University of Oulu

Karoliina Auvinen, Teemu Meriläinen, Laura Saikku, Sampsa Hyysalo & Jouni K. Juntunen (2023) Accelerating transition toward district heating-system decarbonization by policy co-design with key investors: opportunities and challenges, Sustainability: Science, Practice and Policy, 19:1, DOI: 10.1080/15487733.2023.2256622

Accelerating transition toward district heating-system decarbonization by policy co-design with key investors : opportunities and challenges

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Author: Auvinen, Karoliina1,2; Meriläinen, Teemu1,3; Saikku, Laura1;
Organizations: 1Finnish Environment Institute SYKE, Helsinki, Finland
2Design and Architecture, Department of Design, Aalto University School of Arts, Aalto, Finland
3Department of Economics, Accounting and Finance, University of Oulu Business School, University of Oulu, Oulu, Finland
4School of Technology and Innovations, University of Vaasa, Vaasa, Finland
Format: article
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 3.3 MB)
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Language: English
Published: Informa, 2023
Publish Date: 2023-10-18


District heating in European, Chinese, and Russian cities is still mainly produced with fossil fuels. Energy-system reconfiguration is essential to achieve full decarbonization, which calls for a greater understanding of how to engage key investors in market transformation and how to formulate effective policy mixes. This article reports on how decarbonization could be accelerated in district-heating systems in Finland with stakeholder orientation especially on key investors consisting of companies focused on district-heating, data-center management, real estate development, and sewage operations. The technological attention is on the excess and ambient heat systems. Drawing from surveys, interviews, and workshops we identified investment barriers and collected policy and strategy proposals to overcome them. The results demonstrate that diversifying and strengthening the policy and strategy mix is needed to overcome barriers related to profitability, political uncertainties, and underdeveloped cooperation and profit-sharing models. Policy co-design with key investors holds potential to improve the effectiveness and acceptability of policies, but with certain limitations as regime actors tend to oppose the types of destabilization needed to achieve full decarbonization of energy systems. Thus, effective policy co-design processes need further development as collaboration is a success factor to achieve climate change-mitigation targets, but simultaneously tensions and conflicts cannot be avoided when accelerating energy-system transformation.

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Series: Sustainability. Science, practice, and policy
ISSN: 1548-7733
ISSN-E: 1548-7733
ISSN-L: 1548-7733
Volume: 19
Issue: 1
Article number: 2256622
DOI: 10.1080/15487733.2023.2256622
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
1172 Environmental sciences
Funding: We gratefully acknowledge the European Union for funding the CANEMURE project (EU LIFE17 IPC/FI/000002 Life-IP CANEMURE-FINLAND) and the Academy of Finland for funding the "Digitally Mediated Decarbon Communities in Energy Transition" project (348197).
Dataset Reference: Research data such as survey reports, ambient and excess heat case and company lists, and summary of the workshops (in Finnish) are publicly available at the Finnish Environmental Institute Syke website (
Copyright information: © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.