Govt wants to ban coal usage in 2029

The use of coal for producing heat and electricity is possible to become illegal in Finland in 2029, based on a bill submitted to the parliament on Thursday.

The envisaged schedule met instant criticism particularly from the Helsinki power company, currently depending largely on coal for its district heating needs. The industry accepts the phaseout of coal, but has said the tight schedule blocks innovative solutions.

Kimmo Tiilikainen, the minister for energy and environmental affairs, said on Thursday that Finland wants to be in the "forefront of countries giving up the use of coal". Tiilikainen said the legislation and the changes in taxation make it clear to commercial companies in the energy sector how they will have to schedule their own decision making.

The captial's municipally owned energy firm, Helen said that as the legislation speeds up the investment decisions it at the same time prevents the usage of emerging new technologies. Talking to national broadcaster Yle, Janne Rauhamaki, a section head at Helen, mentioned geothermal energy and small serial-produced nuclear power plants as new options under development.

Helen has determined that biomass is the fastest way to replace coal, but Helen is concerned about the availability of biomass. It has said the current domestic production of biomass would not meet the demand.

Coal has still a major role in the production of district heating in Finland. Nationally coal is the source of energy for 26 percent of district heat, but in Helsinki its share in 2016 was 60 percent.

The ministry has acknowledged that the coal ban would create the largest financial impact in district heating in Helsinki and northwestern Vaasa.

Although huge piles of coal are still seen at the Helsinki downtown waterfront, Helen has announced earlier the closure of the coal powered plant at Hanasaari near the inner city by 2024. To replace the Hanasaari plant alone, two biofuel based power plants would be needed. As a first alternative source, a major heat pump plant has been installed in the downtown core area under the Esplanade park.

Taxation of the use of peat will be increased. Also coal will get a tax increase prior to being phased out. The use of biofuels would be favored. The changes in taxation would at least temporarily give an advantage to the use of natural gas as a source of energy in Finland.

The government on Thursday also submitted bills determining the share of biofuels in transport and domestic heating. From 2021 three percent of the light fuel oil used for heating and work equipment should be biofuel based. In 2029 the requirement would be ten percent. In transport, biofuels must cover 18 percent of the consumption in 2021 and would have to reach 30 percent in 2030.