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Estonia starts to trade with greenhouse gas emissions under the new scheme


The Riigikogu approved the new greenhouse gas emissions trading scheme, which will operate in parallel with market-driven European Union Emissions Trading Scheme (ETS).

If current trading system set greenhouse gas emissions limitation commitments on major companies engaged in energy production and industry, then the new scheme establishes this commitment to the sectors, which have remained outside of trading system so far. These sectors include transport, agriculture, waste management, operation of combustion units with up to 20 megawatts of rated thermal input, and use of solvents and other products.

A new unit will be created for trading – AEA or annual emissions allocation that is equal to one tonne of CO2 equivalent. Annual maximum amount of the greenhouse gas emissions refers to emissions that are allowed to a Member State to emit into the air in mentioned sectors within a specific year.

The country’s task is to ensure that the emissions in these sectors would not exceed the annual maximum amount. According to very initial estimates, Estonia is likely to have a surplus of units over the period, which enables Estonia to earn millions of euros of revenue from the sales of the units during this period, which in turn would be invested in the same sectors to reduce greenhouse gas emissions.
Approximately 6.30 million units were allocated to Estonia by 2013, increasing by approximately 6.47 million units per year by 2020. In doing so, one unit is equivalent to one tonne of greenhouse gas emissions.

The implementation of such emissions trading scheme enables the Member States to achieve the greenhouse gas emissions limitation targets in a more flexible and cost-effective manner.

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