Press release 14.9.2006

Government environmental expenditure will increase next year

In the Finnish government budget proposal for 2007 EUR 40 million more is earmarked for environmental protection expenditure than in this year's budget. The increase is completely due to environmental subsidies for agriculture, which will grow from EUR 265 million to EUR 311 million. Growth in environmental subsidies for agriculture is attributable to transfers between budget sub-items, and thus subsidies received by farmers will not increase in practice. The data appear from the review Finland's Natural Resources and the Environmentpublished by the Ministry of the Environment and Statistics Finland.

The next biggest government environmental spending after environmental subsidies for agriculture was caused by research and development and development co-operation. R&D expenditure will grow slightly next year, while expenditure in development co-operation will remain unchanged.

Government expenditure on the environment, EUR million

  2004 2005 2006* 2007**
Environmental administration 111 115 115 114
Development co-operation 117 161 161 161
Research and development 188 197 201 203
Environmental subsidies for agriculture 294 322 265 311
Others 230 226 198 191
Total 940 1 021 940 980

* Budget
** Budget proposal

Municipalities spent EUR 689 million on environmental protection in 2005. Most of local government environmental protection expenditure was covered by payments charged from those using the services. Industry spent EUR 612 million on environmental protection in 2004.

Income from environmental taxation will contract

It is estimated that the income from environmentally related government taxation and fees will decrease slightly next year. According to the budget proposal for 2007, EUR 4,985 million will be collected in the form of environmental taxes, while in this year's budget that was estimated at EUR 5,029 million.

Of environment-related taxes the largest are energy taxes, amounting to approximately EUR 2,957 million, and motor car tax, making EUR 1,350 million. Vehicle tax is estimated to generate EUR 585 million and waste tax EUR 55 million.

Maritime safety in the Baltic Sea will improve

In 2005 the Environmental Commission of the International Maritime Organisation (IMO) named the Baltic Sea (excluding Russia's territorial waters and economic zone) as a Particularly Sensitive Sea Area (PSSA). The additional security measures improving maritime safety related to this status came into force in July 2006.

Safety risks in the Baltic Sea are particularly related to oil transport and illegal oil discharges. The volume of oil transports was 120 million tonnes in 2005 and it is forecast that, by 2010, the volume will have grown to about 190 million tonnes. Oil transports will increase because Russian oil production and exports will grow and the operation of new ports built on the Baltic Sea shore will start.

Share of biofuels will grow

According to a task force discussing the matter, biofuel use could be increased in Finland by imposing a use obligation on biofuels. In practice, this would mean blending biofuels into petrol and diesel. The task force recommended gradual progress, so that the proportion of biofuel would be about one per cent in 2008, two per cent in 2009 and three per cent in 2010.

Finland has informed the EU of its target that by 2010 biofuels will account for 5.75 per cent of transport fuels. Higher price of crude oil has given rise to several biofuel production projects in different parts of Finland. The start of actual production will depend on the support solutions to be made.

The review Finland's Natural Resources and the Environmenthas been published annually since 1994 in connection with the national government budget proposal. The review is drafted by the Ministry of the Environment in conjunction with the Ministry of Finance, the Ministry of Trade and Industry, the Ministry of Agriculture and Forestry, the Ministry of Transport and Communications, Statistics Finland, and the Finnish Environment Institute (SYKE). In 2006 the working group responsible for the review was chaired by Mr Markku Nurmi, Director General of the Ministry of the Environment.

Source: Finland's Natural Resources and the Environment 2006. Ministry of the Environment and Statistics Finland.

Inquiries: Ministry of the Environment / Markku Nurmi +358 9 1603 9440, Statistics Finland / Leo Kolttola +358 9 1734 3234

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