Estonia’s 2030 National Energy and Climate Plan (NECP 2030) Estonia's Communication to the European Commission under Article 3(1) of Regulation (EU) No 2012/2018. Final version 19 December 2019 CONTENTS SECTION A: NATIONAL PLAN 1. OVERVIEW AND PROCESS FOR ESTABLISHING THE PLAN 1.1. Executive Summary 1.2. Overview of current policy situation 1.3. Consultations and involvement of national and EU entities and their outcome 1.4. Regional cooperation in preparing the plan 2. NATIONAL OBJECTIVES AND TARGETS 2.1. Dimension Decarbonisation 2.2. Dimension Energy Efficiency 2.3. Dimension Energy Security 2.4. Dimension Internal Energy Market 2.5. Dimension Research, innovation and Competitiveness 3. POLICIES AND MEASURES 3.1. Dimension Decarbonisation 3.2 Dimension Energy Efficiency 3.2. Dimension Energy Security 3.3. Dimension Internal Energy Market 3.4. Dimension Research, innovation and Competitiveness SECTION B: ANALYTICAL BASIS 4. CURRENT SITUATION AND PROJECTIONS WITH EXISTING POLICIES AND MEASURES 4.1. Projected evolution of main exogenous factors influencing energy system and GHG emission developments 4.2. Dimension Decarbonisation 4.3. Dimension Energy Efficiency 4.4. Dimension Energy Security 4.5. Dimension Internal Energy Market 4.6. Dimension Research, Innovation and Competitiveness 5. IMPACT ASSESSMENT OF PLANNED POLICIES AND MEASURES 5.1. Impacts of planned policies and measures described in section 3 on energy system and greenhouse gas emissions and removals including comparison to projections with existing policies and measures (as described in section 4). 5.2. Section 3 assesses the macroeconomic and, to the extent feasible, the health, environmental, employment and education, skills and social impacts of the planned policies and measures should be assessed. 5.3. Overview of investment needs 5.4. Impact of the planned policies and measures on other Member States and regional cooperation SUMMARY OF NECP 2030 Annex IA List of parameters and variables to be reported in Section B of National Plans Annex IB Greenhouse gas emissions requested in Section B of the plan by IPCC sector and gas types Annex II KPP 2050 policies and principles Annex III Relation between the measures in NECP 2030 and the objectives of the plan Annex IV Descriptions of the measures Annex V Responses to the comments on the draft version of NECP 2030 SECTION A: NATIONAL PLAN 1. OVERVIEW AND PROCESS FOR ESTABLISHING THE PLAN Executive Summary i. Political, economic, environmental, and social context of the plan. The year 2019 marked 28 years since Estonia regained its independence. We have been a member of the EU for 15 of those years. In 2019, the main factors behind the ever-increasing energy demand were open offices and working from home, zero-energy buildings, air-conditioning and ventilation, electric scooters and parcel robots, social media, smart devices and cloud services, There are currently no exact projections of the impact of these new energy dependencies on the climate and the environment, on energy management or human health. The Estonia 2035 strategy1, which assesses global megatrends and will influence lifestyles - and hence energy demand - is currently being drafted. In 2019 there are 1.32 million people living in Estonia, with an average monthly gross salary of €1,419. The employment rate is 5.1%. GDP in the previous year was € 26 billion (€ 19,737 per capita), while exports totalled €14.4 billion and imports €16.2 billion. Economic growth was approximately twice as rapid as the EU average (in 2018, real GDP growth in Estonia was 3.9%, whereas the EU average was 2.0%=. The generation of electricity from oil shale and wind power decreased in 2018 compared to the previous year, while electricity generation from wood fuels increased. The production and export of wood pellets continues to increase. Estonia has three times as much organic farmland than the EU average, accounting for 20% of the land. The air in Estonia is among the world’s purest - for example Tallinn ranks fourth on the list of capital cities with the purest air. There is still a need to address air pollution particulates (PM2.5) and related emissions from local heating that are due to ageing heating equipment and incorrect wood-based heating methods2. Under the Government’s action programme3, the current Government plans to develop the Estonian economy into a competitive, low-carbon economy by the middle of the century. On 3 October 2019, the Government decided to support the establishment of an EU-wide long-term climate neutrality objective by 2015 if there are sufficient transition measures and the differences and different baselines of Member States and sectors are taken into account. Member States should retain the right to select appropriate ways of achieving the