Growth through decarbonisation: Why the EU must stand firm on emissions trading
EU Climate Week began in Brussels on 12 October. The EU itself should remember that the economy can grow while emissions fall. Technology Industries of Finland does not support erratic climate policy. We support a predictable investment environment, a strong and long-term emissions trading system, electrification and clean domestic energy.
Climate action is still sometimes approached with caution on the grounds that it is too expensive. Europe’s own figures tell a different story: between 1990 and 2024, the EU’s GDP grew by more than 70 percent, while net greenhouse gas emissions fell by 40 percent. Since the launch of emissions trading in 2005, emissions in the sectors covered by the system have halved.
The Commission wants to support the continuation of climate policy because it links climate policy more closely to competitiveness, affordable energy and reducing strategic dependencies. European Commission President Ursula von der Leyen outlined the bigger picture in her State of the Union address in September:
“The transition is complex, and we have to adapt our approach and learn along the way. But Europe can, must and will stay the course on its climate goals.”
The Commission has also consistently promoted the phase-out of Russian fossil energy imports, with transition periods. In Finland, security is understood broadly. Climate policy is also not seen as a separate cost item, but as part of building self-sufficiency and resilience.
In Finland, the volatility of fossil fuel prices is visible in transport and logistics costs. In the marine industry and heavy transport, the transition to clean electricity and clean fuels is beginning.
We need a major leap in electrification
One of Finland’s strengths is that electricity is more than 95 percent emission-free and among the most competitive in Europe in terms of price. Growing electricity consumption creates demand, but networks are now starting to become a bottleneck. At the same time, the Confederation of Finnish Industries’ green investment data window, Fingrid’s assessments and the Finnish Wind Power Association’s own figures all point to strong readiness to unlock new production potential.
In addition, Finland’s existing nuclear power capacity is being renewed, and readiness to produce electricity and heat with small modular reactors is being built in several locations. The Finnish economy needs a major leap in electrification, supported by hydrogen, clean fuels and other solutions. This electrification leap is the next growth step, and both society and companies must be brought on board. We cannot afford to stumble now.
Emissions trading rewards the most efficient solutions
Technology Industries of Finland has defended the EU Emissions Trading System as the cornerstone of climate policy because it is a market-based tool. In addition, it generates revenues that should be allocated to accelerating the transition in the sectors affected by emissions trading. It puts a price on emissions but leaves companies free to choose the means. Emissions are reduced where it makes the most sense and where it is most cost-effective. For the sake of the EU’s own competitiveness, this should not be distorted with state aid.
Countries and companies that have invested early are now in a stronger position. Weakening emissions trading would punish frontrunners and would not eliminate regulation as it would simply be replaced by more detailed, less market-based and less efficient steering.
Freedom from fossil fuels is also security policy
Europe’s dependence on imported fossil fuels is both an economic and a security policy risk. Russia’s war of aggression has shown how energy can be used as an instrument of pressure and as a means to finance a war economy. Every unit of energy saved or produced cleanly
in Europe reduces the need to transfer wealth outside the Union.
According to Eurostat, the EU is moving in the right direction, but slowly. Energy import dependency has decreased: in 2022, net imports accounted for 63 percent of the EU’s energy, and in 2024 the figure was still 57 percent. Yet in 2025, oil, gas and solid fossil fuels worth EUR 337 billion were still imported into the EU. In other words, we remain heavily dependent on energy whose price is determined elsewhere.
Fossil fuels are still needed in transport, heating and industry. But dependence — the obligation to buy — can be reduced especially through electrification, clean electricity production, a sufficient and smart grid, and energy efficiency. These are precisely the areas where Finland has solutions to offer. When carbon has a price, demand is created for clean technology. At the same time, the trade balance, security of supply and Europe’s own strategic autonomy are strengthened.
Bringing the handprint into EU climate policy
European solutions can also reduce emissions outside Europe. In Finland’s case, this export-driven carbon handprint is larger than the emissions of our emissions trading sector. There is therefore evidence of the positive impacts of technology exports. However, the EU has not yet strongly embraced the carbon handprint in its climate policy.
Could the handprint be brought more firmly into the core of EU climate policy, alongside the carbon footprint?
I am in Brussels for Climate Week — let’s discuss.
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