Isamaa chair sends PM critical open letter following Auvere oil plant visit

Isamaa chair Urmas Reinsalu at the site of the Enefit 280 oil shale refinery under construction in Auvere, Ida-Viru County.
Isamaa chair Urmas Reinsalu at the site of the Enefit 280 oil shale refinery under construction in Auvere, Ida-Viru County. Source: Isamaa

Following a visit to the shale oil refinery still under construction in Auvere, Ida-Viru County, opposition Isamaa chair Urmas Reinsalu penned an open letter to Prime Minister Kaja Kallas (Reform), demanding full government support for Estonian state-owned energy group Eesti Energia's investment so that it could start operations without delay.

"The situation that has arisen as a result of your government's inaction is incredibly serious and is threatening hundreds of new jobs in Ida-Viru County while also threatening the layoffs of hundreds of existing employees," Reinsalu wrote in his letter.

"An application for an environmental impact assessment has been submitted on behalf of the company to the Ministry of Climate and the Environmental Board, the statutory deadline for which is 30 days," he highlighted. "The decision has been held up for months already by the obviously politically motivated lack of approval from the Ministry of Climate."

Reinsalu described what's taking place as unacceptable, noting that it's in conflict with the fundamental principles of the rule of law as well as the credibility of Estonia's investment environment.

"The project in question is of multifaceted essential importance in terms of Estonia's economic interests and in particular the development of the Ida-Viru region," he said. "Taking current world market shale oil prices into account, the plant would be capable of exporting more than €100 million worth of production when operating at full capacity. This means several tens of millions of euros in tax revenue for the state from the entire value chain. The refinery would employ 450 people – 150 jobs at the plant, plus logistics and mining jobs – which, given the over 12 percent unemployment rate in Ida-Viru County, would have a major employment policy impact.

The Isamaa chair added that the new Auvere shale oil refinery would have value in terms of energy security as well, as it would be capable of generating more than 30 megawatts (MW) of dispatchable electricity.

"The company is implementing the investment in good faith in accordance with all legal requirements in force in Estonia," he noted. "The signal that it's possible to either indefinitely postpone or downright halt large-scale industrial investments in Estonia using essentially just phone law is entirely unacceptable."

According to Reinsalu, foiling the refinery project likewise means putting the kibosh on potential investments in the chemical industry further down the value chain, and writing off such a large-scale investment will also significantly worsen Eesti Energia's ability to meet state dividend expectations from 2025.

"Among other things, what's incomprehensible is the behavior of your government's minister of finance, who should be safeguarding state revenue receipts as well as the prudent management of state-owned companies," he wrote to Kallas. "A man with general meeting competences at Eesti Energia, as a result of which he should do no harm to the company, is constantly using the rhetoric in the position of some outside observer that he personally doesn't consider the company's decision to build right. Politicians' or officials' phone law with references to nonexistent domestic regulations cannot be the source of the public governance of investments."

Investments in the Estonian state-owned Eesti Energia for the new shale oil refinery total some €350 million. Nearly €290 million of this has already been paid out, however the obligation remains to pay out the remaining sums arising from the contracts.

The fellow opposition Conservative People's Party of Estonia (EKRE) has likewise previously criticized the hampering of the completion of the Auvere oil refinery.

Minister of Finance Mart Võrklaev (Reform), who serves as the general meeting of Eesti Energia shareholders, initially declined to take a clear position regarding launching operations of the plant, but since Friday has repeatedly confirmed that the refinery must be completed.


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Editor: Aili Vahtla

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