targets, including making sovereign tax assessments to achieve climate neutrality. Measures for achieving a climate-neutral economy in Estonia by 2015 are currently under development and hence cannot be included in this plan. 1 Materials on the Estonia 2035 strategy can be found at: https://www.riigikantselei.ee/et/valitsuse- toetamine/strateegia-eesti-2035/materjalid 2 This section uses data from the Statistics Estonia portal, www.stat.ee. 3 See point 15.6 of the Government’s action programme, https://www.valitsus.ee/sites/default/files/content- editors/valitsus/Ratasellvalitsus/vabariigi_valitsuse_tegevusprogramm_2019-2023.pdf Estonia’s 2030 National Energy and Climate Plan (‘NECP 2030’) is a communication that has been drawn up to meet the requirement laid down in Article3(1) of Regulation (EU) No 2018/1999 on the Governance of the Energy Union and Climate Action (‘the Regulation’), according to which each Member State is to prepare and submit to the Commission its national Energy and Climate Plan every ten years. The plan must be submitted to the Commission by 31December 2019 and any updated versions or justifications for not updating the plan must be submitted by 30 June 2023 and 30June 2024. The Regulation sets out a template for the plan to ensure all Member State plans are comparable. The Commission will publish all the plans on its website.4 In Estonia, strategic planning by the State is based on the State Budget Act5. According to the Act, there are two types of development document in Estonia, namely those concerning fundamental elements of policy and development plans. Documents concerning fundamental elements of policy are approved by decision of the Estonian Government following discussion in Parliament. This means that in Estonia, the energy objectives and actions required in the national energy and climate plans of Member States are laid down primarily as sectoral development documents and documents on fundamental elements of policy. 1) The fundamental elements of Estonia’s climate policy for 2050 (ENMAK 2050) are as follows6: 2) Estonia’s energy development plan to 2030 (ENMAK 2030)7: 3) Plan for climate change adaptation by 20308; 4) 2014-2020 transport development plan9 (2021-2030 plan is under preparation); 5) 2011-2020 forestry development plan10 (2021-2030 plan is under preparation); 6) 2014-2020 national waste management plan 11 (2021-2030 plan is under preparation); 7) Estonian 2014-2020 rural affairs development plan (2021-2030 plan is under preparation); NECP 2030 will be updated in future years based on the development plans being drawn up for the following decade and submitted to the European Commission by 30 June2013 and in connection with supplementing the national targets by 30 June 2024. NECP 2030 describes the provisions of these development documents and highlights the relevant measures and trends. The development plans on which the NECP 2030 is based are the strategic environmental assessments (SEA), in accordance with the Environmental Impact Assessment and Environmental 4 https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/governance-energy- union/national-energy-climate-plans 5 The State Budget Act can be found at: https://www.riigiteataja.ee/akt/107072017040 6 http://www.envir.ee/sites/default/files/362xiii_rk_o_04.2017-1.pdf 7 https://www.mkm.ee/sites/default/files/enmak_2030.pdf. 8 https://www.envir.ee/sites/default/files/kliimamuutustega_kohanemise_arengukava_aastani_2030_1.pdf 9 https://www.mkm.ee/et/tegevused-eesmargid/transport 10 https://www.envir.ee/et/metsanduse-arengukava-2011-2020 11 https://www.envir.ee/et/eesmargid-tegevused/jaatmed/riigi-jaatmekava-2014-2020 Management System Act (KeHJS). The NECP 2030 does not constitute a strategic planning document under Section 31 of the Act, as the requirement to draw it up is laid down in Regulation (EU) No 2018/1999. NECP 2030 includes both measures from national development documents and measures under discussion. Future updates to the NECP 2030 will include case-by-case assessment of whether, depending on amendments to the document, the document fulfils the functions of a strategic planning document within the meaning of the Act. The Act lays down provisions concerning national strategic planning documents, but not the process of initiating and drafting the SEAs of documents required under EU and international agreements. For the reasons given above, no SEA procedure carried out for the NECP 2030 12. In addition to the above-mentioned development documents, the following studies were used in the course of drafting to develop measures: 1. National general energy efficiency obligation for the period 2021-2030 and achievement of the renewable energy target (2018); https://www.mkm.ee/sites/default/files/180917_energiatohusus_2030_aruanne.p