Estonia is on the brink of a major energy transition that will involve a substantial reduction of the role of domestically produced oil shale in the country’s future energy mix. The transition will require Estonia to carefully balance social, environmental, economic and energy security considerations.
Estonia has a unique energy mix among IEA member countries. Domestically produced oil shale, an energy-rich sedimentary rock that can be either burned for heat and power generation or used for producing liquid fuels, dominates energy supply. This gives the country a high degree of energy independence but also the highest carbon intensity among all IEA countries. In 2018, oil shale accounted for 72% of Estonia’s total domestic energy production, 73% of total primary energy supply and 76% of electricity generation, which is a significant drop over the past 10 years.
Estonia has already achieved its mandatory emissions reduction and renewable energy targets for 2020. However, total final energy consumption started increasing again in 2016. In most IEA countries, energy consumption has been decoupled from economic growth and population, but this is not yet the case for final energy consumption in Estonia.
Looking to 2030, for the first time Estonia is required to reduce its emissions rather than merely containing their growth. As with most IEA countries, Estonia’s main challenge is the decarbonisation of its transport sector, which is currently not on track to meet its short-term emission and energy efficiency targets