Fortum calls for biomass subsidy phase-out

Finland’s Fortum has called for a Europe-wide phase-out of subsidies for the use of biomass fuel in power and heating plants.

The company also recommended that EU-level sustainability criteria for solid biomass be put in place.

In the latest publication in its ongoing Energy Review series, Fortum said it believes the biomass sector should transition to a market-driven system ‘in place of complex subsidy systems’. 

Part of the impetus for its recommendations, Fortum said, is policy uncertainty, which has ‘increased’ across the EU, destabilizing the market and ‘reducing investment willingness’. According to the Energy Review, sustainability and subsidies represent the biggest policy risks impacting the bioenergy sector.  

‘We think that biomass use must be advanced in a market-driven way and the current subsidy systems should be phased out,’ said Kari Kankaanpää, Fortum’s Senior Manager for Climate Affairs.

Instead, Kankaanpää said, ‘the EU’s emissions trading scheme should steer investments in biomass-fuelled plants and fuel choice in existing plants.

'Support for bioenergy innovations and for research and development, particularly in the commercialization of new bioenergy technologies, will continue to be needed in the future,' the company emphasized. 

Fortum expects its own use of biomass, which accounts for one quarter of its heating fuel in the EU, to grow by 50% over the next few years from its current level of 5.1 TWh.  

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