Minister Multala: Strong EU emissions trading system secures investments and competitiveness
Finland and seven other EU Member States have signed a non-paper that stresses the important role of a strong emissions trading system in the EU. The non-paper is their response to the discussion where certain Member States hope for major changes to the emissions trading system and a lower price for emission allowances.
The non-paper has been signed by Portugal, Spain, the Netherlands, Luxembourg, Slovenia, Denmark, Sweden and Finland.
“The emissions trading system is the backbone of European climate policy. A strong system is a clear advantage for Finland. When pollution costs money, clean solutions are the winners in the market. This guides investments in the right direction,” Minister of Climate and the Environment Sari Multala says.
The credibility of emissions trading is based on its predictability and the outlook it gives to future energy and climate policy.
“Short-term decisions that aim to lower the price of emission allowances would create uncertainty and drive out investments in clean solutions. Europe’s competitiveness should be built with a stable, long-term and technology-neutral climate policy, not with inconsistent action,” Multala says.
Emissions trading reduces emissions and strengthens security
The EU’s emissions trading system has effectively reduced emissions and promoted clean electricity production. As much as 37% of the EU’s greenhouse gas emissions are covered by the emissions trading system. Emissions from this sector have halved since 2005 (EEA, 2025). Emissions from the Finnish emissions trading sector have decreased even faster than in the EU as a whole.
Emissions trading also strengthens the EU’s security of supply: the decrease in the demand for fossil fuels reduces the EU’s dependence on imports and makes it less vulnerable to price fluctuations caused by the international energy market and geopolitical crises. The impact of the recent events in Iran on the world market price for oil also remind us that geopolitical crises lead to bigger and less predictable hikes in oil prices than the EU’s climate policy.
Finland benefits from strong emissions trading
Finland’s electricity production is almost emission-free, which is why the country benefits a great deal from a strong emissions trading system compared to countries that still use fossil fuels. Besides this, numerous decisions on investments in clean energy are pending in Finland. Clean investments and technologies would become less profitable if the price for emission allowances decreased significantly.
“When the foundations of climate policy are challenged in the EU, Finland adheres to a strong and predictable emissions trading system that encourages to invest. We have always supported the EU’s ambitious emission reduction targets and ensured that emissions trading is developed in a way that is market-driven and technology-neutral,” Minister Multala says.
Besides the non-paper signed by eight countries, the Prime Ministers of Denmark, Finland, Portugal, Spain and Sweden have sent a letter to President of the European Council António Costa, demanding that the EU leaders strengthen the Union’s common commitment to the climate targets and emissions trading system to promote competitiveness and the green transition.
Inquiries
Juuso Kilpinen
Special Adviser to Minister Multala
tel. +358 295 250 128
[email protected]