Outgoing year successful for oil shale industry
It was a successful year for the oil shale industry as the world market price of shale oil remained high. The sector's future is uncertain as requirements in the green turn remain unclear.
Estonia's leading oil shale company Eesti Energia saw the first year where more oil shale was used to generate shale oil than power, CEO Hando Sutter said. The national energy company will be concentrating on launching a new oil factory in 2023 for which purpose the government allocated €125 million in spring.
Sutter said that Eesti Energia is coming out of a difficult period that saw layoffs and structural changes.
"This reorganization largely took place in 2019 and 2020. From here, we can continue developing and growing, and I believe the employees still with us can be certain they'll have their jobs next year and a decade down the line," the CEO explained.
Ahti Asmann, CEO of Estonia's leading shale oil manufacturer VKG, was proud that the company managed to make do without asking the government for support during the coronavirus year. Asmann said the situation is good, considering world market demand and prices, while uncertainty associated with the green turn means no new investments are planned.
"Companies invest if they have at least some way of forecasting the future. Carbon policy today means that it is impossible to forecast anything for the next five or ten years. The business, tax and regulatory environments today do not favor investments into oil shale processing," Asmann concluded.
The Kiviõli Keemiatööstus, part of Alexela Group, survived with the help of a €37 million government loan it secured this fall. The company is looking to use the money to modernize its oil production to considerably lessen its environmental footprint.
CEO Priit Orumaa sees gradually moving away from oil shale and into the waste sector as the company's future.
"Kiviõli Keemiatööstus needs to transform from an oil shale handler into a waste handler, which is the course we have plotted. We are in the process of carrying out surveys and applying for environmental permits for these tests. It is the only saving grace for the company in this green turn. Recycling, manufacturing oil from organic plastic waste – that is the chance of the Kiviõli Keemiatööstus today," Orumaa said.
The oil shale industry employs over 6,000 people in Virumaa.
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Editor: Marcus Turovski