---
category: literaturenote
citekey: obengdarkotransportpovertyarcticregion2025
title: Transport Poverty in the Arctic Region of Finland
authors: "Obeng-Darko, Nana Asare; Kirjavainen, Janne; Similä, Jukka"
year: 2025
date: 2025-10-22 2025-10-22
doi: 10.1163/23874562-20250007
publication: Arctic Review on Law and Politics
url: "https://brill.com/view/journals/arlp/aop/article-10.1163-23874562-20250007/article-10.1163-23874562-20250007.xml"
zotero_key: YNF8E3NJ
zotero_storage: TA74BL2P
collections: imporditud
folder: 001_artiklid
firstAuthor: "Obeng-Darko, Nana Asare"
status: converted
---
![](_page_0_Picture_0.jpeg)

### Arctic Review on Law and Politics (2025) 1–24

brill.com/arlp

# **Transport Poverty in the Arctic Region of Finland**

*Nana Asare Obeng-Darko |* orcid: 0000-0002-2168-3723 University of Lapland, Law Faculty, Yliopistonkatu 8, 96300 Rovaniemi, Finland *[nana.asare.obeng-darko@ulaplan](mailto:nana.asare.obeng-darko@ulapland.fi)d.fi* Corresponding author

*Janne Kirjavainen |* orcid: 0009-0004-1507-7972 University of Lapland, Faculty of Social Sciences, Yliopistonkatu 8, 96300 Rovaniemi, Finland *[janne.kirjavainen@ulaplan](mailto:janne.kirjavainen@ulapland.fi)d.fi*

*Jukka Similä |* orcid: 0000-0002-9722-5200 University of Lapland, Law Faculty, Yliopistonkatu 8, 96300 Rovaniemi, Finland *[jukka.simila@ulaplan](mailto:jukka.simila@ulapland.fi)d.fi*

Received 31 March 2025 | Accepted 30 July 2025 | Published online 22 October 2025

# **Abstract**

This article critically examines the ways in which transport and mobility sustainability regulation causes transport poverty and what can be done to reduce this impact in the Finnish Arctic region (Lapland). It explores how regulatory changes under the European Union's Green Deal policy may either mitigate or exacerbate transport poverty in this sparsely populated area. Drawing on a comprehensive review of relevant EU and Finnish legislation, the article identifies key legal factors that influence accessibility, affordability, and reliability of transport. These factors are examined in the context of Lapland's unique characteristics, including its low population density and high dependence on private cars. The analysis reveals that most regulatory measures – except for the Social Climate Fund – are likely to worsen transport poverty for vulnerable groups in Lapland. While the Social Climate Fund may offer short-term relief, it is not sufficient on its own to provide a sustainable long-term solution. To promote a fair and inclusive transition to sustainable transport, the article recommends that Member States prioritise the use of Social Climate Fund resources in remote areas to support alternative transport options such as mobility-on-demand and shared mobility services. While financial support or fiscal incentives for purchase of ev are possible, the prices of ev may still turn out to be too high for low-income households and many residents affected by transport poverty are likely to remain unable to afford electric vehicles in the near term. Despite this, only the minimum necessary should be allocated to direct income support, as it risks prolonging reliance on fossil fuels. The findings underscore the need for comprehensive strategies that effectively address the distinct challenges faced by vulnerable populations in remote regions, ensuring an equitable transition to sustainable transport.

### **Keywords**

transport poverty – sustainable transport – Social Climate Fund – Emissions Trading System ii – Lapland

#### **1 Introduction**\*

Under the European Union (EU) Green Deal, the EU aims to accelerate the transition of the transport sector toward more sustainable and smart mobility by prioritising users and offering more affordable, accessible, healthier, and cleaner alternatives to current mobility habits. Achieving sustainable transport requires a significant reduction in emissions from the sector.

Transport emission largely stems from the type of fuel used. In response, the EU is actively developing renewable and sustainable energy fuels to drive its mobility transition. However, this transition involves more than just replacing fossil fuels or advancing technology – it also raises critical equity concerns. Transport equity relates to disparities in accessibility, affordability, and reliability, collectively referred to as transport poverty. Contributing factors at the system level include energy availability, multimodal transport options, costs, technological limitations, and policy or legislative barriers. Vulnerable groups such as low-income individuals, the elderly, people with physical disabilities, and residents of sparsely populated areas like the Region of Finnish Lapland (hereafter Lapland) may be disproportionately affected.

<sup>\*</sup> Information about processing of personal data at Mid Sweden University: www.miu[n.se/](https://www.miun.se/en/personaldata)en /p[ersonaldat](https://www.miun.se/en/personaldata)a.

The key challenge is to develop and promote effective decarbonisation strategies while addressing or eliminating transport poverty. The Green Deal serves as a comprehensive, multi-sector policy agenda to transition the EU into a climate-neutral economy by 2050, with a commitment to ensuring that no one is left behind. The transport sector is central to these decarbonisation efforts. To this end, the EU has introduced several regulatory measures, including the Effort Sharing Regulation (esr),1 the Renewable Energy Directive (red),2 the Alternative Fuels Infrastructure Regulation (afir),3 the Emissions Trading System ii (ets2),4 and the Social Climate Fund (scf).5

This article focuses on road transport and examines how sustainability regulations affect transport poverty in the Finnish Arctic region. Specifically, it explores the ways of which regulatory changes under the EU Green Deal exacerbate transport poverty in Lapland – a sparsely populated region that exemplifies the challenges faced by similar areas across Europe – and what can be done to reduce adverse impacts.

This study adopts a document analysis approach to examine the relationship between EU transport sustainability regulations and transport poverty in the Finnish Arctic region. The analysis is grounded in a comprehensive review of relevant EU and Finnish legislative and policy documents, including the esr, red, afir, ets2, and the scf. These texts are critically interpreted to assess their potential impacts on transport accessibility, affordability, and reliability in sparsely populated areas. The study is contextualised within the unique geographic and demographic characteristics of Lapland, where sparse

<sup>1</sup> Regulation (EU) 2023/857 of the European Parliament and of the Council of 19 April 2023 Amending Regulation (EU) 2018/842 on Binding Annual Greenhouse Gas Emission Reductions by Member States from 2021 to 2030 Contributing to Climate Action to Meet Commitments under the Paris Agreement, and Regulation (EU) 2018/1999 (Text with eea Relevance) oj L 111/1.

<sup>2</sup> Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 Amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/ec as Regards the Promotion of Energy from Renewable Sources, and Repealing Council Directive (EU) 2015/652 oj L, 2023/2413.

<sup>3</sup> Regulation (EU) 2023/1804 of the European Parliament and of the Council of 13 September 2023 on the Deployment of Alternative Fuels Infrastructure, and Repealing Directive 2014/94/Eu (Text with eea Relevance) oj L 234/1.

<sup>4</sup> Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 Amending Directive 2003/87/ec Establishing a System for Greenhouse Gas Emission Allowance Trading within the Union and Decision (EU) 2015/1814 Concerning the Establishment and Operation of a Market Stability Reserve for the Union Greenhouse Gas Emission Trading System (Text with eea Relevance) oj L 130/134.

<sup>5</sup> Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 Establishing a Social Climate Fund and Amending Regulation (EU) 2021/1060 oj L 130/1.

service network, harsh weather conditions, and limited public transport infrastructure contribute to high car dependency. The analysis is further informed by theoretical frameworks such as spatial mismatch, social exclusion, and social justice, which help to elucidate the systemic and distributive dimensions of transport poverty. Rather than relying on empirical data collection, the methodology emphasises legal and policy analysis to identify structural risks and equity concerns associated with the sustainability transition in transport.

The article is structured as follows: Following the introduction, section 2 reviews the literature on transport poverty and introduces the concept of the 'transport poverty trap'. Section 3 outlines key features of road transport, including the region's car dependency, as well as the relative amount of lowincome individuals in Lapland. Section 4 analyses the regulatory framework supporting the Green Deal's transport goals and its effects on transport poverty. Section 5 discuss how scf could mitigate adverse impacts on transport poverty in Lapland. Section 6 presents concluding remarks.

