Kallas: Environmentally unfriendly companies will become uncompetitive

Kaja Kallas.
Kaja Kallas. Source: Ken Mürk/ERR

Estonia's manufacturing industry saw the biggest decline in Europe last year and the sector says a lack of government support is the main problem. But the prime minister said companies not taking the environment into consideration will suffer the most.

The forest and wood industry has been hit the hardest over the last 12 months. In April the volume of wood processing decreased by a quarter compared to the same time in 2022.

Several companies have reported running into difficulties as a result.

On Thursday, Finnish forestry group Stora Enso announced it would make 100 redundancies at its site in Lääne-Viru County.

The sector believes companies may go under as input prices are much higher in Estonia than in competitor countries. The situation on the markets does not seem to be improving, they say.

Prime Minister Kaja Kallas (Reform) said it is difficult for the wood industry and the government is working to ensure stability.

"The timber industry is really struggling, precisely because they've had a lot of raw materials coming in from Russia and Belarus and it's now blocked. The whole green policy and the green reforms are aimed at boosting the industry and the competitiveness of the industry in a situation where there is such an economic revolution in the world. And those who don't have green credentials are actually losing out to the competition," said Kallas.

But Henrik Välja, Estonian Forest and Wood Industries Association CEO, said the problem for the sector is the Estonian economic environment's lack of international competitiveness.

"In other words, in our competitor countries companies have been offered energy subsidies in larger volumes, long-term development visions and a higher degree of political stability than we have had in Estonia," said Välja.

Margus Kohava, head of the Estonian Forest and Wood Industries Association, said, the entire forestry and timber sector is struggling and expects from the government stable and long-term policy. 


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Editor: Mari Peegel, Helen Wright

Source: Aktuaalne kaamera

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