Estonia to cap renewable energy fee for energy-intensive companies

Tallinn, July 31 The Estonian government has decided to impose a cap on the renewable energy fee for energy-intensive companies, which will reduce electricity costs for major consumers by an average of 6.80 Euro (7.75 US dollars) per megawatt-hour.

In Estonia, energy-intensive companies currently pay renewable energy fees that are, on average, about 1.6 times higher than elsewhere in Europe.

As reported by Estonian Public Broadcasting (ERR) on Thursday, Minister of Economic Affairs and Information Technology Erkki Keldo said that competition for investment is fierce among Estonia's neighbouring countries and Finland, Sweden, Latvia and Lithuania have already introduced similar discounts for their industrial enterprises.

The cap on renewable energy fees will target companies whose annual electricity consumption exceeds one gigawatt-hour. As a result of the change, eligible businesses will receive a discount of 75 to 85 per cent, depending on the sector, Xinhua news agency reported. The discount will apply only to companies that implement energy management systems or audits that ensure efficient energy use.

According to Statistics Estonia, around one hundred large consumers met the eligibility criteria in 2023. The measure will have the greatest impact on the wood and paper industry, the food industry and the chemical industry - sectors in which electricity costs make up a significant portion of total expenses.

Introducing the preferential rate will require amendments to the Electricity Market Act and state aid approval from the European Commission. The Ministry of Climate and the Ministry of Economic Affairs plan to bring the draft legislation to the government no later than the end of the year.

Meanwhile, on Thursday, the latest statistical forest inventory (SMI) released by Estonia's environmental agency revealed that the country is losing more forest than it's gaining.

The Estonian Fund for Nature said the country's forests are being over-felled, leading to younger, less diverse woodlands.

Forest expert Eliisa Pass called the trend worrying, and the agency confirmed that, over the past decade, logging has outpaced regrowth. Though forest stock may now be stabilising, the agency plans to improve monitoring using remote sensing from 2026.

Currently, 70 per cent of Estonia's forests are managed, up from 68 per cent, and in 2024, logging reached nearly 11 million cubic metres, according to official figures.

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