In Estonia, energy-intensive companies currently pay renewable energy fees that are, on average, about 1.6 times higher than elsewhere in Europe.

Minister of Economic Affairs and Information Technology Erkki Keldo (Reform) said that competition for investment is fierce among Estonia's neighboring countries and Finland, Sweden, Latvia and Lithuania have already introduced similar discounts for their industrial enterprises.

The cap on renewable energy fees will target companies whose annual electricity consumption exceeds one gigawatt-hour. As a result of the change, eligible businesses will receive a discount of 75 to 85 percent, depending on the sector. The discount will apply only to companies that implement energy management systems or audits that ensure efficient energy use.

According to Statistics Estonia, around one hundred large consumers met the eligibility criteria in 2023. The measure will have the greatest impact on the wood and paper industry, the food industry and the chemical industry — sectors in which electricity costs make up a significant portion of total expenses.

A broader goal of the measure is to support the development of a market for long-term renewable energy purchase agreements, or PPAs (power purchase agreements). For this reason, the preferential rate for companies will gradually be tied to the existence of such contracts.

"In the long term, we want to ensure a continued supply of green energy to the market because it helps bring energy prices down for everyone — both businesses and households. To make that happen, upcoming wind and solar parks must be able to secure financing from banks. For banks, it is important that renewable energy producers have a stable source of income, and PPAs help guarantee that," Keldo said.

Thanks to the price cap, energy-intensive companies will pay an average of €6.80 less per megawatt-hour consumed between 2026 and 2028.

Introducing the preferential rate will require amendments to the Electricity Market Act and state aid approval from the European Commission. The Ministry of Climate and the Ministry of Economic Affairs plan to bring the draft legislation to the government no later than the end of the year.

The cost of the measure is projected to average €9 million per year from 2026 to 2028. The government intends to allocate the necessary funds as part of the 2026–2029 state budget strategy and the 2025 state budget process.

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