### **2 Transport Poverty**

Transport poverty refers to the inability of individuals or households to access essential services due to inadequate, unaffordable, or unavailable transportation options. It includes situations where high transport costs consume a significant portion of household income, limiting access to employment, education, healthcare, and social participation (Lucas and et al. 2016).6 This condition particularly affects marginalised or vulnerable populations and is characterised by systemic deficiencies in transport infrastructure and services – especially motorised transport – resulting in mobility challenges (Mattioli and et al. 2018).7 Transport poverty encompasses a broad range of barriers, including financial constraints, geographic isolation, limited public transport options, and a lack of viable alternatives (Moore and et al. 2013).8 Consequently, transport poverty not only restricts physical mobility but also impedes access to essential services, opportunities, and social inclusion.

<sup>6</sup> Karen Lucas et al., 'A Method to Evaluate Equitable Accessibility: Combining Ethical Theories and Accessibility-Based Approaches', *Transportation* 43, no. 3 (2016): 473–90, http[s://d](https://doi.org/10.1007/s11116-015-9585-2)oi .or[g/10.1007/s11116-015-9585-2.](https://doi.org/10.1007/s11116-015-9585-2)

<sup>7</sup> Giulio Mattioli et al., 'Reprint of Transport Poverty and Fuel Poverty in the UK: From Analogy to Comparison', *Transport Policy*, Household transport costs, economic stress and energy vulnerability, vol. 65 (July 2018): 114–25, https://doi.org/10.1016/j.tranpo[l.2018.02.019.](https://doi.org/10.1016/j.tranpol.2018.02.019)

<sup>8</sup> José Moore et al., *Social Disadvantage and Transport in the UK: A Trip-Based Approach*, Working Paper 1063, Transport Studies Unit (University of Oxford, 2013).

Within the EU, transport poverty is legally defined, in the scf, to mean "individuals' and households' inability or difficulty to meet the costs of private or public transport, or their lack of or limited access to transport needed for their access to essential socioeconomic services and activities, taking into account the national and spatial context".9

Transport poverty trap is seen as the persistent inability of individuals and households to escape chronic transport poverty. This definition mirrors the broader concept of a poverty trap which is understood to mean "any self-reinforcing mechanism which causes poverty to persist" (Azariadis and Stachurski 2005).10 In this context, individuals or households remain chronically and systematically deprived of the benefits of transportation due to inaccessibility, unaffordability, and unreliability of all non-walking transport modes. The trap is influenced by factors at the individual or household level (e.g. income), societal level (e.g. infrastructure provision), and regulatory environment (e.g. transport policy).

# **2.1** *Aspects of Transport Poverty*

The definition of transport poverty highlights three core dimensions: accessibility, affordability and reliability.

*Accessibility* refers to the ease of reaching essential services from a given location using available transport modes (J. Gutiérrez 2009).11 It includes spatial proximity and the ability to interact within a space (Gutiérrez n.d.).12 Accessibility challenges are common in rural and underserved urban areas with poor infrastructure, limited-service providers and inadequate route coverage. These challenges disproportionately affect vulnerable groups such as low-income households, the elderly, people with disabilities, and marginalised communities (Lucas 2012).13

*Affordability* concerns the financial burden of transport. When costs such as public transit fares, fuel, and vehicle maintenance exceed a household's resources, access to jobs, education, and healthcare becomes limited. This

<sup>9</sup> Regulation (EU) 2023/955, art. 2(2).

<sup>10</sup> Costas Azariadis and John Stachurski, 'Chapter 5 Poverty Traps', in *Handbook of Economic Growth*, ed. Philippe Aghion and Steven N. Durlauf (Elsevier, 2005), 1:327, http[s://d](https://doi.org/10.1016/S1574-0684(05)01005-1)oi .or[g/10.1016/S1574-0](https://doi.org/10.1016/S1574-0684(05)01005-1)684(05)01005-1.

<sup>11</sup> J. Gutiérrez, 'Transport and Accessibility', in *International Encyclopedia of Human Geography*, ed. Rob Kitchin and Nigel Thrift (Elsevier, 2009), 412, https://doi.or[g/10.1016/B97](https://doi.org/10.1016/B978-008044910-4.01030-0)8 [-008044910-4.01030-0.](https://doi.org/10.1016/B978-008044910-4.01030-0)

<sup>12</sup> Gutiérrez, 'Transport and Accessibility'.

<sup>13</sup> Karen Lucas, 'Transport and Social Exclusion: Where Are We Now?', *Transport Policy* 20 (2012): 105–13.

is especially problematic for low-income families in rural areas, reinforcing cycles of poverty and exclusion (Litman 2002).14

*Reliability* pertains to the consistency and dependability of transport services in terms of timeliness, frequency, and overall effectiveness (Higgins and Kanaroglou 2016).15 Unreliable transportation can lead to missed opportunities, job loss, educational setbacks, and economic instability, which can develop into transport poverty (Soza-Parra and et al. 2019).16 Conversely, reliable transport enables uninterrupted access to essential services, helping to mitigate transport poverty.

# **2.2** *Theories of Transport Poverty*

Focusing on economic, spatial and social dimensions, theories of transport poverty help explain its causes, dynamics, and consequences (Titheridge and et al. 2014).17 These theories reveal how transport systems contribute to socio-economic disparities and help design effective interventions and promoting equitable access. Key theories include (a) spatial mismatch and entrapment, (b) social exclusion, and (c) social justice.

### 2.2.1 Spatial Mismatch and Entrapment Theory

Spatial Mismatch Theory, developed in North America in the 1970s, examines the geographic disconnect between employment opportunities and residences, highlighting how inadequate transportation traps individuals in cycles of poverty (Sheller and Urry 2000).18 The theory posits that the spatial disparity between jobs and residences creates significant barriers for employment seekers, particularly those from marginalised or low-income communities (Martin and et al. 2017).19

Entrapment Theory builds on this by explaining how individuals become trapped in a cycle of transport poverty due to persistent barriers such as inaccessibility, unaffordability, and unreliability. These barriers contribute to

<sup>14</sup> Todd Litman, 'Evaluating Transportation Equity', *World Transport Policy & Practice* 8 (January 2002): 50–65.

<sup>15</sup> C. D. Higgins and P. S. Kanaroglou, 'Understanding the Impact of Transit Service Reliability on Transit Ridership in Toronto', *Journal of Transport Geography* 56 (2016): 76–87.

<sup>16</sup> Jaime Soza-Parra et al., 'The Underlying Effect of Public Transport Reliability on Users' Satisfaction', *Transportation Research Part A: Policy and Practice* 126 (August 2019): 83–93, https://doi.org/10.1016/j.tr[a.2019.06.004.](https://doi.org/10.1016/j.tra.2019.06.004)

<sup>17</sup> Helena Titheridge et al., *Transport and Poverty: A Review of the Evidence* (University College London, 2014).

<sup>18</sup> Mimi Sheller and John Urry, 'The City and the Car', *International Journal of Urban and Regional Research* 24, no. 4 (2000): 738–39, https://doi.or[g/10.1111/1](https://doi.org/10.1111/1468-2427.00276)468-2427.00276.

<sup>19</sup> Michael J.R. Martin et al., 'The Spatial Diffusion of Racial and Ethnic Diversity Across U.S. Counties', *Spatial Demography* 5, no. 3 (2017): 145–69.

broader cycles of economic and social deprivation. Key elements include geographic disparities, transport limitations, restricted employment access, and their socio-economic impacts (Stacy and et al. 2019).20

# 2.2.2 Social Exclusion Theory

Social Exclusion Theory focusses on the outcomes of transport poverty rather than its causes. Originating in France in the early 1970s, the term describes the loss of access to essential services needed for full societal participation (Lucas and et al. 2017).21 This exclusion prevents individuals from engaging in economic, political, and social life due to reduced accessibility to opportunities and services, largely caused by insufficient mobility (Kenyon and et al. 2002).22

Primarily operationalised in terms of access, social exclusion concerns the consequences of obstacles like distance, physical disabilities, affordability, time constraints, fear of crime, and regulatory restrictions (Church and et al. 2000).23 Inadequate transport exacerbates exclusion, especially for vulnerable populations (Currie and Delbosc 2010).24

### 2.2.3 Social Justice Theory

Social Justice Theory examines transport poverty through the lens of inequality and fairness. It advocates for equal access to transport and prioritises policies that support the most disadvantaged (Harvey 2009).25 Beyond analysing current disparities, this theory also aligns with transport policy governance and its underlying political ideals and proposes solutions that reflect public policy objectives (Titheridge and et al. n.d.).26

<sup>20</sup> Christina Stacy et al., *Too Far from Jobs: Spatial Mismatch and Hourly Workers* (Urban Institute, 2019), https://www.urban.org/feature[s/too-far-jobs-spatial-mismatch-and](https://www.urban.org/features/too-far-jobs-spatial-mismatch-and-hourly-workers) [-hourly-workers.](https://www.urban.org/features/too-far-jobs-spatial-mismatch-and-hourly-workers)

<sup>21</sup> Karen Lucas et al., 'Assessment of Capabilities for Examining Long-Term Social Sustainability of Transport and Land Use Strategies', *Transportation Research Record: Journal of the Transportation Research Board* 2013, no. 1 (2007): 30–37, https://doi.or[g/10.3141](https://doi.org/10.3141/2013-05) [/2013-05.](https://doi.org/10.3141/2013-05)

<sup>22</sup> Susan Kenyon et al., 'Transport and Social Exclusion: Investigating the Possibility of Promoting Inclusion through Virtual Mobility', *Journal of Transport Geography* 10, no. 3 (2002): 210–11.

