Finance minister formalizes call to leave EU CO2 scheme

Finance minister Martin Helme (EKRE).
Finance minister Martin Helme (EKRE). Source: ERR

Finance minister Martin Helme (EKRE) has formalized his call for Estonia leaving the European Union's CO2 trading system by writing to Minister of the Environment and co-party member Rene Kokk. The European Union says such a move could not take place, even temporarily.

In his formal letter, which codifies comments Helme made on Monday, Helme has asked Rene Kokk to investigate options for Estonia to leave the European Union emissions trading system (ETS), even on a temporary basis. Helme argues that this would lead to reduced electricity prices and as such be a means of mitigating the effects of the coronavirus pandemic. The European Union says quitting the ETS is not an option.

EU: Leaving ETS not on the table

However, according to some reports leaving the ETS would equate to an "Est-exit" as the union says that Estonia cannot leave the system even for the short term.

Vivian Loonela, European Commission President Ursula von der Leyen's spokesperson, told ERR Tuesday that any EU member state cannot withdraw from the ETS, either temporarily or permanently.

Helme asked in his letter 1) What steps must be taken to exit the Estonian trading system? and 2) What are the possible consequences of leaving the trading system and their direct and indirect effects on the Estonian state and companies as participants in the trading system?, according to ERR's online news in Estonian

The Estonian government has already cut electricity prices in an effort to breathe life into the economy, with excise duty now set at the minimum allowed by the European Union. The rate will drop from €4.47/MWh to €1/MWh, which means that consumers will pay 3.1 percent less.

Helme is also asking Kokk to point out the effects on the various areas that are affected by the trading system and whether any other other countries that have raised the issue of leaving the ETS or altering its workings.

"If the answer is yes (to the question of whether any other countries have questioned the ETS-ed.), then I would like you to present a list of these states and, if possible, arguments that other countries have used," Helme wrote.

SDE MP: Helme project would actually cause prices to rise

Social Democratic Party (SDE) MP Lauri Läänemets, who heads up the Riigikogu's renewable energy support group, says leaving the ETS would actually lead to electricity price increases, as it would delay important changes in energy production which should make Estonia's production more environmentally friendly and potentially make the country energy-dependent on other, non-EU countries, as a result.

"On the other hand, it would help to enslave Estonians to another energy-producing country if we no longer have the capacity to produce energy competitively," Läänemets said.

At present, Estoni should do the opposite - direct more money to energy efficiency and green energy production, Läänemets went on.

"What moment could be better to make changes than the economic downturn? Renewable energy investments would create higher-paid jobs and bring a perspective that oil shale, for example, does not have," Läänemets said.

Läänemets said he was also interested what solution Helme had in mind to replace the money obtained from the CO2 quota sales, adding that the buck would stop with the taxpayer.

"The only alternative, regardless of whether it is collected immediately as taxes or taken out as a loan, is the taxpayer. In other words, instead of money from another country, Helme wants to collect the missing tens of millions from the people of Estonia."

Läänemets added that the easiest way to cut electricity bills is to support his party's bills, which would make the renewables sector and charges related to it more efficient and save the taxpayer hundreds of millions of euros over the next 12 years, he said.

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Editor: Andrew Whyte

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