Supplementary budget to support energy security

Minister of Public Administration Jaak Aab.
Minister of Public Administration Jaak Aab. Source: Stenbock House/Flickr

In addition to expenses tied to refugee accommodation and civil protection, Estonia's supplementary state budget aims to bolster energy security. Plans are in place to develop capacity to handle large quantities of liquified natural gas (LNG), with investments to connect small renewable energy producers to the grid also on the table. The coalition is still debating whether to slash excise duties on motor fuels.

Estonia's minister of economic affairs and infrastructure is set to give the government an overview of options for shaking Estonia's dependence on Russian gas at a cabinet meeting on Tuesday. A floating LNG terminal is on the horizon and should be connected to the grid before the start of the next heating season, "Aktuaalne kaamera" reported on Monday.

Minister of Public Administration Jaak Aab (Center) said that constructing a stationary LNG terminal would take years.

"A floating terminal could be a faster way to have gas supply security. It would also alleviate the situation in Finland and Latvia. We have the opportunity for the fastest solution in the Port of Paldiski. Our neighbors lack such options," Aab said.

Minister of Finance Keit Pentus-Rosimannus (Reform) said that the goal is to have something in the works by fall.

In addition to an LNG terminal, the supplementary budget includes investments to connect renewable energy micro producers to the grid.

Deliberations are ongoing in terms of measures to alleviate price advance. The Center Party still prioritizes slashing the excise duty on motor fuel.

"We have not reached an agreement yet. At first, it seems the effect would be too small for something that would be difficult to restore to the previous level later on, in terms of state budget revenue While Center feels that having at least a short-term tax policy measure could be welcome symbolically. Plus, risk groups – subsistence benefits or one-off support for risk groups. Those are things we are discussing. No one has drawn any red lines, with Center proposing bolder measures and Reform busy doing the math," Aab said.

Pentus-Rosimannus described the Monday talks with the coalition partner as constructive.

"Both sides understand that we need to communicate certainty. Secondly, we are not putting together a budget to give everyone something they want. We have a war going on in Europe. We are adding expenses that are absolutely necessary at this time," the finance minister said.

These inescapable expenses also include accommodation and education for Ukraine refugees. Minister of Social Protection Signe Riisalo (Reform) said that the state has counted on receiving up to 50,000 refugees.

"That is the limit at which we would be forced to admit that we have no more accommodation left, where we would have to start erecting refugee camps. And let us be honest, talking about 50,000 people in all, we would currently still need to find and quickly fix up places for 15,000 people," Riisalo said.

She added that it is too soon to say how much the supplementary budget will have for accommodating refugees. The ministry calculates having to pay €25 per night for every new accommodation place created for around €10,000 annually. Refugees who have a job or qualify for subsistence benefits will have to pay for their own accommodation. The supplementary budget should be finished by mid-April.


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Editor: Marcus Turovski

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