Nordic Energy Technology Perspectives 2016 presents a clear technological and economical pathway for the Nordic region towards a nearly carbon-neutral energy system in 2050. Nordic countries’ success can send a strong signal to the global community that the ambitions of the Paris Agreement from COP21 are achievable. The report identifies opportunities for policy makers and the private sector in three strategic areas: 1. Incentivise and plan for a significantly more distributed, flexible and interconnected Nordic electricity system. A decentralised electricity supply with a high share of wind is likely to achieve a carbon-neutral system at lower cost than a system reliant on nuclear and thermal generation. But the shift will require flexibility measures beyond those now provided by Nordic hydropower, as well as a significant increase in cross-border electricity trade. 2. Ramp up technologies to decarbonise energy-intensive industries and long-distance transport. Emissions from industries like steel and cement are the most challenging to reduce, requiring rapid advances in the demonstration and deployment of carbon capture and storage (CCS) and other innovative technologies. Electrification will be at the core of most low-carbon transportation, but long-distance transport will likely require large volumes of biofuels. 3. Tap into cities’ positive momentum to strengthen national decarbonisation and enhance energy efficiency in transport and buildings. Driven in part by air quality, health and congestion objectives, many Nordic cities lead their countries’ decarbonisation efforts, with more ambitious targets and advanced roll-out of electric vehicles.