A new report by Professor Emeritus Markku Ollikainen and his working group, prepared for the Kone Foundation’s Metsän puolella (“For the Woods”) initiative, finds that Finland can achieve its carbon neutrality target by 2035 through cost-effective measures that strengthen forest carbon sinks and complement them with technological sinks. These measures, which include promoting incentives to enhance forest carbon sequestration, are projected to boost economic growth and improve the sustainability of forestry within 10–15 years. The study was released ahead of Petteri Orpo’s government budget session on 1–2 September 2025, which is expected to significantly influence Finland’s progress toward its carbon neutrality goal under the Paris Climate Agreement.
The report emphasizes the importance of research-based pathways at the national economic level to guide policy on carbon sinks. The most feasible measures identified include enhancing forest carbon sinks, accelerating the green transition to develop technological sinks, and compensating for reductions in forest sinks caused by accelerated peat decomposition through Internationally Transferred Mitigation Outcomes (ITMOs) as defined in Article 6 of the Paris Climate Agreement.
Specific recommendations for forest carbon sinks involve reforming the Forest Act to make Tapio’s good forest management practices mandatory, creating a forest carbon rent mechanism to reward landowners for carbon sequestration, and moderately restricting harvesting in state-owned forests. These measures are expected to strengthen forest sustainability, protect biodiversity, and halt the decline in large trees. Green transition measures include shifting the energy sector from biomass to electric boilers, promoting biogenic carbon dioxide capture and storage (BECCS), and supporting hydrogen economy solutions. These initiatives are anticipated to drive economic growth, making them investments in the national economy rather than mere climate policy costs.
The combined measures are projected to generate approximately 27 million tons of new carbon sinks, with additional programs adding 6 million tons by 2035. After accounting for soil emissions, the net carbon sink is expected to reach 14 million tons, roughly matching Finland’s projected fossil emissions for 2035. The report underscores that determined reductions in fossil emissions remain essential to achieve full carbon neutrality.
Economic modeling indicates that these measures will enhance GDP growth by about EUR 2 billion by 2040 compared with a baseline scenario without additional carbon sink initiatives. This growth is attributed to increased productivity and improved material efficiency resulting from investments in the green transition. Professor Ollikainen concludes that a realistic pathway exists for Finland to achieve its 2035 carbon neutrality target while simultaneously strengthening economic growth and the sustainability of its forestry sector.
