COMMISSION STAFF WORKING DOCUMENT Country Factsheet Finland Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: Finland, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 223 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet Finland Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 222} {SWD(2015) 224 à 243}  
 
 
Towards an Energy Union  
         Finland 

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

The  value  added  of  the  energy  sector  amounted  to  1.9%  of  GVA  in  2005  in  Finland,  expanding  to 
2.3%  in  2012.  Its  share  is  higher  than  the  EU-average.  The  share  of  the  energy  sector  in  total 
employment is on the other hand lower than average. It has fallen since 2005, resulting in 0.47% of 
total employment in 2012. 

Source: EUROSTAT – National Accounts 

According to EurObserv'ER, in 2013, the share 
indirect  renewable  energy 
of  direct  and 
related  employment  in  total  employment  of 
the  economy  in  Finland  was  at  about  1.32%, 
above the EU average of 0.53%. 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT 

TRADE BALANCE OF ENERGY PRODUCTS 

Finland  is  a  net  importer  of  fossil  fuels  and  normally  also  of  electricity.  The  trade  deficits  in  the 
energy products appear to be relatively stable over time. Finland had a current account surplus up 
until 2010; thereafter a deficit has been recorded. The contribution of the energy trade has remained 
negative throughout this period, and was slightly below the EU-average in 2014. 

0.01.02.03.020052012FIEU27Value added of energy sector% of grossvalue added (total economy)0.000.200.400.6020052012FIEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of Finland differs from the one of the EU28, with the notable difference of a much 
higher  share  of  renewable  energy  in  gross  inland  energy  consumption  and  –  to  a  lesser  extent  - 
nuclear.  Compared  to  1995,  the  share  of  renewable  energy  in  gross  inland  consumption  sharply 
increased, more than EU average (from 21% to 30%1 of the energy mix), while the share of gases only 
slightly decreased (by 1 percentage point). The main decrease concerns the use of solid fuels (by 6 
percentage points). 

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

IMPORT DEPENDENCY 

Finland has an overall import dependency2 below the EU28, while importing 100% of its crude oil and 
gases.  Crude  oil  is  refined  in  Finland  and  90%  of  it  is  then  exported.  Moreover,  Finland  is  solely 
dependent  on  gas  imports  from  Russia 3  (although  gas  represents  only  9%  of  gross  inland 
consumption). Overall, the supply concentration index is high for Finland. The energy trade deficit is 
slightly below EU average.  

1  
2  
3  

Equivalent to 37% of final energy consumption. 
An import dependency rate in excess of 100% indicates that energy products have been stocked 
Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated 
as the ratio between volumes  of imports from that specific non-EU supplier and total imports  (from EU and non-EU 
countries). 

2 

-4-2024FIEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2006 -4-2024FIEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Finland 

Finland  is  reliant  on  electricity  imports  during  peak  demand  periods.  It  will  continue  to  be  reliant 
until and to some extent also after the 1600 MW nuclear power plant, Olkiluoto 3, is complete (with 
the start of electricity production planned in late 2018). 

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

Interconnection capacity for electricity in 2014 

Source: European Commission based on 
ENTSO-E scenario outlook and adequacy 
forecast 2014 
Note:  Reference  to  2030  target  is  based 
on  October  2014  European  Council 
conclusions stating that "the Commission 
will also report regularly to the European 
Council with the objective of arriving at a 
15% target by 2030" 

the  2020  and  2030 

The interconnection capacity for electricity in Finland is at 30%, 
targets.  The  second 
well  above 
interconnector  with  Estonia,  Estlink2  (supported  under  the 
European  Energy  Programme  for  Recovery),  started  operation 
at  the  beginning  of  2014.  The  new  cable  tripled  the 
interconnection  capacity  with  Estonia,  thus  improving  the 
connection with the Baltic States. 
The  Finnish  natural  gas  market  is  isolated  as  it  is  fully 
dependent on gas imports from Russia. Two projects out of the 
33  key  security  of  supply  infrastructure  projects  listed  in  the 
European  Energy  Security  Strategy  (EESS)  are  relevant  for 
Finland and address the issue. These are the regional Baltic LNG 
interconnector 
Finland–Estonia 
terminal  and 
'Balticconnector',  which  are  key  in  ending  Finland's  energy 
isolation  in  the  gas  sector  and  diversifying  gas  sources  and 
counterparts.  Several  (both  on-grid  and  off-grid)  smaller  scale 
LNG  terminals  are  also  under  preparation/construction  in 
Finland. 

