Guidance from Ministerial Working Group on Climate and Energy Policy for the reform of the Climate Change Act

Press release 2020-03-18 at 7:41

The Ministerial Working Group on Climate and Energy Policy met on Tuesday 17 March 2020. The ministers discussed the key principles that guide the reform of the Climate Change Act and received an update from the working group preparing the reform of energy taxation. The Ministerial Working Group also heard a briefing on the impacts of coronavirus in the energy sector.

The Climate Change Act that entered into force in 2015 will be reformed so that the carbon neutrality target to 2035 will be reached. The land use sector and emission reduction targets to 2030 and 2040 will be included in the Act. The present Act is a framework act, which means that it concerns public authorities. The Act includes provisions concerning a climate policy planning system.

The Ministerial Working Group pointed out that carbon neutrality should be addressed in the Act as an average of several years, instead of an individual target. According to the ministers, it is also important that the planning system covers all sectors.

“The carbon neutrality target concerns all sectors, which is why a comprehensive approach is an absolute necessity. Planning of climate actions should be clear and proactive so that it is also easy for individual people, businesses and various kinds of organisations to follow what is happening and participate in the work,” says Minister of the Environment and Climate Change Krista Mikkonen.

Among the topics included in the Government Programme is the reform of energy taxation. The aim is to reduce electricity tax towards the minimum rate allowed by the European Union, and the industrial energy tax rebate system is to be abolished. The tax revenue from heating fuels will be raised by a total of EUR 100 million during the electoral term. The use of peat for energy will be decreased by at least half by 2030, and the necessary changes to the taxation of peat will be assessed as part of the overhaul of energy taxation. The main outlines of the working group appointed to prepare the energy taxation reform should be completed by the government discussion on spending limits in April. The Ministerial Working Group received an update on the preparation.

The Ministerial Working Group noted that coronavirus will impact on the energy sector in many ways. However, the electricity market continues to function and businesses are well prepared for various kinds of consequences. There are no immediate risks concerning the energy sector, but the situation is being monitored very closely and action will be taken to prepare for different scenarios.

The task of the Ministerial Working Group on Climate and Energy Policy is to guide and direct the implementation of the Government Programme with respect to promoting the carbon neutrality target, strengthening of carbon sinks and decision-making on climate and energy policy, while also taking into account social justice and international competitiveness.

Inquiries:

Riikka Yliluoma, Special Adviser to the Minister of the Environment and Climate Change, tel. +358 50 414 1682, riikka.yliluoma@ym.fi