The two Nordic nations will explore building the first rail connection from a European Union member state to an Arctic Ocean port. The link would cost around around 2.9 billion euros ($3.6 billion).
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Finland and Norway have agreed to explore building an Arctic rail link connecting Finland to the Barents Sea coast.
The proposed link would run from Finland's northern city of Rovaniemi to Norway's deep-water port of Kirkenes, near the Russian border.
The link would cost around €2.9 billion ($3.6 billion) and would open in 2030.
"The Arctic railway is an important European project that would create a closer link between the northern, Arctic Europe and continental Europe. The connection would improve the conditions for many industries in northern areas," Finnish Minister of Transport and Communications Anne Berner told a news conference.
Melting Arctic — A boon for shipping?
The Arctic is expected to become increasingly important for international trade as global warming, which has caused ice cover to melt, makes shipping routes in the region commercially viable.
Earlier in August last year, a Russian tanker sailed from Europe to Asia without an accompanying ice-breaker for the first time.
Arctic journey highlights effects of global warming
A Finnish icebreaker has set a new record for the earliest transit of the fabled Northwest Passage. The effects of climate change have opened up, for ever longer periods, the once forbidding route through the Arctic.
Image: picture-alliance/AP Images/D. Goldman
Safe harbour
The Finnish icebreaker MSV Nordica is docked before setting sail for the Bering Strait in British Columbia, Canada. The giant vessel is about to take a team of international researchers through the Northwest Passage to record the environmental and social changes transforming this remarkable, forbidding corner of the planet.
Image: picture-alliance/AP Images/D. Goldman
Bright ice
Shards of broken sea ice shine brightly under the Arctic sun as the ship sails through the Franklin Strait on the Northwest Passage. Sea ice forms when the top layer of water reaches freezing point, usually in October. Should the ice survive the following year’s summer melt and beyond, it becomes the toughest kind.
Image: picture-alliance/AP Images/D. Goldman
A distant ship, smoke on the horizon
A cargo ship is framed distantly on the horizon from the deck of the MSV Nordica in the North Pacific Ocean. It’s one of the first sightings of marine traffic the Finnish icebreaker has encountered since it left Vancouver to traverse what is one of the most isolated maritime routes in the world.
Image: picture-alliance/AP Images/D. Goldman
The Chukchi Sea
The MSV Nordica sails past ice floating on the Chukchi Sea off the coast of Alaska as it continues its journey through the Arctic's Northwest Passage. The record-breaking trip remains a challenge for conventional ships but scientists predict the route will be ice free by 2050, if current levels of warming continue.
Image: picture-alliance/AP Images/D. Goldman
Alone in the wild blue yonder
Waves crash against the hull of the MSV Nordica as it heads towards the Bering Sea under a gray sky. For most of its 24-day journey through the Northwest Passage, the only companions the ship and her crew had were Arctic sea birds, seals and the odd whale. Late on in the journey, a crew member sighted a polar bear.
Image: picture-alliance/AP Images/D. Goldman
At journey's end
Boatswain Henri Helminen secures a rope as the MSV Nordica docks in Nuuk, Greenland, having traversed the Northwest Passage through the Canadian Arctic Archipelago. The 10,000 kilometer (6,214 miles) journey is the earliest transit of the Passage, breaking the record set by a Canadian Coast Guard ship in summer 2008.
Image: picture-alliance/AP Images/D. Goldman
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Alternative route
The proposed rail link to the Arctic Ocean would improve Finland's logistical position and accessibility, and provide an alternative route for Finland's imports and exports, a study by the governments of Finland and Norway said.
Finland is currently completely dependent on the Baltic Sea for its transportation needs.
Finnish transport minister Berner said the railway should be linked with the proposed project to build an undersea rail tunnel between Finland and Estonia. With the tunnel, the railway would also connect with Rail Baltica, a link between Tallinn and Warsaw.
The study showed that the link would have "significant" environmental impacts and would affect the reindeer husbandry sector in both countries.