals related to forest stock change
are considered. Emissions from harvested wood
are attributed to the year of production and to thecountry of harvest, i.e. where the roundwood is
produced. However, in the reality the carbon stockin HWP is changing and it can vary substantiallybetween countries. The IPCC expert meeting in
Dakar, Senegal (Brown et al. 1999), identified
three alternative approaches for estimating theemissions and removals of CO2 from forest harvesting and wood products. The approaches are
summarised in Box 1 and illustrated in Figs. 1–3.

Box 1. The three alternative new approaches, identified in the Dakar meeting, for estimating net emissions from HWP (Brown et al. 1999).
Stock-change approach – This estimates net changes in carbon stocks in the forest
and wood- products pool. Changes in carbon stock in forests are accounted for in the
country in which the wood is grown, referred to as the producing country. Changes in
the products pool are accounted for in the country where the products are used, referred to as the consuming country. These stock changes are counted within nationalboundaries, where and when they occur.
Production approach – This also estimates the net changes in carbon stocks in theforests and the wood-products pool, but attributes both to the producing country.
This approach inventories domestically produced stocks only and does not provide acomplete inventory of national stocks. Stock changes are counted when, but not
where they occur if wood products are traded.
Atmospheric-flow approach – This accounts for net emissions or removals of carbon
to/from the atmosphere within national boundaries, where and when emissions andremovals occur. Removals of carbon from the atmosphere due to forest growth areaccounted for in the producing country, while emissions of carbon to the atmospherefrom oxidation of harvested wood products are accounted for in the consuming
country.

Athmosphere
ForestgrowthDecomposition/combustionof wood consumed

Slash

ExportWood
production
ImportNational boundary
System boundary
Stock change = (stock change forest) + (stock change consumer products)= (forest growth – slash-wood production)+ (wood consumption – deconsumtion/combustion of wood consumed)

Figure 1. Stock-change approach (Brown et al. 1999).

175

Athmosphere
ForestgrowthDecomposition/combustionof wood consumed

Slash

ExportWood
production
ImportNational boundary
System boundary
Stock change = (stock change forest) + (stock change domestic-grown products)= (forest growth – slash-wood production) + (wood production –deconsumtion/combustion of wood grown in country)
Figure 2. Production approach (Brown et al. 1999).

Athmosphere
ForestgrowthDecomposition/combustionof wood consumed

Slash

ExportWood
production
ImportSystem boundary

National boundary

Atmospheric flow = (forest growth – slash – deconsumtion/compustion of wood consumed)
Figure 3. Atmospheric-flow approach (Brown et al. 1999). The atmospheric flow(from the atmosphere to the system) can also be expressed = (stock change forests) + (stock change consumed products) + net export.

176

2.2 The model and data
In this study an aggregated spreadsheet model for
the C stock changes in HWP was developed. It is applicable to calculation of stocks and their changes inindividual countries or country groups using different accounting approaches. As default data themodel uses the global FAO Forestry database(FAOSTAT 2002), which includes the national
production and international trade flows of the major groups of HWP, most compiled since 1961. The
production prior to 1961 is estimated by exponential growth in the model. Using the consumption
rates of HWP, converted to C flows, as input of themodel and assuming an exponential decay of the
HWP stocks in use, the C stocks and their changes
are integrated in the model, starting from year
1900. The initial stocks in 1900 are approximatedto be zero. In the model, two separate stocks of(semi-finished) HWP are considered, solid wood
products (sawnwood and wood-based panels) andpaper products (paper and paperboard), which differ from each other essentially in their use-lives.
The spreadsheet also includes a model for changes

of HWP stocks in landfills but their modelling includes lots of uncertainties and therefore results forlandfills are not presented here. In the on-goingwork by the IPCC, where the Good Practice Guidance for the LUCF sector is developed, the above
model is proposed to be the basic tool for estimating the C balances in HWP.
The model was numerically tested with data of several countries. The decay rate (or lifetime) parameters, however, were estimated only on the basis ofFinnish data. The parameters were estimated byfitting the model output into sequential inventories
of solid wood products in Finland. These inventories of the years 1980, 1990 and 1995 have earlier
been presented by Pingoud et al. (2001), whereas
the latest inventory of year 2000 was carried out forthis study (Figure 4). The main model parameters
are given in Table 1, in which the decay rate parameter of solid wood products represent simply a conservative estimate based on above inventories. The
decay rates of Table 1 are equivalent to an average
lifetime of solid wood products of 30 years and paper products 1 year, the corresponding half-lives

20
18
16

4.70
14

4.87

Tg C

12

1.68

10
8

1.41

1.47

Wood-based
panels

1.19

6
4

Civil
engineering

8.87

9.53

1990

1995

10.98

Sawnwood +building logs

7.21

2
0

1980

2000

Figure 4. C stock inventory of solid wood products in Finland based on the statistics onconstruction and housing. Years 1980 to 1995 presented by Pingoud et al. (2001). Year 2000
by Perälä (personal communication, 2002). The figures of sawnwood and wood-based panels are based on building stock statistics, civil engineering on model calculations. The more
uncertain figures on civil engineering were only estimated in years 1995 and 2000.

177

being 21 and 0.7 years. In addition, it was assumed
that the yearly growth in production rates was 2%
before 1961.

Table 1. Parameter values for the global C stockof HWP in use in the spreadsheet model (adt =air dry tonne).
Solid
wood
products

Paper
products

Decay rate (1/yr)

3.3%

100%

Estimated growth of
production prior to 1961
(1/yr)

2%

2%

Dry weight3(Mg/m and Mg/adt)

0.45

0.90

C content in dry matter

50%

50%

pear to vary more or less yearly depending on the
HWP consumption. For instance in Finland, HWP
formed a C source in year 1991. Some bias iscaused by the fact that trade and consumption of final products are excluded from the numbers of Table 2. The FAO statistics being the basis of themodel includes only roundwood and semi-finished
HWP. Thus, for instance, furniture and pre-fabricated houses manufactured in a country but exported has been counted in the stock-change of the
producer country. Denmark is an example of such a
country. However, according to Table 2 stockchange in HWP appears to be quite a significant
factor in the countries’ GHG balance, especiallycompared to the reduction commitments in Annex
B of the Kyoto Protocol. As these are on average
about 5% of the base year emissions, stock changes
in HWP could in theory contribute to a remarkableportion in emission reductions. Note also that insome countries with small forest area the estimatedchanges in HWP stocks are much larger than stockchanges in the LUCF sector.

2.3 Results
The outcomes of the three approaches for some selected countries were calculated with the above
model, the results being illustrated in Table 2. The
carbon balance of HWP (expressed here as Gg
CO2) are given and compared to 1) total GHG
emissions (in Gg CO2 equivalent) excluding
Land-Use Change and Forestry (LUCF) in the baseyear 1990 and 2) emissions from LUCF, as reported in the national GHG inventories. The countries selected are industrialised countries committed to the Kyoto Protocol (Annex B). In case HWP
were included in the C accounting due to the Protocol, which could happen in the second commitment period at the earliest, HWP would have an
impact on the assigned amounts of above countries.
Considering first the stock-change approach, we
see that HWP in use is a sink for all the selected
countries in 2000, the highest sink in proportion tobase year emissions estimated for Austria and Finland. However, the sink estimates by the model ap-

178

Production approach appears to be less favourable
than stock-change approach for most of the selected countries. One reason for this is the concentration of roundwood production in fewer countries than consumption of HWP, the wood producing and exporting countries taking all the advantage of the growing HWP stocks.
Maybe most interesting are the numbers for atmospheric flow approach. (Here the given numbers
do not give the total atmospheric flow in Figure 7
but the sink additional to stock change in forests,
i.e. = (stock change consumed products) + net export.) From the results we note some countries(Finland, Sweden and Canada) with very large additional sink due to HWP. In case of Finland thesink due to HWP would be more than 30% of thetotal base-year emissions! The numbers become
understandable when bearing in mind that the sinkconsists of two terms of which the net export term
dominates totally the C removal of the above exporter countries giving a huge credit to their national C balance.

Table 2. Total CO2 emissions excluding LUCF and emissions from LUCF for the base year 1990, reported in the national communications under the UNFCCC. Calculated additional emissions from HWP in 2000 using the three approaches and compared to reported base-year emissions according to the developed model. Note that negative numbers means carbon sinks. The input data of the model, the production andtrade data since 1961, are from the FAO database (FAOSTAT 2002). Parameter values of the model are given in Table 1.
Greenhousegas emissions

Total without
CO2 from
LUCF

CO2 from
LUCF

CO2 equivalent(Gg)

Base year

Base year

1990

1990

Australia

41757576206

Austria

76939

Belgium

CO2 from HWP,
Stock-change Approach

CO2 from HWP,
Atmospheric-flow Approach

CO2 from HWP,
Production Approach

2000

% of
total
base-yr% of
LUCF
base-yr

2000

% of
total
base-yr% of
LUCF
base-yr

2000

% of
total
base-yr% of
LUCF
base-yr-2061-0.5 %-3 %-443-0.1 %

-1 %

-2117

-0.5 %

-3 %

-9215

-3088

-4.0 %

34 %

-3355

-4.4 %

36 %

-1835

-2.4 %

20 %

142396

-1256

-1443

-1.0 %

115 %

1342

0.9 %

-107 %-694-0.5 %

55 %Canada604717-59032-9207-1.5 %

16 %-91509-15.1 %

155 %

-33848-5.6 %

57 %Denmark

69953

-916

-1892

-2.7 %

207 %

2286

3.3 %

-250 %-106-0.2 %

12 %Finland

77093-23798-2381-3.1 %

10 %-23582-30.6 %

99 %

-4484

-5.8 %

19 %France545665-52020-6707-1.2 %

13 %

-2995

-0.5 %

6%-8077-1.5 %

16 %Germany

1206637-33719-10844-0.9 %

32 %

-6725

-0.6 %

20 %-12566-1.0 %

37 %Greece1053331391-591-0.6 %

-42 %

1536

1.5 %

110 %

-52

0.0 %

-4 %

Japan

1175558-83824-1187-0.1 %

1%

29843

2.5 %

-36 %

5153

0.4 %

-6 %

Netherlands

215798

-1500

-966

-0.4 %

64 %

4792

2.2 %

-319 %-458-0.2 %

31 %phaNorway

46805

-9590

-720

-1.5 %

8%-1409-3.0 %

15 %-182-0.4 %

2%

Portugal

64644

-3994

-1146

-1.8 %

29 %

-2690

-4.2 %

67 %-660-1.0 %

17 %

Spain

305832-29252-5512-1.8 %

19 %

7848

2.6 %

-27 %

-1293

-0.4 %

4%

Sweden69562-20292-1051-1.5 %

5%-18397-26.4 %

91 %

-2808

-4.0 %

14 %UK

741882

8791

-3434

-0.5 %

-39 %

15068

2.0 %

171 %

-3073

-0.4 %-35 %USA

6038192-1059900-72571-1.2 %

7%-40302-0.7 %

4%-46085-0.8 %

4%

179

The importance of the trade in atmospheric flow
approach is illustrated in Table 3. In atmospheric-flow approach the net exports of HWP(negative imports in Table 3) provide the leading
exporter countries with a huge additional removal,
whereas all the net importer countries would get an
extra emission. Finland, Sweden and Canada couldin principle take care of all their reduction commitments by exporting HWP, if atmospheric flow approach were chosen as the accounting framework.
On the other hand, significant additional emissions
would be allocated to Denmark, Spain, the Netherlands, Japan and UK.

Table 3. Net imports of HWP in 2000 converted
to CO2 flows and compared to base-yr emissions. Final products are excluded from these
Net imports
2000% of base-yr
emissions

Australia

1617

0.4%

Austria

-267

-0.3%

Belgium

2785

2.0%

Canada-82303-13.6%

Denmark

4179

6.0%

Finland-21201-27.5%

France3712

0.7%

Germany

4118

0.3%

Greece

2127

2.0%

Japan

31029

2.6%

Netherlands

5758

2.7%

Norway

-689

-1.5%

Portugal

-1544

-2.4%

Spain

13361

4.4%

Sweden-17346-24.9%

UK

18501

2.5%

United States

32269

0.5%

CO2 (Gg/yr)

180

2.4 Conclusions
All the three approaches are equivalent in describing the dynamical global C balance (emission/removal) of forests and HWP. This means that all theapproaches assign the emissions/removals when
they really occur, whereas the IPCC default approach assigns emissions/removals at the time of
harvest. The fundamental difference between theatmospheric-flow and the other two approaches isthe different perspective to the C balance. The atmospheric-flow approach considers within the national boundaries the C flows from the atmosphereto the forests (sink) and from decaying organic
matter and HWP to the atmosphere (source). The
other two approaches consider changes in C stocksof forests and HWP and interpret them as sink orsource. Production approach also considers C
stocks, which are outside the national boundaries.
As a consequence of the different viewpoints theoutcomes of the approaches differ in where theemissions/removals are assigned, i.e., to whichcountry they are allocated. Whichever of the approaches is chosen for national emission reporting
the same approach must be applied in all countries
and both to forests and HWP to avoid doublecounting and no-counting situations.
In addition to be only reported for the UNFCCC,
HWP could be included in the Kyoto accounting in
the future. In this latter case the C accounting could
create strong potential incentives for the use andinternational trade of HWP, as they may have direct
economic consequences for countries being compelled to the commitments of the Protocol. This inclusion could be topical in the second commitment
period at the earliest. However, the accounting
rules negotiated in the future are not necessarily
similar to anyone of the approaches. For example,
some additional discount factors or caps could beapplied to C accounting of HWP etc. The interesting point in accounting is, however, that if not all
countries in the world are compelled to the commitments of the Kyoto Protocol, an asymmetric situation creating additional incentives to international trade of HWP between compelled andnon-compelled countries.

As there are no decisions on the accounting rules
and, for example, we do not know the market conditions of C, the quantitative assessment of incentives and disincentives are highly speculative at the
moment. Factors like cost of reducing emissions,discount rates and international price of C will determine the true outcomes of the potentially strong
incentives provided by HWP approaches in C accounting. Therefore, the incentives are discussed
in the following only qualitatively, relative to eachother rather than in absolute terms.
The outcomes and incentives of the approaches
have been discussed extensively in the literatureearlier. A good summary is presented e.g. in the
Dakar meeting report (Brown et al. 1999). Somenotable points were also presented in the Edmonton statement (Apps et al. 1997). The incentives of
the three approaches compared to the IPCC default
approach are shortly given as follows:
1. The stock-change approach gives a sink forbuilding up of national forest and HWP stocks
whereas the IPCC default approach neglects
the changes in HWP stocks. In national reporting stock-change approach is neutral with respect to international trade in HWP. Whether
HWP are produced within national boundaries
or imported, growth in HWP stock is considered a C removal and its decrease an emission.
2. The basic feature of the atmospheric flow approach is separation of biological sinks andsources from each. Then in fact no incentives
are provided to utilise the closed C cycle of
HWP through the atmosphere (Atmosphere➝Forest ➝ HWP ➝ Atmosphere) as a pumpof renewable bioenergy, as the emission part of
the above sustainable cycle is penalised (bytreating biofuels like fossil fuels). In atmospheric-flow approach net import of HWP isreported as an emission and net export as a removal, in addition to the removal/emission
due to stock increase/decrease. A country conducting forest harvest without replanting, reports no CO2 emissions to the extent that harvested material is transferred to another country. Thus atmospheric-flow approach provides
a disincentive for the use of imported HWP
and imported wood-based fuels are treatedsimilar to fossil fuels. Even if country A reports zero CO2 emissions after burning self-

produced biomass fuel, country A would bebetter off, if the biomass were sold to country
B rather than using it himself. There are, ofcourse, incentives to grow forests and HWP, butpurchase and/or use of HWP is uniformly discouraged by the atmospheric-flow approach(Apps et al. 1997).
3. In production approach the wood-producing
country gets an additional sink due to exported
HWP. However, consistently stock decrease
would be considered as a source for the producing country. Production approach provides
incentives for a country to increase the stocksof those HWP grown in its own forests. However, those HWP are not necessarily inside its
boundaries and thus not influenced by its own
policies. The production approach may notprovide an incentive to an importing country tobetter manage the use of imported wood since
emissions are accounted for in the producing
country. Another drawback of the production
approach is that the importing country has little
incentive to improve the management of waste
and reduce the emissions (Brown et al. 1999).
In practice, the approaches may provide more
complicated indirect incentives. Crediting of HWP
stocks in stock-change approach can increase theuse of long-lived HWP in case a market potential
exists, and consequently also international trade oflong-lived HWP could be boomed. In theory, as theimporting country in production approach would
get no credit for its increasing stocks, it does nothave any incentives to increase the lifetime of
HWP in the export markets (or even assist in reporting HWP stock changes). Also here it should
be noted that there are severe practical difficulties
to verify the stock changes of the exported HWP.
The approximate estimation methods needed for
production approach may to some extent change
its incentives and impacts on international trade on
HWP. Atmospheric-flow approach gives credits
for exporting of HWP and debits for importing
forming a kind of a zero-sum game. This could
cause pressure on international market price of
HWP in case HWP were included in Kyoto accounting. In addition, the (potential) ecologicalimage of all HWP would be threatened, as theiremissions if included in accounting would be calculated like fossil fuels.
181

A particular issue is how the different approaches
handle trade of biofuels produced from wood. The
atmospheric-flow approach does not provide an incentive to switch from fossil fuels to imported
biofuels, because emissions from biofuels are accounted for in the consuming country, and the CO2
emissions per unit energy output (MJ) are higher
for biofuels than for most fossil fuels. But the exporting country would benefit by a decrease in national emissions. In fact, atmospheric-flow approach treats imported biofuels like fossil fuels aretreated in the present accounting system. For theother approaches there is an incentive to switchfrom fossil fuels to imported biofuels, because theemissions from imported biofuels are accounted
for in the producing country. For domesticallygrown biofuels all approaches provide incentives
to switch from fossil fuels because harvest can bebalanced by re-growth.
To illustrate the relative magnitude of the factors
providing incentives in different approaches it isinteresting to compare the estimated magnitude ofglobal C stock change in HWP and the C fluxes ofinternational HWP trade flows with each other.
This gives an insight on the two factors affecting
the reported C emission in atmospheric-flow approach. An approximate conservative estimate of
the present global C stock change of HWP in use,
given in Chapter 2, was a growth of 30–40 Tg C /yr
excluding HWP in landfills. However, in 2000 the
C flow of the whole international trade of HWP
was more than 130 Tg C /yr, this number calculated
by converting the global trade flows given in the
FAO statistics (FAOSTAT 2002) into carbon.
These numbers are illustrative and show that actually the global stock change in HWP appears to bemuch smaller than the zero-sum part of international imports and exports, which in atmospheric-flow approach would be reported as sourcefor net importers and as sink for net exporters.
Even if stock changes in HWP would be zero, these
trade flows would create permanent emissions fornet importers and removals for net exporters.
One issue is the development of HWP stocks intime. In general, they may form a C sink only as
long as their consumption is increasing. However,their stock in future will saturate sooner or later orthe stock will even decrease and form a C source
182

This has to be borne in mind when assessing thelong-term consequences of HWP accounting. For
instance, in production approach a HWP exporter
may be in future responsible for significant emissions taking place outside its own borders andwithout any possibilities to influence on this development.

