Original publication: January 2018
Authors: Christina Ratcliff, Research Administrator
Short link to this post: http://bit.ly/2NCFfZb

This overview of the transport and tourism sectors in Finland was prepared to provide information for the mission of the Transport and Tourism Committee to Finland (8-11 February 2016).

1.INTRODUCTION

Finland is one of the five Nordic countries and the northernmost country in the European Union (EU). It is one of the most sparsely-populated countries in the EU which means the transport and tourism sectors are especially challenging. It is bordered by Sweden to the West, Norway to the North and Russia to the East. The most important sectors of Finland’s economy in 2014 were public administration, defence, education, human health and social work activities (22.2 %), industry (19.8 %) and wholesale and retail trade, transport, accommodation and food services (16.5%).

Table1: Macro-Economic Forecasts for Finland

One of the major challenges for the European transport sector is oil dependency. Despite improvements in energy efficiency, transport in the EU still depends on oil for 96% of its energy needs.Leading the way for other Member States,Finland’s share of renewable energy used in transport fuels is the second highest in Europe. The country has also set a national target of 38% for the total energy consumption that should come from renewable energy sources by 2020 (whereas the EU target is 20 %). Measures implemented to attain the country’s renewables target include the use of biofuels in transport. Indeed Finland is the most forested country in Europe therefore biomass will play a central role in meeting the target.

In March 2015, it was announced that Finland had taken the lead in implementing the EU Directive on deployment of alternative fuels infrastructure, with strong commitment from both the public and private sector to expand the domestic gas refuelling network, in particular the infrastructure for bunkering and distribution of Liquefied Natural Gas (LNG). The Directive requires Member States to create coverage of gas refuelling points in cities by 2020, and along the nine Core Network Corridors of the Trans-European Transport Network (TEN-T) by 2025, but it is estimated that within five years Finland will have established a distribution infrastructure for alternative fuels and power sources.

The Finnish government presented energy and climate policies in 2013 that include an LNG Action Plan providing123 million euros in subsidies for the deployment of LNG infrastructure for industrial and maritime use. As part of the plan, four LNG terminals will be constructed between 2015 and 2019, thereby doubling the potential use in the country, once completed.Moreover, for 2050, the Finnish government has set the ambitious goal of reducing overall transport-related CO2 emissions by 80% through increased use of alternative fuels,such as LNG and renewable biomethane. Targets set out by the administration to reach the objective include a carbon-free passenger vehicle transport, a renewable share of 70 % for heavy duty road transport and 40 % reduction in greenhouse gas (GHG) emissions from the maritime sector. In addition, Finland’s goal is to cover the whole domestic transport sector’s demand, including aviation, through increased domestic production of renewable fuels.

2.TRANSPORT

The main strength of the Finnish transport sector comes from the quality of its transport infrastructure.Rail, port and air infrastructure in Finland is rated second best in the entire EU (although ratings for Finnish roads have slightly decreased). The national budget allocated to the Ministry of Transport and Communications for 2014 was 2,970 million euros, which was reduced to 2,854 million euros for the 2015 budget proposal (-4 %). According to the International Transport Forum, Finland spent 1,723 million euros on transport infrastructure investment and maintenance spending in 2013.
The high quality of the Finnish transport infrastructure can also be illustrated through the World Economic Forum’s index of satisfaction with transport infrastructure quality (please see Figure 1), produced for its Global Competitiveness Report 2014-2015. Finland is ranked first out of the 28 Member States based on overall performance of transport infrastructure in 2014.

Figure1: Satisfaction with infrastructure quality (2014)

What’s more, consumer satisfaction with Finnish transport is high, especially with urban transport14. Indeed, as illustrated in Figure 2, Finland scores highly in the Market Performance Index (MPI) for urban transport (tram, local bus and metro) in 2013 closely followed by airline services and then train services.

Figure2:Market Performance Index for three transport markets (2013)

The share of employment in quickly growing transport enterprises in Finland has increased significantly in recent years, and is now above the EU average17.In 2014, the share of women employed in transport corresponds to the average EU share (23%), which ranks Finland in 11th place, joint with Denmark,in the EU 28 ranking.

There are two Core Network Corridors of the TEN-T that cross Finland (please see the map1):

  • The North Sea-Baltic Corridor stretches from the North Sea ports Antwerp, Rotterdam, Amsterdam, Bremen and Hamburg through Poland to the Belarus border and to the Baltic countries’ ports Klaipeda, Ventspils, Riga and Tallinn as well as to Helsinki. It covers rail, road, airports, ports, Rail/Road Terminals, inland waterway as the “Mittelland Kanal” and “Motorway of the Sea” links to Finland. The key project is “Rail Baltic(a)”, a UIC standard gauge railway between north-eastern Poland, Kaunas, Rigaand Tallinn.
  • The Scandinavian-Mediterranean Corridor extends from the Finnish-Russian border and the Finnish ports of HaminaKotka, Helsinki and Turku-Naantali via a “Motorway of the Sea” to Stockholm and with a branch from Oslo, through southern Sweden, Denmark, Germany, where the ports of Bremen, Hamburg and Rostock are connected, western Austria to the Italian ports La Spezia, Livorno, Ancona, Bari, Taranto, Naples and Palermo and “Motorway of the Sea” links to Malta. It comprises rail, road, airports, ports, RRT’s and “Motorway of the Sea” sections. The key projects are Fehmarnbelt fixedlink and Brenner base tunnel.

Finland has completed its TEN-T Core Network for high-speed rail and inland waterways (bearing in mind that Finnish high-speed rail covers a very small section of the rail network). Completion rates for the road network and for conventional rail are slightly below EU average.

Finland is participating in 17 TEN-T projects (the total cost of which is 670 million euros), for which some 300 million euros has been granted as co-funding. The Finnish Transport Agency receives financial assistance of approximately 83 million euros from the TEN-T budget. One of the priorities for Finland is to take the Rail Baltica project forward to the implementation phase.The total length of the national comprehensive road/rail network is approximately 8,800 km, of which the share of the core network is 2,460 km. The core network comprises the waterways of Saimaa, the Helsinki node, the airports of Helsinki and Turku, the ports of HaminaKotka, Helsinki, Turku and Naantali, and the combined road and rail transport terminal in Kouvola. The comprehensive network comprises 18 airports, 12 ports, one inland port and a terminal.

Map 1:TEN-T Core Network Corridors (focus on Finland)

Link to the full publication: http://bit.ly/563-423

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