Climate change mitigation - Outlook 2020 (Estonia)

Scenarios

Two scenarios for GHG emissions are presented in Estonian Report to Article 3.2 of monitoring decision (year 2009 submission). The With Measures (WM) scenario evaluates future GHG emission trends under current policies and measures. In the second, the With Additional Measures (WAM) scenario, a number of additional measures and their impacts are taken into consideration.

• WM scenario formulation for 2006–2020

Several studies made on the development of the Estonian energy supply have shown that the level of GHGs and especially CO₂

emissions cannot not be reduced without applying special measures. For the elaboration of the required complex of measures, the plan for renewable source utilisation outlined in the Estonian energy development projections was applied. Minimum limits were set for the amount of electricity produced from renewable sources and for the share of biofuels used in the transport sector. According to these outlines, the following minimum limits for renewable energy source utilisation for electricity production were projected:

Table 1. Renewable energy sources [PJ/y] for electricity and heat production (Estonian Report to Article 3.2 of monitoring decision, 2009)

Similarly minimum shares of biofuel use in the transport sector were introduced.

Table 2. Minimum level of biofuel use in the transport sector (Estonian Report to Article 3.2 of monitoring decision, 2009)

Tables 1 and 2 together form the essence of the WM scenario. This scenario also includes the building of an additional fluidised bed unit in the period up to 2020.

• WAM scenario

For constructing the WAM scenario the following additional requirements were added to the set of data used for the WM scenario: building of additional offshore wind farms with an annual electricity production of 4 PJ. As a result, the energy contributions for this scenario were set up as follows:

Table 3.  Energy from renewable [PJ/y] by WAM scenario (Estonian Report to Article 3.2 of monitoring decision, 2009)

The same conditions as for scenario WM apply to the use of renewables in the transport sector. The WAM scenario also assumes the building of the second block in the Narva powerplant.

The starting points of the WAM scenario are:

Energy

Table 4. Consumption of primary energy source by sources in the WAM scenario in absolute and relative amounts in 2006-2020 (Estonian Report to Article 3.2 of monitoring decision, 2009)

Table 5.  Electricity consumption in the WM and WAM scenarios in 2006–2020, GWh (Estonian Report to Article 3.2 of monitoring decision, 2009)

Table 6.  Supply of electricity by the WAM scenario in 2006–2020 (Estonian Report to Article 3.2 of monitoring decision, 2009)

Emissions from the Industrial Processes sector

Considering emissions from other sources in the WAM scenario compared with those in WM scenario, it can be concluded that the emissions from the Industrial sector do not change significantly between the scenarios. The emissions trends and values in the WM scenario could be followed in WAM scenario. In general, the changes in CO2 coming from other sources do not influence the development of Estonia’s energy supply.

Table 7. CO2 emissions from other sources in the WAM scenario in 2006-2020 (Estonian Report to Article 3.2 of monitoring decision, 2009)

Projections of GHG emissions

Projections of total aggregated emissions, converted to CO2-eq for three scenarios WA, WAM and Without Measures (WOM) for 2005-2020 are summarised in Table 8 and Figure 22. The latter illustrates the level of aggregated emissions corresponding to the national reduction target under the Kyoto Protocol (2008-2012) and Post-Kyoto target (2012-2020).

Table 8. Projections of total aggregated GHG emissions, Gg CO2-eq (Estonian Report to Article 3.2 of monitoring decision, 2009)

Figure 22. Historic and projected emissions of GHG, in Gg CO2-eq (Estonian Report to Article 3.2 of monitoring decision, 2009)

According to the Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their GHG emissions to meet the Community’s GHG emission reduction commitments up to 2020, Estonia can increase its GHG emissions by not more than 11 % compared to 2005 (Annex II of the Decision). That means that Estonia should not exceed the level of 21 797.39 Gg CO2-eq of total GHG emissions.

Projected removals from sinks

Projected removals from sinks are presented in the Table 9.

Table 9. LULUCF projections (Report pursuant to Article 3.2 of Monitoring Decision, 2009)

Kyoto Protocol

Estonia ratified the Kyoto Protocol on 14 October 2002 (RT II 2002, 26, 111, RT I 2004, 43, 298). The aim of Kyoto Protocol is to decrease amounts of GHG emissions by 5 % during the years 2008 - 2012 compared to the base year of 1990 among Annex I parties.

