Karu responded to a call from the Minister of Public Administration Jaak Aab (Center), where ministers of various fields where asked to come up with proposals to speed up the development of Estonia's eastern region.

Minister for Foreign Trade and Information Technology Kaimar Karu proposed the construction of a hydrogen plant, on top of two other plants already suggested, with an estimated total investment of €800 million.

The previous discussions had covered building a shale oil refining plant or a shale oil refinery (investment total €600 million) and building a CO2 capture or carbon dioxide capture plant in Auvere (investment volume €200 million). The third proposal, from Karu, is the establishment of a hydrogen plant, which would be linked to the Eesti Energia oil plant.

Karu wrote that the investment needed for the hydrogen plant was estimated to be at €200 million. This will be accompanied by a study on the application of hydrogen technologies and their introduction, which would open the way to the creation of new products and services both in the region and in the wider world.

In addition, the minister said it is important to develop a circular economy in Ida-Viru County. Chemical recycling is a part of the circular economy, and Karu says there is a great deal of competence in the chemical industry in the county.

"Estonia, or the Ministry of the Environment, in particular, wants to be ambitious, but focuses only on solving the problem of municipal waste collection based on the interests of waste managers. In fact, it is necessary to build capacity for recycling materials. The most promising is the chemical recycling of plastic," Karu said.

The exact price of the refinery will soon be known

Priit Luts, a spokesman for Eesti Energia, told ERR the company is focusing more on innovation than ever before, developing business lines based on new competencies and technologies.

"One example of such an innovation is a refinery for liquid fuels, which is essentially a hydrogen refinery, where hydrogen is produced from natural gas. Preliminary work on the refinery is currently underway, with the result that the cost and return on investment will be specified by early summer," he said. "We are ready to supply hydrogen in other areas as well and are having discussions with ministries on how to do this."  

Last September, the Government's Climate and Energy Commission commissioned the Ministry of Finance and Economy to analyze various options for co-financing a shale oil refinery. The process of drafting the National Budget Strategy 2021-2024 should clarify how the state plans to support the refinery investment.

Luts said Eesti Energia supports the state's ambition to use the competence of the energy sector in Ida-Viru County which has been developed over the last 100 years to develop new forms of entrepreneurship there.

Luts added that: "In the near future, we intend to study, in cooperation with Estonian R&D partners, the possibilities of applying CO2 capture technologies in the production of liquid fuels. We can recycle used tires into a valuable product and are currently looking for a research partner, with whom to achieve the same capability for recycling plastics. Eesti Energia's decades of experience and expertise can also be used to extract new mineral resources among other things, we are in the process of developing a concept for the future mine."

The circular economy mentioned in the ministerial letter is, according to Luts, the present and future of the Estonian oil shale industry, as the waste from each process must become the next raw material.

"Eesti Energia already has the ability to utilize the limestone and ash produced during production to reduce the environmental impact not only in its sector, but more broadly. We are working to ensure that the developments of Eesti Energia do not make Ida-Viru County the source of environmental problems in the near future," Luts said.

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