<sup>23</sup> Andrew Church et al., 'Transport and Social Exclusion in London', *Transport Policy* 7, no. 3 (2000): 195–205.

<sup>24</sup> Graham Currie and Alexa Delbosc, 'Modelling the Social and Psychological Impacts of Transport Disadvantage', *Transportation* 37, no. 6 (2010): 953–66, http[s://d](https://doi.org/)oi.org/10.1007 /s11116-010-9280-2.

<sup>25</sup> David Harvey, *Social Justice and the City* (University of Georgia Press, 2009), 100.

<sup>26</sup> Titheridge et al., *Transport and Poverty: A Review of the Evidence*.

Social justice helps identify the unequal distribution of transport services and infrastructure. It critiques policies that disproportionately affect vulnerable communities, who often face higher risks of pedestrian accidents, pollution, and isolation due to proximity to major roads (Currie and Delbosc n.d.).27 These conditions are viewed as manifestations of social injustice (Lucas 2006).28

# **3 Road Transport System and Transport Poverty in Lapland**

Lapland is the northernmost region of the EU, covering of 98 983 square kilometres (excluding sea water). Although larger than several EU countries, it is sparsely populated, with a density of just 1.9 persons per square kilometre – making it one of the least densely populated nuts-3 regions in the EU (Eurostat 2024, Eurostat 2024).29 In 2023, nearly 30% of Lapland's population lived in municipalities classified as sparsely populated and rural (Helminen and et al. 2020).30 Travel time to Rovaniemi, the regional centre, exceeds two hours for most of the area and more than four hours in regions outside the main road network (Traficom 2021).31

Thus, there are vulnerable population groups in Lapland at risk of falling into the transport poverty trap. Although the regional incidence of individuals at risk of poverty in Lapland (13.4%) mirrors the national figure for Finland (Statistics Finland 2024),32 substantial variations persist among its sub-regions, reflecting divergent socio-economic structures. The Eastern Lapland sub-region exhibits the highest vulnerability, with 16.3% of its

<sup>27</sup> Currie and Delbosc, 'Modelling the Social and Psychological Impacts of Transport Disadvantage', 957.

<sup>28</sup> Karen Lucas, 'Providing Transport for Social Inclusion within a Framework for Environmental Justice in the UK', *Transportation Research Part A: Policy and Practice* 40, no. 10 (2006): 805.

<sup>29</sup> Eurostat, 'Population Density by nuts 3 Region', 27 March 2024, http[s://ec.e](https://ec.europa.eu/eurostat/databrowser/view/demo_r_d3dens/default/table?lang=en)uropa.eu /eurostat/databrowser/view/d[emo\\_r\\_d3den](https://ec.europa.eu/eurostat/databrowser/view/demo_r_d3dens/default/table?lang=en)s/default/table?lang=en; Eurostat, 'Area by nuts 3 Region', Eurostat, 29 April 2024, https://doi.or[g/10.2908/R](https://doi.org/10.2908/REG_AREA3)EG\_AREA3.

<sup>30</sup> Ville Helminen et al., *Urban-rural classification*, Suomen ympäristökeskuksen raportteja 21 | 2020 (Suomen ympäristökeskus (syke), 2020), [https://h](https://helda.helsinki.fi/server/api/core/bitstreams/68a815fe-6c4d-4168-aefd-e1645acaa977/content)elda.helsinki.fi/server/api /core/bitstreams/68a815fe-6c4d-4168-aefd-e[1645acaa977/c](https://helda.helsinki.fi/server/api/core/bitstreams/68a815fe-6c4d-4168-aefd-e1645acaa977/content)ontent.

<sup>31</sup> Traficom, 'Internal and International Accessibility of Finland and Its Regions', Tieto Traficom, 29 September 2021, https://tieto.traficom.fi/en/statistic[s/internal-and-inter](https://tieto.traficom.fi/en/statistics/internal-and-international-accessibility-finland-and-its-regions) [national-accessibility-finland-and-its-regions.](https://tieto.traficom.fi/en/statistics/internal-and-international-accessibility-finland-and-its-regions)

<sup>32</sup> Statistics Finland, 'Income Level, Income Inequality, Population at Risk of Poverty or Dependent on Basic Social Security in the Dwelling-Population by Region, Information and Year', PxWeb, 2024, https://pxdata.stat.fi:443/P[xWebPxWe](https://pxdata.stat.fi:443/PxWebPxWeb/pxweb/en/StatFin/StatFin__tjt/statfin_tjt_pxt_14ww.px/)b/pxweb/en/StatFin/Stat Fin\_\_tjt/statfi[n\\_tjt\\_px](https://pxdata.stat.fi:443/PxWebPxWeb/pxweb/en/StatFin/StatFin__tjt/statfin_tjt_pxt_14ww.px/)t\_14ww.px/.

residents classified as at risk of poverty. Likewise, the prevalence of persistent poverty in Eastern Lapland (11.2%) substantially exceeds the national rate of 7.8%.33 In Finland, "at a risk of poverty" describes households whose disposable income falls below 60% of the equivalent national median, whereas "persistent risk of poverty" is reserved for households meeting this threshold in the reference year and in at least two of the three preceding years.34

Mobility in Lapland is heavily reliant on private passenger cars. As of July 2024, there were more than 500 cars per 1000 inhabitants (Statistics Finland 2024).35 The average car driving distance in Lapland was 31.1 km, compared to the national average of 21.8 km. Residents also spent more time driving – 35.9 minutes per day on average – than those in other Finnish regions, where the figure is generally below 30 minutes (Traficom 2021).36

Several factors contribute to this car dependency. The railway network is limited and does not extend to northern Lapland. Long distances, snowy roads, and cold Arctic weather make micromobility options like e-bikes impractical, even though they may be viable in warmer climates (Dorantes and Murauskaite-Bull 2022).37

Declining populations in some areas have led to reduced transport services. Existing services – many of which cater to tourism – do not meet all local mobility needs. A 2018 taxi reform worsened the situation by removing the requirement for taxis to be stationed in specific locations, favouring demand-based service distribution instead (Ministry of Transport and Communications 2024).38 While population trends vary across Lapland, the overall trajectory is downward and expected to continue (Lapin luotsi 2023).39

According to the Finnish Transport and Communications Agency (Traficom 2023),40 current financial constraints may make it impossible to maintain

<sup>33</sup> Ibid.

<sup>34</sup> Ibid.

<sup>35</sup> Statistics Finland, 'Population and Society', Statistics Finland, 2024, [http](https://stat.fi/tup/suoluk/suoluk_vaesto_en.html)s://stat.fi/tup /suoluk/s[uoluk\\_vaest](https://stat.fi/tup/suoluk/suoluk_vaesto_en.html)o\_en.html.

<sup>36</sup> Traficom, 'Finnish National Travel Survey 2021. Regional Tables', 2021, http[s://w](https://www.traficom.fi/sites/default/files/media/file/HLT2021_maakuntataulukot.xlsx)ww.trafi com.fi/sites/default/files/medi[a/file/HLT2021\\_m](https://www.traficom.fi/sites/default/files/media/file/HLT2021_maakuntataulukot.xlsx)aakuntataulukot.xlsx.