There are 3 Flexible Mechanisms aimed to reach this purpose:

• joint implementation – JI
• clean development mechanism – CDM
• emissions trading – ET

Two of these mechanisms are used in Estonia: JI and ET.

On 5 May 2004 the Government approved Ambient Air Protection Act (RT I 2004, 43, 298) where § 153 changed the Law for Ratifying Kyoto Protocol. Amendment to the Ambient Air Protection Act from 11 March 2007 regulates the use of JI and the issue of double counting concerning linking the EU Emission Trading Scheme with Kyoto flexible mechanisms.

Joint implementation

In 1993 Estonia started cooperation with Sweden on pre-JI projects – activities implemented jointly – where no actual emission reductions were transferred. Altogether 21 projects were implemented. Information on these projects is available at the UNFCCC website.

Estonia has signed Memorandums of Understanding with Austria, Denmark, Finland, the Netherlands and Sweden. Estonia is one of the Parties of the Agreement on a Testing Ground for Application of the Kyoto Mechanisms on Energy Projects in the Baltic Sea Region. So far JI projects have been implemented in cooperation with Austria, Finland, Sweden and the Nordic Environment Finance Corporation as Fund Manager for the Testing Ground Facility. Execution of JI projects brings additional investments to Estonia in the form of technology and knowledge. The main reason for the Estonian companies and project owners being interested lies in the fact that implementing the JI mechanism is a good opportunity for raising additional financing of environmentally friendly energy projects, which might otherwise be economically unfeasible. Estonia has seven early-mover projects that started generating emission reductions before 2008 and for those years Assigned Amount Units (AAUs) will be transferred to the investor countries. During the commitment period 2008-2012 all projects will generate Emission Reduction Units (ERUs). Up to now, eight projects have been approved and implemented, resulting in total emission reductions of 1.47 Mt CO2-eq by 2012 (Figure 23).

Figure 23. Emission reductions from JI projects implemented in Estonia (2002-2012)

Emission trading under the EU Emission Trading Scheme

Estonia’s first National Allocation Plan (NAP) for the EU Emission Trading Scheme (EU ETS – Directive 2003/87/EC) for years 2005-2007 included 43 installations. District heating installations with a capacity exceeding 20 MW formed the largest group – 20 units – while five major installations owned by AS Eesti Energia generate electricity only, and there was also one combined heat and power plant included; the rest of installations were industrial ones. The first NAP for GHG emission allowances delivered the right to emit 56.9 Mt CO2 during 2005-2007. This was based on the assumption of satisfying increasing electricity consumption in Estonia as well as meeting the opportunity for increasing electricity exports.

The second allocation plan (NAP 2) for the 2008-2012 period adopted by the government comprises 122.8 million allowances (24.6 million per year) from 47 installations. In May 2007 the European Commission endorsed Estonia's national plan with the condition that certain changes would be made, including an essential reduction in the total number of emission allowances applied for. The cleared annual allocation is 12.7 Mt CO2 allowances, 47.8 % less than Estonia had applied for. Based on the decision of the EC, the NAP 2 was brought into force on 20 December 2007 (Decree no. 257). Nevertheless, the legal action was initiated in the European Court of Justice (case T-236/07) against the EC over its decision to reduce the CO2 emission gap under the phase 2 of the EU ETS. In its judgment of 23 September 2009 the European Court of First Instance annulled the European Commission decision, deciding that by imposing a ceiling on emission allowances to be allocated, the Commission had exceeded its powers.

Regarding activities under the Kyoto Protocol, in August 2009 the Government decided to sell excess Assigned Amount Units through the Green Investment Scheme. A special working group with participants from the Ministries of the Environment, Finance, Foreign Affairs and Economic Affairs and Communications was created for conducting negotiations with possible buyers. Agreements will be approved by the government and signed by the Minister of the Environment. The Ambient Air Protection Act is in the process of being amended to add the procedure for international emission trading through Green Investment Scheme.

Draft National Long-term Development Plan for the Fuel and Energy Sector until 2020

The development of the main energy indicators until 2020 as forecast in the Draft National Long-term Development Plan for the Fuel and Energy Sector until 2020 is presented in Table 10.

Table 10. Main goals of the Estonian Energy sector (Report pursuant to Article 3.2 of Monitoring Decision, 2009)