The last time Estonia had a serious discussion about producing motor fuel was three years ago when oil shale companies Eesti Energia and VKG looked into the feasibility of an oil shale pre-refinery. The output of the half-a-billion-euro factory would be clean enough to be turned into motor fuel. The study concluded that refining oil shale to reach the necessary level of purity was economically unsound at the time.

"Our calculations showed that value added from refining would not justify the refinery investment. The demand for oil shale for use on the ship fuel market was deemed more effective than investing in a refinery," CEO of VKG Ahti Asmann said.

The Ukraine war, soaring fuel prices and efforts to shake the Russian oil dependence have caused the topic of turning oil shale into moto fuel to resurface. The plan has the support of the Conservative People's Party (EKRE). Asmann said that while a pre-refinery could be built in five years, it would still constitute a very risky project as the price of oil fluctuates greatly. The main obstacle, however, is the green turn plan.

"Europe has clearly plotted a course away from fossil fuels and regulation tabled works to complicate such an undertaking. Talking about creating in Estonia the ability to refine oil shale, Estonia and indeed the EU should first abandon the green turn ambition, while I feel that is not realistic. Investors cannot go up against the government and regulations.

Margus Vals, member of the board of national energy company Eesti Energia, said that past studies have shown that oil shale could be turned into Euro 5 diesel fuel, while Estonia wants the resource given even more value.

"The same oil that can be used for making diesel can be turned into chemicals more valuable than motor fuel. It is also better in line with climate targets in that those chemicals are not burned but used in everyday life."

Vals also pointed to the European Commission's plan to ban internal combustion engine vehicles in 13 years' time, which means that contributing to electric mobility and trading an ICE vehicle in for an electric or hybrid one makes more sense than producing diesel.

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