3 Final remarks
The impact of HWP on GHG balance of the atmosphere can be considered from different perspectives. The first viewpoint is simply the balance ofwood-based C associated with the lifecycle of HWP
and timing of the C emissions into the atmosphere
during their lifecycle, which was considered in theabove study. HWP as a C pool are not yet included in
the national GHG emission inventories, and thus
this issue is lively discussed at the moment.
The viewpoint can be extended by further taking
into account all the side-fluxes of fossil C emissions associated with the lifecycle of HWP, resulting mainly from fuel-use in production, transportand other stages of the cycle. A case study on theseemissions in Finland was presented by Pingoud andLehtilä (2002). The lifecycle fossil C emissions are,however, already included in the current reporting
system (IPCC 1997a, b, c), and together with thewood-based ones considered above, represent absolute C emissions from the HWP lifecycle.
A more extended view is to consider the use of
HWP as substitutes for other products. In spite of
the above absolute GHG emissions due to HWP,
they can be a favourable choice compared to alternative products. With wood-based fuels we can replace especially fossil fuels, and with HWP also
more energy-intensive materials, which means that
we can generate relative GHG emission reductions
by using HWP (Hall et al. 1991, Marland andSchlamadinger 1995, 1997). The previous study
by Pingoud and Perälä (2000) concerned the relative GHG balance, if the use of HWP were maximised in Finnish new construction. One part of thepresent Climtech-study not reported here is a micro-level case, in which the GHG impacts of building a wooden multi-storey house is compared withthose of a similar one built in concrete.

The sink capacity of HWP is so limited that it cannot hinder CO2 increase and the increasing stock
can only mitigate CO2 increase in the atmospherefor some time. While C sequestration in HWP canreach saturation, the C benefits of energy and materials substitution can be sustained.
Publications and reports made under
the project
Pingoud, K., Perälä, A-L., Pussinen, A., Soimakallio, S.
2002. Carbon Sink of Wood Products and Other
Greenhouse Effects. Evaluation and Further Development of International Accounting Methods. Unpublished draft version, 27th August 2002. (To be
published).

References
Apps, M., Karjalainen, T., Marland, G., Schlamadinger,
B. 1997. Accounting System Considerations: CO2
Emissions from Forests, Forest Products, andLand-Use Change. A Statement from Edmonton,
Alberta, 28-30 July 1997.
Brown, B., Lim B., Schlamadinger, B. 1999. Evaluating
Approaches for Estimating Net Emissions of Carbon Dioxide from Forest Harvesting and Wood
Products. IPCC/OECD/IEA Programme on National Greenhouse Gas Inventories, 51 p.
http://www.ipcc-nggip.iges.or.jp/public/mtdocs/
dakar.htm.
FAOSTAT 2002. FAO database on Forestry.
http://www.fao.org/forestry/include/frames/english.asp?section=http://apps.fao.org/page/collections?subset=forestry
Hall, D.O., Mynick, H.E., Williams, R.H. 1991. Cooling
the greenhouse with bioenergy. Nature 353, 11-12.
IPCC 1996. Climate Change 1995: Impacts, Adaptations and Mitigation of Climate Change: Scientific-Technical Analyses. Contribution of Working
Group II to the Second Assessment Report of theIntergovernmental Panel on Climate Change. [Watson, R.T., Zinuowera, M.C., Moss, R.H., Dokken,
D.J. (eds.).] Cambridge University Press. USA
1996. 879 pp.
IPCC 1997a. Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories Guidelines. Reporting Instructions (Vol. 1). http://www.ipccnggip.iges.or.jp/public/gl/invs1.ht

IPCC 1997b. Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories Guidelines.
Workbook (Vol. 2). http://www.ipcc-nggip.iges.
or.jp/public/gl/invs1.htm
IPCC 1997c. Revised 1996 IPCC Guidelines for National
Greenhouse Gas Inventories Guidelines. Reference
Manual (Vol. 3). http://www.ipcc-nggip.iges.
or.jp/public/gl/invs1.htm
IPCC 2001. Climate Change 2001: Mitigation. Contribution of Working Group III to the Third assessment Report of the Intergovernmental Panel on Climate Change. [Metz, B., Davidson, O., Swart, R.,
Jiahua, P. (eds.).]. Cambridge University Press,
Cambridge, United Kingdom and New York, NY,
USA. 752 pp.
Marland, G., Schlamadinger, B. 1995. ‘Biomass fuels
and forest-management strategies: How do we calculate the greenhouse gas emission benefits?’, Energy 20, 1131-1140.
Marland, G., Schlamadinger, B. 1997. ‘Forests for carbon sequestration or fossil fuel substitution? A sensitivity analysis’, Biomass and Bioenergy 13,389-397.
Pingoud, K., Lehtilä, A. 2002. ‘Fossil carbon emissions
associated with carbon flows of wood products’,
Mitigation and Adaptation Strategies for Global
Change 7: 63-83, 2002.
Pingoud, K., Perälä, A.-L. 2000. Studies on greenhouse
impacts of wood construction. 1. Scenario analysisof potential wood utilisation in Finnish new construction in 1990 and 1994. 2. Inventory of carbon
stock of wood products in the Finnish building stockin 1980, 1990 and 1995 (in Finnish, abstract in English), Espoo, Technical Research Centre of Finland,
VTT Julkaisuja – Publikationer 840, 58 p. + app. 14 p.
http://www.inf.vtt.fi/pdf/julkaisut/ 2000/J840.pdf
Pingoud, K., Perälä, A.-L., Pussinen, A. 2001. ‘Carbon
dynamics in wood products’, Mitigation and Adaptation Strategies for Global Change 6: 91–111,
2001.
Sampson, R.N., Wright, L.L., Winjum, J.K., Kinsman,
J.D., Bennemann, J., Kirsten, E., Scurlock, J.M.O.
1993. Biomass management and energy. Water, Air
and Soil Pollution, 70(1-4), 139-159.
Winjum, J. K., Brown, S., Schlamadinger, B. 1998. Forest Harvests and Wood Products: Sources and Sinks
of Atmospheric Carbon Dioxide. Forest Science44(2), 272-284.

183

Developing and Testing of Renewable Energy Certificate System (RECS)
Uusiutuvan energian sertifiointijärjestelmän kehittäminen ja testaus (RECS)

1 Introduction

Nina Elomaa, Jari Hovila, Reima Päivinen
Fingrid Oyj, Helsinki, Finland
Fingrid Oyj, Helsinki
Abstract
The objective of this study was to develop and test
procedures and a system for the trading of green
certificates. RECS procedures for Finland were developed for the purpose of auditing production devices and for issuing and trading the certificates. A
web-based certificate register was also developedand implemented.
Lyhennelmä
Tämän tutkimuksen tavoitteena oli kehittää kaupankäyntijärjestelmä, jossa uusiutuvilla energiamuodoilla tuotetun sähkön ympäristöominaisuudella voi käydä kauppaa. Hankkeessa kehitettiin
sertifikaattien myöntämistä ja ylläpitoa varten
web-pohjainen rekisteri sekä otettiin käyttöön
Suomessa eurooppalaisen RECS-hankkeen mukaiset menettelyt voimalaitosten rekisteröimiseksi, sertifikaattien myöntämiseksi sekä kaupankäynnin hoitamiseksi.

RECS means the “Renewable Energy Certificate
System”. It enables many types of support schemes,
rather than being a support scheme itself, and it is
not restricted by national boundaries. The RECS
concept was presented for the first time 1998, andthe idea for introducing a test phase to demonstrate
the operational functionality of the RECS concept
was proposed in 1999. Later on, it was decided thatthe test phase was to be implemented during January 2001 to December 2002.
The RECS concept is based on the voluntary tradeof renewable energy certificates. The RECS system is now working in 7 countries in Europe having above 100 members, and the RECS idea has
also been recognised world-wide. Finland has
been involved in RECS from the beginning.
RECS provides a mechanism for representing a
specific instance of electricity production of amegawatt hour of renewable electricity by a unique
certificate which can be transferred from owner toowner before being used as proof of generation, or
exchanged for financial support. The trade of
RECS certificates is separated from the trade ofphysical electricity, as seen in figure 1.

Ecological benefits

RE

Certificatescertificate
marketproducer

Energy kWhFigure 1. RECS principle.

184

energymarketTo ensure that national systems are harmonised,built to the same standards and compatible witheach other, RECS members have developed andadopted a set of rules: the Basic Commitment (BC).
RECS is administered within each geographicalarea by an Issuing Body (IB), which is unique tothis area and independent of other members of
RECS. Fingrid Oyj is the IB for Finland. All IBs
are members of the international Association of Issuing Bodies (AIB), which guarantees the compatibility and adherence to the BC of the various national certificate systems. In addition, the commercial operations of each IB are subject to peer review by the AIB.
Each participating RECS country has a National
Team representing the RECS members, IB, andother governmental or environmental organisations of that country. The National Team chooses
the national representatives to different RECS forums and co-ordinates the RECS work on the national level.
Each RECS certificate is uniquely identifiable,transferable and therefore tradable, and contains
standard information – including: a unique certificate number, issuer, generation plant identity, timeof issue, type of technology, installed capacity, andan indication of whether public support has been
received.
The life cycle of a RECS certificate is as follows:
1. Issue: A RECS certificate is issued for, anduniquely relates to, a specific instance of the
production of a standard quantity – one megawatt hour – of renewable electricity.
2. Transfer: Each RECS certificate is registeredas belonging to a single party at each point during its life, this being adjusted accordingly following each transfer of its ownership.
3. Redemption: RECS certificates are redeemedwhen they are “used”.

2 RECS process
RECS certificates are created, change owners andare eventually redeemed under a carefully developed and managed control structure.
2.1 Membership in RECS
Before trading can start, the owner of the production device has to become a member of RECS. The
owner has to be registered at the RECS secretary
web site and pay the registration fee. Moreover, theowner has to pay the membership fee to the Finnish
Team. The Finnish Team co-ordinates the RECS
activities in Finland.
2.2 Audit of production device
The production device shall be audited by an accredited auditing company. In Finland, auditing
has been performed by SFS Sertifiointi Oy. SFS
Sertifiointi writes an auditing report. The reportcontains general information on the production
unit, energy measurement arrangements, accountof ownership of the plant, and the owner’s guarantee of selling the green property only once.
When Fingrid has received the report, the production device is registered in the RECS register andtrading can take place.
2.3 Issuing
For every 1000 kWh of produced renewable energy, a RECS certificate is issued. This certificate
takes the form of an electronic record. The record
states what is being certified: the identification of
the Issuing Body, the location of the production device, the technology used for the production of therenewable energy, and the time when the certificate
was issued.

185

2.4 Ownership transfer/trade
Once a certificate has been issued, it can be traded.
The member records the transfer of ownership in
the Central Registration Database and retains all
documentation related to the transaction.
2.5 Redemption
The owner of a certificate can redeem it (e.g.) to advertise its environmental performances, or to fulfil
a purpose specific to that country or region (e.g. renewable obligation, tax exemption, etc). After redemption, the certificate can no longer be transferred or traded.
2.6 Control structure
The issuing and trading with RECS certificatestakes place according to the rules set in the BasicCommitment (BC), which was developed by theinternational Association of Issuing Bodies (AIB).
Based on the BC, the AIB drew up a standard protocol to act as a framework for the national Issuing
Bodies to develop their own Domain Protocols, inwhich the BC has been applied to a specific country. The Domain Protocol specifies in more detail
how the rules of BC are fulfilled in each country.
Each protocol has been reviewed by the membersof the AIB for acceptability as a pre-condition ofparticipation in the Test phase.

3 Software for RECSThe Nordic Transmission System Operators,
TSOs (Fingrid in Finland, Svenska Kraftnät in
Sweden, Statnett in Norway, Eltra and Elkraft in
Denmark), developed together a web-based certificate register (RECSCMO) for the management ofcertificates. These five companies own and manage the software together.

186

RECSCMO was developed by the Finnish company Absolutions according to the specification
prepared by the Nordic TSOs and the consultant
company EdiSys. The project specification phasestarted at the end of the year 2000 and was finalised
at the beginning of 2001. The first version of thesoftware was taken into operation in June 2001 andthe first certificates were issued in Finland on 5
July 2001.
The main topics in the implementation and planning of the system were as follows:• special attention to functionality• the idea is to create a pilot system• the solution has to be implemented with low
costs without compromising security issues• the system has to be easy to use.
The system has five main functions:
1. The IB can register the RECS members of its
domain in the system.
2. The IB can register the production devices inthe system.
3. The certificates are issued to the system bysending the metering data on the production
device.
4. The RECS member can transfer the certificates within the system by choosing the certificates to be transferred and the party to whom
the certificates are transferred.
5. The certificates can be redeemed when they
are used by changing the status of the certificate from transferable to redeemed. Once thecertificate is redeemed, the system does not allow it to be transferred.
Moreover, the system has a different type of reporting function to the RECS member and to the IB.
The IB can follow the actions taken by the member.
The general information regarding production devices and some statistical information are publicand can be viewed on the web site. Access to moredetailed information is restricted to the members of
RECS.

The RECSCMO system is available at address
https://www.recscmo.com. During the test phase,
also communication and transfer of data between
the Nordic RECSCMO and other European RECS
registers were studied and tested.

The time series are sent to Fingrid monthly after
the owner of the plant has made all necessary fueland auxiliary energy calculations. Fingrid forwards the measuring values to the RECSCMO database monthly.

Instead of developing their own registers, Austria
and Italy have decided to use RECSCMO as the
RECS register for their own domains.

5 Statistical information

4 Measuring data
Only green production is eligible to receive RECS
certificates, the quantity issued reflecting theamount of net electrical energy generated as evidenced by meter readings adjusted by meter
amendments and the outcome of any disputes.
The net electrical energy generation is the grossproduction minus demand of any generating auxiliaries and minus losses in the main generator transformers on the site of the production device.
For a RECS-registered production device using
bio-mass as the source of energy, the certificates
can only be issued for the share of the total generation that derives from bio-mass. The share is calculated based on the fuels used and their share of the
production (MWh).
The owner of the production device is responsible
for collecting the metering data according to the
RECS principles. The metering data is based onhourly metered values. Generating auxiliaries can,however, be taken into account by using other metering values or appropriate correction factors. The
owner of the production device sends the green
share of production to Fingrid in EDI format. EDI
was chosen to be used in the transfer of meteringvalues, because EDI is widely used in Finland andin other countries in energy settlement.

Today there are 16 RECS members in Finland, andaltogether 97 production devices have been registered in their accounts. So far, 3,257,198 certificates (MWh) have been issued in Finland. The certificates are distributed between various production technologies in the following way:
• Wind-onshore 16,037• Wind-offshore 2,539• Hydro 702,865• Biomass/Energy crops 16,372• Biomass/Forestry/Agricultural waste 2,512,425• Biomass/Municipal waste 5,982• Biomass/Industrial waste 978
The figures below show the issued, transferred andredeemed certificates in each month. Finland has
been very active in starting to use RECS. The shareof Finnish members of all issued certificates is almost 50%.
The number of transferred and redeemed certificates is much lower than those issued. At the moment, the data is not therefore up to date.

187

Issued certificates
800 000
700 000
600 000
500 000
400 000
300 000
200 000
100 000
0

2001

January

February

March

April

May

June

July

Figure 2. Issued certificates per month (12 September 2002).

Transferred and redeemed certificates
35 000Transferred
Redeemed

30 00025 000
20 000
15 000
10 000
5 000
0

2001

February

April

June

AugustFigure 3. Transferred and redeemed certificates per month (12 September 2002).

188

6 Discussion

7 Conclusions

The implementation of RECS procedures in Finland has been carried out according to the original
project plan.

The test phase of RECS shows that the procedures
and the developed RECSCMO register are functioning technically as expected.

The development and operation of the RECSCMO
register has been carried out in a satisfactory manner. Small adjustments to the register during thetest phase have been made when deemed useful.

Because RECS is a voluntary system, the future of
RECS depends on the members’ willingness tocontinue. Some adjustments to the register and to
the general RECS procedures would be necessary
for the future.