<sup>37</sup> Lucía Mejía. Dorantes and Ingrida Murauskaite-Bull, *Transport Poverty: A Systematic Literature Review in Europe*(Publications Office of the European Union, 2022), 23.

<sup>38</sup> Ministry of Transport and Communications, 'Arviomuistio Taksilainsäädännön Muutosehdotuksista', 2024, https://www.taksiliitt[o.fi/wp-content/u](https://www.taksiliitto.fi/wp-content/uploads/2024/05/Taksis%C3%A4%C3%A4ntelyn-arviomuistio-3.pdf)ploads/2024/05/Taksis%C3 %A4%C3%A4[ntelyn-arviomuistio-3.p](https://www.taksiliitto.fi/wp-content/uploads/2024/05/Taksis%C3%A4%C3%A4ntelyn-arviomuistio-3.pdf)df.

<sup>39</sup> Lapin luotsi, 'Long-term population development in the region of Lapland', 2023, [http](https://lapinluotsi.fi/lappi-nyt/vaesto/vaeston-kehitys/)s:// lapinluotsi.fi/lappi-nyt/vaest[o/vaeston-kehitys/](https://lapinluotsi.fi/lappi-nyt/vaesto/vaeston-kehitys/).

<sup>40</sup> Traficom, 'Service Level of Long-Distance Passenger Transport Services', Tieto Traficom, 14 August 2023, https://tieto.traficom.fi/en/statistic[s/service-level-long-distance-passen](https://tieto.traficom.fi/en/statistics/service-level-long-distance-passenger-transport-services) [ger-transport-services.](https://tieto.traficom.fi/en/statistics/service-level-long-distance-passenger-transport-services)

existing state-funded transport services between municipalities. This could lead to service cuts, unmet new needs, and rising ticket prices.41 In addition, the average distance to a bus stop served by at least one long-distance bus per day is 11.2 kilometres (Traficom 2021).42 A 2023 survey found that 75% of residents did not consider public transport a viable option. However, over half said they would use it if service levels improved.43 In summary, car dependency remains strong in the Arctic region.

# **4 The EU Transport Sustainability Policies and Their Impact on Transport Poverty in Lapland**

Transport policy in the EU is governed by Article 4(2)(g) tfeu and Title vi (Articles 90–100) of the Treaty on the functioning of the European Union (tfeu). Article 90 tfeu outlines the objectives of a common transport policy, while Article 91(1) sets rules and conditions for international transport through EU territory, transport safety, as well as other appropriate provisions. Article 91(2) further stipulates that such measures referred in paragraph 1 should consider their impact on living standards, employment, and transport facilities

The EU Green Deal aims to make Europe the first climate-neutral continent by 2050.44 It incorporates sustainable transport legislations to reduce greenhouse gas (ghg) emissions and supports the UN's 2030 Agenda for Sustainable Development. Achieving this goal requires a 90% reduction in emissions by 2050, promoting healthier, cleaner, and more affordable mobility options for all.

In 2020, the Commission adopted the Sustainable and Smart Mobility Strategy, which targets 90% emissions cut by 2050. Key goals include 30 million zero-emission vehicles by 2030 and nearly all vehicles zero-emission by 2050.45 The strategy emphasises affordability, accessibility, and reliabil-

<sup>41</sup> Ibid.

<sup>42</sup> Traficom, 'Regional Accessibility Reviews', Tieto Traficom, 11 November 2021, [http](https://tieto.traficom.fi/en/statistics/regional-accessibility-reviews)s://tieto .traficom.fi/en/statistic[s/regional-accessibility-reviews](https://tieto.traficom.fi/en/statistics/regional-accessibility-reviews).

<sup>43</sup> Liikenneturva & Taloustutkimus 'Liikenneturvan Liikenne Lapin maakunnassa 2023 – kyselyn tuloksia', 2023, Personal Communication 7 January 2025.

<sup>44</sup> Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, The European Green Deal, Brussels, 11.12.2019, com(2019) 640 Final.

<sup>45</sup> European Commission, 'Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee

ity for all, ensuring mobility is available for rural and remote regions, accessible for people with disabilities, and offering good social conditions and job opportunities.46 The transition should, according to the strategy, be socially fair and just or it risks failure.

To support these objectives, the EU has introduced several regulatory instruments: the esr, red, afir, ets2 and the scf. From transport poverty perspective, these instruments do not work in the same direction. esr and red may indirectly impact fuel prices; afir directly affects access to charging stations; ets2 has direct impacts on fuel prices; and the scf is designed to ensure the transition socially fair and just.

The following subsections examine these instruments and their implications for road transport sustainability and transport poverty in Lapland.

#### **4.1** *Indirect Impacts on Fuel Prices: esr and red*

The impact of the esr and the red on fuel prices is indirect. Neither regulation operates through market-pricing mechanisms, nor do they explicitly seek to raise fuel costs. Nevertheless, the implementation measures they require Member States (ms) to adopt can influence prices. However, in practice, it's impossible to disentangle the effect of the esr and the red on fuel prices because all ms use the blending mandate (also called the distribution obligation) to satisfy both sets of transport-sector requirements (Lundberg and et al. 2023).47 This mandate obliges fuel suppliers to mix a specified share of renewable fuels with traditional fossil fuels. Since renewable fuels are more expensive than their fossil counterparts, the blending mandate ultimately increases fuel prices.

The esr sets binding annual ghg emission reduction targets for ms s in sectors not covered by the EU Emissions Trading System (ets1), including road transport. Given that transport accounts for nearly a quarter of the EU's ghg emissions, the esr promotes energy efficiency, electric mobility, sustainable transport modes, and renewable energy adoption to mitigate emissions and reduce fossil fuel dependency.48

of the Regions Sustainable and Smart Mobility Strategy – Putting European Transport on Track for the Future', 2020, para. 9.

<sup>46</sup> Ibid., para. 8.

<sup>47</sup> Liv Lundberg et al., 'The Impact of Blending Mandates on Biofuel Consumption, Production, Emission Reductions and Fuel Prices', *Energy Policy* 183 (December 2023): 113835, https://doi.org/10.1016/j.enpo[l.2023.113835.](https://doi.org/10.1016/j.enpol.2023.113835)

<sup>48</sup> Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on Binding Annual Greenhouse Gas Emission Reductions by Member States from 2021 to

Each ms has a national target contributing to the EU-wide goal of a 40% reduction below 2005 levels by 2030.49 Wealthier countries with higher gdp s are assigned more ambitious targets. ms have flexibility in how they meet these targets, including borrowing, banking, or trading emissions.50 This flexibility means that the esr's impact on transport poverty varies across countries, depending on national implementation strategies. Although these flexibilities are intended to drive cost-effective reductions, in practice it's unlikely a country would shift all efforts away from transport, given that transport typically accounts for a large share of national emissions. Importantly, the esr itself does not directly raise fuel prices, though some national implementation measures can do so.

The esr requires Finland to reduce emissions from all effort sharing sectors together by 50% by 2030 compared to 2005 levels. In 2023, transport accounted for approximately 37% of emissions in Finland's esr-covered sectors and about 23% of total national emissions. Road transport alone was responsible for around 96% of domestic transport emissions (Siikavirta and et al. 2024).51

The red is a key EU directive promoting the integration of renewable energy across sectors, including electricity, heating and cooling, biofuels, and transport. It sets a binding target for renewable energy to comprise at least 42.5% of the EU's gross final energy consumption by 2030.52 For the transport sector, the red mandates that renewable energy must account for at least 29% of final energy consumption by 2030.53 Alternatively, a ms may achieve at least a 14.5% reduction in ghg intensity in the sector.54 However, Member States report in accordance with both obligations.

While these targets may lead to short- to mid-term increases in fuel prices, the red allows ms to implement support mechanisms to offset costs for consumers and taxpayers. These mechanisms can help reduce the overall system cost of renewable fuel deployment and support the decarbonisation of transport without disproportionately burdening vulnerable populations.

In Finland, both the esr and the red transport requirements have been implemented primarily through the blending mandate under the Act (446/

<sup>2030</sup> Contributing to Climate Action to Meet Commitments under the Paris Agreement and Amending Regulation (EU) No 525/2013 (Text with eea Relevance) oj L 156/26.

<sup>49</sup> Regulation (EU) 2023/857, art. 1.

<sup>50</sup> Regulation (EU) 2018/842, art. 5.

