Eesti Energia audit flags critical flaws, particularly with oil shale
According to the final report arising from a special audit of state owned Eesti Energia, severe environmental violations occurred at the group's energy production company Enefit Power AS, which could potentially lead to fines, criminal proceedings, reputational damage, and challenges in securing financing.
The most serious category highlights violations related to Eesti Energia subsidiary Enefit Power, and the Environmental Board (Keskkonnaamet) could potentially decide to halt operations at Enefit Power's shale oil plants or power stations, on the basis of the report.
This would lead to a virtual shutdown of the whole shale oil production sector.
Sorainen highlighted that pollutant limits set in the environmental permit (KKL) are consistently exceeded at Enefit Power's Enefit 140 and Enefit 280 oil plants as well as its power plants, and that the Enefit Power management board prepared annual reports containing incorrect data regarding environmental audits.
Sorainen emphasized that exceeding pollutant limits at EP could lead to misdemeanor proceedings, fines of up to €400,000, significant reputational damage, and an increased risk of complaints from competitors and environmental organizations.
Furthermore, the risk of criminal proceedings cannot be ruled out if threats to human life, well-being, or the environment are identified by the Environmental Board.
Sorainen noted that incorrect information suggests Enefit Power's activities conflict with Eesti Energia's environmental policy, risking reputational damage and loss of environmentally conscious partners.
The special audit, conducted by Sorainen OÜ and Grant Thornton Baltic OÜ, covers the period from January 1, 2020, to December 31, 2023. It was commissioned in April by previous finance minister Mart Võrklaev (Reform).
Current Minister of Finance Jürgen Ligi (Reform) had earlier stated that the issues have already been addressed and significant management changes have been implemented, though he was referring primarily to reported mismanagement by the preceding Eesti Energia management board, particularly with respect to a now discarded plan to separate another Eesti Energia subsidiary, Elektrilevi, from the whole.
In addition to Enefit Power and Elektrilevi, the Eesti Energia group includes Enefit Connect, Enefit Green, Narva Soojusvõrk, and Enefit Solutions. Virtually all oil shale mining and refining takes place in Ida-Viru County. The ensuing fossil fuel's use in power stations in Ida-Viru County and anywhere else is under pressure from EU climate goals, though the oil has multiple other applications in the chemicals industry.
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