VKG to build two new second-sector plants next to its oil shale industry

A VKG plant.
A VKG plant. Source: Rene Kundla/ERR

In the Climate Act and Earth Resources Act, the government intends to establish timelines for exiting the oil shale industry. According to VKG, Estonia's largest shale oil producer, the green initiative should consider when more environmentally responsible businesses can be established in Ida-Viru County. VKG is preparing to construct two new facilities.

Climate Minister Kristen Michal (Reform) has authorized the construction of a new oil shale mine. However, the minister said this was only a transient solution and that he does not see a future for the oil shale industry.

"My personal position, and that of the Coalition, is that all such polluting, high environmental footprint businesses will take a back seat to businesses with a smaller environmental footprint," he said, adding that the sector's window of opportunity is closing fast.

On the one hand, there are the financial markets, which no longer finance this so-called "brown industry," and on the other, there is the product itself, which no longer has a high price and could not enter the market, because it is polluting.

"In any event, this is the position we have taken, and I want to implement these deadlines through amendments to the Earth Resources Act and the Climate Act," Michal said.

VKG, an oil shale oil producer that is constructing a new mine in the municipality of Lüganuse, will employ 1,600 individuals. According to Ahti Asmann, chair of the company's management board, the exit from the oil shale industry in Ida-Viru County should be preceded by the establishment of new job-creating businesses.

"Ida-Viru County requires a rational approach; we need time to establish a new business and economic model. Today, in addition to our existing activities, VKG is developing a bio-products industry and the recycling of plastic waste industry. So we are really working hard to carry on working," Asmann emphasized.

VKG plans to open a waste paste treatment plant in 2026 and a bio-products plant a year later.


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Editor: Kristina Kersa

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