<sup>51</sup> Hanne Siikavirta et al., 'Annual Climate Report 2024', Sarjajulkaisu, 29 October 2024, 42, https://julkaisut.valtioneuvosto.fi/handl[e/10024/165896](https://julkaisut.valtioneuvosto.fi/handle/10024/165896).

<sup>52</sup> Directive (EU) 2023/2413, art. 2(a).

<sup>53</sup> Ibid., art. 1(15)(1)(a)(i).

<sup>54</sup> Ibid., art. 1(15)(1)(a)(ii).

2007) on the Promotion of the Use of Renewable Fuels in Transport. Since taking office in 2023, the Prime Minister Orpo's government programme has brought a change to the blending mandate policy of Finland by prioritising the ambition to maintain fuel prices at current levels over the greenhouse gas reduction impact of the policy. The programme explicitly states that "*The price of transport fuels will not increase due to the Government's measures*."55 As a result, the government decided not to follow the path adopted by the previous government of the ever-tightening blending mandate but decided to proceed along a looser path until the end of its own government term in 2027. In addition, it had decided to reduce the penalty for non-compliance with the blending mandate. Moreover, it introduced a flexibility mechanism allowing fuel distributors to meet their renewable fuel obligations via alternative emission reduction projects.56 These changes reduce consumers' immediate costs compared with the measures the previous government deemed necessary to satisfy both EU requirements and Finland's 2025 carbon-neutrality commitment (Sipilä and Lottonen 2024).57

The Finnish Climate Change Panel has assessed the Prime Minister Orpo's government transport emission reduction policy. It criticized all the measures described above and concluded that "*From the perspective of the effort sharing sector's emission reduction target, sufficient emissions reductions in road transport can only be ensured by maintaining the blending mandate from 2025 onwards at the level prior to the changes proposed by Prime Minister Orpo's government* (Seppälä and et al., Tieliikenteen päästövähennystoimet ja niiden vaikutukset 2024)."58 The report referred to above supports with this assessment (Seppälä and et al. 2024, Sipilä and Lottonen n.d.).59 The Panel also expressed concern that the upcoming emissions trading system for road transport (ets2), set to begin in 2027, may not be enough alone to meet Finland's emission targets

<sup>55</sup> A strong and committed Finland – the Government's vision. Programme of Prime Minister Petteri Orpo's Government 20 June 2023. Publications of the Finnish Government 2023:60, 166.

<sup>56</sup> Amendment (841/2024) to the Act (446/2007) on the Promotion of the Use of Renewable Fuels in Transport.

<sup>57</sup> Esa Sipilä and Johannes Lottonen, *Selvitys hallitusohjelman uusiutuvien polttoaineiden jakeluvelvoitetta koskevien kirjausten vaikutuksista sekä RED III-direktiivin kansallisesta toimeenpanosta*, vn/26504/2023 (Ministry of Economic Affairs and Employment, 2024).

<sup>58</sup> Jyri Seppälä et al., *Tieliikenteen päästövähennystoimet ja niiden vaikutukset*, Suomen ilmastopaneelin raportti 1/2024 (Suomen ilmastopaneeli, 2024), x.

<sup>59</sup> Ibid., 59; Sipilä and Lottonen, *Selvitys hallitusohjelman uusiutuvien polttoaineiden jakeluvelvoitetta koskevien kirjausten vaikutuksista sekä RED III-direktiivin kansallisesta toimeenpanosta*.

(Seppänen and et al. 2022).60 It proposed alternative policy measures to meet targets with similar cost and income distribution effects.61 The criticisms have not changed government policy.

From a transport poverty perspective, the current government's policy has two implications. In the short term, keeping fuel prices low may help reduce transport poverty by mitigating the impact of regulation on affordability. This effect is dependent on the kilometres driven, so households living in remote Arctic regions, benefit from this policy. However, in the long run, delaying the esr and the red compliance could lead to stricter future policies and higher fuel prices, potentially exacerbating transport poverty. This, however, is dependent on the policy of future governments.

# **4.2** *Improving Accessibility to Alternative Fuel Infrastructure: afir*

The afir aims to accelerate the development of alternative fuel infrastructure across the EU. While the definition of alternative fuel covers a number of alternative fuels, for passenger transport in Finland it is mainly a question of the electrification of transport.

Primary objectives of the regulation are to:

- 1. Ensure a minimum level of infrastructure to support the uptake of alternative fuel vehicles across all transport modes;
- 2. Guarantee full interoperability of infrastructure across Member States;
- 3. Provide comprehensive user information and accessible payment options at alternative fuel infrastructure (European Commission 2023).62

Article 1(2) of afir outlines requirements for national policy frameworks, including the deployment of infrastructure in areas without mandatory EUwide targets. This implies that Finland must include measures targeting the Arctic region to ensure transport accessibility, reliability, and affordability, thereby helping to reduce transport poverty.

National frameworks must also ensure that publicly accessible recharging and refuelling points are accessible to older persons and individuals with reduced mobility or disabilities.63 Additionally, national plans may include

<sup>60</sup> Anni Seppänen et al., *Implementation and impacts of national emissions trading in road transport. Report of the Finnish Climate Change Panel 4/2022*, Suomen ilmastopaneelin raportti 4/2022 (Suomen ilmastopaneeli, 2022), https://doi.or[g/10.31885/9789527457146](https://doi.org/10.31885/9789527457146).

<sup>61</sup> Ibid., 38.

<sup>62</sup> European Commission, 'Alternative Fuels Infrastructure – European Commission', 2023, art. 1, https://transport.ec.europ[a.eu/transport-themes/clean-transport/alternative-fuels](https://transport.ec.europa.eu/transport-themes/clean-transport/alternative-fuels-sustainable-mobility-europe/alternative-fuels-infrastructure_en) [-sustainable-mobility-europe/alternative-fuels-infrastructure\\_en.](https://transport.ec.europa.eu/transport-themes/clean-transport/alternative-fuels-sustainable-mobility-europe/alternative-fuels-infrastructure_en)

<sup>63</sup> Regulation (EU) 2023/1804, art. 14(2)(i).

provisions to guarantee accessibility across the entire territory, especially in rural areas, to ensure territorial cohesion.64

Since afir's adoption, the number of electric vehicles (ev) charging points and hydrogen refuelling stations has increased significantly across the EU, from about 30,000 in 2014 to over 600,000 by 2023 (European Commission 2024).65 In the Finnish Arctic, however, hydrogen refuelling stations are still absent, and public ev charging infrastructure is only moderately developed. Most areas in Lapland have access to a charging station within a 50-kilometre radius, but the most remote regions remain underserved. There are still large areas with over 25 km distance between stations and variation in total power output (Traficom n.d.).66

Finland leverages national flexibilities under afir for ten-t roads due to low traffic volumes. On most roads in Lapland, the average daily traffic of light vehicles is under 3000, with seasonal variations. According to Finland's National Programme for Alternative Transport Fuels Distribution Infrastructure, some road segments have traffic volumes too low to justify infrastructure investment based on socio-economic cost-benefit analyses (Ojala and et al. 2024).67 These flexibilities allow for greater distances between charging stations and fewer installations, as one station can serve both directions of travel.

In the short term, alternative fuel infrastructure does little to alleviate transport poverty. A dense network of charging stations is of limited use to individuals who cannot afford an ev. Conversely, in areas where infrastructure is sparse – such as much of Lapland – even those who can afford ev s may be discouraged from purchasing them. However, in the long term, as ev prices decline and infrastructure expands, the situation may improve.

### **4.3** *Direct Impacts on Fuel Prices: Emissions Trading System ii*

The ets2 is a new EU mechanism set to become operational in 2027; it aims to raise fossil fuel prices relative to alternative energy sources. It extends the existing ets1 to cover CO₂ emissions from fuel combustion in buildings, road transport, and additional sectors not covered by ets1. ets2 was introduced to

<sup>64</sup> Ibid., art. 14(3)(c).

<sup>65</sup> European Commission, 'European Union (EU27) | European Alternative Fuels Observatory', 2024, http[s://alternative-fuels-observatory.ec.e](https://alternative-fuels-observatory.ec.europa.eu/transport-mode/road/european-union-eu27)uropa.eu/transport-mode/road/euro [pean-union-eu](https://alternative-fuels-observatory.ec.europa.eu/transport-mode/road/european-union-eu27)27.

