Background information

A part of Finland’s Just Transition Fund-strategy is to halve the energy use of peat by 2030. On 8 April 2020, the Ministry of Economic Affairs and Employment set up a working group to examine how the use of peat can be directed in a controlled way to innovative products with a higher degree of processing instead of burning, thus ensuring business continuity for the sector. The task force was also to propose ways to achieve this in a regionally and socially equitable way, without jeopardising electricity and heat supply. The working group also assessed other ways of compensating for the regional economic and employment losses in areas where the impact of the reduction in the use of peat for energy purposes is significant.

Content of measure

The working group involved ministries, government agencies, universities and research institutes, environmental NGOs, energy companies, as well as employer’s organisations and business associations.

The working group submitted its final report to the Ministry of Economic Affairs and Employment on 31st of March 2021, and it was assessed by the relevant ministries. The working group proposes a number of measures to improve the situation of peat entrepreneurs in the face of a sharp fall in demand for energy peat.

The working group proposes a one-off package for companies in the sector. This would include a partial compensation from the state for unsold energy stocks for peat entrepreneurs, the acquisition by the state-owned enterpise Metsähallitus of private peat-production areas, setting up a working group to determine the level of compensation for the destruction of peat production machinery, an adjustment allowance for entrepreneurs who stop peat production, and the preparation of an early retirement scheme for elderly entrepreneurs. Metsähallitus is the enterpise that manages state-owned land.

The second set of proposals relates to the orderly transition of peatland enterprises to new business activities. Its impact is estimated by the working group to be lower than the first package, but it could also benefit from funding from the EU's Fair Transition Facility (JTF).

Use of measure

Some of the proposals of the working group were acted upon by prime minister Sanna Marin’s government, for instance the refund for scrapped peat machinery.

Target groups

Workers	Businesses	Citizens
Other groups of workers	Other businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government Employers' organisations Company / Companies Other social actors (e.g. NGOs) Local / regional government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	Consulted
Form	Not applicable	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Only employers' organisations
• Main level of involvement: Peak or cross-sectoral level

Involvement

Peak-level organisation Confederation of Finnish Industries was consulted regarding the EU carbon market. The employers organistions Finnish Energy [Energiateollisuus] and Machine Entrepreneurs [Koneyrittäjät] were members of the working gorup.

Views and reactions

The sectoral employers organisation Koneyrittäjät stated that the working group found many positive measures, but were disappointed that there was no effort to stop the fast decline of use of peat for energy. They have further stated that peat is important for the security of supply in Finland, not least during the energy crisis.

Sectors and occupations

This case is not occupation-specific.

Sources

• 20 August 2020: Members of the working group for peat [ Työryhmän jäsenet ] (tem.fi)
• 05 March 2021: Peat working group summary of consultations [ Yhteenveto turvetyöryhmän kuulemista tahoista] (tem.fi)
• 31 March 2021: Peat farmers really need fair compensation for the collapse of the sector [Turveyrittäjät tarvitsevat oikeasti oikeudenmukaista kompensaatiota alan romahduksesta] (www.koneyrittajat.fi)
• 31 March 2021: The working group makes proposals to ease the situation for peat entrepreneurs [Työryhmältä ehdotuksia turveyrittäjien tilanteen helpottamiseksi] (tem.fi)
• 30 January 2024: Peat, a source of security of supply, is rapidly disappearing without remedial action [Huoltovarmuutta varmistava turve häviämässä nopeasti ilman korjaavia toimia] (www.koneyrittajat.fi)