Recent discussions have frequently revolved around Finland's forests and whether they are a carbon sink or a source of carbon emissions. In these discussions, the abbreviation LULUCF often appears. What lies behind this abbreviation, and what larger context is it related to? This is what I will address in this article.
To get started and ensure we are on the same page, I have compiled a few basic concepts and their definitions related to the topic. It is worth taking a moment to read and understand these before we dive into the main subject. The concepts are listed here in alphabetical order, not by importance or any other specific order.
Fluorinated greenhouse gases (F-gases) are man-made gases used in industrial applications, often as substitutes for ozone-depleting substances because they do not harm the atmospheric ozone layer. However, F-gases are potent greenhouse gases with a global warming potential significantly higher than that of carbon dioxide.
An ecosystem is a functional entity formed by living organisms and their non-living environment within a geographically and environmentally uniform area. For example, a single lake, forest, or bog can be considered an ecosystem.
Ecosystem services are the material and immaterial benefits provided by natural ecosystems to humans. These services are divided into four categories: provisioning services include food, water, and building materials; supporting services include photosynthesis and nutrient cycling; regulating services include climate regulation and purification of water and air; and cultural services include aesthetic value and recreation. The examination of ecosystem services is fundamentally anthropocentric in nature.
The goal of the European Green Deal is to transform the EU into a modern, resource-efficient, and competitive economy, where there are no net greenhouse gas emissions by 2050, economic growth is decoupled from resource use, and no person or region is left behind. The Deal was adopted in 2019.
GWP100 or Global Warming Potential 100, is a coefficient used to standardize the impact of different greenhouse gases by expressing their warming effect over a 100-year period relative to carbon dioxide.
Carbon dioxide equivalent (CO₂e) is a common metric used to express the impact of different greenhouse gases on the intensification of the greenhouse effect relative to carbon dioxide, since some greenhouse gases are more harmful to the climate than others. Methane (CH₄) is converted to carbon dioxide equivalents using a factor of 28, and nitrous oxide (N₂O) using a factor of 265 (GWP100), meaning they are 28 and 265 times more harmful to the climate than carbon dioxide, respectively.
A carbon sink is an increasing carbon reservoir that absorbs carbon dioxide from the atmosphere, thereby reducing its concentration. The most important ecosystems acting as carbon sinks on Earth include oceans, forests, soils, and plants.
Carbon removal refers to the extraction of greenhouse gases from the atmosphere achieved through carbon sinks.
Carbon balance or net carbon sink, is calculated as the difference between the amount of carbon sequestered in a carbon reservoir—such as a forest—and the amount of carbon released from it over a specific period of time.
Climate neutrality means that greenhouse gas emissions and removals are equal in magnitude.
Land use refers to the purposes for which the land surface is utilized, such as housing, road infrastructure, and agriculture and forestry. Land use has a significant impact on ecosystems, biodiversity, and the climate.
Land use change refers, for example, to clearing forests for housing development or draining peatlands for forestry purposes.
Soil carbon refers to organic carbon stored in the soil, which is formed, for example, as plants decompose into humus and organisms become part of the soil’s organic matter. Human activities have a significant impact on the stability and persistence of soil carbon.
Emission – a greenhouse gas release into the atmosphere originating from various sources.
The Emission Trading System ETS is the European Union’s carbon market mechanism, based on a cap-and-trade system for emission allowances in energy-intensive industries and the power sector. Under the system, facilities that produce significant harmful emissions must obtain or purchase a permit for each tonne of carbon dioxide they emit. The EU’s annual cap on total emission allowances is set lower than actual emissions, encouraging companies to reduce their emissions and sell any surplus allowances to others that need more. Emissions trading is therefore the trading of emission rights. In the EU, the ETS covers over 10,000 energy production and industrial facilities. It is the EU’s most important tool for achieving emission reductions. Since the system was introduced in 2005, EU emissions have decreased by 41%. According to the ETS Directive, at least 50% of the revenues from emissions trading must be used for climate and energy-related actions. Based on the latest available report, 78% of the ETS revenues from 2013 to 2020 were allocated to these purposes.