the 

gas 

3 

Top non-EU gas suppliers in 2013 (% in total imports)FinlandEuropean Union country[%]country[%]Russia100.0Russia39.0Norway29.5Algeria9.7Qatar6.754%49%98%106%100%100%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasFIEU28Import dependency 2013 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power generation 
(left) and gas supply (right) (2013) (Herfindahl index – 
10000 means monopoly) 

Sources: European Commission based on ESTAT, CEER and Platts 
Power Vision 

Sources:ESTAT and European Commission Calculations 

The  concentration  of  the  power  generation 
is  much  below  EU  average  while 
market 
concentration  on  gas  markets 
the 
maximum  level.  Gasum  Oy  acts  as  the  sole 
importer  and  transmission  system  operator  on 
the basis of long term supply contracts. 

is  at 

Wholesale  electricity  prices  are  slightly  below 
EU  average  while  wholesale  gas  prices  are 
above the EU average.  

The annual switching rate has settled at a level 
of  7-8%.  One  of  the  strengths  of  the  Finnish 
retail  market  is  smart  metering.  The  rate  of 
smart  metering  reached  97%  by  the  end  of 
2013.  They  have  enabled  advantageous  spot 
price-based electricity contracts and also energy 
innovative 
response  and  other 
demand 
services.  There  is  no  switching  on  the  gas 
in  Finland  have  a 
market  as  gas  retailers 
their  own  distribution 
monopoly  within 
network.  Gas  is  used  by  industry  and  energy 
production and only marginally by households. 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

Inflation  in  Finland  was  lower  than  on  average  in  the  EU  before  the  crisis,  but  since  2011  the 
development of the rate is close to the Euro area-average.  Energy prices are contributing, but have 
played  a  somewhat  less  of  a  role  in  recent  years  for  the  overall  price  development  in  Finland  as 
compared  to  other  Euro  area  countries.  The  share  of  energy  products  in  the  households' 
consumption basket is smaller in Finland than in the EU or the Euro area on average. 

Source:DG ECFIN based on Eurostat 

4 

-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsFinland : Price evolution & the contribution of energy prices-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEA : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

VULNERABLE CONSUMERS 

Based on a EUROSTAT survey on income and 
living  conditions,  three  proxy  indicators  are 
used  to  assess  fuel  poverty.  They  indicate 
that  it  is  less  of  a  stringent  issue  in  Finland 
than in the rest of the EU. Social assistance is 
a  last-resort  form  of  income  security  in 
Finland  and  used  to  address  consumer 
vulnerability.  It 
is  based  on  the  client's 
essential  expenses,  which  include  electricity 
and heating bills. 

 Source: European Commission, based on on EUROSTAT SILC survey 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(35.9 Mtoe primary energy and 26.7 Mtoe final energy) 

Finland’s  2020  energy  efficiency  target  is 
35.9  Mtoe  expressed 
in  primary  energy 
consumption  (26.7  Mtoe  expressed  in  final 
energy  consumption).  Even 
if  Finland’s 
current  primary  energy  consumption  (32.8 
Mtoe  in  2013)  is  below  its  2020  target,  the 
margin  is  small  and  additional  efforts  are 
the  primary  energy 
needed 
consumption  at  this  level  or  to  minimise  its 
increase  when  the  GDP 
increases  again 
during the next five year period.  

to  keep 

 Source:  European  Commission,  based  on  EUROSTAT  and  on  national  energy 

efficiency targets as declared by the MS under the Energy Efficiency Directive 

ENERGY INTENSITY 

Primary energy intensity in Finland is above EU average, and has decreased at a slower pace since 2005. 
This  is  even  more  striking  in  the  industrial  sector,  due  to  Finland's  sectoral  specialisation  in  energy 
intensive industries. 

