Riigikogu discussed “The green transition – both a challenge and an opportunity for Estonia“ as a the matter of significant national importance today; it was initiated by the Estonian Centre Party Faction.
Reports were heard from the Chairman of the Environment Committee Erki Savisaar, the European Commissioner for Energy Kadri Simson, and the Coordinator of the Just Transition Platform of the Association of Local Authorities of Ida-Viru County Hardi Murula.
Erki Savisaar described the green transition as a huge challenge for Estonia, but also as an extraordinary opportunity to do away with old dependencies and achieve a complete energy autarky. “By nature, green transition is a strategy aimed at bringing about a structural change in the economy and social organisation,” he said. “This strategy should make Europe energy-autarkic and environmentally sustainable.”
The Chairman of the Environment Committee said that the green transition starts on the local level through local actions, and referred to the example of the Farm to Fork strategy that emphasises the need to support small and organic businesses, and the significance of short supply chains. “The strategy serves a double purpose – on the one hand, a cleaner nationally produced food, and on the other, food security. Our ability to produce food and raw food products is vital because we depend on it daily.”
Another important aspect is circular economy, i.e. increasing resource recovery, including reducing refuse, waste, and pollution. He identified two major questions that need to be solved in Estonia to ensure the functioning of circular economy – biodegradable waste and plastic. He also thinks that a balance should be found between reusable and singe-use packaging, which should be as adaptable as possible to circular use or recycling.
Thirdly, Savisaar highlighted energy, which needs to be more sustainable and carbon neutral. While transport has been dependent on oil and power and heat generation on oil shale, he would like to see these replaced with sun, wind, hydrogen, methanol, biofuels, and – for good measure – waste. He stressed that this did not mean closing down manufacturing or power plants with massive carbon emissions but that it was possible to capture this carbon.
“Over the last years, the price of CO2 has reached such a high point that the power produced from oil shale is no longer competitive on the market. The forecasts show that the price will go up further, and faster than before. This means that we must definitely find new methods for generating power. However, in practice, we are still missing a functional solution to oil shale industry,” he said.
Savisaar concluded with a few remarks on hydrogen. “On the one hand, hydrogen is clearly a fuel for the future, but on the other hand, it is also an excellent way to store energy,” he said. He emphasised that Estonia could contribute to hydrogen energy, especially by developing and testing a complete system. He explained that the next year’s budget had planned EUR 5 million for the purpose, with another at least EUR 25 million added in the near future. “Over the next five years, I would like us to reach a level where at least 25% of transport and energy in Estonia is based on hydrogen,” he added.
In her report, Kadri Simson presented the European Union Green Deal, new initiatives, and the Just Transition Fund.
Simson said that the purpose of the Green Deal was to turn Europe into the first climate neutral continent by 2050. “This is a growth strategy which covers all the fields, beginning with transport, environment, health care, and life in rural areas. However, the most important aspect of the Green Deal is energy, because up to 75% of the current CO2 emissions in the European Union come from energy,” Simson said.
She stressed that the Green Deal would remain a long-term priority of the European Commission even regardless of the crisis because the need to clean up European economy and make it more competitive has not gone anywhere. “As we are in a situation where the economy needs a pick-me-up and we can do this through additional investments, the conditions are more than ripe for the green transition,” she said. “Studies show that renewable energy creates more jobs and added values than injecting funds into chains that start with fossil fuels.”
The Commissioner for Energy iterated the clear recommendation of the European Commission to the Member States to use 30% of the EU long-term budget as well as the new recovery package for climate goals related investments.
She pointed to Ida-Viru County as being by far in the most precarious situation in the Estonian context, as it depends largely on the oil shale industry. Simson explained that the region would avoid a decline with the help of the new Just Transition Fund that offers assistance to regions that depend on fossil fuels mining or industries with large CO2 missions.
Simson confirmed that Estonia’s share of the total EUR 17.5 billion is EUR 340 million, with additional resources for technical assistance. She hastened to add that Estonia would receive the highest per capita support in Europe. “These funds can be used in Ida-Viru County, preferably to retrain and train the working age population so that they would find employment in some other field whose ecological footstep is smaller. These funds can and must be used to create new jobs as well,” she said.
As the latest developmental directions in European energy, Simson highlighted the higher emission reduction goals of the EU for 2030, and the strategies for integrating energy systems, hydrogen energy, renewed methane energy, off-shore renewable energy, and wave of renovations. “For us – Estonia and the countries around the Baltic Sea more broadly – wind energy could very potentially give a massive advantage in cheaply producing hydrogen,” she said and added that hydrogen was also an excellent method to store renewable energy or electricity.
Hardi Murula introduced the possibilities of green transition in Ida-Viru County.
He explained that the population numbers of Ida-Viru County have significantly decreased over the recent years, as have the per capita relative wellbeing and relative GDP. “We really treasure our people and we want to maintain their wellbeing, help them find motivation to remain in our County, and contribute to the transition,” Murula said.
Although the oil shale industry might not play the biggest role in the County’s economy in absolute employment figures, the industry does pay the highest salaries and does provide the largest added value. “If we remove this one industry from the equation, all the others stand to suffer as well,” Murula said. “We hope that the transition will increase our share in the national wealth of Estonia, raise our salaries, and ensure a sufficient budget for our local governments to accept these challenges; if not, it would be a clear failure.”
Murula stressed that the transition must be spread out over a longer period and follow an agreed plan. He also said that it was not possible to close and replace the existing structures overnight. A new alternative and the relevant business sector should be built up next to the existing one; after that, the regulations and the changes in the economic environment would contribute to reducing the importance of the oil shale sector in the economy of the County.
Speaking of the Just Transition Fund, Murula emphasised that 90% of its assistance should be directed towards the development of the business sector, including research and development, and 10% into the living environment. He also thinks that Ida-Viru County should receive a guaranteed regional loan, which would help to develop the business sector. Murula also mentioned the need to guarantee a specification in the regional labour taxes through the national level regulations as a way of developing entrepreneurship and ensuring wellbeing and economic growth.
Siim Kiisler (Isamaa), Dmitri Dmitrijev (Centre Party), Katri Raik (Social Democratic Party), Yoko Alender (Reform Party), Imre Sooäär (Centre Party), Mihhail Lotman (Isamaa), Keit Pentus-Rosimannus (Reform Party), and Tarmo Kruusimäe (Isamaa) took the floor during the debate.
Photos of the sitting (Author: Erik Peinar, Chancellery of the Riigikogu)
Video recordings of the sittings of the Riigikogu can be viewed on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)
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