In discussions in Estonia about the emissions trading system and the need to change it, a common argument is that Estonia has received €2 billion through the system, money that has helped build railways, purchase trains and renovate homes.

ERR asked the Ministry of Climate what exactly has been done in Estonia over the years with this €2 billion.

Kristi Klaas, deputy secretary general at the Ministry of Climate, said that revenue from the emissions trading system is intended for investments to improve people's living environment and to introduce less polluting technologies.

"In one way or another, this money has reached almost every corner of Estonia, for example through renovation grants, upgrading kindergartens and nursing homes, developing rail transport and supporting innovative initiatives by companies. Overall, Estonia is a net beneficiary of the emissions trading system, meaning we receive more revenue from it than companies pay into it," Klaas said.

In the period from 2013 to 2020, the largest share of the funds — €118.503 million — was allocated to promoting energy efficiency and the use of renewable energy in public sector buildings.

Although this period has ended, Karoli Noor, acting head of the ministry's communications department, said not all of the funds have yet been paid out. The expenditures have been planned in the budget and projects are still underway.

The measure was divided into two sub-measures: reconstruction of buildings owned by local governments and the central government. Through this, 26 nursing homes, kindergartens and other municipal buildings are being renovated.

A further €39.483 million in quota revenue has been spent on pilot projects aimed at supporting adaptation to climate change and mitigating its impacts.

This amount included the purchase of 15 electric buses for Tallinn and the development of charging infrastructure, as well as the construction of two geothermal borehole-based heat pump stations: one in Tiskre in Tallinn with a capacity of up to 74 kilowatts and another in Roosna-Alliku with a capacity of up to 400 kilowatts.

In addition, the National Library received a heat recovery ventilation system, installed during its reconstruction.

The budget for a measure aimed at increasing the use of alternative fuels in transport is €38.489 million. The goal is to boost the production and consumption of biomethane and with the help of the support scheme, 942,000 megawatt-hours of biomethane have been produced in Estonia since 2018.

The budget for the apartment building energy-saving measure was €22.913 million. With this funding, 19 apartment buildings — 823 apartments and more than 49,000 square meters of living space in total — were reconstructed. This resulted in annual energy savings of 4,240 megawatt-hours, meaning energy consumption fell by 59 percent compared with the period before the projects. Activities under the measure ended in 2024.

A total of €8.329 million in quota revenue was earmarked for international cooperation to export solutions developed in Estonia. This meant providing support to bring solutions, services and products developed in Estonia or given added value here to developing countries, helping them mitigate climate change or adapt to its impacts.

A total of 27 such projects were implemented in Kenya, Tanzania, Ukraine, Georgia, Costa Rica, Namibia, Azerbaijan, Kazakhstan, Grenada and Bangladesh.

The smallest share of revenue from the 2013–2020 period — €5.367 million — was directed toward reducing flood risks. The aim of the measure is to prevent or reduce the consequences of flooding in areas at risk.

Three application rounds were opened, resulting in flood-risk studies for nine areas and nine construction projects in Paide, Sindi, Pärnu, Haapsalu, Keila, Kuressaare and Hiiumaa.

Flood and water-level remote monitoring services were also further developed, enabling the Environment Agency's weather service to provide spatial operational information about flooding on its website.

For the 2021–2029 quota revenue period, many expenditures still lie ahead, though budgets have been planned in line with the state budget strategy for 2026–2029.

A total of €56.175 million from the measure has been allocated for the purchase of new electric trains. Another €584.833 million is intended to support funding for the construction of Rail Baltica, while €50 million is earmarked for equipment related to Rail Baltica rolling stock.

Some €163.805 million in quota revenue is being directed toward improving the energy efficiency of public sector buildings and 26 projects have been completed so far.

A total of €45 million has been allocated for developing sustainable public transport. This will fund a hovercraft for the Piirissaar–Laaksaare route, electric buses or trolleybuses for Tallinn and low-emission vehicles for regional routes. The measure will also fund preparations for a clockface schedule for passenger rail traffic, platform extensions, tunnel construction and the development of shore infrastructure for electric ferries serving island connections.

Some €11.8 million will support accessibility improvements in public transport, including improved access to the Jäneda, Lehtse and Nelijärve railway stops.

