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Estonia requires “stronger biomass policies” to meet climate targets

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The International Energy Agency (IEA) has said that "major efforts are required" for Estonia to reduce its emissions, adding that meeting climate targets will require stronger forestry and biomass policies from the nation.
The IEA said its Energy Policy Review arrives at a critical moment for Estonia, which is facing notable challenges amid the climate and energy crises, and Russia's invasion of Ukraine.
The organisation commended Estonia for taking steps to cease all energy trade with Russia whilst ensuring regional energy security, and for the work to accelerate the energy transition, including setting a 2050 carbon-neutrality target and a target for 100% of annual electricity demand to be covered by renewable energy by 2030.
However, it added that these targets will require major investments across all sectors, as well as improved energy sector planning.
Steps made to date
The report noted that Estonia has decreased its greenhouse gas emissions (GHG), mainly due to an overall reduction in electricity and heat generation from oil shale and growth in generation from wind, solar photovoltaics (PV) and domestic forestry biomass.
However, starting in 2020, net GHG emissions have been increasing due to a rebound in electricity and heat generation from oil shale and to land use, land-use change and forestry (LULUCF) becoming a net emissions source, mainly due to increased emissions from forests, according to the IEA.
Policy recommendations
Existing policies are insufficient to meet Estonia's targets, but new policies are being developed to support stronger emissions reducations activity, added the organisation.
"Estonia’s ambitious targets require accelerated renewables deployment, increased electrification and phasing out oil shale generation while ensuring a just transition that maintains energy affordability and supports economic development in the oil shale region," it commented.
Changes to fiscal and tax policy are needed to encourage consumers to move away from fossil fuels and support the uptake of low-emission, more efficient, renewable and innovative options, continued the IEA.
Estonia’s excise duty rates are not based on GHG emissions or other environmental factors. In addition, Estonia is the only IEA member country without taxation on private vehicles and has one of the oldest and least efficient vehicle fleets.
The IEA therefore recommended a broad effort to align price signals with climate and energy goals by updating energy excise duties; increasing carbon prices; quickly introducing vehicle taxation to drive uptake of efficient vehicles, including electric vehicles (EVs); and ending support for fossil fuels.
A major electricity system transformation is needed to achieve the 100% renewable electricity target and put Estonia on the path to climate neutrality, added the report.
The IEA recommended that the government ensure co-ordination between all components of electricity sector planning, including electrification, to clarify to energy sector stakeholders which pathways to climate-neutral electricity generation will be supported by policy, market regulations and incentives.
Biomass policies and the role of biomethane
Meeting climate targets will also require stronger forestry and biomass policies, according to the report.
To meet its climate targets, the IEA said that Estonia needs to increase LULUCF emissions removals. However, LULUCF has been a notable emissions source every year since 2018, driven mainly by changes to Estonia’s forests, including increased logging.
Forestry biomass plays a major role in Estonia’s energy system, accounting for 23% of total energy supply in 2022 (compared to the IEA average of 3.5% in 2022) and is a key fuel for heating, continued the organisation.
The European Union ban on wood imports from Russia could increase demand for Estonia’s forestry energy products (40% of which were exported in 2021), potentially increasing prices and reducing domestic availability, the IEA went on to say.
Measures to boost LULUCF carbon absorption could reduce the availability of biomass for energy. The IEA recommended that the government develop strong measures to ensure that LULUCF delivers net emissions reductions in line with climate and energy targets, including a robust forest inventory methodology, well-enforced biomass sustainability criteria and clear estimates on the environmentally sustainable level of biomass available.
In addition, efforts to reduce emissions from heating should focus on heat pumps and thermal storage. The IEA suggested.
It also noted that Estonia has successfully boosted biomethane production. With further action, it could decarbonise its entire gas supply.
"The IEA recommends the government swiftly decarbonise the gas sector by developing a comprehensive policy for boosting biomethane production and demand," said the organisation.






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