Food producers awaiting new government measures to alleviate energy prices

The Chamber of Agriculture and Commerce has made a proposal to the government, as a temporary measure, to establish a marginal price for electricity and lower the rate of excise duty on gas. The measures should be implemented retroactively, the chamber says.

"The excise duty rates established in Estonia are much higher than our competitors, and of the EU minimum level," a member of the Chamber of Agriculture and Commerce Meeli Lindsaar said.

Lindsaar nonetheless said the government's decision to postpone the excise duty increase planned by the electricity carriers and to the network fees of electricity and gas is worth being recognized.

The chamber said that a temporary measure should be establishing a marginal price of €80 per MWh, for electricity (prices exceeding the €1,000-per-MWh-mark on an hourly basis, and the €460-per-MWh-mark as a daily average, have both been seen this winter - ed.).

The measures should be implemented retroactively from the fourth quarter of last year, in the chamber's estimation.

High inflation and rising production have put companies in the Estonian food sector in a difficult position, which favors an increase in imports. Lindsaar explained that this would reduce the specificity of Estonian producers.

The Chamber of Agriculture and Commerce pointed out that in December 2020 the electricity bill of one food industry was €15,000, then a year later it was €150,000. At the same time, energy consumption has been the same.

According to the companies with a fixed contract, their bills have also doubled compared to the same period last year, and in the case of long-term contracts to be concluded in the future, the price will be €80 per MWh.

The Netherlands and Lithuania, for example, are planning to set a marginal price. The excise duty rate on natural gas is seven times higher in Estonia than in Latvia and Lithuania, and therefore, according to the Chamber of Agriculture and Commerce, it should be reduced in order to maintain the competitiveness of Estonian companies.

In addition to the rise in the prices of electricity, natural gas and motor fuels, raw materials, packaging and waste management have become more expensive, in addition to labor shortages and rising wage costs.

The energy crisis, in turn, means a rapid rise in food prices.


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Editor: Roberta Vaino

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