Sikkut: Estonia to vote against new taxes at EU energy ministers' meeting

Riina Sikkut.
Riina Sikkut. Source: Kairit Leibold/ERR

Minister of Economic Affairs Riina Sikkut (SDE) said Estonia will only support one of the three main proposals to be presented at the EU energy ministers' meeting on Friday. However, Estonia is ready to compromise to maintain unity among the member states.

"[The policy] which concerns consumption reduction, including the mandatory goal of reducing peak consumption by 5 percent — we can support that," Sikkut told ERR on Tuesday. 

"But the tax or fee instruments — in their case, we do not support implementation at all, or at least not mandatory implementation," she added.

On Friday, ministers will discuss a proposal to limit electricity consumption by 10 percent per month and at least 5 percent during peak hours. This is the only proposal Estonia will support.

The second proposal suggests creating new taxes on energy companies' windfall profits or new price caps. The money will then be used to help struggling consumers.

Sikkut said this policy would have little economic benefit for Estonia.

"And secondly, we can see that it does not encourage investment in renewable energy and long-term fixed-price contracts. But these are the things that we actually want to encourage, not take away the motivation to invest," she emphasized.

Additionally, Estonia does not support the suggested 33 percent tax on windfall profits for energy producers.

"Here, we have actually already established a resource fee for companies that depends on the world market price. And we do not see any reason for double taxation in this situation," the minister said.

Asked if the government would agree to these policies if Estonia could be granted an exception, Sikkut said the state remains "ready for compromise" because EU unity over the war in Ukraine is "the most important thing".

"Of course, for us, the most suitable option would be if the solidarity fee was not mandatory at all. But it would also suit us if Estonia gets an exception, so that we do not have to implement the solidarity fee. It does not fit our tax system, and basically it would be a tax change for one company, which does not make sense," she said.

The introduction of an EU-wide tax would also require the unanimous approval of all the member states. This would not be agreed upon on Friday as only energy ministers will attend the meeting and the policies will be adopted with a majority vote.

Commenting on media reports about a proposal from 13 member states to set a price ceiling on imported gas, the minister said Estonia would only support this policy for natural gas supplied by Russia.

A price ceiling may affect the security of supply as providers could choose to sell their products to non-EU countries, and member states still need gas for the coming winter, she said.

"So we have not really supported a general price ceiling, but at the same time a price ceiling for Russian gas would undoubtedly be reasonable," said Sikkut.


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Editor: Mait Ots, Helen Wright

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