The number of registered production devices andthe number of issued certificates has been muchhigher than expected. By the end of 2002, there
will be approximately six million issued certificates in Finland. This is mostly due to the openingof foreign certificate trade to the Netherlands.
If the RECSCMO register will be used after the
RECS test phase in the stage of production, somedevelopment is needed to ensure the security andcompatibility of the register. Also the transfer ofcertificates between European RECS registers has
to be developed further and tested.
The RECS procedures used in Finland will alsoneed some adjustment in the future.

189

Information and Communication Technology (ICT) and Energy Economy
Informaatioteknologian (ICT) vaikutus energiatalouteen

Esa Pursiheimo, Ritva Hirvonen
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Abstract
The objective of the study is to get an overview of
the ICT effects on energy economy by studying
published reports, articles and presentations. The
main interest lies on USA, where most of the previous studies have been made. Based on the overview, effects of the ICT on Finnish energy economics are studied. Here, the most important industrial
sectors, where detailed studies should be considered in future, are traced.
Energy intensity has decreased about one percent
annually in USA during the 1990s. It is estimatedthat one third of the change has been structural,
where economy has grown faster in non-energy intensive industries, such as information and communication technology (ICT) industry. The rest of
the change has been due to the increase in energy
efficiency of energy production, transmission andutilization.
The trends in US electricity consumption in residential and commercial sectors do not show any
major changes due an increase in ICT technology.
Estimates of electricity consumption in ICT varyfrom 2% to 8% in USA.
ICT has also indirect effects on energy consumption by e.g. e-commerce, telecommuting anddematerialization. Prediction and analyzing ofthese indirect effects is difficult, because complex
cause-and-effect relationships of the society cannot be identified explicitly. Rebound and substitution effects of ICT can cancel possible energy savings.
The Finnish energy intensity has decreased in late
1990s annually over 3%. It seems that the high190

value added by the ICT-companies in the electrical
products and manufacture sector has had a strong
effect on the intensity.
Service business orientation in Finnish economy
will increase the energy efficiency. With new business opportunities in ICT, the economy growth canbe maintained at a high 2–4% level also in
2010–2030. Energy intensity might decrease annually by 2–3% in 2010–2030, due to transformation into service society.
Tiivistelmä
Selvityksen tavoitteena on saada yleiskuva informaatioteknologian vaikutuksista energiatalouteen
julkaistujen raporttien, artikkeleiden ja esitelmien
avulla. Aiemmin julkaistusta materiaalista suurin
osa käsittelee Yhdysvaltoja. Saadun yleiskuvan
avulla arvioidaan mitä vaikutuksia informaatioteknologialla on Suomen energiatalouteen. Energiankäytön alueet, joissa yksityiskohtaisemmat informaatioteknologian vaikutustarkastelut Suomessa
saattaisivat olla tarpeen, on selvitetty.
Energiaintensiteetti on vähentynyt noin prosentin
vuosittain 1990-luvulla Yhdysvalloissa. On arvioitu, että noin kolmasosa tästä muutoksesta on rakenteellista, jolloin talous on kasvanut enemmän
ei-energiaintensiivisillä teollisuuden aloilla kuten
informaatio- ja tietoliikenneteollisuudessa. Loputmuutoksesta on aiheuttanut tehokkuuden lisääntyminen energian tuotannossa, siirrossa ja käytössä.
Informaatioteknologian yleistyminen ei ole muuttanut merkittävästi yksityisen ja kaupallisen sektorin sähkön kulutusta Yhdysvalloissa. Arviot informaatioteknologian osuudesta sähkön käytössä
vaihtelevat kahdesta kahdeksaan prosenttiin.
Informaatioteknologialla on myös epäsuoria vaikutuksia energian kulutukseen esim. sähköisen
kaupan, etätyön ja dematerialisaation kautta. Näi-

den epäsuorien vaikutusten ennustaminen ja analysointi on vaikeaa, koska yhteiskunnan kompleksisia syy- ja seuraussuhteita ei pystytä tunnistamaan eksplisiittisesti. Informaatioteknologian aiheuttamat rebound- ja korvautumisilmiöt voivat
vähentää energian säästöpotentiaalia.
Suomessa energiaintensiteetti on vähentynyt
1990-luvun lopulla vuosittain yli kolme prosenttia.
Näyttää siltä, että informaatio- ja tietoliikennealan
yritysten menestys sähkö- ja konetekniikan toimialalla on vaikuttunut merkittävästi intensiteettiin.
Suomen taloudessa tapahtuva palvelusektorin kasvu lisää energiatehokkuutta. Informaatioteknologian avulla kansantalouden kasvu saadaan pidettyä
korkealla 2–4 prosentin tasolla myös vuosina
2010–2030. Energiaintensiteetti voisi tällöin vähentyä vuosittain 2–3 prosenttia johtuen pääosin
palveluliiketoiminnan kasvusta.

due to ICT. Examples of rebound effects can befound in telecommuting and paperless office.
The objective of the study is to get an overview of
the ICT effects on energy economics by studying
published reports, articles and presentations. The
main interest lies on USA, where most of the previous studies have been made.
Based on the overview, the effects of the ICT on
Finnish energy economics are studied. Here themost important industrial sectors, where detailed
studies should be considered in the future, aretraced.
By scenario approach, effects of ICT on Finnish
energy economy in the future can be evaluated.
The problem in evaluation of effects lies in thewidespread use of ICT in a different kind of applications and industries, where the direct and indirect effects merge and present statistics do not haveproper contribution in evaluation.

1 Introduction
Energy intensity has decreased about one percent
annually in USA during the 1990s. It is estimatedthat one third of the change has been structural,
where economy has grown more in non-energy intensive industries, such as information and communication technology (ICT) industry. The rest of
the change has been due to increase in energy efficiency of energy production, transmission and utilization.
The present trend is forecasted to continue. It is
possible that present economy forecasts may overestimate the future energy consumption and underestimate the growth of economy. It has also been estimated that ICT industry and use of ICT in various
applications will increase the electricity consumption and at the same time environmental effects.
Information and communication technology is acornerstone in dematerialization of the society.
However, the dematerialization requires a change
in human behavior and social innovations, besides
the ICT development. Rebound effects of ICT
should also be considered, where the environmental
burden of society decreases less, or even increases,
although the burden in activity in question decreases

2 Recent trends in the U.S. energy
intensity
Energy intensity, i.e., the ratio of energy consumed
to unit of gross domestic product, is an indicator of
the total energy efficiency of the national economy.
During the internet era (1996–2000) the U.S. energy intensity has decreased on average 3.4% annually, whereas the annual drop during the oil crisis era (1973–1986) was averaging only 2.6%.
The unusual trend in energy intensity depicted infigure 1 can be explained by the exceptional
growth of the “new economy”. From 1996 to 2000
the GDP has increased annually on average 4%
while the U.S. energy consumption has experienced only 1% annual gain. The major trend of theinternet era, the increasing use of the informationand communication technology (ICT), seems tohave generated significant economic growth without a major increase in the total energy consumption.
The recent improvements in U.S. energy intensity
can be divided into structural and efficiency gains.
191

25

4%

1 000 BTU/$

E/GDP
Annual change
20

2%

15

0%

10

-2 %

5

-4 %

0
1949

-6 %
1954

1959

1964

1969

1974

1979

1984

1989

1994

1999

Year
Figure 1. The U.S. energy intensity (E/GDP) from 1949 to 2000 and the annual percentual growth (EIA 2001a).

The structural effect of the ICT on energy intensity
is based on the more rapid economic growth of theless energy-intensive information technology sector compared to the more energy-intensive traditional industry sectors. The non-structural improvements are based on the direct and indirect effects of the ICT on the society and economic system.
In a U.S. Environmental Protection Agency (EPA)
study (Boyd and Laitner 2000), the recent decreasein energy intensity is divided into changes in electricity intensity and non-electric intensity. During
the internet era the electricity intensity improved
mainly subject to efficiency gains, whereas in 1997
and 1998 the non-electric intensity dropped 6% annually, half of the change due to sectoral shifts ineconomic activity. However, the contribution of
ICT cannot be verified. It should be noted that in
the EPA study, the non-electric energy does not include transportation, and the effect of weather onenergy intensity is found insignificant.
In another study (Murtishaw and Schipper 2001)
the changes in energy intensity are examined by di192

viding U.S. energy consumption into several sectors including, e.g., transportation, residential andmanufacturing. The structural change, especiallythe strong growth of the ICT industries, is considered as the most significant reason for the decreasing energy intensity. Also, some energy-consuming activities, such as vehicle-kilometers andheated residential floor area, have not increased as
rapidly as GDP. The study finds improvements inenergy efficiency to be merely a minor factor andalso argues that the effect of ICT on efficiency cannot be verified from the statistics. However, thechanges in energy-consuming activities could bebased on the indirect effects of ICT on the economic system.
Even if the ICT affected the energy intensity
merely via sectoral shifts, the continuity of the recent trend can cause the estimates of future energy
consumption to be overrated. The U.S. energy officials have reacted to the decreasing energy intensity and have set an estimate of 1.5% (EIA 2001b)
as the annual drop in energy intensity through year
2020. However, ICT is not mentioned as the reason
for the re-estimation.

3 Electricity consumption of the ICT
and the internet
The sectoral shift due to the strong growth of the
ICT sector and the indirect effects of ICT on economy are possible, because use of computers and internet has spread like a wildfire in the modern society. From the energy consumption point of view,
this development leads to a massive information
technology infrastructure, which can become amajor consumer of electricity.
The year 2000 estimate of the number of PC units
in U.S. is over 130 million (ADL 2002). Moreover,the network infrastructure of the internet and theintranets consists of numerous electrical appliances such as routers, servers, etc. However, the recent trends of U.S. electricity end use depicted infigure 2 do not reveal any major changes of electricity consumption in residential and commercial
sectors in the 1990s, which is the era of computerization.
In 1999 a controversy over electricity consumptionof the information technology was caused by astudy (Mills 1999), which suggested that internet
alone uses 295 TWh of electricity, i.e., 8% of thetotal U.S. consumption. In the study only the com-puters and appliances connected to the internet
were included, and on-line time of 12 hours per
week was used. Moreover, by adding up theunnetworked computers and devices, the share of
ICT is calculated to be 13% of the total electricity
consumption.
However, in a memorandum (Koomey et al. 1999)
by Lawrence Berkeley Laboratory (LBNL) theseclaims were responded and corrected estimatespresented. The overestimations in (Mills 1999) arebased mainly on too high power consumption values used in calculations. The corrected estimate of
the electricity consumption associated with internet is stated by LBNL as 36 TWh.
LBNL has also presented in (Kawamoto et al.
2001) estimates for the electricity consumption of
the entire U.S. ICT infrastructure. Computers andother devices use 74 TWh, i.e., 2% of the total consumption, of which commercial share is 71% andresidential only 12%. The most recent study (ADL
2002) suggests computers and appliances in commercial sector using 97 TWh (3% of total use) inyear 2000. The main reasons for these reasonableconsumption values seem to be decreasing power
demands of electrical devices and the saturation ofcomputers in offices.

3 500
3 000

Residential

TWh

2 500

Commercial
Industrial

2 000

Total

1 500
1 000
500
0

1980

1985

1990

1995

2000

Year
Figure 2. The total electricity end use in U.S. from 1980 to 2000 and the electricity
used by residential, commercial and industrial sectors (EIA 2001a).

193

4 ICT and energy consumption
Information technology can affect the energy
economy also otherwise than via sectoral shift orelectricity use of the computers. The use of hightechnology in economic activities can improve energy efficiency, although usually cost-efficiency
being the major incentive. Thus, development ofthese methods depends on energy prices.
In the industrial sector ICT can be used, e.g., to optimize and control manufacturing processes, but it
is hard to point out the direct effect of ICT on improved energy efficiency. In the commercial sector
so called intelligent systems monitor the state ofbusiness buildings and control consequently lighting, heating and air-conditioning. These systems
can produce even 25% energy savings, but low energy prices may reduce even such investments(Romm 1999).
The magnitude of these direct effects on energy
consumption can be evaluated by doing technicalmeasurements and calculations, but ICT affects
energy consumption also indirectly. A society is achaotic and complex system with numerous indirect causal connections. When a new technology
changes human behavior in energy-consuming activities, cumulative effects can be surprising. The
prediction and analyzing of these indirect effects isdifficult, because complex cause-and-effect relationships of the society cannot be identified explicitly (Allenby 2000). Also, several rebound andsubstitution effects of ICT can cancel possible energy savings.
4.1 E-commerce
In e-commerce the vendor and the client agree thetransaction of a product or a service via internet.
Nowadays the contribution of e-commerce to thetotal trade is small, but the share is estimated to be
7% in 2004 (Romm 1999). Moreover, e-commerce
is mostly substituting regular trading, therefore indirect effects of e-commerce on energy use can besignificant.
If the client purchases the product on-line insteadof in a store, the vendor avoids heating, lighting
194

and air-conditioning of the building. Also, the transition from traditional trade to e-commerce affects
the energy-intensive construction industry due tothe decreasing demand of business premises. It isestimated in (Romm 1999) that predicted growthof e-commerce would lead to 1.5 billion square
feet of unused floor area in commercial buildings.
It is also calculated that ratio of energy required perbook between traditional book store and e-commerce is 16/1 (Romm 1999). It should be noted thatanalyzing the effects of ICT on buildings is quitedifficult due to the lag in statistics.
The utilization of e-commerce in business-to-business (B2B) trading has great potential to reduce inventories, and it is estimated that maintenance of
one billion square feet of warehouses can be
avoided due to e-commerce in 2007 (Romm 1999).
B2B e-commerce is based on information systems,
which are used by companies to place orders to
subcontractors on the basis of on-line orders bycustomers. Such an electronic cooperation between companies lowers inventory to sales ratio
and also energy consumption.
From the customer point of view, on-line shopping
substitutes for driving to the store. However, theproduct usually must be shipped to the customer
even via air freight which can cancel energy savings of e-commerce. Nevertheless, utilization of
ICT in optimizing the freight routes can makee-commerce more energy efficient than a traditional trip to a mall.
4.2 Telecommuting
Internet and communication systems enable
telecommuting, i.e., working at home or elsewhere
instead of in office. Telework is beneficial to theemployee, employer and environment; homebased work is more comfortable for the employee
and no time is wasted on commuting, the employer
can reduce office space, and energy consumed by
car trips to work and maintenance of offices candecrease.
A worker is estimated to consume 4500 kWh lesselectricity per year in home office than in traditional workplace (Romm 1999). Also, it is pre-dicted that with a recent growth rate of home-based
businesses, 2 billion square feet of offices can bemade redundant in year 2007 (Romm 1999).
Telecommuting has great potential to reduce energy consumed by transportation, but verifying
this effect from statistics is difficult due to thebriefness of the internet era. It should also be notedthat telecommuting might increase other car trips
and cause urban sprawling and therefore longer
driving distances.

5 ICT and Finnish energy economy
The Finnish energy intensity has fluctuated greatly
during the past decades, mainly due to the majorchanges in GDP as depicted in figure 3. The strong
recession and economic boom of the 1990s caused
energy intensity to drop only on average 0.8% annually. However, during the internet era the annual
decrease has been 3.3% and in 2000 the energy intensity dropped 6.6% due to the decrease in energyuse.

4.3 Dematerialization
Due to the applications of ICT, information no
more has to be stored, transferred or collected inphysical form. Therefore, the dematerialization of
information has great potential to reduce manufacturing of the materials used to store information,e.g., very energy-intensive paper production.
However, paperless office has not come true, but
consumption of office paper has increased regardless of dematerialization. Nevertheless, the manufacturing of newsprint has decreased due to on-line
news (BCG 1999).

The industrial energy intensity has also decreasedin the late 1990s, which is caused by unusual
growth of value added, whereas growth rate of energy consumption is similar to the 1980s. The effect of sectoral shift is to be revealed by examining
the electricity intensities of the four main electricity-consuming industrial sectors. The machineryand electrical products manufacture has experienced major decline in electricity intensity,whereas the remaining sectors only have minor decreases during the ICT era as seen in figures 4 and5. Also, the industrial electricity intensity has

1,8EnergyGDP
Energy intensity

1,6

1980 = 1

1,4

1,2

1

0,8

0,6

1975

1980

1985

1990

1995

2000

Year
Figure 3. The Finnish energy consumption, gross domestic product (GDP) and energy intensity from 1975 to 2000 proportional to year 1980.

195

2,5

Electric energy
Value added
Electricity intensity

1980 = 1

2

1,5

1

0,5

1975

1980

1985

1990

1995

2000

Year
Figure 4. The Finnish electricity consumption, value added and electricity intensityfrom 1975 to 2000 proportional to year 1980 not including the machinery and electrical products manufacture.

5
Electric energy
Value added

41980 = 1

Electricity intensity
3

2

1

0

1975

1980

1985

Year

1990

1995

2000

Figure5. The Finnish electricity consumption, value added and electricity intensity inthe machinery and electrical products manufacture form 1975 to 2000 proportional toyear 1980.

