Apartment buildings renovation support to depend on CO2 emissions income

Apartment buildings in Lasnamäe.
Apartment buildings in Lasnamäe. Source: Priit Mürk/ERR

Estonia has €260 million in European subsidies to spend on renovating apartment buildings in the next two years. In 2026 and 2027 the necessary millions will have to come from the state budget.

Estonia can use €331 million from European structure funds to renovate apartment buildings in 2021-2027. Another €10 million is available from the EU Recovery Fund. The money will be made available to apartment associations through KredEx.

Ivo Jaanisoo, Climate Ministry undersecretary for living environment and circular economy, said that of the total €341 million around €80 million has been paid out, while the remaining €260 million needs to be distributed in 2025.

"While the sums can be transferred until 2027, it takes roughly two years to go from a funding decision to the money being paid out. This time is spent on planning, construction and preparatory activities. When we say that the money needs to be used by 2027, what this means is that decisions need to be made in early 2025," he said.

Support sums for 2026 and 2027 should come from emissions quota trading proceeds. This revenue is forecast at €280 million for 2026. How much of it will be earmarked for apartment building renovations will become clear in climate law deliberations.

"Missing a year would send a very poor signal to the sector as [construction] companies would then have to rebuild their capacity after the break and incur expenses. Ideally, we would retain renovations funding from one year to the next," the undersecretary said.

Andres Jaadla, chairman of the Estonian Union of Cooperative Housing Associations, said that more money should be made available to apartment associations.

"They say that having more subsidies would overheat the construction market, lead to even higher prices and exhaust construction capacity. We do not agree. We believe that looking at the rest of the economy, companies that currently specialize on major projects should reorient and concentrate instead of apartment building renovations and fixing up the housing fund. People's wellbeing, health and better indoor climate are at stake," Jaadla explained.

The union chairman added that 60 percent of all energy in Estonia is used to heat and power residential buildings. "We are being very wasteful today because of our Soviet-era housing," he said.

Jaadla also said that apartment associations would like to see funding rounds planned longer ahead. "We have been told today that the new round will start sometime early next year. In truth, the government could know how much European subsidies it has and when the next round will be opened, so that associations could plan ahead."


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Editor: Mirjam Mäekivi, Marcus Turovski

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