The International Energy Agency, an organisation of industrialised countries that monitors the energy market, has criticised Finland for subsidising the production of peat, which is considered a fossil fuel.
Finland instituted a system at the end of 2006 making large peat-fired power plants in the north of the country eligible for state support. The subsidies make it possible to use the power plants at times when the market price of electricity is so low that running them would not otherwise be economically feasible.
The subsidy, paid by all buyers of electricity, amounts to a few million euros.
IEA Executive DirectorNobuo Tanaka presented the agency's new report on Finnish energy policy.
The overall tone was positive, but some shortcomings were found. Tanaka said that there should be more state-run efforts to develop bioenergy.
Peat is not considered a biological source of energy. The UN energy panel has classified it as a fossil fuel, generating more carbon dioxide emissions than coal.
Tanaka said that Finland must see to it that the peat subsidies are temporary.
Tanaka's host, Minister of Economic Affairs Mauri Pekkarinen (Centre) defended peat, saying that Finnish scientists are working to more precisely define its character.
Pekkarinen said that research findings suggest that Finland might have the possibility of getting the UN to redefine peat as a "slowly renewable natural resource".
