Shale oil production in Estonia may end in five years. The European Commission wants to change the carbon quota system. This would make oil production very expensive.
The heads of Eesti Energia and VKG wrote to the Prime Minister. They said that if Estonia does not get an exemption, oil production will no longer be beneficial. However, a new oil plant will open on Thursday in Auvere.
The Commission wants the industry to invest more in reducing emissions. The head of Eesti Energia said that making shale oil green is very difficult. Carbon is always present in oil and cannot be removed.
The oil shale industry wants Estonia to get an exemption. They want free quotas to remain the same until liquid fuels are imported into Europe. The head of VKG said that taxes may increase several times. This would make the work very difficult.
Eesti Energia will open a new oil plant on Thursday. It now operates at full capacity. If the laws do not change, the plant can operate profitably for 14 years.
The Commission also wants carbon quotas for waste incineration. This could make landfilling cheaper than waste incineration. If the carbon quota price rises, the Iru power plant may lose competitiveness.
The current carbon quota price is 80 euros per ton. The Commission estimates that by 2030 the price will be 110 euros. If the Iru plant cannot sell heat to the market, more waste will go to landfills and more wood will be burned for city heating.