National Emergency Supply Agency commences emergency stockpiling of fuel peat
The National Emergency Supply Agency (NESA) has commenced the emergency stockpiling of fuel peat to ensure the supply of heat in the event of disruptions and emergencies. Emergency stockpiling is a measure of last resort, the implementation of which is decided by the Government. Primary responsibility for ensuring the supply of heat rests with the companies that provide heating.
The National Emergency Supply Agency has, after thorough assessment and preparation, decided to establish Finland’s first emergency stockpile of fuel peat in order to prepare for potential fuel scarcity during upcoming heating seasons. The stockpiling will only be carried out for a transition period, as the long-term goal is for Finland to phase out the use of peat in energy production and transition to emissions-free energy production methods.
The establishment of the emergency stockpile is part of a policy decision issued by the Finnish Government’s Ministerial Working Group on Preparedness on 7 April 2022 for e.g. strengthening Finland’s self-sufficiency and ensuring security of supply with temporary measures.
A contract on the emergency stockpiling of fuel peat has been drawn up with Vapo Oy, to be realised with funds from the National Emergency Supply Fund. The contract is considered a strategic procurement for preparing for emergency conditions, and the procurement procedure was carried out accordingly.
In addition to this procurement to be carried out with funds from the National Emergency Supply Fund, the NESA is also procuring fuel peat under a special mandate issued by the Ministry of Economic Affairs and Employment. Combined, these procurements will correspond to approximately 20–30% of the estimated need for fuel peat in the next heating season.
Companies must prepare for the heating season by procuring fuels
The use of peat for energy production has decreased significantly in Finland in recent years. In practice, it is no longer regularly extracted except in response to submitted orders. As such, energy companies should take steps to make sure that they are adequately prepared for both the discontinuing of energy imports from Russia and the potential consequences thereof, such as the supply of wood becoming scarce and fuel prices increasing further.
The Finnish Government has already appealed to district heating companies to secure the supply of fuels for the next and subsequent heating seasons by immediately establishing agreements with peat suppliers on the extraction of peat. These agreements should ideally span several years.