On Thursday, the government plans to approve Estonia's positions to be presented in response to the European Commission's proposal for setting 2040 climate targets. This includes a recommendation on how much greenhouse gas emissions need to be reduced by that year to achieve climate neutrality by 2050.

The Commission recommends that Estonia cut its emissions by 90 percent compared to 1990 levels. According to forecasts prepared for the government's draft climate law, Estonia's currently planned measures and technological solutions would allow for an 82 percent reduction in greenhouse gas emissions by 2040 – 8 percentage points less than the Commission deems necessary.

Estonia does not outright oppose this plan but emphasizes in its positions for government approval that it can only agree with the European Commission's proposal if conditions enabling such reductions are met and if new technologies, such as carbon capture, are deployed over the next 15 years.

Estonia also finds it necessary to reassess progress toward the 2030 targets in 2032. This review should evaluate technological advancements and include an impact assessment on the economies and sectors of member states, adjusting the 2040 goals accordingly.

In its stance, Estonia stresses that industrial policy should support climate policy while maintaining the competitiveness of European Union member states.

Estonia believes that the 2040 framework should offer member states flexibility to determine which sectors and methods to use in reducing greenhouse gas emissions.

Projections prepared for the climate law indicate that electricity production, shale oil production, the peat industry, deforestation, road transport and agriculture have the most significant impact on Estonia's emissions.

Achieving an additional 8 percentage point reduction would entail further costs with the adoption of new technologies. Implementing the measures currently outlined in the draft climate law would cost the state over €3 billion over 15 years until 2040, alongside more than €11 billion in private sector investments.

According to the explanatory memorandum on Estonia's positions, the 2040 climate target serves as a signal to financial markets and industries for investment planning and long-term strategies, as well as for entrepreneurs and policymakers to plan the necessary investments in workforce skills development.

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