<sup>66</sup> Traficom, 'Regional Accessibility Reviews'.

<sup>67</sup> Tuuli Ojala et al., 'National programme for alternative transport fuels distribution infrastructure', Publications of the Ministry of Transport and Communications, 13 November 2024, 146, https://julkaisut.valtioneuvosto.fi/handl[e/10024/165917](https://julkaisut.valtioneuvosto.fi/handle/10024/165917).

address the insufficient emission reductions in these sectors, which are critical to achieving the EU's 2050 climate neutrality goal.

Unlike ets1, ets2 operates upstream in the supply chain, requiring fuel suppliers to monitor and report emissions.68 The system aims for a 43% reduction in emissions from buildings and road transport by 2030 compared to 2005 levels.69 All emission allowances under ets2 will be auctioned, with a portion of the revenues allocated to the Social Climate Fund (scf) to support vulnerable households and micro-enterprises, thereby promoting a just transition.70

Despite its goals, ets2 raises concerns about its impact on low-income consumers. Increased costs for fuel suppliers may be passed on to consumers, raising fuel prices (Haywood and Jakob, The Role of the Emissions Trading Scheme 2 in the Policy Mix to Decarbonize Road Transport in the European Union 2023).71 This is particularly problematic for low-income households, which typically spend a larger share of their income on transport fuels and may lack the capital to invest in low-carbon alternatives such as ev s (Haywood and Jakob 2023, El-Geneidy and et al. 2016).72 In sparsely populated areas like the Finnish Arctic, where car dependency is high and alternatives are limited, the impact could be severe. This assertion echoes other studies across the EU showing that in rural, low-density regions, any policy that increases the cost of private vehicle use significantly raises the risk of transport poverty (Jüngling and et al. 2025, Primc and et al. 2025).73

Carbon pricing under ets2 is intended to incentivise behavioural change. In the short term, this may include more fuel-efficient driving or switching to public or non-motorised transport. In the medium term, households may invest in more efficient vehicles or adopt blended fuels. Long-term adaptations

<sup>68</sup> Directive (EU) 2023/959, para. 77.

<sup>69</sup> Ibid., para. 80.

<sup>70</sup> Ibid., para. 84.

<sup>71</sup> Luke Haywood and Michael Jakob, 'The Role of the Emissions Trading Scheme 2 in the Policy Mix to Decarbonize Road Transport in the European Union', *Transport Policy* 139 (August 2023): 101, https://doi.or[g/10.1016/j.t](https://doi.org/10.1016/j.tranpol.2023.06.003)ranpol.2023.06.003.

<sup>72</sup> Ibid., 102; Ahmed El-Geneidy et al., 'The Cost of Equity: Assessing Transit Accessibility and Social Disparity Using Total Travel Cost', *Transportation Research Part A: Policy and Practice* 91 (September 2016): 304–5, https://doi.org/10.1016/j.tr[a.2016.07.003](https://doi.org/10.1016/j.tra.2016.07.003).

<sup>73</sup> See e.g., Eva Jüngling et al., *Making the Best of the New EU Social Climate Fund*, Policy Brief (Bruegel, 2025), https://www.jstor.org/stabl[e/resrep69145;](https://www.jstor.org/stable/resrep69145) Kaja Primc et al., 'Transport Poverty Vulnerability Index: Making Use of Standardised Databases', *Energy Research & Social Science* 123 (May 2025): 104041, https://doi.org/10.1016/j.ers[s.2025.104041](https://doi.org/10.1016/j.erss.2025.104041).

could involve relocating homes or workplaces to reduce travel needs (Graichen and et al. 2021).74

ets2 is not a standalone policy but complements other Green Deal instruments. It supports ms in meeting their esr targets (Duwe and et al. 2023, European Commission 2023).75 The transport sector is now subject to dual coverage: EU-level emissions caps under ets2 and national esr targets. ets2 is expected to cover about 50% of esr emissions, significantly contributing to the EU's 2030 goals (Hanoune 2024).76 However, this dual system may reduce the perceived importance of national targets. With an EU-wide emissions cap in place, ms may feel less compelled to meet their individual esr targets. Originally, these national targets were designed to ensure fair burden-sharing among Member States. If ets2 effectively limits emissions, the role of national targets in sectors like transport may diminish (Graichen and et al., Including Transport Sectors in the EU ETS n.d.).77

ets2 affects prices throughout the market in the EU. Although there are mechanisms to curb excessive price spikes, none of them can adjust for specific regional or individual differences. Recognising the potential for ets2 to exacerbate transport poverty among vulnerable households, micro-enterprises and transport users, the EU established the scf to mitigate negative effects and ensure that the transition remains fair and inclusive.

**4.4** *An Instrument to Reduce Transport Poverty: the Social Climate Fund* Spanning from 2026 to 2032 and with a maximum allocation of eur 65 billion, the scf is designed to support a socially fair transition toward climate neutrality. It addresses the social impacts of ghg emissions from buildings and road transport, focusing on vulnerable households, micro-enterprises, and transport users.78

<sup>74</sup> Jakob Graichen et al., 'Including Transport Sectors in the EU ets', Oeko-Institut, 13 May 2021, https://www.oeko.de/en/publication[s/including-transport-sectors-in-the-eu-ets/](https://www.oeko.de/en/publications/including-transport-sectors-in-the-eu-ets/).

<sup>75</sup> Matthias Duwe et al., 'Can Current EU Climate Policy Reliably Achieve Climate Neutrality by 2050? Post-2030 Crunch Issues for the Move to a Net Zero Economy', Ecologic Institute, Oeko-Institut, 2 March 2023, https://www.ecologi[c.eu/19160](https://www.ecologic.eu/19160); European Commission, 'ets2: Buildings, Road Transport and Additional Sectors – European Commission', 2023, https://climate.ec.europ[a.eu/eu-action/eu-emissions-trading-system-eu-ets](https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/ets2-buildings-road-transport-and-additional-sectors_en) /ets[2-buildings-road-transport-and-additional-sectors\\_en.](https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/ets2-buildings-road-transport-and-additional-sectors_en)

<sup>76</sup> Cecile Hanoune, 'The Effort Sharing Regulation', in *Delivering a Climate Neutral Europe*, ed. Jos Delbeke (Routledge, 2024).

<sup>77</sup> Graichen et al., 'Including Transport Sectors in the EU ets'.

<sup>78</sup> Regulation (EU) 2023/955, art. 3(1).

The scf provides both temporary direct income support and structural investments. These include measures to:

- Increase building energy efficiency;
- Decarbonise heating and cooling;
- Integrate renewable energy; and
- Improve access to zero- and low-emission mobility.79

In essence, the scf aims to alleviate the financial burden on EU citizens who may face increased costs due to climate action. In the context of transport sustainability, the scf mandates that ms develop Social Climate Plans (referred to as "Plans") that specifically target vulnerable transport users. According to Article 8 of the scf Regulations, these Plans must include among others:

- Measures to facilitate access to zero- and low-emission vehicles and bicycles;
- Financial support for vehicle acquisition;
- Infrastructure development; and
- Promotion of a second-hand market for zero-emission vehicles.

Plans should prioritise affordable zero-emission vehicles and incentivise accessible public transport and sustainable mobility services.80 ms must submit their plans to the Commission by 30 June 2025. The Commission will then review each plan in close collaboration with the submitting State and aims to complete its assessment and issue a decision within five months of receipt.

However, this timeline is subject to several uncertainties that may prolong the process:

- ms may miss the submission deadline;
- The Commission may request additional information;
- A ms may revise the Plan after the submission; and
- The ms and the Commission may agree to a reasonable extension of the assessment period.

Finland has begun preparing its Plans and intends to submit it by the end of June 2025. However, it remains uncertain whether it will do so or when the Commission will issue its decision. To date, no draft of Finland's Plans is publicly available.

The scf also promotes social inclusion and aims to mitigate transport poverty through affordable mobility solutions, shared mobility services, and public transport fare subsidies. These strategies can significantly augment mobility alternatives for low-income individuals and vulnerable groups, particularly in remote and sparsely populated regions like Finnish Lapland. Additionally, the

<sup>79</sup> Ibid., art. 3(2).

