1. Energy relations with Russia Riku Huttunen Deputy Director General Ministry of Employment and the Economy

2. Energy in Russia More than 25 % of global natural gas reserves Gazprom monopoly (in transit) Energy exports cover 60 % of Russian export revenues, energy taxes cover appr. 50 % of federal budget Very low energy efficiency – new thinking? Large investments needed at all stages of energy chain Huge gas field & infrastructure projects in Yamal, Sakhalin, Shtokman etc. Foreign investments (money) and technology is welcome, Russian ownership preferred and preserved

3. Imports from Russia to Finland and the EU Finland (2008)EU27 (2006) Natural gas100 %42 % Coal84 %26 % Crude Oil83 %34 % Electricity12-13 % of consumptionmarginal In Finland fuel substitutes normally exist; natural gas is not used for direct heating of houses like in Central Europe. Oil and coal are globally traded goods.

4. Gazprom, Nabucco, Nord Stream and South Stream

5. EU and Russia Russia is the biggest supplier of natural gas and Russian economy is dependent on export revenues => very strong interdependence Energy high on the EU agenda since 2006 Russia-Ukraina gas disputes, Belarus Latest crisis in the beginning of 2009 EU energy policy: Energy efficiency Renewable (indigenous) energy sources Geographical diversification of sources

6. Regional energy fora Many fora for energy cooperation in the North: EU Northern Dimension: energy is a part of Environment Partnership (NDEP), energy efficiency a priority BASREC (Baltic Sea Regional Cooperation) Barents Euro-Arctic Council Nordic Ministerial Council and nordic countries are active participants in regional cooperation with Russia

7. Russia and international agreements Energy Charter Treaty (ECT) Russia signed, not going to ratify(?) Would be important for gas transit, investments etc. Post-PCA Agreement EU willing to include wide energy provisions (as in the ECT) Medvedev’s proposal (new legal instrument for energy) Little additional value for the EU WTO membership When? Dispute settlement and other binding rules

8. Import and specific import dependency