Estonia will receive €354 million in EU grants to support the phase out of oil shale, a fossil fuel, in energy production in Ida-Viru, thanks to theTerritorial Just Transition Plan(TJTP) adopted by the Commission. Oil shale related companies located in this easternmost region account for over 50% of Estonia’s total greenhouse gas emissions.
Estonia has set the objectives to cease electricity production from oil shale by 2035, to phase out oil shale in energy production by 2040 and to reach climate neutrality by 2050. Investments financed by theJust Transition Fund(JTF), will support the country to address the social, economic and environmental challenges related to the transition to a climate neutral economy.
Investments in green energy production and a diversified economy
The plan invests in solar, wind and hydro power, and in renewable hydrogen, and it supports the development of renewable heating solutions. It also includes the restoration of contaminated brownfield sites.
With the JTF support, Estonia will diversify its economic activity away from fossil fuels, which account for almost half of Ida-Viru’s GDP. It will create a new business environment in the region, based on a circular economy, which will support research and development in collaboration with local education and research institutions.
Mitigating the social impact of the climate transition
The Plan foresees the reskilling and upskilling of around 11,000 local workers and jobseekers. It will also provide large-scale labour market mobility solutions for oil shale workers to new businesses with high value-added green jobs. Moreover, it will create around 1,100 direct jobs notably in the renewable energy sectors.
In addition, the JTF will support and improve in the region the quality and accessibility of social and health services.
Members of the College said:
President of the Commission, Ursula von der Leyen said:
“Europe is investing in accelerating the transition to clean energy. And we are making sure no one is left behind. Estonia’s Just Transition Plan is providing investments from the EU to support industrial change in the Ida-Viru region. This is an investment in the future of the region, to bring new jobs and new skills for workers, to succeed in the economy of tomorrow.”
Executive Vice-President for the European Green Deal, Frans Timmermans, added:
“The transition to climate neutrality has to happen in a fair way, or it just will not happen. The Just Transition Fund will help Ida-Viru develop new and sustainable economic activities and enable its citizens to benefit from the opportunities brought by the green transition. The European Commission is on Estonia’s side to work for a healthy, green, and fair future.”
Commissioner for Cohesion and Reforms, Elisa Ferreira, said:
“The Just Transition Fund’s objectives are more important than ever. As we step up the pace of our energy transition, we need to make sure that the regions and workers more exposed get the necessary support to cushion the economic and social impacts. In Estonia, the Just Transition Plan for Ida-Viru, developed in close cooperation with local stakeholders, will contribute to diversify the regional economy by creating business opportunities in sustainable, growing sectors and reskilling the work force. Territories matter, people matter.”
Background
The JTF supports the territories which are most affected by the transition towards a climate-neutral economy. These territories are identified in the TJTPs following a dialogue with the Commission in the framework of the negotiations of the 2021-2027 Partnership Agreements and the associated programmes. The TJTPs, developed in close consultation with local partners, set out the challenges in each territory, as well as the development needs and objectives to be met by 2030. They also identify the types of operations envisaged along with specific governance mechanisms.
The approval of TJTPs opens the door to dedicated financing under the other two pillars of the Just Transition Mechanism (JTM): a just transition scheme under InvestEU and thePublic Sector Loan Facility for Just Transitionthat combines Commission grants with European Investment Bank loans.
The JTM is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. It provides targeted support to help mobilise around €55 billion over the period 2021-2027 in the most affected regions to alleviate the socio-economic impact of the transition.
More information
The Just Transition Mechanism: making sure no one is left behind
The Just Transition Platform: Accompanying Member States and regions to achieve a just transition
Breakdown of Just Transition Fund allocations per Member State
Questions and Answers on the EU Cohesion Policy legislative package 2021-2027
2021-2027 Partnership Agreements
Factsheet on Cohesion Policy for a Just Transition in Estonia
Statement by President von der Leyen on the Estonian Just Transition Fund
Thank you very much, and what a pleasure to be here in Krenholm, in Narva. Indeed, the two words Narva and Krenholm were words that accompanied me throughout my childhood. But they were a little bit like these distant fairy tales where you have these words, that are childhood words, but I never thought that they were reality. So it was wonderful for me today to walk through Krenholm and to see all the childhood fairy tales that I heard of. Thank you very much for having me here. And many, many thanks also for the wonderful guided tour and the nice lunch, in one of the old factories, that we had – really amazing.
