The Court emphasized that Estonia is a state governed by the rule of law, where the rights of individuals, in this case the freedom to conduct a business, can only be restricted on the basis of law and any restrictions must also be proportionate. The precautionary principle in environmental law does not take precedence over other generally recognized principles of the rule of law, said Maria Joost, spokesperson for the Tallinn Administrative and District Court.

The Court stressed that the complex permit has been granted to Enefit Power AS under rather strict conditions, which will ensure the rapid environmental sustainability of the oil shale plant. The permit requires the company to implement important measures, including carbon capture and the environmentally sustainable use of waste gas, by 2031 at the latest, which will significantly reduce the plant's impact on the climate.

The Environmental Board will review the complex permit if the legislation changes. In addition, the company will be also required to submit an annual report to the Environmental Board confirming its compliance with environmental requirements and low-carbon economy objectives.

Estonia as a whole is moving towards a low-carbon economy, and greenhouse gas (GHG) emissions have already fallen by around 60 percent, twice the EU average. The Court found that the construction of the oil shale plant would not change this, nor would it prevent Estonia from meeting its climate targets. Estonia's long-term national strategy "General Principles of Climate Policy Until 2050" foresees a gradual transformation of the economy in a way that allows industry to thrive through innovation and environmental stewardship.

The Court found that the holistic approach adopted by the Environmental Board, which takes into account the entire Auvere energy complex, is also in line with an earlier decision made by the Supreme Court of Estonia in the same oil shale plant construction permit dispute. Namely, that the Auvere energy complex will reduce its GHG emissions if oil production is increased, while at the same time, the use of oil shale in power plants is reduced.

Thus, although the climate impact of a single oil shale plant is negative in isolation, the overall aggregate may be positive. According to the Court, a reasonable approach is to close older, more environmentally damaging production units and open new, more environmentally friendly ones instead. The production of oil shale is the refining of oil shale and thus generates much more local revenue.

The complainant expressed concern that the construction of the oil plant will increase GHG emissions. However, the Court stressed that the climate impact has to be assessed in its broader context. Estonia is reducing emissions in the energy sector as well as in other sectors, including land use and forestry (LULUCF). Emissions from the oil shale plant will not prevent Estonia from achieving climate neutrality, as emissions from other sectors, including shale electricity production, will decrease.

The Court also took into account in its ruling, the EU Emissions Trading Scheme (ETS), which regulates and limits CO₂ emissions on a market-based basis. In addition, environmental permit regulations allow for the modification of existing permits in order to balance pollution levels in the region and to reduce the environmental burden.

The Court stressed that no international treaty or EU legislation explicitly prohibits the construction or authorization of an oil plant. The Environmental Board can only make decisions on the basis of existing legal provisions and strategic development documents that concern the achievement of climate objectives through integrated solutions, not by banning individual industrial plants.

Furthermore, the Court pointed out that the EU Emissions Trading Scheme (ETS) ensures market-based regulations that limit carbon emissions and steer companies towards more sustainable solutions. In the international context, it is important that production takes place where environmental requirements are most stringent – this is to avoid the same production moving to countries with less stringent environmental requirements, as that could negatively contribute to the overall global climate impact.

The Court pointed out that the complex authorization permit is granted for a ten year period, until December 31, 2034. If the plant wishes to operate for a longer period, it will have to obtain a new permit, and this will have to be done on the basis of the legislation in force at that time. In the framework of Eesti Energia's current strategic action plan of, the activities of the Auvere energy complex are to be transferred in stages from the production of energy carriers to the chemical industry.

The appeal was brought by an individual person, however, the Court found that Estonian law did not confer on them the right of appeal. The European Court of Human Rights has taken a similar position in the case of Verein KlimaSeniorinnen versus Switzerland.

The judgment has not yet entered into force.

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