Finland’s trade sector requires policy intervention to achieve carbon reduction goals

While companies in the Finnish trade sector have made positive strides in reducing their energy consumption, policy intervention is needed to ensure an acceleration is possible, according to trade association Kaupan Liitto.

In 2022, trade businesses reduced their electricity consumption by 1%, and heat consumption by 9%, while also seeing a 12.3% reaction in carbon emissions, the group noted.

While the sector has set targets to achieve carbon neutrality by 2035 and zero emissions by 2050, realisation of these goals will require the establishment of support mechanisms.

Energy consumption

The total energy consumption of companies in the trade sector reached 2,294 GWh for electricity and 1,324 GWh for heat in 2022, aligning with Finland’s overall 4% drop in national energy use.

This downward trend in energy consumption resumed after a temporary rise in 2021, attributed to a comparison with the COVID-affected low-consumption year of 2020. The trade sector also managed to reduce greenhouse gas emissions from energy use by 13% through a combination of purchasing renewable energy and adopting emission-free solutions.

Despite these achievements, further emission reductions hinge on strategic policy decisions, especially given that many companies in the sector have already exceeded initial energy-saving targets.

Policy measures

Kaupan Liitto highlighted the necessity of policy alignment with emission-reduction goals. For example, directives related to building energy efficiency should focus on measures that tangibly reduce emissions without mandating cost-intensive requirements that might undermine more effective, alternative solutions.

Achieving carbon neutrality by 2035 and near-zero emissions by 2050 is a shared goal across trade subsectors, with the grocery trade representing 54% of emissions, specialty trade 36%, and technical trade 10%. Approximately 98% of the sector’s emissions stem from the industry’s value chains.

Kaupan Liitto emphasised that while intra-industry collaboration is crucial, achieving these targets necessitates several policy actions, such as creating a service-specific electricity tax category, supporting self-sufficient electricity production, optimising the use of waste heat, and establishing incentives for low-carbon investments. Read more here.