The fate of a planned oil shale refinery in eastern Estonia has no bearing on European Union fair transition support, which is instead primarily predicated on those countries, like Estonia, facing tough times in their transition away from the sector to greener energy, European Commissioner Kadri Simson (Center) says.
"No plan gets approved or rejected according to any mechanical criteria; everything is a matter of argumentation. The commission's position is that the Just Transition Fund is for future transition," Simson, who holds the energy portfolio, told ERR's online Estonian news.
"A Member State must have submitted a fair transition plan to the commission and that plan can then be approved."
Estonia's €340-million grant decision is based on the same criteria and one unaffected by the status of the proposed plant, in Ida-Viru County, epicenter of Estonia's oil shale mining, refining and power station industry.
Simson said that Estonia had already written in the intended construction of an oil shale facility in its original climate and energy plan, and submitted it to the commission by the deadline of the beginning of 2020.
"In doing so, countries demonstrated to the commission in what ways they will achieve a more sustainable result after ten years, so that in 2030, the EU will see lower CO2 emissions than in 2020," she added.
"With that, Estonia has announced that it will replace the current use of oil shale in electricity generation, with oil production," Simson went on.
The sedimentary shale has long been mined in Estonia, and is generally then burnt to produce shale oil – while the industry is often associated with the Soviet era, the Kiviter process of extraction was invented in the early 1920s during the period of the First Estonian Republic.
Viru Keemia Grupp (VKG), a private company unconnected to the state-owned Eesti Energia, is the main utilizer of the process, which generates large volumes of waste water.
Whichever way the oil is extracted, it can be used to fuel power stations, which once produced around 90 percent of Estonia's electricity, but also has several other applications including in the chemicals industries. In the past it was also used as a motor fuel.
Cogeneration processes are also being looked at whereby it might be possible to see some electricity generation at oil refining – rather than oil burning – stage.
The proportion of oil itself used in electricity generation can also be reduced by introducing, for existence, oxygen, during the burning process.
Another by-product from power stations is hot water which, rather than being sent to cooling towers or similar, provides hot water for population centers nearby, such as Narva.
Approval of Estonia's plan by the European Commission is due in the autumn, and if it goes ahead the €340 million in fair transition funds will be due.
These funds and any commission support beyond that will not, however, compensate for job losses up until now, given that other EU countries have also seen job losses as result of transitioning; there are insufficient funds to fairly compensate all member states, Simson said.
Nonetheless, the plan submitted to the commission must demonstrate where those made redundant will be alternatively employed, in the same location but in jobs with a lower environmental impact.
Job losses in Ida-Viru County also carry a political dimension. The region has traditionally shown strong support for the Center Party – Simson's own party – but this has been diminishing in recent years. Voter turnout at the 2019 general election was particularly low, less than 50 percent, as opposed to seeing a large-scale transfer of support to another party or parties.
With states previously reliant on coal mining and coal burning power stations, the transitional process has been measurable in decades, she added.
The EU's climate goal is to be climate-neutral by 2050, a target which Estonia has signed up to.
Editor: Andrew Whyte