EU’s emissions trading system criticized by Olli Rehn: ’Leads to inequality between Member States’

Olli Rehn, former European Commissioner and current Governor of the Bank of Finland, calls for comparable research data on forest carbon sinks to support the emissions trading system.

Olli Rehn, Governor of the Bank of Finland and former Vice-President of the European Commission, criticizes the EU’s emissions trading system based on forest carbon sinks. Interviewed by forest.fi, he deplores the lack of research data. According to Rehn, the verification and comparability of the carbon sink units traded appear to rest on an uncertain foundation.

’We need improved research data based on measurements. The calculation and validation of carbon sinks is implemented in the Member States by very heterogeneous methods,and the resulting data sets are not fully comparable. This leads to inequality between the MSs,’ Rehn says to forest.fi.

We need improved research data based on measurements. The calculation and validation of carbon sinks is implemented in the Member States by very heterogeneous methods,and the resulting data sets are not fully comparable. This leads to inequality between the MSs.

The measuring of forest and soil carbon sinks is the subject of much debate in Finland. The volume of growing stock in forests has continued to increase and it continues to function as a carbon sink, but this is no longer sufficient to offset the growing emissions from the soil in Finnish forests.

According to Natural Resources Institute Finland, the carbon sinks in Finnish forests have turned into an emission source. It has come as something of a surprise that in Sweden, another well-wooded Nordic country, forests still form a significant carbon sink.

Interviewed by the Metsälehti magazine, an expert at the Natural Resources Institute Finland says that the widely divergent results in Finland and Sweden are due to the use of different research models.

One of the threatening scenarios mentioned is that because of the model used, Finland could end up having to pay for compensatory climate actions to, say, Romania, as a result of not meeting the EU’s carbon sink goal.

Speaking to forest.fi, Rehn points out that the forest carbon sinks have decreased in several EU Member States. Besides Finland, this is also the case in other countries with significant forest resources, such as Sweden, Germany and France.

’The future development of the sinks is also uncertain. Antti Asikainen, Co-Chair of the Finnish Forest Bioeconomy Science Panel, has said that in the near future, the forest sinks in the EU countries are anticipated to drop to even less than half of what they were just over a decade ago,’ Rehn says.

Rehn’s career encompasses top positions in the EU

Olli Rehn has acted as Governor of the Bank of Finland and Chairman of its Board since 2018. His term of office will continue for the next seven years. His previous positions include those of Minister of Economic Affairs, Member of Parliament, and European Commissioner in 2004–2014.

Referring to his current position at the Bank of Finland, Rehn says he is not directly responsible for forest sector issues, but that he does follow public debate on the sector.

’Sustainable forestry is such an important element of Finnish national economy that one had better be familiar with its development prospects.’

Rehn says that on his visits to more southern European countries he always takes up the sustainable forest management and forest industry in Finland.

’I used to talk about ’the land of the green gold’, but these days not so often – even though I still think like that. Of course, the focal points have changed across the years, reflecting other changes in the world,’ he says.

Continuous-cover silviculture is not a panacea

The EU Commission is working on the closer-to-nature certification of forests. In Finland, this has been associated with continuous-cover silviculture.

Speaking about certification, Rehn mentions the Finnish examples of recommendations for good forest management created in broad-based negotiations, existing forest certification systems and in-house recommendations adopted by businesses and actors.

Thanks to these, we already follow close-to-nature principles in that, more than before, protective thickets and living and dead trees of different ages are left in forests, and the continuous-cover method is recommended for sites where it is suitable, especially peatlands.

’Thanks to these, we already follow close-to-nature principles in that, more than before, protective thickets and living and dead trees of different ages are left in forests, and the continuous-cover method is recommended for sites where it is suitable, especially peatlands,’ Rehn says.

’Still, the growing site and its requirements must be the guiding factor in choosing the appropriate method of regeneration,. Continuous cover is one option, but it is not invariably the only choice,’ he continues.

Read more: Experts: Rule of thumb for success of continuous-cover silviculture

Trump’s tariffs would shrink export revenue

In line with others, the forest sector observes closely the aggressive tariff policy measures of U.S. President Donald Trump. Rehn notes that all tariffs weaken the operating conditions of those subject to them.

Some of this income, at least, would be lost if the USA was to impose a duty on forest industry imports from Finland. As for wood products, the share and value of the exports are much smaller. For the European Union as a whole, the share of paper and paperboard exports is clearly smaller.

About 13 percent of Finnish exports of paper and paperboard went the the United States in 2024. The value of these exports is EUR 843 million.

’Some of this income, at least, would be lost if the USA was to impose a duty on forest industry imports from Finland. As for wood products, the share and value of the exports are much smaller. For the European Union as a whole, the share of paper and paperboard exports is clearly smaller,’ Rehn says.

Facts

• Olli Rehn , Dr. Phil., is Governor of the Bank of Finland.
• In 2004–2014, he acted as European Commissioner, both for EU enlargement in 2004–2009 and for economic and monetary affairs and the euro in 2010–2014, when he also acted as a Vice-President of the Commission.
• Rehn has also acted as Finnish Minister of Economic Affairs, Member of Parliament and Member of the European Parliament.
• Towards the end of 2024, Rehn assumed the chairmanship of the steering committee of the Forest Academy for Decision Makers, organized by the Finnish Forest Association.
• Forest.fi is published by the Finnish Forest Association.