All the Nordic countries have ambitious targets for decarbonisation of their economy. Moreover, the Nordic Council of Ministers has a vision for a decarbonised Nordic region, signed by all heads of state.
However, current policies reveal a gap between expected emission reductions and national decarbonisation targets. This gap appears due to a lack of concrete plans on how to reach these ambitious targets, especially for the individual residential heating, transport and industry sectors.
Copenhagen Economics was asked to assess to which extent and how electrification of the wider economy, e-fuels, CCS and integration of the Nordic power markets can provide the necessary contribution for decarbonisation to close the remaining gap.
We have taken a three-step approach to determine the roadmap for decarbonisation for each of the Nordic countries:
a.Determine the gap between current policies and political decarbonisation targets
b.Explore the technologies and options to decarbonise including sectoral, timing and country-level differences
c.Identify the political initiatives which can help deliver on the decarbonisation targets while ensuring a smooth and cost-effective transition
We identify four key results that a successful decarbonisation strategy needs to deliver and propose a roadmap for the coming years. Further, we propose a set of concrete policy initiatives at the national, regional and international level needed for a cost-effective path for decarbonisation.
The proposed policy initiatives has three main components that can help deliver on the Nordic decarbonisation targets:
1.Establish a credible carbon pricing framework
2.Targeted support for promising technologies
3.Integration of power markets and better regulation models for TSOs/DSOs