196

hardly a decreasing trend, if the machinery andelectrical products manufacture sector is excluded.
It seems that the high value added by the ICT-companies in the electrical products and manufacture
sector affects strongly the electricity intensity.
As was stated earlier, ICT and internet era have notcaused any considerable change in the U.S. electricity consumption trends. Finland is one of theleading countries subject to computers and internet
connections per capita. When analyzing the Finnish electricity consumption, electric heating
should be excluded from the statistics due to thefluctuation of weather conditions. However, theelectricity consumption statistics without electricheating do not show any rising trend in the ICT era.
In (Heiskanen et al. 2001) some of the indirect effects of ICT on energy use are studied. The energy
consumed by road transportation has increased in
the 1990s clearly less than in the 1980s, and the recent trend of passenger transportation is more orless level. However, reasons behind this development are related rather to saturation of the motor
vehicle stock than to e-commerce or telecommuting.
E-commerce is not as common in Finland as in theUSA, and usually products purchased on-line areshipped from abroad. In (Heiskanen et al. 2001)
energy effects of e-grocery are studied. It is estimated that in 2010 the share of on-line grocery is
5–10% and with 10% share 7% of the energy usedby production chain and customer traffic can besaved. However, the potential of energy savings
depends on the length of the delivery routes.

6 Future effects of ICT on Finnish
energy economy
Finland has not been very much of services society.
Finnish private services account only for 40% of
GDP; which is about 10% less than EU average.
However, Finland has been swiftly transforming
into an information society, which includes a large
amount of services. In future the service sector
shall account for at least 50–60% of GDP in Finland. Moreover, industrial sectors shall include
more and more services in the form of after sales,
monitoring and maintenance functions.
Increasing service orientation will increase the energy efficiency of Finnish society. This trend is themain contributor in energy efficiency in the future,
where ICT is the main driver for new business opportunities. With new business opportunities theFinnish economy growth can be maintained inhigh 2–4% level also in 2010–2030. Energy intensity might decrease annually by 2–3% in 2010–
2030 due to transformation into service society.
ICT effects on energy economy are somewhat controversial. On one hand dematerialization can decrease energy utilization e.g. in paper industry, andon the other hand ICT might increase energy utilization through rebound effects.

197

Publications and reports made under
the project

Heiskanen, E., Halme, M., Jalas, M., Kärnä, A., Lovio,
R. 2001. Dematerialization: The Potential of ICTand Services. Ministry of Environment, 2001.

Pursiheimo, E., Hirvonen, R. 2002. Information andcommunication technology (ICT) and energy economy. (In Finnish, with English abstract). TechnicalResearch Centre of Finland, Espoo. (to be published).

Kawamoto, K., Koomey, J., Nordman, B., Brown, R.,
Piette, M.A., Ting, M., Meier, A. 2001. Electricity
Used by Office Equipment and Network Equipment in the U.S.: Detailed Report and Appendices.
Lawrence Berkeley National Laboratory, February
2001.

References

Koomey, J., Kawamoto, K., Nordman, B., Piette, M.A.,
Brown, R. 1999. Initial Comments on ‘The Internet
Begins with Coal’. A Memo from Lawrence Berkeley National Laboratory to EPA’s Skip Laitner, December 1999.

ADL 2002. Energy Consumption by Office and Telecommunications Equipment in Commercial Buildings, Volume I: Energy Consumption Baseline. Final Report by Arthur D. Little Inc. to Office of
Building Technology State and Community Programs, January 2002.
Allenby, B. 2000. Information Technology Impacts on
the U.S. Energy Demand Profile. Conference Papers, E-Vision 2000, October 2000.
BCG 1999. Paper and the Electronic Media. Boston
Consulting Group, September 1999.
Boyd, G., Laitner, J. 2000. Recent Trends in the U.S. Energy Intensity: An Index Number Analysis. U.S.
EPA, January 2000.
EIA 2001a. Energy Information Administration’s 2002
Annual Energy Outlook. U.S. Department of Energy, Energy Information Administration, December 2001.
EIA 2001b. Energy Information Administration’s 2000
Annual Energy Review. U.S. Department of Energy, Energy Information Administration, August
2001.

198

Mills, M. 1999. The Internet Begins with Coal: A Preliminary Exploration of the Impact of the Internet
on Electricity Consumption. Greening Earth Society, May 1999.
Murtishaw, S., Schipper, L. 2001. Disaggregated Analysis of US Energy Consumption in the 1990s: Evidence of the Effects of the Internet and the Rapid
Economic Growth. Energy Policy, 29, 2001.
Romm, J., Rosenfeld, A., Herrmann, S. 1999. The
Internet Economy and Global Warming: A Scenario of the Impact of E-Commerce on Energy andthe Environment. The Center for Energy and Climate Solutions, The Global Environment and Technology Foundation, December 1999.

Reducing Carbon Dioxide Emissions of Transport in Finland
Liikenteen hiilidioksidipäästöjen vähentämismahdollisuudet Suomessa

Hanna Kalenoja, Jorma Mäntynen,
Harri Kallberg, Tuomas Jokipii,
Kari Korpela, Mika Kulmala
Tampere University of Technology,
Tampere, Finland
Tampereen teknillinen korkeakoulu, Tampere
Abstract
In Finland the goal of reducing carbon dioxide
emissions of transport has been set to reduce theemissions to 1990 level by the years 2000–2012.
Approximately 64% of the carbon dioxide emissions of transport are caused by passenger transport and 36% by goods transport. Almost two
thirds of the emissions are due to the long distanceregional traffic, which also includes the emissionsof water and air traffic. According to the emission
forecast defined in the national LIPASTO-database,the amount of carbon dioxide emissions will by theyear 2020 be approximately 9% greater than in
1990, if present development of transport demand,and of vehicle and fuel technology will continue.
Several measures to reduce carbon dioxide emissions have been analyzed in this study. In addition
to the effect on carbon dioxide emissions, the applicability and feasibility of the measures havebeen assessed. The emissions and mileage of passenger and goods transport have in this study been
divided into source areas, in order to be able to
make an inventory of the emissions by source, toassess the effects of the measures, and to allocate
the measures effectually.
The assessed measures have been mainly allocatedto the modes and source areas where the emissions
are greatest. The studied measures include different means of transport pricing, legislative measures, development of vehicle technology, promoting public transport, decreasing the traffic congestion, development of transport system, and changesof attitudes and life styles.

Among the most efficient measures to reduce carbon dioxide emissions would be increasing the fuelprice, decreasing the annual tax of diesel passenger
cars, promoting economical driving style, and adding bio-fuel components to conventional gasoline
and diesel fuels. Also promoting railway transport
and increasing the maximum total weight of articulated trucks to 70 or 80 tons would decrease carbon
dioxide emissions notably. The most efficient measure of studied public transport means was the development of light rail systems in urban areas.
Tiivistelmä
Suomessa liikenteen hiilidioksidipäästöjen vähimmäistavoitteena on pidetty päästöjen määrän palauttamista vuoden 1990 tasolle vuosiin 2008–2012 mennessä. Noin 64 % Suomen liikenteen hiilidioksidipäästöistä on peräisin henkilöliikenteestä ja noin 36 % tavaraliikenteestä. Lähes kaksi kolmasosaa henkilöliikenteen hiilidioksidipäästöistä
on peräisin pitkämatkaisesta eri seutukuntien välisestä liikenteestä, johon kuuluvat myös laiva- ja
lentoliikenteen päästöt. Liikenteen hiilidioksidipäästöjen perusennusteen mukaan hiilidioksidipäästöjen määrä on vuonna 2020 noin 9 % suurempi kuin vuonna 1990, jos nykyisenkaltainen kehitys liikenteen kysynnässä sekä ajoneuvo- ja polttoainetekniikassa jatkuu.
Tässä tutkimushankkeessa on selvitetty erilaisten
liikenteen hiilidioksidipäästöjä vähentävien keinojen vaikutusta liikenteen hiilidioksidipäästöihin
ja arvioitu toimenpiteiden soveltuvuutta hiilidioksidipäästöjen vähentämistavoitteiden kannalta.
Päästöjen inventointia, toimenpiteiden vaikutusten
arviointia ja toimenpiteiden kohdentamista varten
liikenne on tutkimuksessa jaettu liikennemuodoittain lähdealueisiin, jolloin on voitu melko yksityiskohtaisesti tutkia kunkin keinon vaikutusten laajuutta. Tutkitut toimenpiteet on kohdennettu pääosin niihin liikennemuotoihin ja niille lähdealueille,
joissa päästöt ovat suurimmat. Tutkimuksessa on
199

tarkasteltu taloudellisen ohjauksen, lainsäädännöllisten keinojen, ajoneuvotekniikan kehittymisen,joukkoliikenteen edistämisen, liikenteen sujuvuuden parantamisen, kuljetusjärjestelmien kehittymisen sekä asenteiden ja elämäntapojen muuttumisen
vaikutuksia liikenteen hiilidioksidipäästöihin.
Laskennallisesti tutkituista toimenpiteistä liikenteen hiilidioksidipäästöjä vähentäisivät eniten
polttoaineen hinnan korottaminen, moottoriajoneuvoveron eli ns. dieselveron alentaminen, taloudellisen ajotavan yleistyminen ja biokomponenttien lisääminen polttoaineisiin. Myös rautatiekuljetusten suosiminen ja ajoneuvoyhdistelmien suurimman sallitun kokonaismassan nostaminen vähentäisi hiilidioksidipäästöjä melko paljon.
Joukkoliikenteen keinoista tehokkain on kaupunkiseutujen raideliikenteen kehittäminen.

1 Introduction
Approximately 18% of the total carbon dioxide
emissions in Finland are caused by the transport
sector. EU has accepted to aim to reduce the greenhouse gas emissions by 8% compared to 1990 levelby the years 2008–2012. National goals for reducing the emissions have been set separately taking
into account the local possibilities to reduce emissions and increase energy efficiency. In Finland thepossibilities to reduce the amount of carbon dioxide emissions have been evaluated to be limited
due to the already high level of bio-energy use andcombined production of electricity and heat, andrelatively efficient energy use in industry, housing
and transport. Finnish national goal was in EU set
to restore the emissions to 1990 level by the years
2008–2012. (Kulmala and Kallberg 2002, VTT
2001)
According to Finnish national emissions databasefor transport (LIPASTO) the amount of carbon dioxide emissions will increase by 9% during theyears 1990–2020, if present development of transport demand and vehicle and fuel technology continues (VTT 2001). Figure 1 presents the relative
development in carbon dioxide emissions in 1990–
2001 and a forecast for 2002–2020. Several measures of reducing the carbon dioxide emissions
have been analyzed in this study. In addition to carbon dioxide emission effects, also the applicability
and feasibility of the measures have been assessed.

% change compared to 1990
120
100
80

road transport
railway transportwater transport
air transport
total

60
40
20
0
-20

1990

1995

2000

2005

2010

2015

2020

Figure 1. The development of carbon dioxide emissions of transport in 1990–2001
and a forecast for 2002–2020 compared to the base year 1990.

200

2 Methods
2.1 Emissions by mode andsource area
The transport demand and carbon dioxide emissions have been divided into modes of transport
and into geographical source areas in order to beable to inventory the emissions, to assess the effects of measures, and to allocate the measures according the source areas. The measures have been
mainly allocated to the modes and source areas thathave the greatest carbon dioxide emissions.
Figure 2 presents the carbon dioxide emissions divided into passenger and goods transport and into
geographical source areas in passenger transport.
Almost two thirds of the emissions are related toregional long distance traffic, including also waterand air traffic.
Most of the carbon dioxide emissions in passenger
transport are caused by passenger cars. Figure 3
shows the emissions divided into passenger transport modes. The relative share of passenger car

traffic will decrease during the forthcoming decades, although the mileage of passenger car traffic
has been estimated to increase. At the same timethe emissions of air traffic will grow significantly.
The emissions of passenger traffic have been evaluated to decrease by 6% during 1999–2020.
In the goods traffic sector approximately 60% of
the emissions originate from road transport. Almost 35% of the emissions are caused by cargovessels. The amount of carbon dioxide emissions
in goods transport has been forecasted to increaseby 11% during 1999–2020.
2.2 Measures to reduce the emissions
The studied measures to reduce carbon dioxide
emissions are connected to transport pricing, legislation, development of vehicle and motor technology, promoting public transport, decreasing thecongestion of traffic, developing the freight transport systems, and changes of the attitudes and life
styles. The study period is 1999–2020. The measures to reduce carbon dioxide emissions werecompiled in a comprehensive literature survey. Al-

passenger transport ofsmall municipalities
7%
goods transport
36%
long distancepassenger
transport
41%
passenger transport
in Helsinki region
6%
passenger transport inother urban regions
3%

passenger transport inother large urban regions
6%

Figure 2. Carbon dioxide emissions divided into goods and passenger transport and into geographical source area.

201

private cars
company cars
vans
taxis
local buses
long distance buses
charter buses
motor cycles
mopedsmotorsleighs
local trains
long distance trains
undergrounds
trams
passenger ships
aeroplanes

1999
2020

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

ton/year
Figure 3. Carbon dioxide emissions of passenger transport in 1999 and forecast for the year 2020.

together 37 measures have been presented, of
which 15 were chosen into further analysis. Table 1
presents the studied measures and the basic calculation assumptions. The measures are partly overlapping and their effects cannot therefore be added
up. For example increasing the fuel prices affects
driving style and transfers demand to fuel-efficient
vehicles, which have also been studied as separate
measures.

Most of the measures are allocated on road transport sector, because road transport has a dominantrole of carbon dioxide emissions also during theforthcoming decades. The development of vehicle
technology has been included in the pricing measures influencing consumer behaviour – transferring the demand towards more fuel-efficient vehicles.

Table 1. Studied measures to reduce carbon dioxide emissions.
MeasureDescription

Mechanism

increasing gasoline anddiesel fuel price for passenger cars

• fuel price increases by 25%• fuel price increases by 50%

Price increase reduces mileage andaffects driving style on the short run.
On the long run price increase affects
choices of vehicle and household
ocation.

passenger car purchasetax differentiation• purchase tax depends on the
carbon dioxide emissions of
the vehicle

Tax reform decreases the retail prices
of fuel-effective cars and increases theprice of much fuel consuming cars.

decrease of annual tax ofdiesel vehicles• annual tax of diesel driven passenger car is decreased

The share of diesel driven passenger
cars increases in the vehicle fleet.

introduction of biofuel
components• bio-ethanol is added to conventional gasoline (E10) and biodiesel(vegetable oil esters) to diesel fuelLife cycle emissions of carbon dioxide
decrease, because carbon dioxide
consumed during the cultivation of
biomass can be taken into account.

202

… Table 1. continues

MeasureDescription

Mechanism

reduction of public
transport fares• local bus fares decrease by 20%
and long-distance public transport
fares by 30%

Increases the willingness to use public
transport.

promoting employer paid
public transport tickets• taxation value of employer paid
public transport tickets isdecreased and ticket type isactively marketed to employers
and employees

Increases the willingness to use public
transport.

increasing public transport priorities in urban
areas• public transport is given priorities
at traffic signals and main streetsby separate bus lanes in largest
urban areas

Increases public transport service levelby reducing ride times, reduces fuelconsumption of bus traffic by decreasing number of stops due to traffic
signals and congestion.

development of urban
light rail systems• light rail system is developed at
metropolitan area and introduced
in other large urban areas

Increases public transport supply,
decreases public transport ride time,
reduces energy consumption of public
transport.

development of traffic
signal control systems• traffic signals are controlled aiming
to minimize the number of stops
instead of minimizing the amountof delays

Reduces fuel consumption by
decreasing the number of stops.

increasing the maximum
total weight of articulated
vehicles• the maximum total weight ofarticulated vehicles increases
from 60 tons to 70• the maximum total weight ofarticulated vehicles increases
from 60 tons to 80 tons

Decreases the total truck mileage.

increasing the load factorof trucks• load factor increases and empty
running decreases

Decreases the total truck mileage.

promoting rail freighttransport• part of goods transported by roadare shifted to be transported
by rail

Decreases the total truck mileage.

lowering speed limits• existing speed limits on main roads
are followed more accurately by
ncreasing speed control systems• winter speed limits are extended
to obtain round-the-year

Decreases fuel consumption per km.

promoting economical
driving style• all drivers follow economical drivingstyle• 20% of passenger car drivers and
60% of bus and truck drivers follow
economical driving style

Decreases fuel consumption per km.

203

3 Effects on carbon dioxide
emissions

3.1 Increasing the fuel prices ofpassenger cars by 25% or 50%

The effects of the studied measures on the carbon
dioxide emissions in 2020 are compared to the basic scenario presented in LIPASTO database. Basic scenario represents the present development,
which has been assumed to continue during thenext decades. It includes for example the predicted
improvement of fuel-efficiency of passenger cars
and the anticipated growth of transport demand.

Increasing the fuel price by 50% would decrease
the carbon dioxide emissions by 8–15% on thelong run. Increasing the price by 25% would decrease the emissions by 4–7%. The effects havebeen calculated on each source area by using priceelasticities. Fuel price elasticities have in the shortterm studies been observed to vary between –0.15
and –0.5 and in the long term studies between –0.3
and –0.9 (Swahn et al. 1994, Goodwin 1992). Increase in the fuel price affects travel behaviour inseveral ways: the reduced mileage is due to shorter
trips, choosing other modes than car, and increased
car pooling. Price also affects awareness of economical driving style and increases the demand for
fuel-efficient vehicles. In the long run fuel price affects household and choices of work site location.
However, effects of increasing fuel prices are socially unsustainable, and the effects are not fairly
distributed among different social groups and regions. Price increase affects also areas, where there
are not available any alternative more fuel-efficientmodes for passenger cars. Therefore the effects
should be considered primarily from the viewpointof social sustainability and equity of mobility.

The carbon dioxide emissions of transport are in
the studied cases 0.5%–15% smaller than in the basic scenario in 2020. The most efficient measures
to reduce carbon dioxide emissions are measuresconnected to fuel price and vehicle taxation. Also
promoting the economical driving is an efficientmethod even without economical incentives. Figure 4 shows the effects of studied measures on the
carbon dioxide emissions of the transport in 2020.

