The state-owned energy company told the Baltic News Service that as there is no capacity market in Estonia, the measure wouldn’t have any immediate impact here, but that in the longer term the planned implementation of a pollution cap may actually harm the Estonian economy.

European transmission system operators already anticipated supply security issues in the medium term, and the enforcement of an additional 550-gram carbon dioxide cap per kilowatt hour would only worsen the situation, Eesti Energia suggested.

The company thinks that reaching climate goals should be viewed separately from issues of supply security to avoid distortions in the electricity market and a deterioration in member states’ supply security. This is also the position of the European electricity industry association, Eurelectric.

The emission of carbon dioxide per kilowatt hour of electricity produced at the newer generating units of Eesti Energia’s oil shale-fueled power plants in Narva is close to 900 grams, and a little over a kilogram where older equipment is used.

The 550-gram emissions performance standard rule proposed by the European Commission in November 2016 as part of the Clean Energy Package implies that newer, more efficient gas and coal-fired power plants would still be able to claim subsidies. The rule would apply instantly to all new generating capacity, and to older capacity five years later.