Estonian politicians skeptical about new EU emissions trading scheme

Chimney and emissions.
Chimney and emissions. Source: Siim Lõvi /ERR

Politicians are skeptical about the European Union's new emissions trading scheme (ETS2) which was provisionally agreed upon over the weekend and will be implemented in 2027.

ETS2 will affect the price of transport and residential heating fuels and taxes will be applied to gasoline, diesel, coal and natural gas.

Yesterday the Estonian Oil Association said the new regulations could add between 12 and 14.5 cents per liter to gasoline and diesel prices.

ERR spoke to Riigikogu factions on Tuesday to find out what each party thinks of the new deal. Most politicians expressed skeptical views and pointed out the policy will hurt families and businesses.

EKRE's Anti Poolamets, a member of the Riigikogu's European Union Affairs Committee, said the green revolution should be halted because it creates additional difficulties for businesses and households.

He said the new agreement does not protect Estonia's interests.

Anti Poolamets. Source: Ken Mürk/ERR

"We are now entering an artificially created economic crisis due to climate policies that are being blindly implemented," he said.

The sovereignty of member states is also being called into question with the creation of new taxes, the MP said.

"The right to impose taxes is left to the member states, but those who are pushing the EU towards a federal union are still able to hijack the tax law with CO2 taxes. Estonia should oppose this, referring [back] to the fundamental principles of the Constitution and the terms of the accession treaties," Poolamets said.

The opposition politician said the government should not seek to increase the excise duty in the coming years, which will raise prices further.

EKRE chairman Martin Helme said the party will not support the agreement. 

Martin Helme. Source: Ken Mürk/ERR

"The whole agreement must be rejected in its entirety. The CO2 trading system really needs to be abandoned, rather than constantly thinking about where to turn the screw," said Helme.

Kokk: Madness

Finance committee chairman Aivar Kokk (Isamaa) was also critical of the deal.

"I think it's madness," he said. "We should be looking at how our businesses and our people can manage and how we can bring down the cost of both fuel and heating, not thinking about how we can raise them."

"Of course, we need to take a step-by-step approach to green energy, but we also need to take into account the capacity of our people and businesses to meet these costs," the MP added.

Aivar Kokk Source: Siim Lõvi /ERR

"If we don't have alternative solutions today, we can't go down the route of just creating some kind of tax that the end consumer will have to pay," he told ERR.

Lauri: People are being forced to change their behavior

European Union Affairs Committee member Maris Lauri (Reform) said the aim of such taxes is to force people to change their consumption and production behaviors.

"It is a perfectly logical approach that we pay attention to saving the environment and create tax systems to do so. Unfortunately, the fact is that people will not change their consumption just by saying good things, you need motivators and money is one of the biggest motivators," the former minister of justice said.

"Whether this is reflected in food prices and reaches consumers depends on how we change our consumption and production. It may be that prices will not rise if certain changes are made to production, if new technologies are explored, new solutions are found," the Riigikogu member added.

Maris Lauri. Source: Ken Mürk/ERR

Asked to evaluate the result of negotiations for Estonia, she said no one ever gets everything that they want.

"It's a compromise between different things — somewhere we get something more, somewhere we have to give something less," she told ERR.

Aas: Price increase is objectionable

Center's Taavi Aas, former minister of economic affairs and infrastructure, also questioned the policies.

"Certainly, in today's energy crisis, any regulatory price increase is objectionable. Rather than raising prices, we need to think about supporting people and businesses," he said.

Taavi Aas (Center). Source: Ken Mürk/ERR

Kaljulaid: No adequate mitigation measures

European Union Affairs Committee member Raimond Kaljulaid (SDE) said the group has repeatedly pointed out the lack of measures in place for the negative economic impacts the policy may bring.

"Clearly, if fuel prices rise, it will affect households with low incomes in particular, and it will hit people living in the countryside particularly hard, as they will inevitably have to drive more kilometres to get to work, take their children to school, go shopping, etc. than people living in cities," he said.

The MP said, while he supports the goals of the green revolution, implementation decisions can also deepen preexisting inequalities in Estonia and go against the main stated policy of fairness.

This means mitigation measures should be introduced to stop rural life from disappearing, he said.

Raimond Kaljulaid. Source: Ken Mürk/ERR

He said if unfairness arises from these changes it may damage society's willingness to implement future green policies and create additional support for populists.

"If Europe's political elites do not understand this dilemma, too bad, but our next generations will inherit a broken planet and, unfortunately, broken societies," Kaljulaid said.


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Editor: Aleksander Kryukov, Iida-Mai Einmaa, Helen Wright

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