Finland's pulp and paper industry is poised to make a multi-billion euro strategic error by planning to ship captured carbon dioxide to the North Sea instead of converting it into valuable synthetic fuels. This decision, driven by immediate regulatory compliance, ignores a looming EU mandate requiring synthetic fuels in aviation by 2025 and road transport by 2028, creating a massive new market for which Finland holds a unique raw material advantage. Research indicates the country could generate significant revenue by refining its industrial carbon emissions into electrofuels, but a lack of coordinated national strategy and investment is pushing industry toward a simpler export solution, potentially forfeiting a future-proof economic sector.
The EU Mandate and Finland's Wasted Advantage
New European Union regulations are creating a guaranteed market for synthetic, non-biological origin fuels. Aviation must begin blending them by December 2025, with road transport and heating following in 2028. Concurrently, the era of free emissions allowances for industry will end in 2034, forcing companies to pay for every ton of CO2 they release. This dual pressure makes carbon capture essential, but Finland's response focuses on disposal rather than valorization. The country, alongside Sweden, produces a staggering 80% of the EU's biogenic carbon dioxide, primarily from its pulp mills. This bio-CO2, considered carbon-neutral, is the ideal feedstock for manufacturing renewable electrofuels to meet the new EU blending targets. "The best raw material for renewable fuels of non-biological origin would be the carbon dioxide produced by pulp mills," said Research Director Petteri Laaksonen from LUT University's School of Energy Systems. He expressed bafflement at the failure to capitalize on this resource, noting it could generate profit almost automatically given the incoming regulations.
The Rush to Export Versus the Complexity of Refining
Instead of building a refining industry, Finland is accelerating plans for carbon dioxide transport infrastructure to North Sea storage sites. Companies like Vantaa Energia are developing projects to ship liquefied CO2 from the Port of Vuosaari in Helsinki to offshore reservoirs by the 2030s. This approach treats carbon purely as a waste liability to be sequestered. Finnish industrial plants emit approximately 30 million tons of CO2 annually. Capturing and utilizing even a third of this volume would require a vast new industrial ecosystem. Janne Kärki, a team leader at the VTT Technical Research Centre of Finland, calculates that processing 10 to 20 million tons would necessitate around one hundred large new facilities—a number he admits is unlikely ever to be realized. A more plausible scenario involves dozens of plants, potentially organized around regional hubs that gather emissions from multiple sources. "It is probable that some kind of hubs or nodes will be built in Finland, whose infrastructure will gather carbon dioxide from different emitters," Kärki stated. Part of the CO2 could be used locally in hydrogen-based fuel production, while the rest would be exported via these same hubs.
A Closing Window for Strategic Pivot
The core of the dilemma is timing. The EU's synthetic fuel mandates create a clear market pull, but building the necessary production capacity takes years. Laaksonen warns that Finland has about eight years to enact a change in direction, a window that is closing rapidly. "That is far too little, because as far as we know, the change has not been started to be planned or implemented," he told reporters. This lack of proactive national planning leaves individual companies to pursue the most straightforward compliance path: carbon capture and storage (CCS). While CCS is crucial for hard-to-abate industrial processes, relying on it exclusively for biogenic emissions wastes their potential as a circular resource. The development of Power-to-X (PtX) facilities, which use renewable electricity to turn CO2 and water into fuels, requires significant investment, supportive policy, and cross-sector collaboration between the forest industry, energy companies, and chemical engineers. Without a coordinated push, the easier option of piping and shipping CO2 abroad will dominate.
Economic and Geopolitical Implications of Inaction
The financial stakes are immense. By exporting its raw carbon, Finland would effectively export the future value-added industry and jobs associated with synthetic fuel production. It would remain a supplier of raw materials—first wood, then CO2—while other European nations with less abundant biogenic carbon but more aggressive investment strategies develop the refining technology and secure the market. This represents a significant opportunity cost, potentially amounting to billions of euros in lost annual revenue and missed chances for technological leadership. Furthermore, it impacts national energy security. Producing domestic electrofuels from domestic industrial emissions and renewable electricity would reduce reliance on imported fossil fuels and advanced biofuels. The current trajectory does little to insulate Finland's transport sector from future global energy market shocks.
The Path Forward: From Waste Stream to Revenue Stream
Experts suggest a hybrid model is not only possible but necessary. A strategic national carbon management plan should differentiate between fossil CO2, which likely must be stored permanently, and biogenic CO2, which should be prioritized for upgrading into fuels and chemicals. This requires clear policy signals from the Finnish government, potentially including investment incentives for PtX demonstration plants and infrastructure planning that connects emission sources to potential refining hubs. The Finnish Parliament, the Eduskunta, will need to consider how national energy and climate strategies can be aligned to foster this industry. The role of Finland's large industrial energy providers, like Fortum, and its forest industry giants, such as UPM and Stora Enso, will be critical. Their investment decisions in the coming two to three years will likely lock in the country's path for decades. The question is whether they will see carbon as mere waste for burial or as the foundation of a new, sustainable export sector. Finland's abundant renewable electricity from wind and nuclear, combined with its forest-based bio-CO2, provides a competitive edge few European nations can match. Squandering that advantage for the sake of short-term logistical simplicity would be an error measured in the billions, with lasting consequences for the nation's industrial future.