-8,0 (price elasticity -0,4)-15,0 (price elasticity -0,8)-8.4%-7,1 (elasticity -0,8)-3,7 (elasticity -0,4)

-6.9
-5.2
-3.2
-2.3
-2.3
-2.0

fuel price increase by 50 %decrease of the diesel vehicle annual tax
fuel price increase by 25 %promoting economical driving style (100 %)introduction of biofuel components
passenger car tax differentiation
promoting rail freight transport (max)promoting economical driving style (20-60%)

truck total weight 60 t -> 70 t
truck total weight 60 t -> 80 t
-1.8
promoting rail freight transport (1/2 max)
-0.9 dynamic traffic signal control systems-0.9 lowering speed limits on main roads-0.6 development of urban light rail systems-0.6 following speed limits more accurately-0.4 reduction of public transport fares-0.4 increasing load factor in road transport by 2
-0.4 employer paid public transport tickets-0.1 increasing public transport priorities-1.9% -15.0

-10.0

-5.0

0.0 %

Figure 4. The effects of studied measures on the carbon dioxide emissions of transport compared tothe base scenario in 2020.

2043.2 Decrease of the annual tax ofdiesel vehicles

3.4 Bio-fuel components of
conventional fuels

Reducing the annual tax of diesel driven passenger
cars would increase the share of diesel cars in thevehicle fleet significantly. If the consumers would
prefer the same vehicle size as previously, the carbon dioxide emissions would decrease by 4%, due
to the better fuel-efficiency of diesel technology. If
the demand would be guided to the most fuel-efficient quartile of the same vehicle size class, thecarbon dioxide emissions would be 8% smaller
than in the basic scenario. An increasing amount ofdiesel vehicles would increase the amount of nitrogen oxide and particulate matter emissions, if thespecific emissions of diesel vehicles would not decrease more than in the basic forecast during thenext decades. Therefore, large-scale introductionof diesel driven passenger cars would have a negative impact on urban air quality.

Adding small amounts of biofuel components toconventional gasoline and diesel fuel does not demand modifications to conventional motor or fuelsystems. Biocomponents could thus be introduced
without wide-ranging alterations of existing vehicle fleet. Ethanol can be added to gasoline up to
10% concentration without motor modifications(Ikonen et al. 2000). Biodiesel could be added todiesel fuel to a greater extent without motor or fuelsystem modifications, but due to the high manufacture costs and poor availability it is not very likelythat the concentration would be high. The assumption in the calculations was, that the concentrationof biocomponents would be 10% in both gasoline
and diesel fuel. The amount of carbon dioxide
emissions would decrease by 5% with these assumptions. Biocomponents are relatively expensive, and the increased costs would presumably be
paid partly by consumers and partly by state. Thismeasure would be easily acceptable to individuals,
if the price increase is moderate, since it does not
require any behavioural changes. It can also be implemented together with other measures withoutloosing its efficiency.

3.3 Passenger car purchase tax
differentiation
Consumer preferences concerning new passenger
cars can be affected by modifying the vehicle purchase tax in order to increase the price of lessfuel-efficient vehicles and decrease the price of
fuel-efficient vehicles. The tax is at the present determined on the basis of the import price. A taxation system that would take into account the motor
power, weight, engine size or fuel consumption,
would affect the consumer preferences more efficiently than the present taxation structure. In thismeasure the purchase tax would be adjusted moderately to guide the demand to the most fuel-efficient quartile of the same vehicle size class as inpresent taxation system. Thus, it would not affectthe vehicle fleet size very much, but would increase the demand of fuel-efficient vehicle types.
The amount of carbon dioxide emissions wouldwith this measure be 3% smaller than in the basic
scenario. Differentiation of purchase tax is a feasible measure, because it would not affect household
transport expenses unevenly and would not necessarily change the amount of collected taxes.

3.5 Promoting economical driving style
Promoting economical driving style would decrease the carbon dioxide emissions by 3–7% compared to the basic scenario. In the more efficientscenario almost all drivers have adopted the economical driving style, which would require all
drivers to be educated to economical driving andintroduction of technical device guiding thedriver’s driving style. In the more moderate scenario 20% of passenger car drivers and 60% oftruck and bus drivers have adopted the economical
driving style. Willingness to drive economicallyusually increases, if fuel price is increased. Also
positive incentives to promote economical driving
should be studied.

205

3.6 Improving public transport service
level
Measures improving public transport service levelor reducing public transport fares have relatively
small effect on the total amount of emissions. The
amount of carbon dioxide emissions is less than
1% smaller than in basic scenario in all the studied
public transport measures. Locally their effects
can be significant – for example employer paid
public transport ticket system would decrease thecarbon dioxide emissions by 2.5–3.5% in large urban regions, although the effect on national level
would be less than 0.5%. The measures of promoting public transport have many other positive impacts, for example impacts on modal split, exhaustgases and urban air quality. The most efficient public transport measure for reducing carbon dioxide
emissions would be development of light rail systems in the large urban areas, requiring relatively
large investments.

3.8 Measures of goods transport
The most efficient measures of freight transport arepromoting the economical driving style and increasing the maximum total weight of articulated
trucks to 70 or 80 tons from the present level of 60
tons. Especially the raw wood transports would
benefit from the increased maximum weight. A
70-ton maximum weight is more fuel-efficient option than 80 tons, which would require an increasein the number of axles in the articulated trucks(Koskinen and Sauna-aho 2001). The increase of
the maximum weight to 70 tons would decrease theamount of carbon dioxide emissions of transport
by 2% compared to the basic scenario.
Also promoting of rail freight transport is a relatively efficient measure to reduce carbon dioxide
emissions, but would require relatively large investments on rail infrastructure. Modal shift of 8%
of truck ton kilometres to railway would decrease
the carbon dioxide emissions by approximately
2% compared to basic scenario.

3.7 Lowering the speed limits
The average speed influences the energy consumption also on main roads, which in Finland usually
have a speed limit for 80 or 100 km/h. In winter anotable amount of roads have a winter speed limit
for 80 km/h due to traffic safety reasons. Optimal
speed for energy consumption would on the mainroad driving conditions be approximately 70 km/h
(Rouwendahl 1996). Most of the passenger car
drivers are speeding at the main roads, the averageoverspeed on main roads is 8–10 km/h (Kangas
2000). The studied measures concerning speed
limits are more accurate follow-up of the speed
limits and extension of the winter speed limit of 80
km/h to all-year limitation. Following up the present speed limit more accurately would reduce carbon dioxide emissions by 0.6 %, and both more accurate follow-up and extension of winter speed
limits by 0.9 %. More accurate follow-up of speed
limits would require more automatic and manual
speed control systems. Also overspeed prevention
devices should be introduced to be able to reduce
speeds efficiently. Speed reduction measures canalso be supported from traffic safety viewpoint.
However, they are relatively difficult to be accepted by car users.
206

4 Conclusions
The feasibility and applicability of measures depends on the priorities and weighing of the selection criteria. For the public sector the most important criteria could be cost efficiency and suitability
to transport policy. Many measures have both direct and indirect costs that can be distributed unevenly among different sectors of society. Most
feasible measures to reduce emissions are acceptable and cost-efficient for individuals, business lifeand public sector.
As an example of different selection criteria, Table
2 presents three different measure packages, whichhave been chosen on the basis of cost efficiency for
public sector, consumer preferences and air quality
improvement in urban areas. The selection criteria
rank the measures to completely different feasibility groups. Promoting economical driving, increasing the road transport load factor and promoting the employer paid public transport tickets areexamples of measures that are relatively easily acceptable from the criteria of cost-efficiency, consumer welfare and air quality improvement. On thecontrary, reducing the annual vehicle tax of diesel
driven passenger cars would not be feasible fromthe viewpoint of cost efficiency and air quality.
Also the increase of fuel prices would have relatively complicated economical consequences affecting several sectors of society.

Table 2. Measure packages chosen with criteria of cost-efficiency, consumer welfare and urban air
quality improvement.
Cost-efficient measures
to public sector

Measures that do noteffect consumer welfare
significantly

Measures improving
the urban air quality

Description

Minimizing the costs ofpublic sector.

Increasing or maintaining
the possibilities of mobility,
decreasing or maintaining
the present transport costs.

Urban air quality goals areemphasized.

Most feasible
measures• extension of winterspeed limits• speed limits are followed
more accurately• increasing the loadfactor of trucks• promoting employer
paid public transport
tickets• increasing the maximum
total weight of articulated trucks• development of traffic
signal control systems• reduction of public
transport fares• promoting employer
paid public transport
tickets• promoting economical
driving style• decrease of annual vehicle tax of diesel driven
passenger cars
• passenger car purchasetax differentiation• development of urban
light rail systems• increasing public transport priorities in urban
areas• promoting rail freighttransport• promoting economical
driving style• development of urban
light rail systems• promoting employer
paid public transport
tickets• development of traffic
signal control systems• increasing public transport priorities in urban
areas• reduction of public
transport fares207

… Table 2. continues

Cost-efficient measures
to public sector

Measures that do noteffect consumer welfare
significantly

Measures improving
the urban air quality

Relatively feasible
measures• increase of fuel price• promoting economical
driving style• increasing the maximum
total weight of articulated trucks• passenger car purchasetax differentiation• introduction of biofuel
components• increase of fuel priceNot acceptablemeasures• development of urban
light rail systems• promoting rail freighttransport• decrease of annual vehicle tax of diesel driven
passenger cars

• increase of fuel price• extension of winterspeed limits• speed limits are followed more accurately• decrease of annual vehicle tax of diesel driven
passenger cars

Publications and reports made under
the project
Kalenoja, H., Mäntynen, J., Kallberg, H., Jokipii, T.,
Korpela, K., Kulmala, M. 2002. Liikenteen hiilidioksidipäästöjen vähentämismahdollisuudet Suomessa. [Reducing carbon dioxide emissions oftransport in Finland. (In Finnish, with English abstract)]. TTKK, Liikenne- ja kuljetustekniikan tutkimuksia 48. Tampere. 105 p. ISBN 952-15-0892-2.

References
Goodwin, P.B. 1992. A Review of New Demand Elasticities with Special Reference to Short and Long Run
Effects of Price Changes. Journal of Transport Economics and Policy. May 1992. pp.155-169.
Ikonen, M., Nylund, N., Aakko, P., Laurikko, J., Eklund,T., Mäkelä, S. 2000. Katsaus ajoneuvoliikenteen
polttoainevaihtoehtoihin. (In Finnish). VTT Energian raportteja 18/2000. Espoo.

208

Kangas, J. 2000. Tielaitos, liikenne- ja tiestötiedot. (InFinnish). Muistio 19.5.2000.
Koskinen, O., Sauna-aho, J. 2001. Features and effetcs
of platoon driving based on vehicle motion simulation. The 8th World Congress on Intelligent Transport Systems. Paper ITS00638. Draft version,
26.6.2001.
Kulmala, M., Kallberg, H. 2002. Liikenteen aiheuttamien hiilidioksidipäästöjen vähentäminen taloudellisen ohjauksen keinoin. (In Finnish). Raporttiluonnos 10.6.2002. Tampereen teknillinen korkeakoulu, liikenne- ja kuljetustekniikan laitos.
Rouwendal, J. 1996. An economic analysis of fuel use
per kilometre by private cars. Journal of Transport
Economics and Policy. January 1996. p. 3 – 14.
Swahn, H., Björketun, U., Eriksson, J. 1994. Transportsektorns CO2-utsläpp. Prognoser och styrmöjligheter via CO2-avgifter. Väg- och transportforskningsinstitutet. VTI rapport nr 395. Stockholm.
VTT 2001. LIPASTO-laskentajärjestelmä.
http://www.vtt.fi/

The Impact of Climate Change on Energy Management
Ilmastonmuutoksen vaikutus energiahuoltoon

Bengt Tammelin*, John Forsius**, Kirsti Jylhä*
Pekka Järvinen**, Jarkko Koskela***, Heikki
Tuomenvirta*, Merja A. Turunen***, Bertel
Vehviläinen***, Ari Venäläinen** Finnish Meteorological Institute,
Helsinki, Finland
Ilmatieteen laitos, Helsinki** Fortum Engineering Oyj, Vantaa, Finland*** Finnish Environment Institute,
Helsinki, Finland
Suomen ympäristökeskus, Helsinki
Abstract
In this study the effect of climate change in Finlandfrom 1961–1990 to 2021–2050 upon heating
power demand of buildings, hydropower production, climatological potential of peat production,
bioenergy, and wind energy was examined.
Changes in monthly mean air temperature, precipitation and wind speed over the period 2021–2050,
predicted by the global climate models, were used
as input for hydrological models, and for heating
power demand, wind power and peat harvesting
calculations.
The climate projections were primarily taken from
Hadley Centre’s global climate model, HadCM3,
simulations. The emission scenarios A2 and B2 of
the Special Report on Emission Scenarios wereused. The estimates of biomass changes werebased on earlier studies.
The heating power demand will decrease by some
10% on average from the period 1961–1990 to
2021–2050. Hydropower production will increaseby 7–11%, the climatological potential of peat pro-duction by 17–24%, the climatological potential of
biomass (mainly wood) by 10–15% and the climatological potential of wind power by 2–10%. These
results must be considered very preliminary.
Tiivistelmä
Tutkimuksen tavoitteena oli selvittää ennakoidun
ilmastonmuutoksen mahdollisia vaikutuksia rakennusten lämmitysenergiantarpeeseen, polttoturpeen korjuuedellytyksiin, bioenergiaan ja vesivoimaan sekä tuulienergian keskimääräiseen saatavuuteen Suomessa vuosina 2021–2050 jakson
1961–1990 keskimääräisiin ilmastollisiin oloihinverrattuna.
Tutkimuksessa käytettiin pääasiassa Hallitustenvälisen ilmastopaneelin uusimpia kasvihuonekaasujen ja aerosolien päästöskenaarioita A2 ja B2, janiiden pohjalta englantilaisella Hadley-keskuksen
ilmastomallilla HadCM3 tuotettuja projektioita ilmaston-muutoksesta (lämpötila, sadanta ja tuulen
nopeus). Biomassan muutosarviot perustuivat
aiempiin tutkimuksiin.
Tarkasteltu ilmastonmuutos lisää käytetystä skenaariosta riippuen jakson 2021–2050 keski-määräistä: bioenergian tuotantopotentiaalia eli lähinnä
puupolttoaineen käyttömahdollisuuksia 10–15 %,polttoturpeen ilmastollista tuotantopotentiaalia
17–24 %, tuulivoiman ilmastopotentiaalia 2–10 %ja vesivoimatuotantoa 7–11 %, sekä vähentää rakennusten lämmitysenergian tarvetta noin 10 %jakson 1961–1990 keskimääräisoloihin verrattuna. Tutkimuksen tuloksia on pidettävä lähinnä
suuntaa antavina.

209

1 Introduction

2 Climate change

Our climate affects strongly the heating demand ofbuildings as well as the potential of power production, especially on power production based on renewable energy sources. Up to now quite few studies on the influence of climate change on power
production in Finland are available.

The span between the present and the 2030s is relatively short in respect to climate change. Within
this time period the different modelled scenarios
give projections where e.g. the rates of global
warming are quite close to each other (Figure 1). A
limited number of global climate model projections have been run for the IPCC4 SRES5 emission
scenarios. Nearly all of them are for the illustrative
A2 and B2 SRES emission scenarios that are not
the most extreme ones but still cover a fairly large
range of the possible emissions.

The aim of the ILMAVA project (April to August
2002) was to produce basic information on the climate change effect upon the energy sector in Finland, from the period 1961–1990 to the period
2021–2050, by using newest information andmodel results on the climate change in northern
Europe. The modelled changes are mainly due toestimated man-made changes in the compositionof the atmosphere.
The project was implemented in co-operation with
the Finnish Meteorological Institute and the Finnish Environment Institute as partners, and Fortum
Oyj as a sub-contractor as part of the Climtech
programme. The project was partially funded byTekes1 and Finergy2.

The climate change was studied by data taken fromthe different simulations:a. Temperature, precipitation and wind predictions used in studies on power production were
produced by the HadCM3 global climate
model of the Hadley Centre in UK, using the
SRES emission scenarios A2 and B2.
b. ECHAM4-GSD and HadCM3-AA simulations were used to study the changes in the degree-day statistics. Heating degree-days correlate very well with the heating power demand of buildings

Objectives

The main objective was to study the effect of climate change on annual heating power demand andon energy production potential of hydropower,
peat, biomass and wind power by the 2030s.
Methodology

Changes in monthly mean air temperature, precipitation and wind speed over the period 2021–2050,
predicted by the global climate models, were used
as input for hydrological models, and for heating
degree-day, peat harvesting and wind power calculations. For studies of biomass changes, the resultsfrom the earlier SILMU3 programme were used.

1
2
3
4
5
6

210

As e.g. wind distribution strongly depends on thespatial resolution of the model, data from thehigher resolution SMHI6 regional climate model
was also exploited.
The HadCM3 A2 and B2 simulations for this timespan do not represent extreme projections as seenin Figure 2. Differences between the HadCM3 projections for seasonal change in precipitation probably depend more on natural variation of climate
than the differences between the A2 and B2 emission scenarios.

