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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

ctor by using second-generation biofuels that can be used in exsisting vehicle fleet. The share of biofuels in road transport would increase to as high as 40% in 2030. Cost optimisation in the different scenarios would require the reduction of emissions in all sectors outside the EU-ETS such as in residential and commercial sectors, waste treatment, industry excluded in the EU ETS and agriculture," says VTT's leader of the research team Tiina Koljonen.

"Costs will rapidly increase if the emission goal is above 36% in sectors outside EU ETS. This would require expensive investments to be made in Finland to reduce emissions. With regard to buildings, cost-effective investments will be a reality under the current policy, signifying a significant increase in the energy-efficiency of buildings. In agriculture, the use of greenhouse gases can only be reduced by a small amount, mainly through decreaseduse of fertilisers," Koljonen says. "The sustainability criteria of biofuels and their actual production cost still include many uncertainty factors that may have a significant effect on the different scenarios. According to initial estimates, refinery investments will require an investment subsidy of around EUR 500 million.

If production subsidies for 2nd generation biofules are also required, the amount of subsidies required will increase to around EUR 1,500 million cumulatively for the years 2020-2030."

With regard to EU ETS, Finland would be a net buyer of emission rights; furthermore, the proposed EU policy would increase the price of electricity and district heating compared to the baseline scenario, also taken into account in the calculations for national economy.

Moderate impact on the national economy

The impact of the EU's 2030 Climate and Energy Framework on Finland's national economy was assessed using the VATTAGE model for the macro economy developed by the Government Institute for Economic Research (VATT), taking into acc
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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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