Primary energy intensity of the economy       

Final energy intensity in industry 

Source: European Commission based on  EUROSTAT and European 

Commission/AMECO 

Source:  European  Commission  based  on 
European Commission/AMECO 

  EUROSTAT  and 

5 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

Specific  energy  consumption  by  households  is  above  EU  average  and  decreased  at  a  much  slower  pace 
than the EU average.The specific energy intensity of passengers cars increased slightly between 2005 and 
2010  which  reflects  a  less  efficient  usage  of  cars.  The  specific  energy  intensity  for  freight  transport 
increased slightly between 2005 and 2010, but it remains below EU average.  

Final  energy  consumption  per  m2  in  residential 
sector, climate corrected 

Specific energy intensity for passenger cars and freight transport4 

Source: European Commission based on  Odyssee database 

Source:  PRIMES  model  background  data  and  estimations  based  on  EU 
Commission and EU MS inputs   

EU  legislation  sets  mandatory  CO2  emission  reduction  targets  for  new  cars  and  vans.  By  2021,  the 
fleet average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet 
average is set at 147 g/km by 2020. 

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by 
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro.   

Modal shares Finland 

Source: Eurostat and EU transport in figures 2015. Data refers to 2013. Modal shares based on tonne-kilometres for freight sector and 
passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

4  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

6 

 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Finland 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
(-16% by 2020 as compared to 2005 in the non-ETS sector) 

Finland  has  decreased  its  emissions  by  8% 
between  2005  and  2014  (based  on  2014 
approximated  data).  According  to  its  2015 
projections  Finland  is  on  track  to  reach  its 
2020 target.  

Non-ETS Emissions 
(vs. 2005) 

Projections with 
existing measures 
2020 

Source:  European  Commission    based  on  EEA.  Based  on  preliminary  inventory 
data.  

Proxy 2014 

ESD (Effort Sharing Decision) emissions are the emissions not covered by the EU 

ETS 

RENEWABLE ENERGY SHARE TARGET 2020 (38%) 

Projections/proxy 

target 

-16% 

-16% 

-8% 

-7% 

is  one  of  the  EU 

leading  users  of 
Finland 
renewable energy, which provided almost 37% of 
total  energy  consumption  in  20135,  5.4%  higher 
than  the  National  Renewable  Energy  Action  Plan 
trajectory. The most important renewable sources 
of energy are bioenergy and hydropower. Finland 
is  well  on  track,  and  even  above,  in  attaining  its 
renewable  energy  target.  In  transport,  Finland  is 
also  one  of  the  few  countries  on  track  towards 
achieving the 10% target by 2020, with a share of 
renewables  in  transports  of  9.9%  in  20136 and  a 
national target of 20% by 2020. 

Source: European Commission based on  EUROSTAT 

GREENHOUSE GAS EMISSION INDICATORS 

 

In 2014, the revenues from the auctioning of ETS allowances amounted to EUR 63.5 million, out of 
which almost 50% are used or planned to be used for energy and climate related purposes.  

5  
6  

Latest Eurostat data: 36.8% 
Eurostat 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Finland 

Largest Sectors of GHG Emissions in 
2012 (*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & fishery) 

Residential & Commercial 

Waste & others 

(*)Sectoral breakdown for 2013 data not available. 

Finland 

EU Average 

34% 

21% 

23% 

12% 

5% 

5% 

33% 

20% 

19% 

12% 

13% 

3% 

GHG Emissions 

Finland 

EU 

EU ETS auctioning revenues 
in 2014 (EUR millions) 

Share of ETS emissions in 
2013 

GHG emissions/capita in 
2013 (tCO2equivalent) 

Carbon intensity of the 
economy in 2013 
(tCO2equivalent/EUR 
millions ) 

63.5 

50% 

11.7 

3205 

42% 

8.5 

339 

328 

Source: European Commission  based on EEA 

ENERGY & TRANSPORT TAXATION 

Energy and transport related taxes as a share of GDP in Finland is higher than for the EU-average. The 
taxation  of  transport  fuel  as  a  share  of  GDP  is  in  line  with  the  EU-average,  while  both  taxation  of 
transport vehicles, and electricity and heating fuels is above average. The overall tax burden in 2012 
has  been  stable  since  2005  in  relation  to  GDP,  but  the  composition  has  changed.  Taxation  of 
transport vehicles and fuel has fallen somewhat as a share of GDP, which has been compensated by 
an increased tax burden on electricity and heating fuels. 

