Earnings before interest, taxes, depreciation, and amortisation (EBITDA) amounted to €283 million, which is 7% more than the year before, Eesti Energia said.

Andri Avila, the company's chief financial officer, called the result "satisfactory".

"Even though the entire year was strong in terms of financial indicators, a large contribution to achieving the final result was made by a very good fourth quarter, where sales revenue totalled €261 million, EBITDA totalled €95 million, and we earned a net profit of €40 million," Mr Avila said.

Increased market prices of oil and electricity as well as increased shale oil production were the main factors that helped increase the company's revenue and profit, Mr Avila added. The market price of electricity in the Nord Pool price area for Estonia rose by 42% on year.

"There are two main reasons for such a big increase in the market price of electricity. Firstly, Scandinavian hydro resources dropped to a significantly lower level than average in the second half of 2018, and this increased the price of electricity in addition to Scandinavia also in the Baltic states," Mr Avila explained.

"The second important reason for the increase was the three-fold hike in the price of carbon dioxide quotas compared with the average level of 2017. As a large part of electricity in Europe is still produced from fossil fuels, this price hike raised the market price of electricity very widely," he added.

The electricity sales volume of Eesti Energia reached 9.2 TWh in 2018, the same level as in 2017. Thanks to an increased market price and the improved reliability of its oil plants, Eesti Energia sold 393,000 tons or 6% more shale oil than in 2017. The production of shale oil reached a record 411,000 tons.

"The aim of the EU's CO2 policy is to support the increase of production of energy from renewable sources. What we actually saw in the Baltic states and in Finland in 2018 was that more Russian-origin fossil electricity than ever, more than 13 TWh, reached our market through Lithuania and Finland, which is equal to 1.5 times the annual consumption in Estonia. Even though unlike EU producers, Russian electricity producers do not need to purchase CO2 quotas for electricity production, they can participate in the same market with their production as the producers within the EU. This creates an unfair competition situation and, in conclusion, kills the EU industry," Mr Avila said.

The same situation has been the reason why the EU commission's aim to increase taxation of non-renewable energy was not reached by its measures in the CO2 certificate market, he added.