Tekes = The Finnish National Technology Agency; www.tekes.fi
Finergy = Finnish Energy Industries Federation; www.energia.fi/finergy/
SILMU = The Finnish research programme on climate change, 1990-1995
IPCC = Intergovernmental Panel on Climate Change
SRES = Special Report on Emission Scenarios
SMHI = Swedish Meteorological and Hydrological InstituteFigure 1. Variations of the Earth’s surface temperature: years 1000 to 2100. From year 1000 to year
1860 variations in average surface temperature of the Northern Hemisphere are shown reconstructedfrom proxy data (tree rings, corals, ice cores and historical records. The line shows the 50-year average, the shaded region the 95% confidence limit in the annual data. From years 1860 to 2000 variations
in observations of globally and annually averaged surface temperature from the instrumental record areshown. The line shows the decadal average. From year 2000 to 2100, projections of globally averaged
surface temperatures are shown for the six illustrative SRES scenarios and IS92a using a model withaverage climate sensitivity. The shaded region marked “several models all SRES envelope” shows therange of results from the full range of the 35 SRES scenarios, in addition to those from a range of models with different climate sensitivities.

211

Figure 2. The seasonal change in temperature (horizontal axis) and precipitation (vertical axis) from theperiod 1961–1990 to 2021–2050 as predicted by global models and two regional models (RCA1-H and
RCA-E). Coloured marks are for SRES-scenarios, and the black marks for results from earlier projections and SILMU scenarios. The natural variation of 30-year averages (±1 or ±2 standard deviation) is
indicated by ellipses.

The parameters used as input for other models in
the ILMAVA project were the change in surface airtemperature, precipitation and wind speed at
10-meter height. In temperature the change is very
uniform over Finland, A2 giving slightly bigger
changes than B2. In precipitation and wind speed
the changes are more unevenly distributed. Thereis larger uncertainty attached to the precipitation
and wind projections than to the temperature projections.

212

As seen in Figure 3, the average annual increase intemperature over land in Finland is about 2°C, inannual precipitation 7–9 %, and for wind speed at
10 m height about 1%. However, for wind power
production the potential sites are not at inland but
offshore and in arctic fells. The sea areas are quite
small in respect to the grid size of the global models so that the Baltic Sea conditions are not too well
represented in the global models.

Figure 3. The climate change in the 2030s in Finland for air temperature (left, °C), precipitation (middle,%) and wind speed at 10 m (right, %) compared to the normal period 1961–1990 predicted by
HadCM3 model using the scenarios A2 (top) and B2 (bottom).

The biggest uncertainties in predicting the climate
in Finland in the 2030s are related to the limited
ability of the global models to describe the regional
distribution of the climate change, and the large
natural variation of temperature, precipitation and
wind.

213

3 Main results

3.3 Biomass

3.1 Heating power demand ofbuildings

In Finland, wood is an important source of energy,
and today about 20% of primary energy production
and about 10% of electricity is obtained usingwood fuel. According to the scenarios used by the
SILMU project, the annual growth of forests willin Finland increase about 20% and logging about
15%. According to the bioenergy program, the potential to increase use of wood fuel until the year2035 is 11–55 terawatthours. The anticipated increase of biomass will increase this potential by theamount of increase of logging potential, i.e., about
15%.

The projected wintertime warming lowers theheating power demand of buildings. However, thetotal heating power demand on buildings depends
not only on the air temperature but also on manyother parameters. The improved isolation andbuilding techniques will probably decrease thepower demand of buildings as well. The migrationof the Finnish population from northern and eastern parts to southern Finland would decrease thetotal heating power demand, as southern Finland iswarmer than the rest of the country.

3.4 Hydropower
On the other hand, the growth of population, decrease in the size of average households and ageingof the population will probably increase the heating power demand of average households. Also increased all-year-around usage of weekend houses,
together with increased cooling of offices and public buildings, may increase the total power demandof buildings.
It is estimated that the power demand of buildingsin Finland by the 2030s will decrease by some10%.
3.2 Peat
According to climate projections used in ILMAVA,
the precipitation sum during the peat producing
season from May to August will increase on average by 11–20 mm. Simultaneously mean temperature will rise by about 1,7 °C. This will increase theclimatological potential of milled peat production
by 17–24%. The amount of energy produced using
peat is at the moment roughly 18 terawatthours,
and energy production is estimated to increase up
to 26 terawatthours until 2010. Peat production isvery dependent on weather, and if climatologicalpeat production preconditions will improve as a result of climate change, it will also improve the reliability of production.

214

To estimate the changes in hydropower production, hydrological modelling was done for three
representative watersheds: Vuoksi, Oulujoki and
Kemijoki. The change in hydropower production
in other watersheds was estimated using thesethree watersheds as references.
The aim was to assess how much climate change
will affect the production of hydroelectric power inFinland. The effects of climate change on water resources have been evaluated using conceptual watershed models. Two scenarios of HadCM3 climate model are used as climate change approximations. The evaluated terms are runoff, evapo-transpiration, lake evaporation, water equivalent ofsnow, soil moisture, groundwater storage, discharge and water level. The precipitation and temperature changes will affect the annual water balance, especially on the seasonal distribution of water balance terms. Water equivalent of snow will
decrease about 50 percent and the duration of thesnow cover period will be shortened by twomonths due to warming. In general, summers will
be dryer due to shorter snow cover season, increased evapo-transpiration from soil and increased evaporation from lakes, whereas winterswill be wetter due to frequent snow melt periods
and increased precipitation. The annual runoff will
increase 0–8% depending on the location of thewatershed and on the climate change scenario
used. The runoff increase is largest in northern Finland (Table 1) and in winter (Table 2).

Table 1. Estimated change in hydropower production in different watersheds.
Water system

1061–1990
GWh/a

HadCM3 A2

HadCM3 B2Change %GWh/aChange %GWh/aOulujoki

2600

+2,8

2673

+7,4

2792

Kemijoki

4440

+15,2

5117

+17,2

5202

Vuoksi

2100

–0,1

2098

+7,6

2260

Iijoki

850

+10,3

938

+11,8

950

Kokemäenjoki

1030

–0,1

1029

+7,6

1108

Kymijoki

1300

–0,1

1299

+7,6

1399

Others

400

+3,2

413

+8,8

435

Total

12 720+6,6

13 565+11,2

14 148

Table 2. Seasonal variation of average hydropower potential (MW) in Finland.
1961–90t

HadCM3 A2

HadCM3 B2December - February

1434

1816

+26%

1795

+25%

March - May

1432

1592

+7%

1673

+17%

June - August

1516

1332

–12%

1480

–2%

September -November

1428

1452

+2%

1518

+6%

Mean

1452

1548

+7%

1616

+11%

According to the HadCM3 A2 and B2 projections,the average power produced by hydropower plants
will increase by 7% and 11%, respectively. Thechange in power production figures differs significantly between the water systems, as seen in Table
1. These estimates include e.g. the uncertainties
caused by the limited capability of global models
to describe regional precipitation and the quite
simple calculation of evaporation in the hydrological models.
3.5 Wind power
The rate of wind power production depends mainlyon the size and the characteristics of the wind turbine, on air temperature and wind speed at the hubheight, and on rime accretion on the blades andcontrol sensors. In Finland, high production ofwind power occurs during the winter months,
while in summer the average wind speed is significantly smaller.
The potential locations for wind power production
are offshore, in the archipelago, on the coast and at
the fells.
The change in wind power potential, taking into
account only the changes in regional average windspeeds at the height of 80 m, was studied. The
Weibull distribution of wind speed was used to calculate the power output from a typical wind turbine. As the cut-off speed for the turbine was taken
to be 25 m/s, the calculations do not take into account the changes in the extreme wind speeds.
According to the HadCM3 A2 projection, the wind
power potential would increase at representative215

regions by 4–10%, giving an average number ofabout +7%. Using the B2 scenario, growth inpower production only occurs in the area of Åland
archipelago (+5%) and south-eastern part of Finland close to the Gulf of Finland (+8%).
As the wind speed close to earth surface highly depends on the roughness of the surface, wind speed
is a very local parameter. According to results fromthe SMHI regional climate model, the largest
changes in wind speed will occur at the sea areas inwinter, providing an increase in offshore wind potential by some 20–30% in winter and 10–15% annually.

4 Concluding remarks
The used scenarios and projections indicate significant changes in the climate during the forthcoming 50 years. These climatic changes will very
likely affect renewable energy resources and heating energy demand in Finland.
In general, the two scenarios A2 and B2 produce
somewhat different projections for the future: A2
gives larger changes in temperature (bigger warming, more decrease in heating power demand) andin surface wind speed (increased wind power) thanB2. To the contrary, B2 increases precipitation andhydropower production more than A2.
The given results include several uncertainties,
which are partly taken into account as shown in
Figure 4.

3530

Influence of climate change (%)

25
20
15
10
5
0
-5
-10
-15
-20
Biomass

Climatological potentialof peat production

Potential ofwind power

Hydropower

Heating energy
demandFigure 4. The influence of projected climate change on energy production potential and heating energy
demand. Arrows depict relative changes between 1961–1990 and 2021–2050 based on scenarios
HadCM3 A2 and B2. The change in biomass is based on SILMU scenarios. Also in the case of heatingenergy demand the calculations are based on different model simulations and scenarios and thus arrows depicting A2 and B2 scenarios have been excluded. In the case of heating energy demand thebar I represents the situation where only the influence of climate change has been taken into account.
The bar II represents the situation where beside climate change also the influence e.g. of the migrationof population, development of housing of other factors have been estimated.
216

The effect of the climate change on the energy sector and electric power production depends on therate of the change of temperature, precipitation,
humidity, evaporation and wind, but also on the
structure of power production. As the span fromthe present to the 2030s is after all quite short, it isassumed that the structure of energy supply in the2030s will be much like the present one. Thus inthis project only the effect of climate change upon
weather parameters were taken into account.

Publications and reports made under
the project
Tammelin, B., Forsius, J., Jylhä, K., Järvinen, P., Koskela, J., Tuomenvirta, H., Turunen, M., Vehviläinen,
B., Venäläinen, A. Ilmastonmuutoksen vaikutus
energiahuoltoon. [The Impact of Climate Change
on Energy Management. (In Finnish).]. Finnish
Meteorological Institute, 2002. (to be published).

These results are very preliminary. It is obviousthat more reliable, detailed data on regional variation of weather parameters produced by improved
regional models are required for more advanced
projections on the effect of climate change on energy resources in Finland. As we will live in an
open electricity market, it is necessary to study thechanges in an area covering at least the whole region of the Nordic countries and perhaps even thearea around of the Baltic Sea.

217

Local Means of Livelihood in Mitigating Climate Change– The Case of Southeast Finland
Paikalliset elinkeinot ilmastonmuutoksen torjunnassa Kaakkois-Suomessa

Sami Lappalainen, Mika Horttanainen,
Esa Marttila
Lappeenranta University of Technology,
Lappeenranta, Finland
Lappeenrannan teknillinen korkeakoulu,
Lappeenranta
Abstract
A reduction of greenhouse gases (GHG) will benecessary in order to control the climatic change in
the near future. This is a fact that should be understood by companies and corporations as a possibility, which could lead to measures that would allow
the development of regional business and industry.
The objective of this research was to find the mosteffective methods and operational models for developing the industry in southeastern Finland in order to reduce greenhouse gas emissions. In particular, this report discusses the opportunities, related
to municipal activities, to influence attainment of
the objectives. This work was implemented as apart of the climate protection campaign,
co-ordinated by the Association of Finnish Local
and Regional Authorities, and is a preliminary research carried out on the basis of literature as wellas, in the case of the examples cited, information
obtained from interviews of local companies.
In order to develop business that will reduce GHG
emissions, this report studied methods for improving the competitiveness of existing companies andfor developing new business. Company networking was seen as being a crucial way in achieving
these goals and improving the opportunities for theregion’s many small companies to deliver large
projects and comprehensive orders. This reportpresents an operational model for company networking, which is suited for municipal activity. As
for various kinds of waste and by-products, this re-218

port puts forward a business model for the controlof the material flows in the form of a so-called material trading market.
Tiivistelmä
Kasvihuonekaasujen vähentäminen on lähitulevaisuudessa välttämätöntä ilmastonmuutoksen
torjunnassa. Tämä tosiasia tulisi nähdä niin yrityksissä kuin kunnissakin mahdollisuutena, johon liittyvillä toimenpiteillä voitaisiin kehittää myös alueen liiketoimintaa ja elinkeinoelämää.
Tutkimuksen tavoitteena oli löytää Kaakkois-Suomen kannalta tehokkaimmat keinot ja toimintamallit alueen liiketoiminnan edistämiseksi kasvihuonekaasupäästöjä hillitsevään suuntaan. Työssä
on käsitelty erityisesti kunnan toimintaan liittyviä
vaikutusmahdollisuuksia tavoitteiden saavuttamisessa. Tutkimus on toteutettu osana Suomen Kuntaliitto Ry:n koordinoimaa kuntien ilmastonsuojelukampanjaa. Tutkimus on luonteeltaan kirjallisuuden pohjalta tehty esiselvitys. Työhön sisältyvien esimerkkitapausten osalta on tietoa hankittu
myös haastattelemalla alueen yrityksiä.
Kasvihuonekaasuja vähentävän liiketoiminnan
edistämiseksi on selvitetty keinoja sekä olemassa
olevien yritysten kilpailukyvyn parantamiseen että
uuden liiketoiminnan kehittämiseen liittyen. Näiden tavoitteiden saavuttamisessa nähtiin yritysten
verkostoitumisen olevan eräs tärkeä keino, jolla
voidaan parantaa muun muassa alueen lukuisten
pienten yritysten mahdollisuuksia suurten kokonaistoimitusten tuottamisessa. Raportissa on esitetty kunnan toimintaan soveltuva toimintamalli
yritysten verkostoimiseksi sekä jätteiden ja sivutuotteiden osalta on esitetty materiaalivirtojen hyötykäyttöön ohjaamiseen erikoistunutta liiketoimintaa niin sanotun materiaalipörssin muodossa.

1 Introduction
In December1997, the Kyoto Conference of theparties to the UNFCCC agreed to the Kyoto Protocol that set quantitative limits to the emissions ofgreenhouse gases for a number of industrializedcountries. Finland is required to maintain approximately the 1990 emissions level during the first
Commitment Period form 2008 to 2012.
The Finnish Government adopted the National Climate Strategy on March 15, 2001, and the Strategy
was supported by the Parliament in its statement onJune 19, 2001. The Strategy contains only domestic actions of GHG reduction to attain the objectiveof the Kyoto Protocol. Concerning this research in
the National Climate Strategy it is mentioned that
local communities have a significant role in emitting GHG, and also in affecting other emissions.
This also means responsibility to implement actions
for reducing emissions. Local communities havetheir opportunities to operate in regional areas. In
order to reduce greenhouse gases, possibilities haveto be observed locally. Every region has its special
characteristics, which form typical potentials andlimitations of a region to control emissions.
Many actions can easily be changed using present
technologies to attain equal or even better resultswith minimum emissions. Anyhow, that requires
being aware of the present situation and also of
those possibilities that are available. When re-quired information about resources and methods isavailable, strategic decisions and operation models
can be used to achieve a new way of operation.
The principal aim of this research is not maximal reduction of GHG emission but rather finding commercial opportunities to increase local interests. Other
objectives of the research were to find the most effective operation models for Southeast Finland in orderto improve the local economy, to raise employment
and at the same time to control GHG emissions.

2 The essential content of study
In order to develop business that will reduce GHG
emissions, this study proposes methods for improving the competitiveness of existing companies
and for developing new business.
2.1 The possibilities and potentials to
reduce greenhouse gas emissions
in Southeast Finland
The beginning of this research examines the special characteristics and potentials of Southeast Finland. The reductions in greenhouse gas emissions
and the effects on employment, which could beachieved by tapping the potential for the increasein the use of renewable energy sources in Southeast
Finland, are estimated (see Table 1). On the basis

Table 1. The potential of additional renewable energy production and the corresponding greenhousegas emission reduction and employment effect in Southeast Finland.
Potential[MW][TWh/a]CO2 eq.
reduction
potential[tco2/a]

Employment
effect underconstruction[person/a]

Employment
effect asworking time[person/a]Wind power

13 MW,
0.0325 TWh/a

9750–22750

52

3.25–6.5

Small scale water power

12 MW,
0.048 TWh/a

11900–40800

1800Photovoltaic

0.060 TWh/a

10500–40000

100–200

0

Solar thermal energy

0.1 TWh/a

30000–45500

200–300

0

Heat pump

0.48 TWh/a

88 000–0219

created by these potentials, the possibilities for developing business that would be suited to the region’s industrial structure are analyzed.
2.2 Means to improve competitivenessand to develop new business
One possibility for the local communities is to develop an operational model (see Figure 1), the purpose of which is to advance business that will reduce greenhouse gas emissions in the companiesof the region. A trade ombudsman or a communal
business developing company of local communities could help to establish business relations between progressive companies working with the environmental sector and other companies like subcontractors, public authorities or financiers. With
this operational model, local communities can advance for instance networking and competitiveness of companies on their own region.

2.3 The activity supporting the growthof the local business
The most significant issues that affect promotionof business growth reducing GHG emissions are
education, research and financing. These issues arestudied to find out, which kinds of activity exist inSoutheast Finland related to the subject of this report.
In the region of Southeast Finland there is only one
university, the Lappeenranta University of Technology (LTKK). Related to the subject of this report, LTKK has both education and research in thefollowing departments: Department of energy andenvironmental technology, Department of industrial engineering and management, and Department of business administration. Education and research has been focused especially in view of therequirements of companies. In Southeast Finland
there are also two Polytechnics, whose practical

COMPANY+ IDEALOCALCOMMUNITYMUNICIPALTRADE
PROMOTING
COMPANYSUPPORT
Trade policy
commission+
Trade assosiation

Publicauthority

Financial
institution
Company C
Company A
Company B

Figure 1. An operational model for company networking which is suitedfor municipal activity.