Source: Eurostat 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

Finland  is  above  EU  average,  the  US  and  South  Korea  in  terms  of  public  support  share  allocated  to 
research  and  innovation  in  the  field  of  energy  and  environment.  In  terms  of  intensity  of  low-carbon 
technologies patents, Finland performs much better than the EU average and main worldwide partners.  

8 

0.01.02.03.0FIEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.0FIEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

Source: European Commission based on  EUROSTAT   

COMPETITIVENESS 

The  real  unit  energy  costs  in  Finland  have  increased 
but  remain  slightly  below  the  EU  average,  while 
higher  than in the  US.  This  development  reflects  the 
fact that real energy prices have increased in Finland 
over the past ten years, while energy intensity of the 
It  remains, 
manufacturing  sector  has 
however, higher than in the EU, but lower than in the 
US. 
Although  lower  than  the  EU  average,  energy  prices 
Significant 
in 
remain  higher 
discrepancies  can  be  noted  between  electricity  and 
gas  prices  paid  by  industrial  users.  Electricity  prices 
are among the lowest in the EU, while gas prices are 
among the highest. 

improved. 

the  US. 

than 

Real unit energy costs (% of value added) 

Source: European Commission 

Source: EUROPEAN COMMISSION based on EUROSTAT and IEA 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY  

  Finland's  medium-term  climate  and  energy  objectives  are  outlined  in  the  2013  updated 
"National  Energy  and  Climate  Strategy",  which  outlines  concrete  measures  to  reach  the  2020 
targets and includes an outlook for post 2020. 

  The  Strategy  involves  various  concrete  targets  to  be  achieved  by  2020:  final  annual  energy 
consumption is to be capped through energy efficiency measures to 310 TWh, consumption of 

9 

10.19.58.210.513.28.812.913.78.00246810121416FIEU27US200020092011 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

heating energy will be reduced by 9%, use of mineral oil will be reduced by 20% (so that by 2025 
the oil's share of total energy consumption will be below 17%). Wind-power permitting will be 
facilitated to increase its electricity generation to 6 TWh by 2020 and to 9 TWh by 2025. The use 
of peat for energy will be reduced by a third by 2025. Coal is planned to be mostly phased-out 
by  emission-free  energies  by  2025.  The  role  of  forest-based  biomass  and  other  bioenergy  is 
emphasised, particularly in efforts to replace the use of fossil fuels and peat in combined heat 
and  power  (CHP) production,  which forms  an  important element in Finland's  energy economy 
and energy policy. 

  Following  the  Strategy  update,  the  parliamentary  “Energy  and  Climate  Roadmap  2050”  was 
published in November 2014. The roadmap, which outlines Finland's energy and climate policy 
goals  for  2050,  serves  as  a  strategic  guide  for  achieving  the  long-run  objective  of  a  carbon-
neutral society.  

  A  new  Climate  Act  has  been  approved  by  the  Parliament  in  March  2015.  The  Act  sets  the 
framework  necessary  (albeit  not  binding  to  private  companies,  persons  or  municipalities)  to 
reducing  emissions  by  at  least  80%  of  the  1990  level  by  2050.  However,  no  interim  target  or 
distinction between ETS and non-ETS has been set. 
"Report on Energy Policy Options" of March 2015 by the Finnish Ministry of Employment and the 
Economy (MEE Publications: Energy and the climate 25/2015) outlines the Finnish energy policy 
options and development scenarios for the coming years.  

