During the week of May 15, 2023, a Finnish delegation including Ambassador Mikko Hautala and several Finnish business leaders visited Minnesota. CEEM was fortunate to welcome the delegation to its office for a discussion on the steps businesses are taking to transition to clean energy and the policy it will take to get there in both Finland and Minnesota.
While there are differences in the scope of their goals, with Minnesota focusing on emissions from electricity and Finland encompassing the entire economy, both regions recognize the critical role that businesses play in achieving their clean energy and sustainability objectives. The Finnish delegation’s visit not only fostered a deeper understanding of the shared challenges and opportunities faced by Minnesota and Finland, it also strengthened the commitment to cooperation and collaboration in addressing climate change globally and transitioning to a clean energy future together.
Partners in Accelerating the Clean Energy Transition
Minnesota and Finland are certainly not strangers, as many Finnish businesses have a strong presence in Minnesota. For example, most Minnesotans are familiar with Nokia, once known for its indestructible cell phones but now working hard to sustainably innovate across mobile, fixed and cloud networks. Uponor is another Finnish company that develops clean plumbing solutions and has its North American headquarters in Apple Valley. These are just two examples of the many companies that connect Minnesota and Finland.
Throughout the week, the Finnish delegation made stops at 3M, Great River Energy, General Mills, Xcel Energy, Thermo King and more to learn about the advances Minnesota businesses are making in the industry. According to Ambassador Hautala, Minnesota is among the six states he is focusing on maintaining a strong relationship with. Finland and Minnesota have a longstanding relationship, including a joint agreement signed in 2021 to focus on increasing cooperation in the research and development of sustainable technologies to advance clean energy and drive economic growth.
Two Leaders in Energy Policy
Both governments have impressive policies that will spur innovation and accelerate the clean energy transition. Finland has long been a leader in this area: the country introduced a carbon tax in 1990, introduced its first circular economy roadmap in 2016 and designed low-carbon roadmaps for 14 Finnish industries in 2020.
Similarly, Minnesota is a leader amongst American states on climate and energy policy. This has become even more noticeable since Governor Walz signed legislation putting Minnesota on a path to 100% Clean Energy by 2040 in January of 2023. The 2040 goal requires 80% of energy sold to customers by utility companies to come from carbon-free sources by 2030, 90% by 2035 and 100% by 2040. Utilities may also purchase renewable energy credits to offset electricity produced with fossil fuels. Minnesota has several other initiatives aimed at accelerating the clean energy transition: the 2021 Energy Conservation and Optimization Act and the impressive policies passed in the 2023 Environment and Energy Omnibus bill.
Interconnectedness Creates Benefits and Challenges
Minnesota does not have as much control over its power grid as Finland does as an independent country. This complicates the state’s clean energy efforts. Minnesota is part of a network called the Midcontinent Independent System Operator (MISO), which covers 15 states stretching down to Louisiana. Currently, 17% of production in MISO comes from renewable sources and 30% comes from low-carbon sources (renewables and nuclear.)
Minnesota’s connection to the MISO grid is beneficial because it increases power availability and decreases the need to overbuild capacity within the state. However, being an ambitious state amongst a group that does not necessarily share the same strong goals is a challenge. The investments needed to update the grid and accommodate the clean energy future the state is hoping to build are substantial. Minnesota alone cannot fund these investments for the entirety of the MISO region, therefore making it an interstate issue that needs to be addressed.
Finland: A Net Zero Economy by 2035
On the other hand, Finland’s Climate Change Act sets the country on a path to be climate neutral by 2035 and net negative (absorbing more carbon dioxide than it emits) by 2040. A key difference between Minnesota’s and Finland’s goals is that while Minnesota’s mandate is only for emissions from electricity, Finland’s is for its entire economy. Finland has a detailed plan that lays out yearly goals for carbon emission reductions and increases in carbon absorption from the atmosphere by sinks like plants, soil and bodies of water (as described in the graph above). In 2035, the combined emissions reductions and carbon sink increases will be enough to bring Finland’s net emissions to zero. Impressively, Finland plans to continue on its emissions reduction trajectory after achieving net zero emissions by becoming the first developed country to absorb more carbon from the atmosphere than it emits by 2040.
Innovation is Critical
Businesses will play a crucial role in the success of Minnesota and Finland’s transition to a clean energy economy. In both places, businesses are working diligently to reduce their carbon footprint and design technologies so that others can do the same. Members of the Finnish delegation were eager to share the ways their companies are innovating to quicken the clean energy transition:
- Sievo is using data analytics to provide companies with insights into their carbon emissions and visualize emission hotspots. The carbon emissions reductions driven by Sievo’s insights are often a money saver for companies. Sievo’s current clients are in finance, procurement, data and tech, but in the future, they hope to partner with universities, hospitals and more.
- Fortum, a Finnish power utility, is working steadily to decarbonize and has become one of the cleanest power utilities in Europe. The company’s two strategic priorities, which are to deliver reliable clean energy and to drive decarbonization in industries, have led Fortum to achieve 97% carbon-free energy production throughout Europe.
- Aurelia produces the most efficient small gas turbine in the world. The turbine is capable of utilizing carbon-free fuels such as hydrogen and biogas. It is used primarily by small and medium-sized businesses, allowing them to cut costs while also reducing carbon emissions.
- Elstor Oy is using energy storage to utilize emissions-free energy for its customers. Their system stores energy produced at off-peak hours, which is cheaper, as heat. Companies can purchase Elstor Oy’s system to reduce their carbon emissions and save money.
Finnish businesses are coming up with exciting innovations that will accelerate Finland toward its clean energy future. Minnesota businesses can collaborate with and learn from sustainability-minded businesses like those whose leaders visited during this trip. Current technologies can bring Minnesota and Finland close to their goals, but innovation is what will get both over the finish line.
By continuing to prioritize innovation, sustainability and partnership, Minnesota and Finland can build a cleaner, more resilient future for generations to come.