<sup>80</sup> Ibid., art. 8(1)(f-g).

scf emphasises community outreach to raise awareness of available transport services and the benefits of sustainable mobility

### **5 Discussion**

This section discusses the potential of the scf to reduce – or at least prevent an increase in – transport poverty during the sustainability transition of the transport system in the Finnish Arctic (the Region of Finnish Lapland). While the transition is already underway, it remains in its early stages, and many of its impacts are not yet fully visible. Even the legislative framework is not yet fully operational. For example, the ets2 has not yet been implemented, and Finland's Social Climate Plan, along with potential legislative amendments, is still under development.

As such, only general observations and assumptions can be made at this stage. However, it is reasonable to expect that the Green Deal legislation will increase the price of fossil fuels, thereby creating a risk of transport poverty in car-dependent regions like Lapland.

The risk of transport poverty varies across regions and population groups. Most specialised services – such as advanced healthcare and specialist retail – are concentrated in the urban centres of Rovaniemi and Kemi-Tornio. Tourist destinations may offer a broader range of services, but for many residents in other parts of Lapland, the distance to urban centres can be hundreds of kilometres. Consequently, the impact of the sustainability transition on transport availability, cost, and reliability differs significantly between urban and rural residents. For rural dwellers, the long distances required to access essential services increase the risk of transport poverty. This reflects a spatial constraint that aligns with the spatial mismatch theory, which highlights the geographic disparity between where people live and where services are located. These disparities also support the social exclusion theory, which focuses on the outcomes of limited mobility – such as reduced access to public goods and societal participation. As Church, Frost and Sullivan have noted, the physical distance between rural residents and essential services tends to exacerbate social exclusion (Church and et al. n.d.).81

While national welfare legislation in Finland guarantees free or subsidised transport for certain vulnerable groups, the Green Deal does not alter these provisions. For example, the public sector provides mobility services for

<sup>81</sup> Church et al., 'Transport and Social Exclusion in London', 199.

individuals unable to travel independently82 and offers school transport for pupils living more than five kilometres from school.83 As Heikki Liimatainen has observed, these policies mean that absolute transport poverty is rare in Finland (Liimatainen 2022).84

However, this does not eliminate the risk of relative transport poverty, where certain groups face significantly greater challenges in terms of accessibility, affordability, or reliability of transport. These challenges are particularly acute for low-income households in sparsely populated areas of Lapland, who may also be vulnerable to rising living costs more broadly. For instance, households living in oil-heated detached homes are especially at risk, as ets2 is expected to increase the cost of heating oil.

From a justice perspective, it is especially problematic if the sustainability transition deepens existing vulnerabilities, pushing individuals into permanent transport poverty. In such cases, affected individuals may fall into a transport poverty trap, where systemic barriers prevent them from accessing the benefits of mobility and participating fully in society.

The scf is the EU's primary policy instrument to address transport poverty arising from the sustainability transition. Finland is eligible to receive up to €348 million from the scf, although it contributes €596 million to the Fund (Government of Finland 2024).85 In addition, Finland is required to finance at least to 25 % of the estimated total costs of its Plan from its own resources.86 In total, approximately €464 million will be available for implementing the scf in Finland. Despite this significant funding, Finland does not currently appear to be planning additional measures specifically aimed at mitigating transport poverty caused by climate policy. As the Social Climate Plan is still under preparation, this presents an opportunity to shape its direction.87

A key question is: How should Finland use the available funds? While the scf Regulation permits direct income support for affected individuals, it limits this to 37.5% of the total estimated cost of the Plan.88 Moreover, such support must be temporary and degressive, and recipients must also benefit

<sup>82</sup> Disability Services Act 675/2023.

<sup>83</sup> Government of Finland, 'Basic Education Act 628/1998', 1998, sec. 32.

<sup>84</sup> Heikki Liimatainen, 'Liikenneköyhyyden Ilmenemismuodot Ja Miten Ongelmiin Voidaan Puuttua. Kalevi Sorsa Foundation', 2022, https://sorsafoundatio[n.fi/wp-content/u](https://sorsafoundation.fi/wp-content/uploads/kss-liikennekoyhyys6-web.pdf)ploads [/kss-liikennekoyhyys6-web.p](https://sorsafoundation.fi/wp-content/uploads/kss-liikennekoyhyys6-web.pdf)df.

<sup>85</sup> Government of Finland, 'Government Proposal he 119/2024 (Government Proposal to Parliament for an Act on Emissions Trading in Fossil Fuel Distribution)', 2024, 4–5.

<sup>86</sup> Regulation (EU) 2023/955, art. 15.

<sup>87</sup> Public consultation 28.11.2024 on the preparation of Social Climate Plan.

<sup>88</sup> Regulation (EU) 2023/955, art. 8.

from structural measures and investments.89 Simply compensating for rising fuel prices through direct support would maintain fossil fuel dependency rather than reduce it. Therefore, ms are encouraged to minimise reliance on direct support and prioritise long-term solutions.

One of the scf's core objectives is to improve access to zero- and lowemission vehicles. Given the strong car dependency in the Arctic, this objective is particularly relevant for Lapland. While the regulation allows support for purchasing such vehicles, it prioritises zero-emission vehicles – provided they are affordable and deployable.90

Although the scf does not define 'low-emission vehicles', it is likely that the European Commission will adopt the definition from Regulation (EU) 2019/631, which classifies vehicles with tailpipe emissions of 0–50 g CO₂/km as zero- or low-emission.91 If this definition is used, support would not be available for vehicles running on gas or ethanol, or for converting petrol or diesel vehicles to these fuels – even though such conversions could reduce emissions at a relatively low cost. This tailpipe-only emissions approach is also problematic for biomethane (Ammenberg and et al. 2021).92.

Consequently,scf support in practice is likely to be limited to electric vehicles, either fully electric or plug-in hybrids. This presents several challenges in Lapland. As of September 2024, ev s accounted for only 1.9% of all cars in the region. The public charging infrastructure remains sparse, and the range of ev s is significantly reduced during the winter months (Ojala and et al. 2024).93 Although technological advancements are improving ev range (IEA 2022),94 breakdowns in remote areas still pose serious logistical challenges. Towing a vehicle to the nearest service station may involve distances of several hundred kilometres, and on-site repairs are often not feasible due to the complexity of

<sup>89</sup> Ibid.

<sup>90</sup> Ibid., art. 8(1)(f).

<sup>91</sup> Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 Setting CO₂ Emission Performance Standards for New Passenger Cars and for New Light Commercial Vehicles, and Repealing Regulations (ec) No 443/2009 and (EU) No 510/2011 (Recast) (Text with eea Relevance.) oj L 111/13.

<sup>92</sup> Jonas Ammenberg et al., *Perspectives on Biomethane as a Transport Fuel within a Circular Economy, Energy, and Environmental System*, iea Bioenergy Task 37 (iea, 2021), 60.

<sup>93</sup> Ojala et al., 'National programme for alternative transport fuels distribution infrastructure'; Traficom, 'Passenger Cars in Traffic by Area, Make, Year of First Registration and Driving Power', TraFICom PxWeb Tilastotietokanta, 2024, http[s://trafi2.s](https://trafi2.stat.fi:443/PXWebPXWeb/pxweb/en/TraFi/TraFi__Liikennekaytossa_olevat_ajoneuvot/010_kanta_tau_101.px/)tat.fi:443 /PXWebPXWeb/pxweb/en/TraFi/T[raFi\\_\\_Liikennekaytossa\\_olevat\\_ajoneuvo](https://trafi2.stat.fi:443/PXWebPXWeb/pxweb/en/TraFi/TraFi__Liikennekaytossa_olevat_ajoneuvot/010_kanta_tau_101.px/)t/010\_kanta \_ta[u\\_101.px/.](https://trafi2.stat.fi:443/PXWebPXWeb/pxweb/en/TraFi/TraFi__Liikennekaytossa_olevat_ajoneuvot/010_kanta_tau_101.px/)

<sup>94</sup> iea, 'Global ev Outlook 2022', 23 May 2022, 21, https://www.iea.org/report[s/global-ev](https://www.iea.org/reports/global-ev-outlook-2022) [-outlook-2022.](https://www.iea.org/reports/global-ev-outlook-2022)

ev technology, the need for specialised skills, and the availability of appropriate spare parts (Kirjavainen and Suopajärvi n.d.).95 Even if such risks are infrequent, consumer perceptions, limited experience, and concerns about reliability in Arctic conditions strongly influence purchasing behaviour (Noel and et al. 2020).96 These factors diminish the appeal of ev s in Lapland, where long distances, harsh winters, and sparse infrastructure make conventional vehicles more practical in the short term.

ev s are expensive, and it is therefore unsurprising that households owning an ev in Finland tend to have significantly higher average incomes than those owning vehicles with other propulsion systems (Sandman and et al. 2024).97 While some studies (IEA n.d.)98 suggest that the total cost of ownership of an ev may not exceed that of a combustion engine vehicle – especially considering that ets2 is likely to increase the cost of operating fossil-fuel vehicles – it appears that substantial financial support would be necessary to make ev ownership feasible for low-income individuals or households. In addition to subsidies for vehicle purchases, the development of recharging and refuelling infrastructure demands considerable investment. Given the limited duration of the scf – spanning only six years – the available funds may not be sufficient to meaningfully support both vehicle acquisition and infrastructure development at the scale required.

