Decarbonisation of the Nordics

​Situation

​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.

Our Approach

​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.

​Results

​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