220

close knowledge gives facility and basic information about methods to reduce GHG emissions.
Each of these educational systems offers also further and supplementary education.
Financing is one of the supporting elements ofbusiness. A direct link between financing and climatic change is possible. For example ESCO (Energy Service Company) finances only energy saving investments. Energy saving is one of the mosteffective methods to reduce GHG emissions. In addition, ESCO itself is one form of business that finances and erects energy saving turnkey equipment for customers. The customer repays the costs
for equipment to ESCO in incomings gained fromenergy savings. The local communities haveplenty of potential targets to save energy by using
ESCO.
2.4 Case studies
Case studies play an essential role in this research,
because they form the framework within which local companies and authorities were interviewed.
The subjects of the cases are the factors and methods related to the material trading market and heating entrepreneurship. Based on the information
obtained from the interviews and literature, newmodels of operation for developing current business practices were proposed.

terial trading market may become a form of business as soon as customers can be charged for services.
To develop an idea of the material trading market,
four representatives of companies and one authority of a city were interviewed. Commonly it
seemed that the material trading market could have
two alternative operational models related to transmission of materials. In the first alternative the material trading market only transmits materials andtakes a fee from the producer of material and in thesecond possibility the material trading market byes
materials and sells them forward.
The material trading market could include different kinds of services like finding out potential further processing and utilization for materials, regional transportation, organized reception of materials in different regions, treatment of materials,
guidance and information and management of authority affairs.
Local communities can advance operation of thematerial trading market to redirect their own kindsof waste and by-products to re-use or recycling using the services of the material trading market.
This kind of activity has positive influence in employment, and GHG emissions can also be reduced
by using materials more effectively.

2.4.1 The material trading market

2.4.2 The heating entrepreneurship

The material trading market is a company, whichtransmits waste materials and byproducts frommaterial producers to appropriate employers, andgives advice related to re-use and recycling. Up tothe present time, existing material trading market
systems have been exchange services of information between material producers and customers
and vice versa. Existing markets have operated
mainly on internet. In the case study it was examined how the material trading market could be developed so that major part of the materials would
be effectively redirected to re-use and recycling.
Using materials effectively affects positively to theclimatic change, because using recycled materials
in production consumes less energy. The methane
emissions are also lower, due to decreasing amountof biodegradable waste on landfills. Running a ma-

The heating entrepreneurship is a form of local
small-scale business, which produces heat to theuse of local community’s estate or heating stationby using indigenous fuels.
The first heating entrepreneurs started in the beginning of 1990’s. Since then the number of boiler
plants heated by an entrepreneur have beensquarely increased (Figure 2). At the beginning of
2002, the number of heating entrepreneurs was a
bit more than 130. Only two of these are located inSoutheast Finland.
As one form of energy production, heating entrepreneurship is a lucrative alternative to produce
thermal energy because of its benefits for local
communities. Heating entrepreneurship employs
221

120

Number of heating plant

101
100

87
80

67
60

50
36

40

24
16

20

3

6

1992

1993

0
1994

1995

1996

1997

1998

1999

2000

Year
Figure 2. Increase in the heating entrepreneurship during 1992–2000.

persons regionally more than ten-fold comparedwith usage of foreign fuels, and the money used forheating mainly stays in the same area. Boilers
heated by indigenous fuels like wood chips do notcause GHG-emissions.
At present there do not exist any operational models for augmentation of the heating entrepreneurship. Problems in augmentation of the heating entrepreneurship are for example: finding appropriate heating object, lack of fuel suppliers of fuels
and equipment and finding investors. Local authorities could help to solve these problems for example by finding an appropriate heating object, arranging education for entrepreneurs and producing
information. Some kind of forum would be also
useful for changing information between heating
entrepreneurs.

3 Discussion
One objective of the research was to find regionallysuitable methods and operation models to develop
business that will reduce GHG emissions. Resultsof the research are particularly accentuated to thefield of energy production, energy saving and222

waste treatment. Among these fields, potentials ofactivities, employing effect and GHG reduction
has been examined. In studying of potentials, problems have been faced because of the incoherenceof information. Pieces of information collectedfrom different sources are not comparable witheach other. Thus, it was not possible to prove thesuperiority of alternative methods reliably. Concrete methods suitable for the use in practise arepresented in case studies.

4 Conclusions
According to this study, some of the most important means to develop business and to reduce GHG
emissions are the development of operationalmodels for local authorities, material trading market and methods to utilize indigenous fuels likeheating entrepreneurship. In particular, development of operation model of communal business developing company was found important, becausewith its use it is possible to affect all the methods
and operation models found in the research. Networking of companies and cooperation between
companies and the public sector can also activate
the means referred to above.

4.1 Further activities
The preliminary research was carried out mainlyon the basis of literature. Based on the results ofthis study, the intention is to start a pilot project.
The purpose of the pilot project is to develop further significant methods found in the preliminary
research, especially related to local business thatwill reduce GHG emissions. The following list
gives proposals for objectives of the pilot project.
The purpose of pilot project is:• To start the heating entrepreneurship, to matchthe heat demand of the local heating needs andthe heat suppliers’ (existing and new heating entrepreneurs) possibility to produce heat.
• To find adaptable ways of action for local communities to re-use and recycle various kinds ofwaste through a material trading market.
• To develop, in cooperation with local communities, an operational model for a municipal business developing company or trade ombudsman
to increase business that will reduce GHG emissions.

• To start energy, emission and waste inspections
together with small local communities.
• To start purchasing of energy saving and emission lowering equipment in cooperation
between small communities.
Publications and reports made under
the project
Lappalainen, S. 2002. Paikalliset elinkeinot ja ilmastonmuutos Kaakkois-Suomen alueella. [Local industries and climatic change in Southeast Finland. (InFinnish, with English abstract)]. Lappeenranta
University of Technology, Lappeenranta. Master’s
thesis. 121 p. + app. 2 p.

223

The Impacts of Climate Change Mitigation on Air Pollutant Emissions
Kasvihuonekaasujen päästöjen vähentämisen vaikutus muihin ilmansaasteisiin

Sanna Syri
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Abstract
This paper presents the results of an assessment examining the side effects of greenhouse control
measures on the emissions of other harmful air pollutants (so-called ancillary benefits) done in thecontext of the Climtech technology programme.
The viewpoints considered were Finnish, European and global. The global assessment was basedon existing literature and recent scientific findings
reported. The national scale study was done withthe help of energy system modelling. The EFOMENV model available at VTT was expanded byadding modules for the calculation of fine particle
emissions. In addition, the existing routines anddatabases for the calculation of sulphur and nitrogen oxides in the EFOM model were updated tocorrespond to the latest status of reduction technologies and recent amendments in emission control
legislation. Scenario studies extending to the year
2030, assuming various levels of greenhouse gas
emission reductions, were performed with the
EFOM model. The EFOM model was used to findthe cost-optimal ways for achieving the specified
greenhouse gas emission reductions, and themodel calculated the simultaneous changes occurring in the emissions of other air pollutants. The
model studies for the Finnish energy system indicated that significant ancillary benefits in air pollution reduction can be achieved. A -20% greenhouse gas cutback requirement by the year 2030
from the 1990 level yielded a simultaneous reduction of 11–16% in sulphur emissions and a 8–9%
reduction in NOx emissions, compared to a greenhouse gas emission stabilisation at the 1990 level.
Technical reduction measures of particulate emissions, especially from small-scale combustion, determine the future development of total national
particulate emissions far more than structural
224

changes in large-scale energy production, which
already executes effective emission control. The
greatest uncertainties in the results lie in the average present level and the possible future changes offine particle emissions from small- scale combustion. The results obtained for Finland are in accordance with corresponding studies from other regions indicating significant ancillary benefits in reduced air pollution. As the general recognition of
the health hazards of air pollution is growing, thismay actually promote significantly the export opportunities of advanced Finnish technologicalknowledge and energy technologies, offering solutions also for, e.g., local air pollution. Especially indeveloping countries, the significant improvements in local environmental conditions achieved
with cleaner technology may actually be more decisive implementation factors than GHG reductions.
Tiivistelmä
Tämän hankkeen tavoitteena oli selvittää lyhyen ja
keskipitkän aikavälin (vuoteen 2030) keskeisimpien GHG-vähennystoimien merkittävät suorat sivuvaikutukset muiden haitallisten aineiden ilmapäästöihin ja niiden aiheuttamiin ympäristöongelmiin. Näkökulmina olivat suomalainen ja Euroopan
laajuinen, sekä soveltuvilta osin globaali. Työn Suomea koskevassa osassa käytettiin VTT:n EFOMENV-energiajärjestelmämallia arvioimaan, mitä
muutoksia ilmansaasteiden päästöissä on odotettavissa kasvihuonekaasujen vähentämistoimenpiteiden myötä. Työn globaali osuus perustui kirjallisuuteen ja uusimpiin raportoituihin tieteellisiin havaintoihin aiheesta. Työssä laajennettiin EFOMmallia kattamaan myös pienhiukkasten päästöjen
laskenta. Lisäksi työssä päivitettiin jo olemassa
olevat rikin ja typen oksidien laskentaa koskevat
laskentarutiinit ja tietokannat vastaamaan uusinta
tietämystä rajoitustekniikoiden ominaisuuksista.
Samoin huomioitiin uusimmat lisäykset ja muutokset ilmansaasteiden päästöjä koskevassa lain-säädännössä. EFOM-mallilla tarkasteltiin vuoteen
2030 ulottuvia skenaarioita. Mallilla laskettiin tilanteita, joissa Suomen kasvihuonekaasujen päästöjä rajoitettiin mahdollisimman kokonaisedullisella tavalla. Malli laski samalla tapahtuvat muutokset muiden ilmansaasteiden päästöissä. Tarkastelut osoittivat, että kasvihuonekaasujen päästöjen
rajoittamistoimenpiteillä voidaan saavuttaa myös
merkittäviä sivuhyötyjä muiden ilmansaasteiden
päästöjen vähentämisessä. Kasvihuonekaasujen-20% rajoitustavoiteskenaariossa vuoteen 2030
asti rikkipäästöjen rakenteellinen vähenemä oli
11–16% ja typenoksidien rakenteellinen vähenemä 8–9% verrattuna tilanteeseen, jossa Suomi toteuttaa vain Kioton pöytäkirjan. Pienhiukkasten
kokonaispäästöjen kehityksessä tekniset rajoitustoimet erityisesti pienlähteissä ovat oleellisempia
kuin rakenteelliset muutokset suuren mittakaavan
energiantuotannossa. Suurimmat tulosten epävarmuudet ovat pienhiukkasten osalta pienlähteiden
päästöjen keskimääräisessä nykytasossa ja tulevaisuuden kehityksessä. Tulokset olivat yhdenmukaisia kansainvälisten tutkimusten kanssa. Lisääntyvä
tietoisuus ilmansaasteiden aiheuttamista terveysriskeistä voi osoittautua lähitulevaisuudessa hyvinmerkittäväksi tekijäksi lisäämään puhtaampien teknologioiden globaalia kysyntää ja siten vauhdittamaan myös suomalaista teknologiavientiä.

1 Introduction
The reduction of greenhouse gases (GHGs) causing warming of earth’s climate is among the greatest challenges that the global energy system ispresently facing. The stabilisation of atmosphericcarbon dioxide concentrations at levels corresponding to a doubling or less of the pre-industrial
level requires emission reductions of 50–80%
from the present during this Century (IPCC 2001).
This would imply dramatic changes in the global
energy infrastructures.
Already now, with the first reduction steps envisaged to be taken with the Kyoto protocol, questions
about the side effects of the greenhouse gas emission reduction measures have risen. At broadest, it
is a question of how the mitigation of climatechange interacts with the objective of global sustainable development. The side effects of climatechange mitigation range across a wide variety of
sectors, such as transportation, agriculture, waste
management or land-use practices. The side effects
can be either positive or negative. This emphasizes
the need for research and careful design of theplanned measures in order to avoid negativeside-impacts.
The Third Assessment Report of the IPCC (IPCC
2001) reviewed the status of knowledge about theside-impacts of climate change mitigation. In
brief, it concluded that significant ancillary benefits are possible, especially in the reduction of local
and regional air pollution, but that large gaps inknowledge still exist. For future research, the IPCC
recommended further development of analytical
tools for evaluating the ancillary benefits of climate change mitigation and further assessment of
the side-impacts of climate mitigation options.
The purpose of this study was to examine the side
effects of greenhouse control measures on theemissions of other harmful air pollutants (so-called
ancillary benefits), especially for the Finnish situation under various medium-term reduction requirements (from the present until 2030). In the
scenario studies for Finland, the EFOM model
available at VTT was used to find the cost-optimal
ways for achieving the specified greenhouse gas
emission reductions, and the model calculated thesimultaneous changes occurring in the emissionsof other air pollutants. European and global aspects were studied mainly by literature review. The
study concentrated on the emissions of fine particles, sulphur and nitrogen oxides.

2 Methods
This study utilised the EFOM-ENV energy systemmodel for Finland available at VTT. The EFOMENV is a linear optimizing energy system model
used at VTT Processes (Lehtilä and Pirilä 1996,
Lehtilä and Tuhkanen 1999). The EFOM model
calculates energy supply and demand withuser-defined pre-conditions and constraints, suchas fuel prices or total GHG emission ceilings. The
model determines for any study period the cost-optimal mix of fuels and technologies with the given
boundary conditions.
225

In this work, the EFOM model was expanded byadding modules for the calculation of fine particle
emissions. In addition, the existing routines anddatabases for the calculation of sulphur and nitrogen oxides in the EFOM model were updated tocorrespond to the latest status of reduction technologies and recent amendments in emission control
legislation. Scenario studies extending to the year
2030, assuming various levels of greenhouse gas
emission reductions, were performed with the
EFOM model. EFOM was used to find the cost-optimal ways for achieving the specified greenhousegas emission reductions, and the model calculated
the simultaneous changes occurring in the emissions of other air pollutants. Figure 1 presents themodelling principle. The dashed boxes indicate themodel additions done in this work.

2.1 Recent legislation concerning air
pollutant emissions
The EU has recently published several significant
new directives regulating air pollutant emissions.
The National Emission Ceilings (NEC) directive(EU 2001a) sets country-specific ceilings for total
annual emissions of sulphur, nitrogen oxides, ammonia and volatile organic compounds (VOCs) tobe achieved by the year 2010. In parallel with the
NEC directive, the EU revised the Large Combustion Plants (LCP) directive, which regulates theemissions from all combustion plants greater than
50 MWth (EU 2001b). The NEC directive is together with the revision of the LCP directive themain instrument towards achieving the Union’s
long-term air quality objectives, i.e., the elimination of excess acid deposition and reduction of tro-

GHG reduction targets

Policies and measuresEFOM:
The Finnish energy and industrial system
All activities producing GHG emissions
Legislation on air pollutants(EU, national)

Air pollutant control
technologies & efficiencies

Cost-optimal ways for achieving
the national GHG targets

Changes in air pollutant emissions(SO2, NOx, particles)
Figure 1. The modelling framework used in the study. The dashed boxes
indicate the additions done in this work.

226

pospheric (=ground-level) ozone below levels
harmful for human health and vegetation (EU2001a). In addition to the NEC and LCP directives,
the EU has completed the work on the regulation ofemissions from waste incineration. All these directives are to be implemented in the national legislation of the EU member countries within one year of
their publication. In Finland, the national programme on implementation is underway at the moment of writing.

sion coefficients for all relevant fuels and technologies in the Finnish energy and industrial systemwere implemented into the EFOM model. The database of the EFOM model contains some 150 energy production and conversion technologies andsize classifications. The technology and sizeclasses cover all technologies presently at use, as
well as foreseeable future technologies, such as
supercritical coal power plants, gas conversion
technologies, fuel cell technologies, etc.

Emissions from the transport sector have been regulated in the context of the Auto-Oil programmes
in the EU. The emission specifications for newcars, heavy-duty vehicles, off-road vehicles, etc.
are progressively tightened (European Commission 2000). Altogether, these directives imply verysignificant reductions in harmful air pollutant
emissions (excluding greenhouse gases) from thetransport sector in the future.

Fine particle emission calculation routines weredeveloped for total suspended particles (TSP) andfor the PM2,5 size fraction. Particulate emission
coefficients were specified separately for smallscale combustion and for large facilities in the
EFOM model. Small-scale combustion was modelled by including the most relevant source types(stoves, fireplaces, heating boilers, etc.) and by distinguishing between old-type and modern-type installations. Fine particle emission coeffients used
are based on (Ohlström 1998, Jokiniemi 2002,
Karvosenoja 2001, Lûkewille et al. 2001, Nussbaumer 2001).

The new CAFÉ (Clean Air For Europe) programme of the EU has set special emphasis on pollution causing adverse effects on public health, i.e.,fine particle concentrations and high troposphericozone levels. Within the CAFÉ programme, newdirective proposals targeting the emissions of particles and ozone precursors (NOx and VOCs) areenvisaged for the year 2005.
The Framework Convention on Long-Range Transboundary Air Pollution of the United Nations Economic Commission on Europe (UN/ECE) covers
practically all countries in Europe, including theareas of the former Soviet Union. The so-called
Göteborg protocol, signed in 1999, has set emission ceilings for acidifying, eutrophying andozone-forming air pollutants (UN/ECE 1999). For
the EU countries, the emission ceilings of the
Göteborg protocol are somewhat higher than those
set in the NEC directive.
2.2 Implementation of air pollutant
emission coefficients into
the EFOM model
Based on air pollution control legislation and on
technology-specific typical emission reductionlevels of control techniques at use, average emis-

For industrial processes, emission coefficientswere based mainly on companies’ published environmental information and on environmental statistics (e.g., Rautaruukki Ltd. 2001, Outokumpu
Ltd. 2001, Fortum Ltd. 2002, Statistics Finland2001).
For the transport sector, emission coefficients applied are based on the LIPASTO model of the VTT(Mäkelä 2002) and on the relevant EU Auto-Oil directives specifying the allowed and expected emission levels of present and future engine and fueltypes (European Commission 2000).