I learnt that the Krenholm cotton mill, when it was built in 1857, actually almost 100 years before I was born, was powered by 11 water turbines – that was new for me, too: renewable power at that time already, more than 160 years ago, from the Narva Waterfall. You all know, of course, the beautiful view on the course that the waterfall did carve into the stone. And I also learnt that the history of your town of course traces so much of the history of Estonia – a story of commerce and trade, but also a story of war and occupation, but in the very end a story of independence and resilience. This is what brings us here together today. Because together, we are writing the next chapter in your truly inspiring story.
I am delighted to announce that today, we are launching Estonia’s Just Transition Fund. The European Union is investing EUR 354 million in Ida-Viru County to support your region’s fair transition to a modern, low-carbon economy. And I think – you have said it already, Kaja – this will bring jobs to the region. It will bring growth to the region. Jobs and growth that are reliable because they are investing in tomorrow’s economy. So it is something which will last.
For example, in wind energy. Year on year, decade after decade, this technology will grow. I joined you when we had the Baltic Sea Summit – amazing to see the Baltic Sea Summit, it was in August. We agreed on targets, if we are able to bring that project up and running, that will cover the energy consumption of around six million households by 2030. It is not so far away. We have to be there in eight years. Six million households – that is more than the number of the households in Estonia, in Latvia, in Lithuania, and in Denmark combined. So that gives you an idea what an amount of power is possible in the Baltic Sea for example. In Estonia, three major offshore wind farms are already planned, with a total capacity of almost 1,500 megawatts. This is nearly as much as your country’s current power generation capacity, which largely comes from this region. This is why the energy company Eesti Energia has been able to announce that all its power production should come from wind and solar by the end of this decade. This, I think, still seems far away, but it is pretty close – end of this decade, as I said, eight years – and this is a winning business case for Ida-Viru. Because you have even more. This region is very rich, for example, I learnt that, in rare earth metals and you have a lot of digital knowledge here. And that is what is needed for the new, circular, green economy. The Just Transition Fund will help create these new companies, or modernise the old ones that are already here. It will bring research; it will bring new jobs into the region. Your Just Transition Fund foresees – and you know it – investment in the founding of new firms, investment in research and innovation, investment in upskilling and reskilling programmes, and investment in digitalisation. This is where the future lies: to take advantage of the necessary transition to other forms of energy. This is necessary, but you have to take advantage of it; to modernise and strengthen the resilience of your economy. And what we are doing here is not only realistic, but I think that this is also very strategic. Because renewables energy is home-grown, it is produced at home, like shale oil. You know it, both energy sources can underpin your independence from Russia, in the short term. But unlike shale, renewables are also good for our health, and they are good for our climate. But that is not all. Renewables have a long-term growth perspective, which fossil fuels do not have. So a lot is in this business case. We just have to make the ends meet and make sure that the investment is there. That is now here with the Just Transition Fund for the region. Your Just Transition Plan means more modernisation, it means more diversification and it means long-term independence.
I want to especially thank you for the very close and very constructive cooperation that all of you have been bringing to the table and are still bringing to the table: the Estonian government, the local authorities, the companies and the trade unions, and the communities most affected here in Ida-Viru. That is amazing how you sat together, how you joined forced, how you turned every stone around and took every good idea, put it in the basket so that we are now really able to deliver on the promise that is written down there, as I saw, the EUR 354 million.
The Just Transition Plan is, as you know, designed as an open process, an inclusive process. We want everybody on board. Because it is your ownership – you own that Plan – that will drive the change we need. You know this region; you know where the opportunities are. We can help with perhaps some advice or we can help by bringing research to the region. We can help with the funding. But you own this region, you own this knowledge and you have a vision for the future. You know where training, technology, and technical support is most needed. You know what is necessary to empower the workers, perhaps the small business owners, and especially young people who want their community here to thrive. So I really want from the bottom of my heart to thank all of you that are present here today. I want to thank you for your leadership because that was necessary, you really needed to bring everything together and then show leadership to make this happen. Your work matters – to the people of Ida-Viru, and for Europe to be a force for good and a progress for all Europeans.
My dear friends,
Standing here by the Narva River – and I have seen it now from different angles, it is amazing. For you, it is familiar, but for me it is a wonderful experience – which was once one of the biggest industrial centres, I can really literally feel that, if you look at history, sometimes history is like a river, like this Narva River. It does not flow in a straight line. History bends, it has its curves, it has sometimes a waterfall; there are rapids and there are rocks, which we could see out there. But every river has a clear direction, even if it is going in many, many different ways towards the direction. With the Just Transition Fund, we want to shape that direction, to flow to a better place. We want to move forward together with you to make Ida-Viru again a centre of progress. With your resilience, your ingenuity, your fantastic ideas, your enthusiasm, your hard work and with Europe’s solidarity, I am very confident that we can do that.
Many thanks for that. Long live Europe.
Source – EU Commission