VKG, Eesti Energia's new shale oil mine depends on coalition agreement

Workers in the Estonia mine in Ida-Viru County.
Workers in the Estonia mine in Ida-Viru County. Source: Rene Kundla/ERR

The opening of a new shale oil mine is dependent on a decision by the future government, Minister of Economic Affairs and Infrastructure Riina Sikkut (SDE) said on Monday. Viru Keemia Grupp and Eesti Energia are awaiting the outcome of coalition negotiations.

The company's permits allow VKG to mine five million tonnes of shale oil a year in the Uus-Kiviõli quarry. But now the plans are stuck behind the Reform, Eesti 200 and SDE discussions.

Sikkut met with VKG head Ahti Asmann on Monday, but she believes new shale oil mines should not be developed. Additionally, the minister said the ultimate decision should sit with the government, not the company.

VKG is not happy with the decision.

Asmann said: "We don't think it's right that the negotiation of some coalition agreements should be an obstacle to business. We said that laws and regulations are not inferior to a coalition agreement."

Sikkut said the decision will rest on what is written into the coalition agreement.

Viru Keemia Grupp (VKG) board chairman Ahti Asmann. Source: Ken Mürk/ERR

"Before that, there is no point in making further investments or taking any other steps," Sikkut said. "If there is no coalition agreement, if there is no clear political decision that this should not be done, there is no reason for VKG to abandon its plans."

The minister said she has not yet given approval for the new mine's substation.

Reform's Kristal Michel said the party would not include a clause stopping the development of mines in the agreement.

He added that unexpected government decisions do not create confidence in the economy.

"Transition still means that if we know where the new businesses, the new revenue, the new economic growth is coming from, then the transition will happen. It's not that you close everything down and then you start looking," Michal told radio show "Uudis+".

But Sikkut said the transition to sustainable energy in Ida-Viru County cannot be carried out "half-heartedly".

Minister of Economic Affairs and Communications Riina Sikkut (SDE). Source: Ken Mürk/ERR

VKG has been developing the Uus-Kiviõli mine for 15 years. Eesti Energia's head Andres Vainola said the company has not given up on developing the site and it has not received a message from the government suspending the project.

"We need to maintain at least 1,000 megawatts of electricity generation capacity in Estonia by 2027. We need oil shale for that too." Vainola said.

But Sikkut argued Eesti Energia's other mines can produce enough for the coming decades.

Both the minister and Michal said the construction of future mines should be discussed in relation to new climate legislation. Asmann agrees that new laws should be drawn up.

"I really think Estonia should choose a clear strategic direction. And that is renewable energy, that is a circular economy and an industry that does not rely on fossil minerals and energy resources," said Sikkut.


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Editor: Merili Nael, Helen Wright

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