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The Ministry of the Environment proposing a balance scenario for increasing environmental charges


Minister of the Environment Keit Pentus-Rosimannus introduced the preliminary proposal on the balance scenario for increasing environmental charges that takes into account the needs of the environment as well as the needs of the industry, according to which the total increase of charges will be 3-10%.

A balance scenario would help achieve environmental objectives – decreasing pollution and using non-renewable natural resources more efficiently; it would also take into account job retention and the needs of the industry using the natural resources in Ida-Virumaa, which is an important area for Estonia.
“Our preliminary proposal is to establish charges for up to ten years. This would make environmental charges stable for investment decisions and ensure keeping the natural environment cleaner,” the Minister of the Environment Keit Pentus-Rosimannus explained. “The analyses of Praxis as well as Ernst & Young confirmed that implementing a steep increase in charges is impossible, as it would also put environmental investments decreasing the negative environmental effects at risk. Based on that, our initial proposal is to keep the increase of charges between 3-10%.”

Key attention in the amendments is paid to pollutants posing a risk to human health and avoiding and decreasing the emissions of those pollutants in the future. The objective of the environmental charges is to ensure a fair price for using non-renewable resources and encourage enterprises to manage non-renewable resources more sustainably and in a less polluting way. For years, Estonia has been following the principle of taxing employment less and pollution and using of non-renewable resources more.

The discussion on environmental charges is currently on the agenda because the Regulation of the Government, which is currently regulating the increase of charges for using natural resources as well as the pollutant rates provided by law, will end in 2015.
The main areas paying environmental charges are the oil shale industry having an extensive environmental impact (mining and processing into electricity or oil), the mining of non-energetic mineral resources (technological dolomite rock and limestone, construction minerals, clay), the peat industry, and waste management.

In 2012, environmental charges amounted to 79 million euros of which 70% is formed by the oil shale industry. The environmental charges are used in three main areas: first, directly to local authorities, where the mining takes place; secondly, to the Environmental Investment Centre for investing into environmental project and finally, to the state budget to cover the expenditure from the state budget. In 2012, the total was 78.8 million euros.
The Ministry of the Environment wishes to reach a decision on the environmental charges to be implemented from 2016 by the end of this year.


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