European environment ministers are meeting this week in Luxembourg to discuss how to move forward with the "Fit for 55" climate and energy package. Estonia has a lot to gain if it acts quickly and wisely, writes Kädi Ristkok, head of the Environment Ministry's climate department.
The "Fit for 55" climate package, announced less than a year ago by the European Commission, establishes a reduction target for greenhouse gas emissions. Essentially, it outlines an economic model that will ensure the sustainability of society and the environment. Those who grab this potential for growth earliest will reap the greatest rewards.
In the same way that we took the digital revolution by the horns in the 1990s, when it was still intimidating and largely unknown, we could now do the same with the green revolution. And if we perform as smartly as we did back then, we might be among the winners.
If we want to be economically successful and improve the well-being of our citizens, we should be at the forefront of climate policy. This is the reality of the European Union's internal market and, to an increasing degree, the global market.
Sustainability has, in fact, become a matter of hygiene for many successful European and global companies. Increasingly, banks, investors, and large corporations with Estonian companies in their supply chains and investment portfolios require sustainable business practices.
Companies will be required to report greenhouse gas emissions in accordance with specific guidelines and to meet global science-based targets. Already now, green projects and businesses have access to preferential finance. This clearly shows that environmentally and climate-friendly technologies and business strategies will have a competitive advantage in the next decade.
Moving in the right direction
Fortunately, Estonia has the resources necessary to adapt to the changing circumstances. We are strong in research, the restoration of nature, innovation, the adoption of digital solutions, and adopting and promoting green technologies.
In the energy sector, we have already begun the shift to low-carbon solutions, which we should now intensify and speed up. The combination of wind and solar energy with new storage solutions will provide our industry with a secure energy supply at lower costs.
Beginning in 2019, the country held four rounds of renewable energy tenders. This has brought 465 GW of energy to the market and gave companies a good experience for future endeavors.
To boost Estonia's potential to generate renewable energy in the future decade, we should speed up the approval of projects, and adjust the electricity infrastructure to meet the needs of large-scale production.
During the next decade, the proportion of electric and hydrogen-powered vehicles in the transportation sector will increase, as will the use of both public and soft transportation (especially in urban areas). Additionally, the infrastructure needed to support these solutions will be developed. Cleaner air, less noise, and more green space will make cities better places to live.
All of the above depends on the innovative green technologies, services and business models that we ought to implement in Estonia and export to larger markets.
Agriculture and food production at the moment generates large quantities of biowaste, which emits greenhouse gases and is costly for businesses to manage. By producing biogas, companies can both reduce greenhouse gas emissions and offset expenses with biogas profits. This "produce where you consume" philosophy is particularly important in a time when security must be a primary concern. In rural areas, the generation of biogas will also generate much-needed jobs.
Beginning in 2018, biomethane producers are subsidized so they can supply biomethane at the same price as natural gas. As natural gas prices have risen dramatically and are expected to remain at these levels for the foreseeable future, biomethane will be able to compete in price with it. Biomethane is arguably one of the most cost-effective methods for achieving both our climatic and economic goals.
First things first
We should also consider the energy trilemma: a balance between environmental sustainability, security of energy supply and affordability.
The balance between these factors may shift over time depending on the resources and technologies at hand. In light of the security of supply and cost-related concerns, we should prioritize winter-specific solutions.
This requires a temporary rise in oil shale or natural gas use and that will have an associated climate impact. Temporarily, such a solution is feasible, but more renewable energy sources should be developed for the following winter season in order to restore the energy trilemma equilibrium.
Renewable energy emits a negligible amount of carbon dioxide, is generated locally, and involves no marginal cost, providing not only environmental sustainability but also greater supply security and affordability.
This is also the guidance provided by the "Fit for 55" climate package. To increase energy efficiency, we should expedite the construction of smaller biogas production units, the installation of solar panels in houses and businesses, and the refurbishment of buildings and equipment.
Climate objectives, energy security, and affordability can all be simultaneously attained. This will require both short- and long-term strategic decisions.
And this should be one of the greatest challenges facing the new government.
Important decisions to come
European Economy and Energy Ministers came to an agreement on a common approach to renewable energy and energy efficiency in the climate package on June 27.
On June 28, European Environment Ministers will do the same with the climate package legislation under their jurisdiction, which will, among other things, establish EU-wide and national climate targets.
However, the operational specifics of the climate package will not be finalized until the end of June.
Ahead of us are negotiations with the European Parliament that typically supports strict environmental rules and the overall strategy already provides a clear indication of the direction.
Estonia will definitely support the environmental goals of the European Union.
Nonetheless, in the negotiations, we believe that it is important, among other things, to take into account the unique characteristics of each country, to allow adequate time for adjustment to the changes, and to create opportunities to mitigate the potential socioeconomic impacts of the changes on people and local enterprises.
At the same time, now is the moment for Estonia, as well as the other Member States, to find the most effective strategies across all sectors for achieving the goals we have set.
The Fit for 55 package is a set of proposals to revise and update EU legislation and to put in place new initiatives with the aim of ensuring that EU policies are in line with the climate goals agreed by the Council and the European Parliament.
The Council today adopted two legislative proposals that tackle the energy aspects of the EU's climate transition under the 'Fit for 55' package: the renewable energies directive and the energy efficiency directive. The agreements pave the way for the Council to start negotiations with the European Parliament.
Editor: Kristina kersa