Planned amendment to lower major consumers' electricity costs
A draft bill from the economy and climate ministries aims to cut renewable energy fees for energy-intensive companies to boost industry competitiveness.
The renewable energy fee reduction is targeted at companies with an annual electricity consumption exceeding 1 gigawatt-hour. There are nearly 80 such businesses in Estonia.
Under the proposed changes, qualifying companies would receive a 75–85 percent discount on the current renewable energy fee rate, depending on their sector. The discount would apply only to businesses that use energy management systems or conduct energy audits to ensure efficient energy consumption.
The reduced rate is expected to take effect in 2026 and companies would be required to gradually increase their share of renewable energy use to 50 percent by 2029.
According to Minister of Economic Affairs and Industry Erkki Keldo (Reform), lowering energy prices for major producers is crucial to improving Estonia's economic competitiveness.
"The renewable energy fee reduction is especially important for our export-oriented, energy-intensive manufacturing companies. These are large firms creating high-paying jobs across different regions of Estonia," Keldo emphasized. He added that energy is one of the most critical inputs in production and reducing its cost makes companies' products more competitive in foreign markets.
"Large consumers could see their monthly costs drop by tens of thousands of euros, which will likely be reflected in the price of goods, whether timber, food or chemical products," Keldo added.
In addition to attracting investment, the measure is also intended to support the development of a long-term renewable power purchase agreement (PPA) market, said Minister of Energy and Environment Andres Sutt (Reform). "That's why we'll gradually link the discount to the existence of such contracts," he explained.
With the discount, energy-intensive companies would save an average of €6.8 per megawatt-hour consumed between 2026 and 2028. The largest impact would be seen in the wood and paper industry, the food sector and the chemical industry — sectors where electricity makes up a significant share of total costs.
To receive the discount, companies would need to apply to TSO Elering, which would decide on eligibility and issue monthly electricity bills reflecting the reduced renewable energy fee. The law would apply retroactively starting January 1, 2026.
The program is expected to cost the state an average of €9 million per year from 2026 to 2029. It would be funded from the national budget and requires state aid approval from the European Commission.
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Editor: Marcus Turovski
