Former European Commissioner and current Governor of the Bank of Finland Olli Rehn is calling for comparable research data on carbon sequestration in forests in order to support the emissions trading system. He criticises the current EU emissions trading system, which is founded on carbon sequestration in forests. In an interview with forest.fi, Rehn expresses regret at the lack of research data. In his view, the basis for verifying and comparing the carbon sink units being traded is unclear.

“We need better research data grounded in measurements. Across EU member states, carbon sinks are calculated and verified using very different methods. The resulting data sets are not fully comparable, and this creates inequality between member states,” Olli Rehn tells forest.fi.

In Finland there is a great deal of debate about the measurement of carbon sequestration in forests and soil. The growing stock of timber in the forests continues to increase and continues to act as a carbon sink, but this is no longer enough to offset the rising emissions from the soil in Finland's forests. According to data from the Natural Resources Institute Finland, the Finnish forest carbon sink has become a source of emissions. Somewhat surprisingly, in Sweden — another Nordic country very rich in forests — forests remain a significant carbon sink.

In an interview with the magazine Metsälehti, an expert from the Natural Resources Institute Finland explains that the very different results obtained in Finland and Sweden can be attributed to the use of different research models. One of the worst-case scenarios mentioned is this: because of the model used, Finland could end up having to pay for compensatory climate measures, for example to Romania, because it has not met the carbon sequestration target set by the European Union.

Speaking to forest.fi, Olli Rehn notes that forest carbon sinks have declined in several EU member states. Alongside Finland, this also applies to other countries with substantial forest resources, such as Sweden, Germany and France.

“The future development of carbon sinks is unclear. Antti Asikainen, co-chair of Finland's panel of forest bioeconomy science experts, has predicted that in the near future carbon sequestration in forests in European Union countries will fall by almost half compared with the levels of a little over a decade ago,” Olli Rehn stresses.

Olli Rehn has held senior posts in the European Union

Olli Rehn has been Governor of the Bank of Finland and chair of its board since 2018. His term of office will continue for a further seven years. From 2004 to 2014 he served as Finland's minister of economic affairs, a member of parliament and a European Commissioner. Speaking of his current post at the Bank of Finland, Rehn notes that he is not directly responsible for forest sector matters, but he does follow the public debate on this important sector.

“Sustainable forestry is such an important part of the Finnish economy that it is as well to have a good grasp of its development prospects.” Rehn says that when he visits southern European countries he always turns to the subject of sustainable forest management and the forest sector in Finland.

“I used to talk about the ‘land of green gold’; these days not so often, though I still think of it that way. Of course, over the years the key issues drawing attention have changed, reflecting other changes in the world,” he stresses.

Continuous cover forestry is not a panacea

The European Commission is working on certification for “nature-friendlier” forests. In Finland this is associated with continuous cover forestry.

On the subject of certification, Rehn cites Finnish examples of recommendations for good forest management drawn up through wide-ranging discussion, within the framework of the existing forest certification systems, as well as in internal recommendations adopted by companies and stakeholders.

“Thanks to that, we in Finland already follow close-to-nature principles. More than before, protected areas and both living and dead trees of varying ages are left standing in the forests. Where it makes sense, particularly on peatlands, the so-called continuous cover method is recommended,” Olli Rehn notes. “However, when choosing a suitable method of forest regeneration, the decisive factor must be the location of the stand and its requirements. Continuous cover regeneration is one option, but not always the only one.”

The tariffs introduced by US President Trump would reduce export revenues

Like other sectors, the forest sector is following US President Donald Trump's aggressive tariff policy measures closely. Olli Rehn points out that any tariffs worsen operating conditions for the companies they apply to. In 2024, roughly 13% of Finland's paper and board exports went to the United States. The value of these exports is 843 million euros.

“At least part of that income would be lost if the United States were to impose a levy on forest sector imports from Finland. The share and value of wood product exports, meanwhile, are far smaller. If we look at the European Union as a whole, its share of paper and board exports is considerably smaller,” Rehn notes.

Some facts

• Olli Rehn, Dr Phil., is Governor of the Bank of Finland.
• From 2004 to 2014 he was a European Commissioner, holding the enlargement portfolio from 2004 to 2009 and the economic and monetary affairs and the euro portfolio from 2010 to 2014, when he was also Vice-President of the Commission.
• Rehn has also been Finland's minister of economic affairs, a member of parliament and a Member of the European Parliament.
• At the end of 2024, Rehn took on the role of chair of the steering committee of the Forest Academy organised by the Finnish Forest Association.
• The content of the forest.fi portal is produced by the Finnish Forest Association
  https://forest.fi/article/eus-emissions-trading-system-criticized-by-olli-rehn/