The two parties ejected the Social Democrats (SDE) from office at the start of this week, with the stated aim of being able to pursue economically right-wing policies more freely.
The climate law had up to now been put on pause; the coalition says it will also revisit another issue which had run into obstacles, namely onshore wind farm auctions.

The climate law has been under preparation for nearly two years now, with no indication that it will be ready any time soon.

Climate Minister Yoko Alender (Reform) introduced the draft bill on a climate-resilient economy to the government last December.

Nothing moved forward since then, however, and in recent months, the focus has shifted more towards energy issues including the auctions for both onshore and offshore wind power.

Prime Minister Kristen Michal (Reform) and Eesti 200 chair and Education Minister Kristina Kallas have now said they plan not only to proceed with the onshore wind auction in the spring as previously discussed, but also to move forward with the climate law, albeit in a way that aligns more closely with Estonia's economy. 

Kallas told ERR: "The question for us is what form this climate law should take — whether it should be so detailed and impose such strict regulations on the economy."

"This is still a topic for discussion. Based on examples from other countries, we can say that climate laws can also be framework laws that are very brief and only establish general norms, giving businesses some guidance," Kallas went on.

Michal, who was climate minister until last summer, also said that the law would primarily be examined from the perspective of economic needs.

He said: "Businesspeople themselves have said that certain aspects of it are needed for the economy. Specifically, the sectoral allocation of limits (CO2 reduction targets – ed.), which will give investment certainty. We will be evaluating the bill from this perspective — from what the economy needs."

Kristina Kallas: No need to rush with offshore wind subsidies

The climate bill also outlines how quickly and to what extent Estonia should reduce its carbon emissions in the coming decades.

For instance, by 2030, greenhouse gas emissions must not exceed the levels recorded in 2022, the bill states, while emissions should be reduced by 59 percent compared with 1990 levels, also by 2030.
By 2035 that figure should have fallen to 71 percent, to 82 percent by 2040, to reach climate neutrality by 2050.

The prime minister noted, however, that in the course of the review of the climate law, this trajectory will surely be reassessed, though declined to answer directly whether he believes ambitions should be scaled back.

First and foremost, the focus should be on the EU, he added, noting that economic considerations will be weighed across the bloc.

He said: "Europe, centrally, I believe, will definitely be revisiting its climate goals within the next six months to a year, depending on the economic situation."

Minister Alender meanwhile stated that, in her opinion, the ambition for reducing carbon emissions as outlined in the bill should not be reduced.
She said: "In my view, this trajectory is adequate, realistic, and achievable, while also fulfilling all the obligations that Estonia has set for itself at the Riigikogu."

Kallas: If businesses find the goals unrealistic, topic can be revisited

Minister Kallas stated that the carbon emission reduction targets outlined in the climate bill were formulated in collaboration with industry representatives, adding that if they feel that this ambition is unachievable for any reason, it could be reassessed.

"These ambitions or goals have not been formulated behind closed doors. Every point has been discussed within the sector. However, if under changed circumstances, for tech or war-related reasons, the ambition is perceived as unrealistic, then it should be reassessed," Kallas said.

In addition to the Paris Climate Agreement, Estonia's climate goals largely stem from the EU's agreed climate targets for 2030 and 2050.

Specifically, the EU has agreed that member states must reduce their emissions in predetermined amounts in sectors such as forestry and land use (LULUCF), as well as transport, buildings, agriculture, and waste.

On Thursday this week, the Reform-Eesti 200 cabinet agreed that it wants to postpone the implementation of the emissions trading system (ETS2) for buildings and road transport fuels and is prepared to request the cancellation of this system.

However, Michal and Kallas did not explicitly state that Estonia should seek a review of EU climate targets in the same way it is with ETS2.

The Reform-Eesti 200 coalition continues in office but is to draft a new coalition agreement as well.

Kallas said that since coalition negotiations are still in the future, this matter has not yet been discussed.

Michal: If debate appears in Europe, we will certainly take part

Michal said: "These goals must be achievable, and I believe that Europe as a whole will evaluate the pace of its climate targets with economic competitiveness and clean industry goals in mind."

"These debates are still ahead of us, so it is a bit early to provide a definitive answer today," the prime minister added.

As for the question of whether Estonia should also review its goal of achieving climate neutrality by 2050, Kallas said: "At the moment, I don't see a reason [to abandon the goal] as there is still sufficient time until 2050 for the economy to have ample opportunity to adapt."

Michal said: "Well, no one has proposed reviewing this goal as of today, but if such a debate arises in Europe, we will certainly take part, as an EU member state."

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