Finland’s national emissions trading authority is the Energy Authority, which allocates the emission allowances assigned to Finland to the facilities operating within the country.
The Effort Sharing Sector refers to the part of EU climate policy that covers sectors not included in the EU Emissions Trading System. This sector includes emissions from the separate heating of buildings, machinery, agriculture, transport, waste management, and F-gases. Combined, these sources account for slightly more than half of the EU’s total greenhouse gas emissions. Finland is required to reduce emissions from the effort sharing sector by 50% from 2005 levels by the year 2030.
–
The European Union directs both EU-wide and member state actions through its climate policy to mitigate and adapt to climate change. This climate policy is based on the United Nations Framework Convention on Climate Change (UNFCCC), the supplementary Kyoto Protocol, the 2015 Paris Agreement, and the UN Climate Conference COP27 held in Sharm el-Sheikh in 2022.
The EU is the world’s third-largest producer of greenhouse gases after China and the United States, accounting for 8% of global emissions. The EU is committed to reducing its net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. Additionally, the EU aims to achieve climate neutrality by 2050. The main instruments of EU climate policy are emissions trading, effort sharing, and land use. Emissions trading and effort sharing have been briefly addressed in the definitions above and will not be further elaborated here.
The EU’s LULUCF Regulation (Land Use, Land Use Change and Forestry) governs the carbon sinks and emissions from the land use sector, including land use changes and forest management. It defines how emissions and removals from land use, land-use change, and forestry are integrated into the EU’s climate targets. Forests and soils play a crucial role in climate change mitigation, as they are currently the only effective means of capturing and storing carbon from the atmosphere. The regulation aims to guide member states in strengthening their carbon sinks and reducing emissions from the land use sector. The target is for the sector to generate no net emissions during the periods 2021–2025 and 2026–2030. The overarching goal is to enhance natural carbon sinks to support the EU's ambition to become climate neutral by 2050 and to improve biodiversity in line with the European Green Deal. In this context, it means that actions taken to enhance carbon sinks must not cause significant harm to other environmental objectives.
Under the LULUCF Regulation, each EU member state sets a reference level for carbon emissions and removals from forests. This level is calculated based on forest use data from the years 2000–2009 and assumes that forest management practices will continue unchanged into the future. The actual carbon sink performance of forests during the period 2021–2025 is then assessed against this reference level. If the actual forest carbon sink exceeds the reference level, the member state may gain a calculated benefit that can be used to help meet certain targets within the Effort Sharing Sector. Conversely, if the LULUCF sector acts as a net source of emissions during the assessment period, the member state must compensate for the excess emissions either through additional measures within the Effort Sharing Sector or by purchasing LULUCF units from another member state.
If the LULUCF sector is a net source of emissions during the assessment period, the member state must compensate for the resulting emissions.
The use of reference levels in the LULUCF Regulation aims, among other things, to assess the climate impact of additional human actions, such as the implementation of new regulations and practices. At the same time, it seeks to exclude the effects of non-human factors on carbon emissions and removals. The use of reference levels supports the objective of maintaining and enhancing greenhouse gas sinks.
If a member state's forest carbon sink is below the reference level during the assessment period, the country may count the shortfall as zero emissions up to a defined flexibility threshold known as the "forest flexibility." This mechanism allows member states to compensate for accounting-based forest emissions. Under the LULUCF Regulation, forest-rich countries with limited opportunities to expand their forest area have been granted relatively greater compensation potential. Finland's forest flexibility amount is -44.1 million tonnes of CO₂ equivalent.
In addition to forest flexibility, the LULUCF Regulation includes a wide range of calculation models and rules, which are not necessary to examine in detail in this context. The main point is to understand the general purpose and structure of the regulation.
