Shale oil, heat and power producer Kiviõli Keemiatööstus (KKT) has requested an extension from the Ministry of Climate for the installation of a sulfur capture unit, otherwise it will shut down its 550-employee shale oil plant a year from now. The ministry, on its part, is awaiting the company's vision for achieving the targets required by law.
"We would still like to continue through the year 2035," said Priit Orumaa, board chair at Alexela Group subsidiary Kiviõli Keemiatööstus.
"To do so, we'd need sufficient oil shale resources from the state," he continued. "In order to meet environmental requirements, we also need to make certain investments, such as into a sulfur capture unit. The current situation is such that we won't be capable of doing so by the end of 2024."
Following its meeting with the company on Friday, the Ministry of Climate decided that in order to be granted an extension, KKT must submit their vision next month regarding the investments they are prepared to make in order to bring their air emissions in line with new standards.
"Hopefully the state will support us," Orumaa said. "The state should still have a vested interest in jobs being preserved and tax revenues generated; there's no reason to shut down the oil shale industry prematurely."
Ministry energy undersecretary Timo Tatar, meanwhile, highlighted that the new standards taking effect from 2025 have been known for nearly a decade already.
"It's very unfortunate that the company has run so late with its investments, but we as the state are certainly willing to consider a proposal that Kiviõli Keemiatööstus is prepared to make at the start of the new year," Tatar said.
KKT doesn't consider additional investments justified, as they have no assurances that they will be able to continue mining oil shale and expand their oil shale quarry.
"First we need to look at the particular proposal that the company makes," Tatar commented. "What we know right now is that the directive known ten years ago already will take effect at the beginning of 2025. There aren't really many options for further transition periods on a transition period."
Orumaa noted that KKT has disagreed with the Ministry of the Environment over the years regarding the conditions with which the sulfur capture unit must comply, and to date the building of the unit has been out of reach for the company.
"The sulfur capture unit itself has high annual costs as well, so there's no point in doing so sooner," he added.
Other oil shale producers have long since made the necessary investments, Tatar countered, noting that their own sulfur capture units are already in place.
According to the ministry undersecretary, also dependent on compliance is whether the company needs to expand its oil shale quarry.
"Kiviõli Keemiatööstus currently has seven to nine years' of shale with mining permits; that should definitely suffice," he said. "What's important to us is that the company is prepared to make the investments required by the directive."
The board chair, meanwhile, said that by their own estimates, the company has enough oil shale for five years, however the company could operate through 2035, due to which they are prepared to expand their current quarry by nearly 100 hectares in size.
"All of this work takes years," he stressed.
The Ministry of Climate doesn't want to issue new long-term oil shale mining permits while the Climate Act is still under development, as it's first necessary to establish a specific timeline for Estonia giving up oil shale.
Tatar said that if the company isn't prepared to make investments that will allow them to remain in operation, then they have no shot at oil shale either.
"If the company is prepared to make the investments necessary for bringing their activity into compliance with requirements, then it would be justified to also consider whether it would make sense to expand the existing quarry or not," he explained.
The undersecretary likewise noted that the state has no interest in leaving the industry in the lurch and has on several occasions lent Kiviõli Keemiatööstus a helping hand. Nonetheless, he added, there is little way forward without these investments.
Editor: Aili Vahtla