The Government is well-advised to give its support to the two interconnection projects now under discussion. Concerns about market power are particularly relevant to the creation of Fortum Oyj. The intention behind the creation of Fortum was to form a large player in the EU energy market. Yet Neste ownes Gasum, Finland's only gas transportation company, and so its merger with IVO has created diagonal integration between electricity and natural gas. The decision to oblige Neste to reduce its stake in Gasum was a very important precondition for workable competition in the domestic electricity market.
Climate change is another important issue in Finnish energy policy.
The country has already exploited much of its energy efficiency potential, partly because of its cold climate and the scarcity of indigenous energy resources, but also because there is strong support for environmental protection in Finland. Finland was the first country in the world to introduce a carbon tax in 1990. Finland also has one of the highest shares of combined heat and power production in the world. Carbon dioxide emissions, however, continue to rise, and Finland is looking for ways to address this problem. Greater use of natural gas, especially in electricity and heat production, could be a promising strategy, provided that the gas market can deliver the additional quantities and that appropriate incentives for gas use are in place.