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Increase in the use of biofuels the most cost-effective way for Finland to achieve the goals of the EU's 2030 Climate and Energy Package
Date:6/17/2014

VTT and the Government Institute for Economic Research (VATT) have completed a study commissioned by the Ministry of Employment and the Economy and the Ministry of the Environment, assessing the impact of the EU's 2030 Climate and Energy Framework on Finland's energy system and national economy. The increased use of second-generation biofuels in road transport would provide Finland with the most cost-effective way of achieving the greenhouse gas emissions goals presented in the policy framework for the sector outside of the emissions trading system. The impact on the national economy caused by the policy framework is estimated to remain moderate, although there are still uncertainties in the estimates.

In January 2014, the European Commission published an policy framework concerning the 2030 climate and energy policy goals, where a 40% reduction in greenhouse gas emissions is proposed for 2030 compared to the emissions in 1990. With regard to the EU's emissions trading sector (EU ETS), the reduction goal is 43%, and for sectors outside the emissions trading sectors it is 30% from the 2005 level.

In the project implemented by VTT and VATT, the impact of the emission goals on Finland's energy system and the national economy was assessed. In the project, calculations were made using three different scenarios, where Finland's emission reduction goal was 32, 36 or 40 per cent in the sectors outside the EU ETS, which inclide transport, building heating, waste treatment, agriculture, and some industries. In the emissions trade sector, the price of an emission right was assumed to rise to the level of EUR 50/t CO2 due to the proposed EU policy. VTT made the calculations using the TIMES-VTT energy system model, where the greenhouse gas reduction measures are presented by sector.

Biofuels comprise up to 40 per cent of transport

"The largest emission reductions in the sectors outside the EU ETS can be achieved in the transport se
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Contact: Tiina Koljonen
tiina.koljonen@vtt.fi
358-503-599-549
VTT Technical Research Centre of Finland
Source:Eurekalert

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