The Natural Resources Institute Finland (Luke) is a research and expert organization under the Ministry of Agriculture and Forestry, responsible for calculating the carbon sink and emission outcomes for the reference levels and assessment periods defined in the LULUCF Regulation in Finland. According to Luke, in the 2021 greenhouse gas inventory, carbon sinks in the LULUCF sector have turned into net sources of emissions. This shift is due to a reduced difference between forest growth and removals, caused by increased logging and decreased forest growth. While Finland's forests still function as a net sink, this is no longer sufficient to offset the emissions from other land-use categories within the LULUCF sector. These categories include forest land, cropland, grassland, wetlands, settlements, and other land use.
The decline in forest carbon sinks makes it more difficult for Finland to meet its LULUCF sector obligations during the 2021–2025 period. In addition to using forest and other flexibility mechanisms, Finland will need to acquire the missing emission units from other member states or compensate for them using units from the Effort Sharing sector.
According to Luke, the decline in forest carbon sinks has been influenced by factors such as reduced forest growth, high logging volumes, decreased soil carbon sinks on mineral soils, and increased soil emissions from drained peatlands. Forest growth is affected by factors including forest area, age structure of the tree stands, forest density, logging activities, and forest damage. Growth also varies annually due to weather conditions, such as growing season temperatures and drought.
Although greenhouse gas inventories in the LULUCF sector involve uncertainties—such as uncertainties in input data and methods, the use of average emission factors, and reliance on modelling rather than direct measurements—the results can be considered sufficiently reliable and, most importantly, comparable. This is especially true when comparing the reference levels set for carbon emissions and removals with the actual outcomes during the assessment periods. The rules and objectives of the LULUCF Regulation are the same for all member states, although there is always some room for differing interpretations.
The rules and objectives of the LULUCF Regulation are the same for all member states.
The significant decline in forest carbon sinks gives Finnish forest management and forestry much to reflect on. There are many different interests involved, which are sometimes seen as conflicting. However, the goal should be shared: healthy and well-growing forests that support biodiversity, diverse ecosystem services, and sensible economic use. Strengthening the forest carbon sink can be achieved without conflicting with these objectives.
The European Green Deal aims to achieve climate neutrality in the EU by 2050, and the LULUCF Regulation concerning the land use sector is one of the key tools for reaching this goal. Notably, through its Biodiversity Strategy and numerous recent proposals related to the LULUCF sector, the Commission is increasingly integrating the land use sector as a unified whole with biodiversity and its enhancement. Ultimately, climate policy and the European Green Deal form one interconnected entity, where everything influences everything else.
–
Main references European Commission Euroopan Unionin neuvosto. (7.2.2023). Ilmastonmuutos: mitä EU tekee? https://www.consilium.europa.eu/fi/policies/climate-change/ Euroopan parlamentti. (14.3.2023). Mepit hyväksyivät uudet tavoitteet maankäytön ja metsien hiilinieluille. https://www.europarl.europa.eu/news/fi/press-room/20230310IPR77223/mepit-hyvaksyivat-uudet-tavoitteet-maankayton-ja-metsien-hiilinieluille Haakana, M., Haikarainen, S., Henttonen H., Hirvelä H., Hynynen J., Launiainen S., Mehtätalo L., Miettinen A., Mutanen A., Mäkinen, H., Korhonen K., Ollila P., Pitkänen J., Räty M., Salminen H., Tikkasalo O-P., Tuomainen T., Viitanen J. & Vikfors S. (n.d.). Suomen LULUCF-sektorin 2021–2025 velvoitteen toteutuminen. Luonnonvarakeskus. Juntti,P. & Ruohonen A. (2023). Muuttuva metsä. Opas jatkuvaan kasvatukseen. Like. Maa- ja metsätalousministeriö. (n.d.). Maankäyttösektorin sisällyttäminen EU:n ilmastotavoitteisiin. https://mmm.fi/lulucf Mutanen A., Vauhkonen J., Packalen T. & Asikainen A. (2019). LULUCF-asetus ja metsien vertailutaso. [Raportti 4/2019]. Suomen Ilmastopaneeli. Ympäristöministeriö. (n.d.). Euroopan unionin ilmastopolitiikka. https://ym.fi/euroopan-unionin-ilmastopolitiikka
EN 
FI