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
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)
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").