Riigikogu debates increasing shale industry environmental fees

VGK mine.
VGK mine. Source: Dmitri Fedotkin / ERR

Monday's Riigikogu first reading of a draft law imposing environmental fees continues. Under the bill, pollution charges for waste, water and air would rise from July 1 next year.

The bill foresees that environmental charges for air, water, hazardous waste and oil shale waste will gradually increase between 2024 and 2027.

As stated in the bill's explanatory memorandum, pollution charge rates have been constant for years and are no longer sufficient to account for the cost of environmental usage.

The change would likewise increase the upper limit of the fee required to extract oil shale.

The introduction of a charge for the right to fell timber as a new fee within the Environmental Charges Act is intended to mitigate the depletion of forest land.

In addition, the draft increases the amounts for the fishing rights fee and changes the basis for calculating the eel fishing fee.

The debate on the draft started on Thursday, but was postponed.

Last week, the Environment Committee of the Riigikogu backed a change in pollution tax rates and decided to support a sharp rise in environmental charges.

Igor Taro, the chair of the Environment Committee, explained the daily Põhjarannik that the annual increase in pollutant charges is dictated by the hazardousness and environmental impact of the pollutants, as well as the need to mitigate their detrimental effects.

Taro (Eesti 200) thinks the increase could be even higher. "It seems that the increase in the level of pollution charges in the draft is not ambitious enough," he said, adding that higher pollution charges would help the transition to a more sustainable economic model.

Andres Metsoja (Isamaa), the vice-chair of the environment committee, voted against, saying the increase was too steep. "The sector would be prepared for a 10 percent change, but the ministry is proposing 50 percent," he said, adding that it should first be clarified whether such a change is affordable for the sector.

Andrus Durejko, the chair of Eesti Energia's management board, told Põhjarannik that the forthcoming significant increase in pollution and environmental charges will have a strong impact on the company's activities in both electricity and oil production, and that such a move is in conflict with the state's obligation as the owner.

The chair of the Viru Keemia Group's management board, Ahti Asman, has previously told ERR that higher pollution rates will mean additional costs of around four to six million euros per year for the company. "Oil shale sector faces tough times as world energy prices start to fall," Asmam said.

"Higher taxes mean that Estonian businesses will find it harder to get started sooner than businesses in other countries," he added.


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Editor: Kristina Kersa

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