Government falls out over EU residential buildings renovation plan

Minister of Foreign Affairs Urmas Reinsalu (Isamaa) and Prime Minister Kaja Kallas (Reform).
Minister of Foreign Affairs Urmas Reinsalu (Isamaa) and Prime Minister Kaja Kallas (Reform). Source: Jürgen Randma/Government Office

The outgoing government's Minister of Economic Affairs and Infrastructure Riina Sikkut (SDE), Prime Minister Kaja Kallas (Reform) and Minister of Foreign Affairs Urmas Reinsalu (Isamaa) got into a heated debate over the EU's plan of renovating housing stock at the Thursday government press conference.

The European Parliament on Tuesday approved its position on amending the EU's Energy Performance of Buildings Directive (EPBD) with 343 votes for, 216 against and 78 abstaining. Negotiations between the Parliament's representatives and the Council will follow.

The initiative has been met with sharp criticism in Estonia as it is believed its goal cannot be achieved in such a short time.

"I agree that clarification is needed in terms of the phase we are currently in. What Member States agreed on was one thing, while what the Parliament decided was slightly different. Talks between the Council and Parliament will now kick off to find a compromise," Sikkut said at the press conference.

The minister said that the main difference between what Estonia has approved and what the European Parliament is after is that the latter wants the energy performance rating of each individual building improved.

"This seems to saddle people [owners] with the responsibility. Estonia's position, and what the Member States agreed on, was looking at the housing stock in general. To say that the energy class has to be D there [on average] places that responsibility with the state. That is what they will be debating. I hope that the sensible compromise found by the Member States will prevail," Sikkut added.

"That is the technical side of it. But the fact that we have a lot of homes and apartment buildings in need of renovation... Renovation improves microclimate, lowers energy bills etc. We could also plot a course for renovation by city block, meaning that yards, playgrounds, garbage sheds, parking areas, EV charging infrastructure would be renovated at once for a given area. We are modernizing our living environment to a considerable degree either way. The need exists in any case. We need to use both European subsidies and our own fiscal resources," Sikkut offered.

Economy minister: It may seem too much but isn't

"Looking at recent funding, pace and construction activity, the task may seem too much, while that is not really the case. We expect an innovation component regarding all major change like this. And Estonia is on top in Europe when it comes to prefabricated renovation of apartment buildings. We have TalTech scientists who have developed suitable solutions for Estonia, which need to be developed, and the goal is to achieve it by creating custom solutions for Estonia, not by doing it the same way it was done 10 years ago," Sikkut also said.

Reinsalu: It is utopian, absurd

Minister of Foreign Affairs Urmas Reinsalu (Isamaa) holds the plan to be unrealistic.

"It is all very beautiful and noble what Riina Sikkut said. Why not just set a goal of everyone getting to live like the king of England in Windsor Castle. The problem is that it's completely utopian," Reinsalu remarked.

Sikkut just shook her head, sitting next to Reinsalu at the press conference.

"Renovating 350,000 buildings in ten years... Whereas the absurdity is also reflected in the fact that because our housing stock is very old, it makes no sense to renovate some buildings. And to imagine the proposal running €15 billion... It is a fundamental difference. Whether it is turned into an obligation or whether, under market conditions, people who have the money renovate their houses one way or the other," the foreign minister continued.

"Therefore, I believe Estonia should not buckle in this matter. It is unrealistic. Experts, builders and construction material producers have all said as much. An absurd situation," Reinsalu added.

Sikkut countered by suggesting it is the state's task to promote voluntary renovation. "What we need to prioritize is stability, avoiding a situation where we're waiting on yet another funding round to bring the next €100 million to the construction market. We need to provide stability for this activity to be constant and in predictable volume. It benefits our construction sector, especially in the conditions of a cooling economy. It is just what the government should be doing," Sikkut said.

Kallas to Reinsalu: Intimidation best kept in check

Prime Minister Kaja Kallas then intervened, telling Reinsalu that it is not sensible to scare people with the European Parliament's proposal.

"The European Parliament is always more ambitious than the Commission or Member States. As Riina already explained, these are the positions we have defended and will continue to defend. To run in the opposite direction and call the whole thing wrong per se because the Parliament's proposal is unrealistic... such intimidation is unwarranted," Kallas said.

"What you just so fiercely attacked (turning to Reinsalu – ed.) is not the final agreement," the PM added.

Reinsalu countered by saying: "So, we have consensus – the proposal is no good."

Riina Sikkut also said that Estonia needs to systematically work with apartment associations and that the situation differs greatly from one region to the next. She gave the example of Rakvere where all apartment buildings are allegedly renovated. "It stands out, makes the city look beautiful. And then we have areas where not a single apartment building has been renovated."

Kaja Kallas said the matter came up during coalition talks between the Reform Party, Social Democrats and Eesti 200 on Wednesday. "In terms of the initiative and how to promote it. We can see it all over Estonia that if two buildings are fixed up in an area, others will want to do the same, the community is activated. We want to make sure money earmarked for renovation ends up where it's needed, that these things get done and people could inhabit aesthetically pleasing and properly insulated buildings," the PM suggested.

Ansip and Paet vote against

Reform Party MEPs Andrus Ansip and Urmas Paet, who voted against the EPBD in the European Parliament, highlighted the unrealistic nature of goals. However, they stressed that their "no" votes don't indicate disagreement with the goals of the green transition.

"This doesn't conflict with the need to make environmentally friendly changes, but in order for things to actually happen and decisions be implemented, they must be realistic," Paet told ERR. "In this case, considering the current situation in many countries, including Estonia, it isn't. We need to move forward with these plans, just in more reasonable terms."

"Setting unfeasible goals rather discredits targets than motivates efforts to reach them. This is perhaps my fiercest criticism of the bill," Andrus Ansip said.

"What we need is a clear plan of where to find the resources for renovation, while the bill at hand does not provide a final answer," he added.

Only Social Democratic Party (SDE) MEPs Marina Kaljurand and Sven Mikser voted for the EPBD changes, with Yana Toom (Center), Riho Terras (Isamaa) and Jaak Madison (EKRE) joining the Reform delegates in voting against.


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Editor: Marcus Turovski

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