From this perspective, it becomes evident that the current regulatory framework designed to transition the transport sector toward sustainability may have unintended adverse effects on certain stakeholders in Finnish Lapland, particularly low-income individuals and households in rural areas. This raises important questions of justice and equity. The theoretical framework of social justice compels us to examine the fairness of the sustainability transition, especially when it results in disproportionate burdens for EU citizens living in Arctic regions. Social justice theory draws attention to the discriminatory

<sup>95</sup> Janne Kirjavainen and Leena Suopajärvi, 'Barriers and risks of socio-technical transition towards sustainable road transport in sparsely populated areas: Case of Finnish Lapland', *European Transport Research Review*, 17 no. 21 (2025): 1–12, [https://doi.org/10.1186/s125](https://doi.org/10.1186/s12544-025-00721-0) [44-025-00721-0.](https://doi.org/10.1186/s12544-025-00721-0)

<sup>96</sup> Lance Noel et al., 'Understanding the Socio-Technical Nexus of Nordic Electric Vehicle (ev) Barriers: A Qualitative Discussion of Range, Price, Charging and Knowledge', *Energy Policy* 138 (March 2020): 111292, https://doi.org/10.1016/j.enpo[l.2020.111292.](https://doi.org/10.1016/j.enpol.2020.111292)

<sup>97</sup> Nils Sandman et al., 'But Can It Drive to Lapland? A Comparison of Electric Vehicle Owners with the General Population for Identification of Attitudes, Concerns and Barriers Related to Electric Vehicle Adoption in Finland', *PLOS Climate* 3, no. 10 (2024): e0000346, https://doi.org/10.1371/journal.pcl[m.0000346](https://doi.org/10.1371/journal.pclm.0000346).

<sup>98</sup> iea, 'Electric Vehicles: Total Cost of Ownership Tool', accessed 17 December 2024, [http](https://www.iea.org/data-and-statistics/data-tools/electric-vehicles-total-cost-of-ownership-tool)s:// www.iea.or[g/data-and-statistics/data-tools/electric-vehicles-total-cost-of-ownership](https://www.iea.org/data-and-statistics/data-tools/electric-vehicles-total-cost-of-ownership-tool) [-tool](https://www.iea.org/data-and-statistics/data-tools/electric-vehicles-total-cost-of-ownership-tool).

consequences of transport governance that, while aiming for environmental goals, may inadvertently deepen poverty. The interaction between vulnerable populations in Lapland and the evolving regulatory environment places some households at heightened risk of falling into persistent transport poverty traps.

In light of these challenges, it would be prudent to prioritise improvements in the availability, accessibility, and reliability of public transport services, as these would directly benefit the most vulnerable groups. However, as discussed in sections 3 and 4 the current trajectory appears to be moving in the opposite direction. Public transport services in rural areas have been deteriorating, making it increasingly difficult for residents to rely on them. This undermines the assumption that carbon pricing under ets2 will encourage a shift toward public transport in the short to medium term (Graichen and et al. 2021),99 as the necessary infrastructure and service levels are simply not in place.

Applying social justice theory to identify these inequities also opens the door to proposing solutions that align with the broader regulatory objectives (Titheridge and et al. n.d.).100 A key principle should be the alignment of supply with demand, which requires a flexible and context-sensitive approach. No single mobility solution will suit all rural travellers (Poltimäe and et al. 2022).101 Instead, a combination of mobility-on-demand services, shared mobility options, and regular bus routes could offer the necessary flexibility to meet diverse needs at a reasonable cost (Sörensen and et al. 2021).102 Implementing such a system would require coordinated collaboration among public transport agencies, private mobility providers, and local governments (Shaheen and et al. 2020).103

The scf Regulation allows for funding to be allocated toward fostering such collaboration.104 Therefore, it is recommended that a significant portion of Finland's scf funding be directed toward the development of innovative and

<sup>99</sup> Graichen et al., 'Including Transport Sectors in the EU ets'; Manuel Frondel and Stefanie A. Schubert, 'Carbon Pricing in Germany's Road Transport and Housing Sector: Options for Reimbursing Carbon Revenues', *Energy Policy* 157 (October 2021): 112471, https://doi.org/10.1016/j.enpo[l.2021.112471.](https://doi.org/10.1016/j.enpol.2021.112471)

<sup>100</sup> Titheridge et al., *Transport and Poverty: A Review of the Evidence*.

<sup>101</sup> Helen Poltimäe et al., 'In Search of Sustainable and Inclusive Mobility Solutions for Rural Areas', *European Transport Research Review* 14, no. 1 (2022): 2–17, https://doi.or[g/10.118](https://doi.org/10.1186/s12544-022-00536-3)6 /s12544-02[2-00536-3.](https://doi.org/10.1186/s12544-022-00536-3)

<sup>102</sup> Leif Sörensen et al., 'How Much Flexibility Does Rural Public Transport Need? – Implications from a Fully Flexible drt System', *Transport Policy* 100 (January 2021): 5–20, https://doi.org/10.1016/j.tranpo[l.2020.09.005.](https://doi.org/10.1016/j.tranpol.2020.09.005)

<sup>103</sup> Susan A. Shaheen et al., *Mobility on Demand Planning and Implementation: Current Practices, Innovations, and Emerging Mobility Futures*, fhwa-jpo-20-792 (US Department of Transportation, 2020), [https://r](https://rosap.ntl.bts.gov/view/dot/50553)osap.ntl.bts.gov/view/dot/50553.

<sup>104</sup> Regulation (EU) 2023/955, art. 8(1)(g).

inclusive transport service models. The goal should be to ensure that, by the end of the scf's implementation period in 2032, the structure of transport services in regions like Lapland is fundamentally more equitable, resilient, and sustainable than it is today.

# **6 Conclusion**

Car dependency in the Arctic is pronounced, and its dispersed settlement patterns and vast distances make reducing private vehicle use especially difficult. Existing transport infrastructure is sparse, so developing an extensive network of alternative‐fuel stations would demand both substantial investment and considerable time. Because infrastructure rollout is inherently slow and not all residents will be able to purchase an ev immediately, the transport system's sustainability transition in the Arctic will face acute challenges.

Although higher fossil‐fuel prices could, in principle, be offset by direct income support funded from the scf, such measures merely sustain a fossil fuel-based mobility regime. Consequently, scf‐supported income transfers must be strictly temporary and reduce over time. In allocating scf resources, ms should prioritise structural, long‐lasting interventions and use direct support only to the minimum extent necessary to facilitate sustainability transition of the mobility system.

The EU Green Deal explicitly seeks to reduce transport poverty, yet policies that increases fuel price risk deepening that very poverty if no viable alternatives to fossil fuel vehicles exist. In the Arctic, high car dependency combined with the high up‐front cost of evs – even though their operating costs are lower – can trap low‐income households in transport poverty. Although purchase subsidies or tax incentives for ev s may help, these vehicles might still be unaffordable for the most vulnerable.

Efforts to expand fixed‐route bus services may prove economically unsustainable in the long run if patronage continues to decline and operational costs rise – especially once scf funding expires. In contrast, mobility-on-demand and shared‐mobility schemes offer greater cost‐efficiency. However, flexible transport solutions must be tailored locally rather than imposed uniformly; they require experimentation, iterative learning, and adaptation. Hence, ms should therefore seize the opportunity provided by the scf to support a diverse and innovative portfolio of mobility initiatives.