From climate commitments to action: electrification needs a strong investment signal

This autumn, I have valued the opportunity to listen to and exchange views with stakeholders on climate action—from New York Climate Week to Fortum’s ETS-themed Power Hour event in Brussels. These conversations bring me back to a practical question: how do we turn climate commitments into investments that replace fossil fuels and reduce emissions? As I look ahead to COP31, the common thread is clear: accelerating electrification and giving businesses the confidence to invest.

Electrification connects climate action and competitiveness

At New York Climate Week New York Climate Week - External link back in September, I brought Fortum’s Nordic experience to the dialogue on climate action, industrial growth and energy security. These objectives can reinforce one another: reliable low-carbon electricity enables industry to cut emissions while reducing dependence on imported fossil fuels.

Electrifying industrial processes, transport and heating provides concrete routes to decarbonisation. Heat pumps, electric boilers and electrified production can replace fossil fuel use. Hydrogen and low-carbon fuels also have a role where direct electrification is not feasible.

But ambition alone will not deliver these changes. Companies need access to competitively priced low-carbon electricity, strong grid connections and predictable investment conditions. Growing demand must be matched by investment in generation, grids and flexibility.

Keep the ETS strong—and make its revenues work harder

At the latest Fortum’s EU Power Hour in Brussels EU Power Hour in Brussels - External link, the focus was on how the EU Emissions Trading System can drive electrification and industrial decarbonisation. This debate goes to the heart of implementation: companies must be confident that reducing emissions remains a sound long-term decision.

The ETS has reduced emissions and established a technology-neutral incentive for cleaner investment. Its next phase must strengthen that signal, not undermine it.

Industrial electrification supporting production of e.g. green steel and low-carbon fuels require substantial upfront investment and confidence extending over decades. A weaker emissions-cap trajectory risks undermining decisions already made and delaying new projects. Short-term relief must not come at the expense of long-term credibility.

Concerns about industrial competitiveness are legitimate. But weakening carbon pricing is not the answer. Europe should reduce investment risks, support demand for low-carbon products and direct ETS revenues towards industrial transformation.

Carbon pricing creates the incentive to move away from fossil fuels; targeted investment support helps companies to finance that move. We need both. Support should enable credible decarbonisation investments rather than preserve fossil dependence.

Bring an implementation agenda to COP31

At COP31, Fortum will bring this perspective to the global climate dialogue: electrification needs an implementation agenda, not simply another commitment. I welcome the COP31 Presidency’s increased ambition on electrification, including its initiative to increase electricity’s share of global final energy consumption to 35% by 2035. This sends an important signal about the central role electrification must play in turning climate ambition into action.

Fortum is also actively contributing to the COP31 Business Forum, bringing our practical experience of electrification into the discussion. We call for connecting climate ambition with reliable low-carbon power, efficient permitting, stronger grids and investment finance. Cooperation between policymakers, energy companies and industrial customers can turn these enablers into projects, while maintaining environmental standards and public trust.

The message connecting this autumn’s dialogues is clear: maintain climate ambition, preserve credible carbon pricing and remove the barriers to electrification. A strong ETS remains essential to Europe’s contribution—and practical delivery must be the test of our commitments.