An earlier plan to build a pulp mill close to the Emajõgi river foundered following environmental protests, though two key differences between the earlier project and VKG's include the fact that the latter would not need to take they large volumes of water needed in pulp mills from any river or other natural body of water, but rather would make use of water which is in any case pumped out of local oil shale mines. Second, the VKG mill would be somewhat smaller than the earlier proposed project, though it would still produce 730 gigawatt-hours of electricity per annum, half of which would end up on the free market, the company says.

VKG's announcement comes just a day after the environment ministry said that Estonia needed just such a development.

VKG says it plans to invest €800 million in the new plant, which it wants to be online by 2026.

Pulp mills have renewables aspect to them

Pulp mills use boilers which can be used to generate CO2-neutral biomass-based electricity, while crude tall oil and turpentine are some of the by-products of the process.

Energy from woody biomass currently accounts for 60 percent of renewable energy consumption, though the EU is now in the process of repointing woody biomass as a renewable source.

VKG also says it sees an issue with the fact that 80 percent of Estonia's timber output is exported to the Nordic countries, primarily as pulpwood and wood chips for burning in energy production.

VKG adds that with its planned plant, energy production would increase by 730 gigawatt-hours per year, half of which would be directed to the free market, and which would be used to supply heating to the towns of Kohtla-Järve and Jõhvi.

Proposed plant would be in Lüganuse municipality

VKG submitted its application for a special plan to the Lüganuse municipality; this plan would look at the options for establishing a pulp mill in Ida-Viru County.

The output would also boost Estonia's exports by 2 percent, at €285 million per annum, VKG claims.

2018 protests over a proposed pulp mill in Tabivere, Tartu County, were followed by the project's being shelved later on that year.

The plant would also develop a thousand jobs, 250 of them in Ida-Viru County, VKG says.

With a proposed production capacity of 330,000 to 500,000 tons per year and a raw material demand of two to 2.3 million cubic meters per year, the project would use water pumped out from the VKG-owned Ojmaa mine – 12.5 million cubic meters is pumped out per annum there, ERR reports.

The now-defunct Tartu pulp mill would have used water from the Emajõgi river.

Treated water in the Ida-Viru proposed project would be directed to the Gulf of Finland, via a water treatment plant (also to be constructed)

Precise location to be determined later

Actual potential locations for the proposed plant would be set out during the course of compiling the special plan, ERR reports.

The complexes' output would comprise several types of bioproducts, namely cellulose and soluble cellulose, biofertilizers and other bi-products, including those which could be used in the textiles industry.

The news from VKG comes just the day after the environment ministry's announcement that Estonia could do with its own cellulose plant as a way of making better use of lower-grade woody biomass, rather than burning it or exporting to Finland and Sweden.

Meelis Seedre, head of the ministry's forest department, said that: "The main issue is that no errors will happen: The material will not go to the kiln, and could be used for something else, while this strategy wants to specify that the control mechanisms can be better. The [ministry] strategy states quite clearly that sawn or plywood material must not go into the kiln".

Keeps woody biomass produce inside Estonia

"For this, however, we need to build a plant, otherwise we still have to export such material," he went on.

"I am referring to a pulp mill that could produce raw paper. At the moment we in Estonia think about the production of wooden houses and sawn timber, furniture. When we bring up the topic of the chemical enhancement of woody biomass, then the situation is we do not have this capability today. This capability is great in Finland and Sweden, and export material to them – at the expense of our people and our economy – that we could hold valuable ourselves if we had a plant," he went on.

The sector is also key in meeting EU climate targets, on which more light was recently shed by the climate package issued by the European Commission last week, including on its forestry strategy, which categorizes wood by its value, making only some eligible for renewables.

"If we want to reach Europe's climate and renewable energy targets, we obviously need to increase renewable energy capacity. This is quite difficult to do without wood," Seedre added, noting that many people do not realize how much woody biomass produced by tree felling is not useful in anything other than energy production, i.e. burning.

The viability of the different types of renewables also hinge on how much state and other support they can obtain, he added.

"Of course, we have wind and solar energy, and a bit of hydro-electric power, here in Estonia. What is worth producing depends a lot on subsidies. In my opinion there must be a balance. If one aspect gets significantly more support than the other, production tends to go in that direction," Seedre said.

VKG is a private sector large-scale industrial enterprise, predominantly involved in oil shale mining, refining and energy production, the company says on its website.

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