Is the 90% emission reduction target economically justified? – Perspectives from the Finnish technology industry
The European Union’s goal to reduce greenhouse gas emissions by 90 percent by 2040 raises questions about its economic impacts and realism. According to Finland’s largest export sector, the technology industry, ambitious climate targets are not a threat — quite the opposite.
Ambitious climate targetsaccelerate investments, boost export potential, and strengthen the resilience and security of supply for businesses and society alike. The proposed target is grounded in scientific calculations and achieving it will lay the foundation for sustainable economic growth.
Technology companies account for more than 50 percent of Finland’s total exports, and the industry’s firms play a central role in shaping the country’s future and success. The sector carries out 65 percent of all R&D investments made by Finnish businesses. Our industry is of the firm belief that only an ambitious and consistent energy, climate, and industrial policy can help the EU reach its climate neutrality goals and accelerate sustainable business and clean technology investments.
It is therefore time to address and dispel some of the common myths surrounding the EU’s climate targets.
Why set such an ambitious goal as a 90 percent emission reduction (from 1990 levels by 2040)? Wouldn’t a more moderate target suffice?
– The target is not an arbitrary political decision. It is based on global scientific scenarios by the European Scientific Advisory Board on Climate Change that define the emission reductions required to avoid dangerous climate change for people and the planet. Ambitious timelines push the EU to renew faster, invest earlier, and ensure that technological breakthroughs become commercial solutions. A bold target — and the innovation it triggers — will also be a competitive advantage for the EU in global markets.
– The Finnish technology industry has already achieved significant emission reductions despite major changes in its operating environment. According to the Technology Industry of Finland’s Low-Carbon Roadmap 2024, the sector reduced its own emissions by an additional 7 percent in four years. Fossil fuel use fell by 11 percent in five years, and emissions from purchased energy dropped by 45 percent. At the same time, industry turnover grew by 43 percent without increasing fossil fuel consumption. This demonstrates that emission reductions and economic growth can advance hand in hand.
Isn’t such an aggressive climate investment a heavy burden on the EU economy — won’t companies suffer, energy costs rise, and competitiveness weaken?
– When seen in full context, climate investments are not costs but investments — not only in the climate, but in the economy. They generate new products, services, productivity, business opportunities, and reduce economic vulnerability. The fact that Finland’s largest export sector has reduced fossil fuel use while growing turnover shows that low-carbon growth is possible.
– The market and export potential of clean technologies is significant. As emission reductions are pursued worldwide, demand for efficient, circular, and sustainable solutions will grow. For instance, the Finnish technology industry’s total annual CO₂ emissions across its global value chain amount to 29 million tonnes, yet its potential to enable emission reductions globally is estimated at 75 million tonnes — more than double its own footprint.
– A less fossil-dependent economy is also more resilient to price shocks and supply chain disruptions. Climate action is not only good business — it is an insurance policy against future risks.
Isn’t the 90 percent target more ideological than scientific?
– No. A 90 percent emission reduction target is fully aligned with the international scientific community’s scenarios and is based on physics and mathematics — the combined modelling of climate systems, the economy, and energy. Politics may set the timeline and tools, but it cannot change physics.
– The Finnish technology industry’s Low-Carbon Roadmap includes scope 1, 2, and 3 calculations and scenario pathways for different reduction trajectories. In one scenario, the industry’s scope 1–2 emissions could fall to 2.4 MtCO₂e by 2050, corresponding to a 69 percent reduction compared to 2017. The target is therefore built on scientific evidence and feasible technological pathways, not ideology.
How can companies actually turn emission reductions and ambitious targets into business opportunities?
– There are several practical ways for companies to capitalise on the transition:
- Clean technology development and exports: Energy efficiency, circular solutions, and low-emission manufacturing technologies are in growing global demand.
- Electrification and digitalisation of processes: Artificial intelligence and data analytics can optimise energy and material use, reduce waste heat, and improve efficiency. Many Finnish tech companies already use automation and AI to cut production emissions — and several SMEs have been recognised for their measurable reductions.
- Circular economy models: Extending product lifecycles, reusing and recycling materials, and offering maintenance services create new service-based business models. According to the Technology Industry Employers of Finland’s Circular Economy Programme, 77 percent of member companies have already integrated or are integrating circular economy principles into their strategy, and 57 percent see it as a major business opportunity. Europe’s circular economy potential alone is estimated at €1.8 trillion in added value in the coming decades.
- Competitive advantage through transparency: Investors, customers, and partners increasingly value transparent, low-carbon operations — soon it will be a precondition for market access.
What kind of policy measures do we need both on European and national level to achieve the EU climate target?
Building on the Clean Industrial Deal strategy launched in February 2025, the Finnish tech industries believe that the EU should concentrate on turning challenges into targets while establishing technology-neutral market mechanisms that will enable the EU’s pioneering companies to deliver the solutions to achieve these goals. The EU cannot regulate its way to global industrial leadership; this is best accomplished through the acceleration of competition and the creation of global market demand for excellent solutions.
Electrification: The electrification of industries is one of the most pivotal tools to achieve their cost-effective decarbonisation. The process of electrification must be accelerated now, with the help of the best available technologies. The EU should strengthen energy ecosystems that can quickly secure affordable energy supply and boost investment in renewable production, use, and storage. Investments should target sectors with long-term competitive advantages. A market-based electricity price must be maintained, keeping the marginal pricing model. The expanded use of digital tools – including smart and cyber solutions – should go hand-in-hand with electrification.
RDI policy & funding: Clean technologies must be rapidly scaled to ensure Europe’s decarbonisation success. The EU should support industrial innovation to improve existing and develop new solutions – in particular through the newly proposed Competitiveness Fund. The Commission should rapidly adopt the “European Tech Frontrunner” model for company-driven research cooperation that connects firms, universities, and research organisations, ensuring participation of all key RDI stakeholders to speed up scaling. EU investments under this scheme should benefit only technologically advanced solutions with high impact.
Carbon handprint: Europe’s green transformation must centre on improving competitiveness by leading the market for sustainable solutions. A key step is defining “Carbon Handprint” criteria to measure the positive climate impact of products and services over their lifecycle. Establishing an EU-wide, standardised Carbon Handprint methodology would create a level playing field for emission calculations.
Lead markets: Accelerating demand for key enabling technologies like hydrogen and for investment-intensive sectors such as green steel is vital for EU decarbonisation. The EU should create lead markets that drive up the demand for leading edge sustainable solutions and as a result, would direct more investments to these areas.
Circular Economy: Completing the Circular Single Market must be a key priority for this legislative cycle. The EU should focus on data management, incentives for refurbishments, and developing a competitive market for secondary raw materials that would also alleviate EU’s dependencies. Over the next five years, circular economy policy should take a holistic approach, cover the entire industrial value chain and accelerate RDI to boost the sector’s overall value.
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Further information:
Laitenberger Henrique
Head of EU Affairs – Public Affairs Technology Industries of Finland