The state budget invests in new solutions and initiatives that lay the groundwork for a more secure future and steer Estonia's economy toward a more sustainable trajectory. Its primary focus lies in continuing long-term investments and achieving the CO2 reduction targets mandated by the Climate-Resilient Economy Act.

Savings generated by government decisions will reduce state interest expenditures by approximately €200 million over the next four years, of which €10 million comes from budget cuts in the Ministry of Climate's allocations.

To stimulate the economy, this year's budget plans €1.9 billion in investments and grants, positioning Estonia among the top EU countries in investment volume. A significant portion of funding is directed toward climate, energy and environmental issues.

A longstanding priority of the Ministry of Climate is channeling revenues from CO2 quota sales into economic revitalization. A €402.6 million investment signals that climate and economic policies are complementary rather than conflicting. The budget clearly demonstrates that Estonia can simultaneously reduce CO2 emissions and grow its economy.

The volume of infrastructure investments is also increasing. Two-thirds of revenue from CO2 quota sales, or €197 million, is allocated to the construction of Rail Baltica, including €74 million for building a joint depot for Elron and Rail Baltica. Additional investments include continuing the development of the Pärnu-Tallinn 2+2 highway sections and contributing €2 million to the Tartu-Riga rail connection.

This year, the emissions trading system will expand to include the maritime sector, requiring maritime companies to purchase CO2 quotas. To mitigate the impact, a €25 million support scheme will be launched to reduce CO2 emissions in the sector and retrofit ships.

The government will continue supporting the renovation of homes in rural areas. €50 million from CO2 quota revenues is allocated to improving the energy efficiency of apartment buildings. Additionally, the state is investing in the development of clean public transport and its network.

An export support measure endorsed by the government's economic cabinet, worth €2 million, will help foster innovative and value-added solutions through business representative organizations, with a particular focus on sustainable energy solutions and local resource utilization.

The 2025 budget promises greater adoption of renewable energy and a stable, cleaner energy supply, which will help ensure affordability and security. According to the coalition agreement, by 2030, all of Estonia's electricity will be renewable, a goal that is becoming increasingly tangible.

The arrival of more wind energy on the market will make electricity more affordable for all Estonians. During peak hours, wind energy production in Estonia can reach up to 500 MWh, while Finland generates approximately 6,000 MWh during its peak.

Securing Estonia's energy supply with clean energy is critical for energy security. As part of this, the development of offshore wind farms and solar parks will involve active collaboration with defense sector experts to find viable compromises.

To support renewable energy development and ensure energy security, plans include private funding for connecting the Gulf of Riga offshore wind farm to the grid and establishing the fourth Estonia-Latvia electricity connection. Both projects are expected to cost around €1.5 million. Preparations are also underway for initiating special plans for EstLink 3, with an estimated cost of €1 million.

Auctions are being conducted for state lands suitable for wind energy development. Approximately 85 square kilometers of state land are projected to accommodate up to 1,100 MW of wind energy capacity.

The state has meticulously mapped areas with minimal environmental and human impact for clean energy production. To meet the 2030 renewable energy target, the electricity grid must also be made more climate-resilient, ensuring it withstands extreme weather conditions. The budget allocates €74 million for building new grid connections and upgrades.

Investments in biomethane and green hydrogen development, amounting to €50 million and €7 million respectively, along with a €25 million green technology subsidy for the maritime sector, mark significant steps toward cleaner industries and a more diverse energy portfolio.

A special environmental program targets Ida-Viru County, allocating €1 million in 2025 and €2 million annually from 2026 onward from mining royalties. The goal is to mitigate environmental impacts from oil shale production.

To address climate change impacts and promote biodiversity, increased funding will be directed to protecting Estonia's nature and forests. Over the next three years, €17.1 million will be allocated to biodiversity conservation and development. Priorities include improving the condition of protected species and habitats, restoring bogs, rivers, coastal meadows and wooded pastures and conducting inventories of natural assets to enhance carbon capture in forests.

The budget also supports the sustainable management of private forests, funding forest inventories, reforestation, afforestation, protection of valuable habitats and early thinning of sparse stands.

It is heartening to see that in challenging times, where ensuring the security of the state and its people remains the primary focus, the pursuit of cleaner and more affordable energy, climate-resilient electrical grids and the protection of Estonia's natural environment have not been overlooked.

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