Court temporarily suspends new oil shale plant building permit

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Tartu Circuit Court Source: Google Street View

A building permit which would allow state-owned energy group Eesti Energia to build a new shale oil plant in Ida-Viru County has been suspended by a court, following an appeal launched by an environmental group.

Eesti Energia spokesperson Priit Luts said that since work has not begun on the proposed plant, the ruling, made by the second-tier Tartu Circuit Court Friday, had no immediate effect.

"Since work on the construction of the new oil plant has not yet begun, the implementation of interim legal protection has no direct impact," Luts said.

The planned plant would be built in Narva-Jõesuu municipality.

While oil shale mining and refining has been a staple of Ida-Viru County since the Soviet era, with its roots even earlier than that, during Estonia's first period of independence, it has not only been hit by the economic cycle – such as the phenomenon of negative world oil prices early in 2020 – but also by factors such as milder recent winters and the arrival of the coronavirus pandemic.

Ultimately, the largest question facing the sector is the EU climate change commitment, whereby all member states would be climate neutral by 2050, which renders the oil shale industry largely obsolete.

This has a political dimension, since Ida-Viru County, where nearly all the oil shale industry is located, has traditionally long been a major support base for the Center Party. Most of the towns in the county, including Narva-Jõesuu, are majority Russian-speaking.

The Center/EKRE/Isamaa coalition boosted Eesti Energia's equity capital by €125 million last March, BNS reports, which would have enabled the company to build a the new, proposed Enefit280 oil plant.

The total cost of the project is estimated to reach €286 million, BNS says.

Priit Luts said that Friday's decision arose from an interim injunction running in parallel with the main legal dispute. The first-tier Tartu Administrative Court is to make a decision on the latter, which involves an environmental NGO involved in the climate strike movement Fridays For Future protests, as well as the Narva-Jõesuu municipal council, in June.

The NGO made an application for interim legal protection to suspend the validity of the contested building permit for the duration of the legal proceedings in April last year, but this was dismissed by the administrative court in May 2020, BNS reports.

By this ruling, the city of Narva-Jõesuu was recognized as the respondent, and included Eesti Energia subsidiary Enefit Energiatootmine AS and Enefit Kaevandused AS as third parties to the proceedings, though these two companies have since merged, being replaced by Enefit Power.

In February this year, the environmental NGO filed a supplement to the complaint and a new application for interim legal protection., but the administrative court rejected this in early March.

It was the appeal on this judgment filed with the circuit court which was upheld Friday, while Friday's ruling – which one judge dissented on – cannot be appealed.

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Editor: Andrew Whyte

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