National Decarbonization Goals in The Nordic Countries

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All the countries of Northern Europe have set ambitious goals to ensure the decarbonization of their economies and the Nordic Council of Ministers concept for the decarbonization of the Nordic region has been signed by the leaders of all states. The key results that a successful decaronization strategy should provide are:

- accelerating progress on decarbonizing heavy transport, such as shipping and aviation, as well as much of heavy industry, as these sectors still rely heavily on fossil fuels for energy consumption;
- for prospective decarbonization of these sectors, technologies should be developed on an industrial scale, because, despite the fact that there are proven and promising technologies, their implementation and introduction are still very expensive;
- it is necessary to strengthen the incentives for adopting such technology. The fact that potential customers are particularly susceptible to international competition limits the adoption of more expensive technology. To put it another way, if companies in the Nordic region are compelled to buy expensive alternatives to fossil fuels, worldwide emissions would not decrease since energy-intensive items will continue to be manufactured;
- in order to comply with the Paris Agreement, the international community must act more decisively to cut greenhouse gas emissions. This is especially relevant because Northern Europe's decarbonization targets are higher than the EU's and the international community's.

So, as has been said, all the Nordic countries have set ambitious decarbonization goals. Denmark, Finland, Iceland and Sweden have set a target year of 2035 to 2050 for achieving carbon neutrality. By 2050, Norway wants to become a low-emission society. Table 1 shows the national decarbonization goals in the Nordic countries (Decarbonization of The Nordic, www.copenhageneconomic.com).

Table 1 - National Decarbonization Goals in The Nordic Countries

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Under existing policies, national carbon projection scenarios indicate that current measures are insufficient to achieve decarbonization goals, requiring the development of new tools, mechanisms, and procedures, which are reflected in the concept of decarbonization. Table 2 contains data showing the difference between projected reductions under current policies and the Nordic targets (Decarbonization of The Nordic, www.copenhageneconomic.com).

Table 2 - Difference between projected reductions under current policies and the Nordic targets (Reductions as share of emissions of CO2 equivalents in 1990)

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Since the Nordic countries cannot rely solely on international instruments or measures within the EU to meet their ambitious goals, because the Nordic countries have more complex decarbonization goals than other parts of the EU, - achieving their rather stringent decarbonization goals is difficult and costly, - therefore national or regional instruments will complement international measures and measures within the EU.

Thus, a roadmap was developed to achieve the Northern region's ambitious decarbonization goals, focusing on three initiatives that are critical to creating a sustainable decarbonization trajectory in the Northern region, such us:

- Creating a reliable carbon pricing mechanism, optimizing existing taxes and energy subsidy schemes
- investor uncertainty and the cost of "green" transformation can be reduced by optimizing the carbon pricing system, especially since hard-to-electrify sectors are subject to global competition, so international cooperation is needed;
- Targeted support for promising technologies - increased state support for advanced key technologies is necessary for full decarbonization, including direct state funding associated with very high technological risks, with an emphasis on reducing investment risk along the entire value chain;
- Integration of electricity markets and better regulation models for TSOs/DSOs (transmission and distribution system operators), increased attention to the huge investment demands in grid infrastructure development are essential to mitigate risks in investments in both intermittent energy sources (variable renewable energy) and novel fuels that require large amounts of electricity as feedstock ("e-fuels").

By Karen Scott