VKG: Price increase of CO2 quota has come in six months instead of decade

Viru Keemia Grupp (VKG) board chairman Ahti Asmann.
Viru Keemia Grupp (VKG) board chairman Ahti Asmann. Source: Ken Mürk/ERR

Energy firm Viru Keemia Grupp (VKG) board chairman Ahti Asmann criticized politicians for not being decisive in their quest for climate neutrality and their incompetent decisions, which have led to high electricity prices.

Asmann spoke to ERR's web show "Otse uudistemajast" and said that while politicians are aiming for a green revolution, they have not established any clear goals and directions. He said there needs to be a greater goal about how to come out on top in the situation.

"Let's see what Europe will say and then we will proceed," he characterized the thought process of the average Estonian politician.

Asmann said Estonian electricity consumers must pay hundreds of millions of euros more per year at the current prices than before. "There is also the question of who this money goes to. It goes to producers. If these producers are in Estonia, great, the money stays in Estonia. But Estonia has become a country, which imports energy and now this money is moving out of the country."

A large part of the electricity price is made up by the carbon dioxide quota, but the estimated ten-year price increase has come in six months. "The European Commission set a goal that the price of CO2 should be €52 per ton by 2030," Asmann said and added that the price has increased from €25 to €60 in the past six months.

Therefore, the VKG board chair said the quota should be replaced with a carbon tax, in which case the price would be controlled and costs for companies would be predictable and understandable.

He said more than half of the price for electricity consumption for consumers now is made up of paying the carbon dioxide quota. The price of that quota depends on political decisions and not market demands, however, according to Asmann. This has brought a significant and unpredictable increase in electricity prices.

From an entrepreneurial perspective, he considers the situation unfit for investment, because it is not possible to plan ahead for the costs and revenue, which comes with each investment.

Asmann also noted that much is made of the green revolution, but it is not noted that it means many different things for different people. "Someone says the green revolution is if I drink from a bamboo straw instead of a plastic straw, the green revolution for others means I do not drink from a straw, at all, but rather from a glass."

The VKG board chair said a new framework law should be completed, which would state goals, stages and also who and when the green revolution affects. The energy firm made a proposal for the framework law to the government last Monday.

Currently, Asmann said the company has turned its attention to carbon-free energy production, which only affects Ida-Viru County and the industries there. At the same time, he admits that the situation is not viewed as a whole nationally and sectors, such as transport, agriculture and forestry - where carbon emissions are also high, but there are no goals to limit it - are left without attention.

Asmann said there is much talk of using hydrogen as an energy source in transport, but not enough is said about how the sector could get there. He said goals should not be impersonal, but specific modes of transportation should be pointed to and assessed if it is possible to transition to hydrogen.


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Editor: Kristjan Kallaste

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