3 Scenarios studied
The EFOM model scenarios were specified by the
Climtech technology programme. The scenario
studies extended to the year 2030. The possible future developments were assessed for two alternative scenarios:• ‘Conventional’ development: International climate change mitigation measures evolve rather
slowly. There are no significant changes in the227support for the development and commercialisation of cleaner technologies. As a result, newtechnologies reducing greenhouse gas emissions penetrate rather slowly into the energy andindustrial systems.
• ‘Optimistic’ development: As a result of accelerating climate change mitigation measuresboth internationally and within Finland, cleaner
technologies develop rapidly and they are taken
into use effectively. This assumes also increased
support for the development and commercialisation of technologies reducing greenhouse gas
emissions.
The greenhouse gas emission reduction targets
were set for the year 2030. In addition, it was requested that during 2008–2012 Finland shouldmeet the Kyoto obligation of emission stabilisation
at the 1990 level. The stringency levels studied in
the scenarios were -10%, -20% and -30% from the1990 level. Scenarios were calculated considering
all six greenhouse gases of the Kyoto protocol. The
EFOM model was used to find the cost-optimal allocations of the emission reductions with the alternative technological scenarios and the resulting air
pollutant emissions (SOx, NOx and particles) under
the cost-optimal greenhouse gas reduction solutions.

4 Results
4.1 Development of particulate
emissions under GHG reductionsin Finland
Small-scale combustion and transport (including
off-road machinery) are presently the dominating
sources of particulate emissions in Finland (Figure2). In the transport sector, diesel engines are thedominating source of particulates. Particulate
emissions from the transport sector are expected to
decline considerably in the future due to the progressively tightening emission limits for new vehicles specified by the EU (European Commission
2000). Figure 2 shows the development of particulate (TSP) emissions in Finland from the year 2000
to the year 2030 with the ‘Conventional’and ‘Optimistic’ scenarios with a -20% greenhouse gas reduction requirement by 2030. In the calculations it
228

was assumed that all small-scale furnaces and boilers would be continuously replaced with modern
technology with a time cycle of 20 years. This assumption causes the significant decline in particulate emissions from the domestic and services sector. In Figure 2, also the calculated effect of tighter
vehicle emission limits from the present to the year
2030 can be seen.
For all large-scale facilities, it was assumed that thepresent legislation and technology levels would bemaintained also in the future, and no simultaneous
improvement would take place. Therefore, there
are no significant decreases in the calculated emission scenarios from large-scale sources. Thisshould be viewed as a conservative (upper) estimate.
Figure 2 shows that structural GHG reduction
measures alone do not warrant simultaneous particulate emission reductions. This is caused by thefact that large-scale combustion plants are alreadyequipped with efficient particulate emission controls in Finland, and a shift towards smaller-scale
combustion of biomass may actually increase particulate emissions unless advanced control technologies are employed.
4.2 Development of sulphur emissions
under GHG reductions in Finland
In Finland, sulphur emissions have been cut verysignificantly during the 1980’s and the 1990’s. In
2000, the national sulphur emissions were 74
kilotonnes SO2 (Statistics Finland 2001), whichcorresponds to a -87% change from the peak levelof 582 kilotonnes SO2 in 1980. Presently, all largescale facilities causing sulphur emissions areequipped with effective flue gas scrubbers. Also
the use of high-sulphur fuels has been cut substantially. This means that large further emission reductions are difficult to obtain and that technicalmeasures typically have high unit reduction costs.
This implies also that structural changes in energy
production may not have very large effects on total
sulphur emissions. Figure 3 shows the calculated
effect of greenhouse gas emission reductions by
2030 compared to present.

50

2000

47,3

Energy Statistics 2000*

45

Off-road machinery
Agriculture

40

Transport

Kilotonnes / year

35
Domestic & services

2030
30

Ind. Processes

25

Ind. heating

20

Ind. CHP < 20 MW
Ind. CHP > 20 MW

15

CHP < 20 MW
10CHP > 20 MW

5Electricity generation

ic
ist

Co

on

ve

Op
tim

nt
io

Ky
o

na
l

to

0

Figure 2. Finnish particulate (TSP) emissions in 2000 and in 2030
with the ‘Conventional’ and ‘Optimistic’ scenarios with a -20%
greenhouse gas reduction requirement. The situation in 2030 with
GHG emission stabilisation at 1990 level (‘Kyoto’) is shown forcomparison.
2000

2030

90

Energy Statistics 2000*

80

Off-road machinery

74,1

Kilotonnes SO2 / year

70

Agriculture
Transport

60

Domestic & services
Ind. processes

50

Ind. heating
40

Ind. CHP < 20 MW
Ind. CHP > 20 MW

30

CHP < 20 MW
CHP > 20 MW

20Electricity generation
10

ic
tim

Op

ion
nt
ve

Co

on

ist

al

to
Ky
o

20
00

0

Figure 3. Finnish sulphur emissions in 2000 and in 2030 with the‘Conventional’ and ‘Optimistic’ scenarios with a -20% greenhousegas reduction requirement. The situation in 2030 with GHG emission
stabilisation at 1990 level (‘Kyoto’) is shown for comparison.

229

The large difference between the modelled emissions for 2000 and statistics is due to the exceptionally warm winter and subsequently low use of coalin 2000, whereas the EFOM model seeks to represent only long-term average conditions. A gradualsmall decrease of sulphur emissions takes place already with the ‘Kyoto’ scenario. The -20% GHG
scenarios (‘Conventional’and ‘Optimistic’) yield a
11–16% structural reduction in total sulphur emissions in comparison to ’Kyoto’. This is due to thediminished use of sulphur-containing fuels,
mainly coal and peat.

ture due to the progressively tightening emission
limits for new vehicles specified by the EU (European Commission 2000). Figure 4 shows the calculated development from the year 2000 to 2030 withthe different GHG scenarios.
The difference between modelled emissions for2000 and statistics is explained by the fact that themodelled emissions from the transport sector are
based on a recent update of the LIISA model(Mäkelä 2002). This update has been done after the
2001 official statistics shown in Figure 4.
The expected decline of emissions from the transport sector (including off-road machinery) causes
the significant drop in total NOx emissions in all
scenarios. The -20% GHG scenarios (‘Conventional’ and ‘Optimistic’) yield a 8–9% structural
reduction in total NOx emissions in comparison to’Kyoto’. This is mainly due to the penetration newtechnologies in the transport sector, such as hybrid

4.3 Development of NOx emissions
under GHG reductions in Finland
Presently, Finnish NOx emissions are dominatedby emissions from the transport sector (including
off-road machinery). Emissions from transportation are expected to decline considerably in the fu-

250

235,9

2000

2030
Energy Statistics 2000*

Off-road machinery
Agriculture

200

Transport

Kilotonnes NO2 / year

Domestic & services
Ind. processes
150

Ind. heatingInd. CHP < 20 MW
Ind. CHP > 20 MW

100

CHP < 20 MW
CHP > 20 MW
Electricity generation

50

ion
al
Op
tim
ist
ic

Co

on

ve

nt

Ky
o

to

0

Figure 4. Finnish NOx emissions in 2000 and in 2030 with the ‘Conventional’ and ‘Optimistic’ scenarios with a -20% greenhouse gas reduction requirement. The situation in 2030 with GHG emission stabilisation at 1990 level (‘Kyoto’) is shown for comparison.

230engines and fuel cells, in the ’Optimistic’ scenario
after the year 2020. In the ’Conventional’ scenario,
the decrease in total NOx emissions is caused by
the smaller total energy use in the energy and industrial sectors. This decrease is partly offset by
the remaining larger emissions with the conventional technologies in the transport sector.

5 International results
In addition to the model study for Finland reported
above, a literature review of similar studies forother countries and regions was conducted. The results for Finland reported here were compared withthe corresponding results from other countries togain insight into the general mechanisms andcountry-specific circumstances determining themagnitude and characteristics of the side effects.
Knowledge of general mechanisms and regional
circumstances is also necessary for understanding
the implications of the side effects and ancillary
benefits for the export possibilities of Finnish
GHG mitigation technologies.

mental impacts and especially to health benefits
gained with GHG mitigation activities have indicated that very significant benefits in reduced
health hazards can be gained by shifting to cleaner
fuels and more modern energy production technologies (Davis et al. 1997, Cifuentes et al. 2001a, b).
Replacement of old coal-fired coal combustion
plants with inadequate emission control by cleaner
and more modern technologies is often is a key position in the reduction of particulate air pollution.
Especially in developing countries, the significant
improvements in local environmental conditions
achieved with cleaner technology may actually bemore decisive implementation factors than the expected GHG reductions. This may actually boost
considerably the global demand for those GHG
mitigation technologies, which offer solutions also
for, e.g., local air pollution.

6 Conclusions

For the EU, analyses on the ancillary benefits ofimplementing the Kyoto protocol have been reported (e.g., Barker and Rosendahl 2000, Syri et al.
2001). The different studies have come up withvery similar results. Structural reductions of
12–20% and 7–10% in sulphur and NOx emissions,correspondingly, can be expected in the EU-15 region by the year 2010 with the implementation of
the Kyoto protocol. The ancillary benefits in VOC
and particulate emissions reductions were estimated smaller, in the order of 4%. One reason forthe small expected relative benefits is that a substantial part of the anticipated GHG reduction
measures, such as shifting to biomass fuels, also
produces significant amounts of VOC and particulate emissions. Secondly, a major part of VOCemissions in the EU is caused by industrial activities, and they are thus not directly affected by GHG
reduction measures targeting largely the production and end-use of energy.

Scenario studies with the EFOM model indicatedthat structural changes in the Finnish energy andindustrial system needed to achieve substantial
GHG reductions would induce significant side
benefits in reduced sulphur and nitrogen oxides
emissions. The -20% GHG restriction scenarios
yielded a 11–16% structural reduction in total sulphur emissions in comparison to the ’Kyoto’ scenario. The main mechanism causing structural reduction in sulphur emissions is the diminishing useof sulphur-containing fuels, mainly coal and peat.
NOx emissions would decrease by 8–9% from the’Kyoto’scenario. This is mainly due to the penetration of new technologies in the transport sector,
such as hybrid engines and fuel cells, in the ’Optimistic’ scenario after the year 2020. In the ’Conventional’scenario, the decrease in total NOx emissions is caused by the smaller total energy use in
the energy and industrial sectors. This decrease ispartly offset by the remaining larger emissions
with the conventional technologies in the transport
sector.

Analyses on the ancillary benefits of larger
long-term GHG emission reductions in the OECD
countries have yielded similar results (ECN-RIVM
2000, IEA 2002). Studies extending to the environ-

The study indicated that structural GHG reduction
measures alone do not warrant simultaneous particulate emission reductions. This is caused by thefact that large-scale combustion plants utilising231fossil fuels are equipped with very efficient particulate emission controls in Finland, and a shift towards smaller-scale combustion of biomass may
actually increase particulate emissions unless advanced control technologies are employed.
The results obtained for Finland in this study are
well in accordance with corresponding studies
from other countries and regions. The largest relative benefits in the present situation can be expected in the reduction of sulphur and NOx emissions. Also significant ancillary benefits in the reduction of particulate emissions are possible, butthey require application of advanced combustion
technology, especially if substantial use of biomass-based fuels in small- and medium–scale installations is planned as a GHG mitigation measure. As the increased use of biomass-based fuels
is one key GHG mitigation measure planned inmany industrial countries and the general recognition of the health hazards of particulate pollution is
growing, this may actually promote significantly
the export opportunities for the advanced Finnish
technological knowledge and solutions in biomass
utilisation. Especially in developing countries, thesignificant improvements in local environmental
conditions achieved with cleaner technology may
actually be more decisive implementation factors
than GHG reductions. This may boost significantly the global demand for those GHG mitigation technologies, which offer solutions also for,e.g., local air pollution.
Especially the estimation of fine particle emissions
is fraught with many uncertainties. Only the emissions from large point sources, which are required
to continuously monitor their emissions, can beconsidered rather reliable. Emissions from smallscale combustion, in turn, can vary very much depending on the combustion conditions, fuel quality
and the operation of possible emission reduction
installations. The average emission levels of domestic furnaces in Finland are presently poorly
known. Further research, especially measurement
campaigns, would be needed for better estimates ofthe present emission levels and future reduction
possibilities.

232

Publications and reports made under
the project
Syri, S. 2003. Kasvihuonekaasujen päästöjen vähentämisen vaikutus muihin ilmansaasteisiin. [TheImpacts of Climate Change Mitigation on Air Pollutant Emissions. (In Finnish, with English abstract)]. Technical Research Centre of Finland,
Espoo. VTT Research Notes XXXX. (to be published).

References
Barker, T., Rosendahl, K. 2000. Ancillary benefits of
GHG mitigation in Europe: SO2, NOx, and PM10 reductions from policies to meet Kyoto targets using
the E3ME model and Externe evaluations. Paper
presented at IPCC/OECD Workshop on assessing
the ancillary benefits and costs of greenhouse gas
mitigation strategies. 27-29.3.2000, Washington
DC, USA.
Cifuentes, L, Borja-Aburto, V, Gouveia, N, Thurston, G,
Davis, D. 2001a. Hidden health benefits of greenhouse gas mitigation. Science 293: 1257-1259.
Cifuentes, L, Borja-Aburto, V, Gouveia, N, Thurston, G,
Davis, D. 2001b. Assessing the health benefits ofurban air pollution reductions associated with climate change mitigation (2000-2020): Santiago,
São Paulo, México City and New Yourk City. Environmental Health Perspectives 109: 419-425.
Davis, D., Kjeilstrom, T., 10 others, 1997. Short-term
improvements in public health from global climate
policies on fossil-fuel combustion: an interim report. Lancet 350: 1341-49.
ECN-RIVM, 2000. Synergy in the approach to climatechange and acidification. Perspectives for energy
and mobility in the Netherlands in 2030. Background report to the fifth National Environmental
Outlook Plan. ECN-RIVM report 00-003. Netherlands Energy Research Foundation, Petten,
Hollanti.
EU 2001a. Directive 2001/81/EC of the European Parliament and of the Council of 23 October 2001 on
national emission ceilings for certain atmosphericpollutants. Official Journal of the European Communities L 309, 27.11.2001, p. 22-30.

EU 2001b. Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on
the limitation of emissions from certain pollutants
into the air from large combustion plants. Official
Journal of the European Communities L 309,
27.11.2001, p.1-20.

Lûkewille, A., Bertok, I., Amann, M., Cofala, J.,
Gyarfas, F., Heyes, C., Karvosenoja, N., Klimont,
Z., Schöpp, W. 2001. A framework to estimate thepotential and costs for the control of fine particulate
emissions in Europe. IIASA Interim ReportIR-01-023, IIASA, Laxenburg, Austria.

European Commission 2000. The Auto-Oil II Programme. A report from the services of the European
Commission. October 2000. European Commission, Brussels, Belgium.

Mäkelä, K. 2002. LIISA 2001.1 Road traffic emission
calculation model. www.lipasto.vtt.fi., VTT, Finland.

Fortum Ltd. 2002. Fortum in Society 2001. Fortum Ltd.,
Espoo, Finland.
IEA 2002. Beyond Kyoto. Energy dynamics and climate
stabilisation. OECD/IEA, Pariisi, Ranska. ISBN
92-64-19838-5.
IPCC 2001. Climate Change 2001: Mitigation. Contribution of Working Group 3 to the Third Assessment
Report of the Intergovernmental Panel on Climate
Change. Cambridge University Press.
Jokiniemi, J. 2002. Personal communication.
Karvosenoja, N. 2001. Primary particulate emissions
from stationary combustion processes in Finland.
Finnish Environment Institute mimeograph 232,
Finnish Environment Institute, Helsinki, Finland.
32 p. ISBN 952-11-1006-6.
Lehtilä, A., Pirilä, P. 1996. Reducing energy related
emissions — Using an energy systems optimization
model to support policy planning in Finland. Energy Policy 24 (9), 805–819.
Lehtilä, A., Tuhkanen, S. 1999. Integrated cost-effectiveness analysis of greenhouse gas emission abatement. VTT Publications 374, Espoo, Finland.

Nussbaumer, T. (ed.) 2001. Aerosols from biomass combustion. IEA Bioenergy Task 32: Biomass combustion and cofiring and the Swiss Federal Office ofEnergy: International Seminar, June 27th, Zûrich,
Switzerland. ISBN 3-908705-00-2.
Ohlström, M. 1998. The fine particle emissions of energy production in Finland (in Finnish with English
abstract). VTT Research Notes 1934, VTT, Espoo,
Finland. 114 p. + app. 33 p. ISBN 951-38-5403-5.
Outokumpu Ltd. 2001. Environmental Report 2000.
Outokumpu Ltd., Finland.
Rautaruukki Steel Ltd. 2001. Environmental Report
2000. Rautaruukki Steel Ltd., Finland.
Statistics Finland 2001. Energy Statistics 2000. Statistics Finland, Helsinki, Finland.
Syri S., Amann M., Capros P., Mantzos L., Cofala J.,
Klimont Z. 2001. Low-CO2 energy pathways andregional air pollution in Europe. Energy Policy 29:
871-884
UN/ECE 1999. Protocol to the 1979 Convention on
long-range transboundary air pollution to abate
acidification, eutrophication and ground-levelozone. UN/ECE Document EB/AIR/1999/1.
United Nations, New York, Geneva.

233