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Renewable energy fee reform is a political hot potato

Solar panels.
Solar panels. Source: Ken Mürk/ERR

The State Budget Strategy (RES) predicts €60 million from 2025 onward from renewable energy fees, but officials and politicians are reluctant to provide additional details and divert questions elsewhere.

The government's September 2025-2027 state budget proposal included a renewable energy tax overhaul that will boost state revenues by €60 million from 2025 onward. However, no one knows what the change will involve or when it will happen.

The chair of the special committee on the control of the state budget, Urmas Reinsalu (Isamaa), asked at the last meeting if the government was planning both to reduce renewable energy fees while sharply increasing electricity excise. Reinsalu said to have overheard such a conversation. He asked Timo Tatar, climate ministry undersecretary, what the reform does entail.

"As the Ministry of Finance makes the national budget, we need to communicate with our colleagues there and find out what is behind it," Tatar said, not being able to elaborate further.

The finance ministry's administrative policy undersecretary Kaur Kajak and State Secretary Taimar Peterkop couldn't comment on the reform either. Reinsalu was chastised by Reform Party member Maris Lauri for circulating unverified rumors.

ERR asked Finance Minister Mart Võrklaeve (Reform) what he knew about the plan, but the minister's advisor, Kertu Subka, suggested that the Ministry of Climate be contacted as it was largely their issue.

However, the head of the energy department at the Ministry of Climate, Rein Vaks, said that discussions regarding the reform are still very raw and that the ministry has yet to address the issue.

"We are aware of the the background and history, but there has been no substantial discussion among officials," he said. "I am not sure if there are any clear plans in the coming weeks or months."

Before reforming renewable energy fees, Vaks said some fundamental issues must be dealt with in renewable energy development.

"Let's see what 2024 brings," Vaks said. "The renewable energy charge is an additional cost for every consumer, and we must try to guarantee that we have more and more renewable energy while keeping the renewable energy charge affordable. This is something we need to work on," he said.

In September, Jevgeni Ossinovski (SDE) told ERR that his renewable energy fee reform would remove the fee from electricity bills and have the state pay renewable energy producers from CO2 funds. Electricity excise duty would also rise. He said the measure would not affect electricity prices and may make it cheaper for socially vulnerable groups.

The leader of the Social Democratic Party, Minister of the Interior Lauri Läänemets (SDE), has said that the reform is not SDE's plan or Ossinovski's idea: different solutions were proposed during the discussion and drafting of the state budget strategy, and it suited the Ministry of Finance to write into the RES that the renewable energy fee could change.

"The appropriate ministers will need to discuss how to move forward with this. We discussed significant adjustments as part of the goal to make electricity more affordable for some people. Experts will have to decide whether, how and when it will finally be possible in this form. They are, as far as I know, entrusted to the Ministry of Climate," he said.

Läänemets could not clarify what the change would entail, or whether it would include a reduction or elimination of the renewable energy fee, as well as an increase in electricity excise duties.

"I can't comment on anything until the climate ministry has examined it," he said. "We talked about a principle or a logic behind it [when putting together the RES], but somebody has to work this out."

According to the Minister of the Interior, there was an open discussion on how things could be done during the drafting of the RES, and he highlighted that there were surely different components, not only the straightforward removal of the renewable energy fee and an increase in excise.

"It doesn't work just like that, it should be more complex as a system," he said.

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Editor: Kristina Kersa

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