 

NATIONAL TARGETS, especially for 2030 

Objectives, 2030-2050 

Targets 

Comments 

GHG reduction  

Renewable energy  

Energy Efficiency / savings 

(2030) 

(2030) 

No 
Yes (2050) 
No 
Yes (2050) 
No (2030) 
Yes (2050) 

Carbon-neutral society objective by 2050 

Increase share of renewable energy to 60% by 2050 

Reduce  energy  intensity  of  the  economy  by  at  least  50% 
by 2050 

7. Regional cooperation  

Finland is part of the Nordic and Baltic wholesale electricity markets, which includes the Nord Pool spot 
market,  and  cooperates  with  its  Nordic  and  Baltic  neighbours  on  the  advanced  integration  of  energy 
markets of Finland, Sweden, Denmark, Norway, Estonia, Latvia and Lithuania. 

Regional  cooperation  on  infrastructure  development  is  necessary  to  optimise  the  identification  of 
regional  infrastructure  priorities  and  to  coordinate  cross-border  investments.  Finland  is  a  member  of 
two Regional Groups which have been established under the TEN-E Regulation: the Baltic Energy Market 
Interconnection Plan (BEMIP) Regional Groups for electricity and gas. 

EU Member States cooperation in the energy sector in the Baltic Sea region has brought many benefits 
for the participating countries. The work and achievements within the framework of the Baltic Energy 
Market  Interconnection  Plan  (BEMIP)  agreed  in  June  2009  and  with  subsequent  amendments  in  2011 
and  2013  respectively  proved  that  enhanced  regional  cooperation  can  be  a  catalyst  for  positive 
developments both in energy infrastructure projects or market related aspects. The MoU on reinforced 
BEMIP was signed on 8 June 2015 with the overall goal to ensure further market and system integration 
of  the  Baltic  States  into  European  Continental  network  and  ensure  its  full  market  functioning  also 
strengthening the  organisational structure  of  the BEMIP.  The  new  MoU  and  Action  Plan  also  foresees 
regional  cooperation  in  new  energy  policy  areas,  including  electricity  and  gas  markets,  security  of 
supply, power generation, renewable energy and energy efficiency. 

10 

 
 
 
 
 
 
 
 
 
Towards an Energy Union - Finland 

Additionally, Regional Gas Market Coordination Group was established on February 12, 2015 to facilitate 
creation  of  the  effectively  functioning  regional  gas  market,  consisting  from  the  representatives  of  the 
ministries responsible for energy policy, the national regulatory authorities of the energy sector and the 
operators of the key gas infrastructure in the Baltic States and Finland. 

8. Cohesion policy contribution  

The  EU  Cohesion  policy  provides  investment  possibilities  to  implement  energy  policy  objectives  in 
Finland  which  will  be  complemented  by  national  public  and  private  co-financing,  aiming  at  optimal 
leverage.  It  also  ensures  integrated  territorial  solutions  to  challenges  by  supporting  capacity  building, 
technical assistance and territorial cooperation, including the Baltic Sea Region macro-regional strategy 
in which Finland takes part. 

Internal  Energy  Market:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  3  million  in  smart 
electricity distribution grids in Finland.  

Energy  efficiency:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  76  million  in  energy 
efficiency  demonstrations  in  public  infrastructure  and  in  SMEs  in  Finland.  A  further  estimated  EUR  8 
million  will  be  invested  in  supporting  the  move  towards  an  energy-efficient,  decarbonised  transport 
sector.  

Decarbonisation:  Common  result  indicator  on  GHG  reduction  not  used  for  FI.  No  EU  Cohesion  Policy 
investments  in  renewable  energy  infrastructure  envisaged  in  FI  over  2014-2020;  research  and 
innovation in the area of renewable energy may be supported. 

Research, Innovation and Competitiveness: Over 2014-2020, EU Cohesion Policy will invest significantly 
in  R&I  and  in  SME  competitiveness  in  Finland.  This  will  be  based  on  the  regional  strategies  for  smart 
specialisation. For Finland, the strategies include a focus on energy efficiency improvements in activities, 
production,  products/services  of  enterprises  as  well  as  research  and  innovation  on  energy  efficiency, 
renewable  energies  and  material  efficiency.  At  this  stage,  at  least  EUR  90  million  is  foreseen  for 
investments in R&I and adoption of low-carbon technologies in Finland, but this might increase further 
in line with the evolving content of the smart specialisation strategy.  

11