EU energy directive ups pressure on Estonian wood and transport industries

Timber - photo is illustrative.
Timber - photo is illustrative. Source: Margus Muld/ERR

According to an expert from the Estonian Ministry of Climate the tightening of the requirements outlined in the Renewable Energy Directive, which was approved by EU countries this week, will have the greatest impact on Estonia's wood and transport industries.

While the EU's aim of ensuring at least 42.5 percent of its total energy is produced from renewable sources by 2030 is not a problem for Estonia, issues related to woody biomass, transport emissions and the permit procedure for renewable energy plants could start to cause difficulties, said Mairika Kõlvart, renewable energy expert at the Ministry of Climate.

No-go areas and the cascading principle

On the topic of using wood as a renewable energy source, Kõlvart highlighted the application of the cascading principle to woody biomass and also the so-called no-go areas for sourcing wood.

No-go areas are zones from which wood should no longer be sourced, as doing so would mean it could no longer be called sustainable, and therefore the energy it produces would not be considered renewable.

Areas with high biodiversity, such as nature reserves, would be considered as no-go areas, as would grasslands, and, in the Estonian context, semi-natural communities, some peatlands and also so-called old forests," explained Kõlvart.

"The concept of old forests is not defined in the law and so each member state is able to define it themselves. How that affects us in the end will also depend on our definition of the term," she added.

However, the cascading principle concerns the payment of subsidies for energy produced from biomass. It would mean that subsidies for energy produced from wood could only be paid if it is proven that using of a particular type of wood for energy is a last resort, Kõlvart explained.

All other possibilities for using the wood must be explored first, to the extent that burning it really is the only option for it to be used. "And to receive a subsidy, you would then have to prove that you had nowhere else to put that wood earlier in the process, apart from for energy," Kõlvart added.

In Estonia's case, there are, however, some exceptions, in which it would be allowed under the directive. These relate to situations in which a country really does not have the capacity to process the volume or type of wood as specified by the directive.

"Perhaps an example here would be the smaller branches that we all cut up - that they should actually be processed. However, as the capacity for that is not so widespread in Estonia, we could continue to use it for energy until we find a better way of processing it. That's the idea of the cascading principle, that wood should add value rather than just go into the furnace," Kõlvart said.

There is also an additional constraint when it comes to bioenergy. Whereas previously, thermal energy and electricity producers generating more than 20 megawatts (MW)of energy had to demonstrate compliance with the sustainability criteria, this limit will now be lowered to 7.5 MW. "Maybe more plants will have to consider where they source their wood from," the expert said.

Transport hit hard

The changes to the EU Renewable Energy Directive gave member states binding targets for the transport sector. These are to either a 14.5 percent reduction in greenhouse gas (GHG) emissions from transport using renewable energy, by 2030, or to achieve at least a 29 percent share of renewable energy in the final consumption of in the transport sector by the same year.

According to Kõlvart, Estonia has yet to decide which of these targets it will adopt, but it is more likely to start with a GHG reduction. However, doing so will require a concerted effort from Estonia, as it has so far only managed to reduce GHG emissions from transport by 6 percent.

"We need to be able to make a pretty big reduction in greenhouse gas emissions over a short period," Kõlvart said.

Estonia would be more inclined to adopt the GHG reduction target as several other EU transport laws are also CO2-based. And in the same way, transport will also be included in the EU emissions trading scheme, the expert explained.

"Since this all very much revolves around GHG, it makes sense to build up this kind of broader picture from the perspective of other directives and EU legislation. It's easier to keep track of and it's more coherent," Kõlvart said.

In addition, the transport sector will also be subject to new requirements in relation to the use of renewable fuels of non-biological origin (RFNBO), comprising mostly of hydrogen and hydrogen-based synthetic fuels. A minimum of one percent of all renewable energy used in the transport sector must be from RFNBOs.

"This is quite a challenge for us because at the moment we have neither hydrogen production nor hydrogen consumption at that level," Kõlvart said.

The hydrogen referred to in the directive is green hydrogen, which is subject to its own criteria - it has to be sourced from RFNBOs.

Permit procedure to be speeded up

The third major issue for Estonia is the directive's requirement to speed up authorization procedures for renewable energy projects.

"The directive sets very specific deadlines for how long the permit procedure is able to take," Kõlvart said.

Under the directive, countries will identify acceleration areas, where renewable energy projects will undergo simplified and fast permit-granting processes.  "The process of designating priority development areas is currently underway. This will be preceded by a 'national mapping exercise,' which should identify all the areas that could contribute to the 2030 targets," said Kõlvart.

"In short, we are currently mapping out the wind energy sites. From this mapping, the most suitable areas, so to speak, will be selected and designated as priority development areas," she explained.

For a priority development area established by a plan, the permit authorization procedure under the Directive may last a maximum of one year for a site on land and two years for one at sea. There is also the possibility of a six-month extension in exceptional circumstances.

In the case of priority development areas, the need for environmental impact assessments may also be waived if certain mitigation measures are in place, while the status of the species living there has to be either maintained or improved, Kõlvart added.

Aidu wind farm, Source: Kristjan Kundla

For projects outside the priority development zones, permit procedures may last a maximum of two years for land-based sites and three years for those at sea.

The directive also introduces the concept of a presumption of "overriding public interest" for the deployment of renewable energy. According to a Council of the European Union press release on Monday, doing so limits the scope for legal objections to the construction of new installations.

On Monday, European Union Member States gave their approval to amendments to the Renewable Energy Directive that increase targets on the use of renewable energy.

The amendments to the Renewable Energy Directive, as well as the new regulations to promote the use of sustainable aviation fuels, which was approved on Monday, are both part of the EU's "Fit for 55" package of climate targets for 2030. According to the European Commission, these are the final pieces of legislation in the package, after which the European Union now has legally binding climate targets across all major economic sectors.


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Editor: Michael Cole

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