From the quota revenue, €103.045 million was directed toward electrifying sections of the railway network on the Tallinn–Tartu, Tapa–Narva and Lagedi–Muuga lines, as well as constructing the Soodevahe joint depot and maintenance depots for Rail Baltica and Elron trains.

A further €18.4 million has been allocated for developing electric and hydrogen charging infrastructure and €10 million for supporting the adoption of low-emission vehicles, including subsidies for purchasing electric cars and bicycles and for installing electric vehicle charging infrastructure in apartment building areas.

The budget for improving the energy efficiency of public sector buildings is €271.191 million, with 26 projects completed so far. For example, a dormitory and academic building were constructed for the Estonian Academy of Security Sciences under the measure.

Some €59.55 million supports pilot projects linked to climate and energy policy goals. The Ministry of Climate cited examples including the construction of the Loodusmaja nature building and preparatory development work for the joint Estonian-Latvian offshore wind farm Elwind.

To mitigate rising electricity prices, €78.551 million in quota revenue was used. Of this, €16 million went to supporting low-income households in 2021–2022, while €62.5 million was spent on the same purpose in 2022–2023.

A total of €57.16 million has been allocated to support research and development related to energy efficiency and clean technologies in sectors covered by the emissions trading system. Through this measure, hydrogen projects at three Estonian companies are supported: Elcogen, Skeleton Technologies and Stargate Hydrogen.

Some €32.686 million is being allocated for the deployment of integrated hydrogen technologies. Through an open call for proposals, three projects received support: the construction of a green hydrogen plant in the city of Narva by Elme Messer HYDG, Eesti Energia's green hydrogen integrated solution pilot project and Derivaat NH3's plan to produce green ammonia in Paldiski.

A total of €25 million in quota revenue is earmarked for shipbuilding companies to convert ships to renewable energy, while €16.503 million was directed toward the construction of an energy-efficient ferry.

To improve the energy efficiency of municipal education buildings, €14.54 million in quota revenue has been allocated, including funding used to reconstruct Narva's Kesklinna High School.

Through a measure to improve the energy efficiency of healthcare institutions, upgrades for the Kuressaare and Narva hospitals have been prepared, with a budget of €3.529 million.

To develop wind energy generation capacity in Northeast Estonia, the state budget strategy foresees using €37 million in quota revenue. As part of the measure, investments were made in air surveillance radars and radio intelligence systems to lift certain national defense-related height restrictions in parts of the region.

A total of €16.2 million will go toward international climate policy cooperation. This includes support for cooperation projects and assistance in developing countries to help achieve climate goals. Examples cited by the Ministry of Climate include the introduction of Timbeter's timber measurement technology to improve forest management in Costa Rica, solar-powered mobile learning centers built in a refugee camp in Kenya and a pilot carbon credit program implemented in Tanzania.

Some €15.765 million in quota revenue will be spent on international climate policy and biofuel reporting, as well as coordinating and developing greenhouse gas emissions trading systems. The measure will produce the climate policy and biofuel reporting required for Estonia to fulfill its international obligations.

A total of €16.65 million will be used for studies and analyses contributing to climate goals, €10 million will co-finance cooperation projects focused on climate and energy goals at universities and in municipalities and €3.6 million will support cooperation projects aimed at improving society's preparedness to adapt to climate change.

Ecosystem protection and restoration will receive €10 million from CO2 funding. This includes nature conservation and restoration work to achieve favorable conditions for habitats and species. For example, emergency work has been carried out at individual sites such as the Tülivere dam and trees in the Huuksi manor park to ensure their preservation and safety.

In Ida-Viru County, €6 million will be invested in activities supporting climate goals, €4.35 million will go toward afforestation support and €3.775 million toward climate-resilient forest management in private forests.

Another €3.5 million will fund carbon audits or improvements in resource efficiency at larger agricultural enterprises, while €1.8 million will be directed toward installing renewable energy solutions on small islands.

With €9 million, energy-efficient lighting solutions will be developed, including replacing old lamps in cultural institutions with new LED lighting, enabling energy savings of up to 75 percent.

Some €6.5 million has been earmarked to reduce electricity consumption used for wastewater treatment at water utility companies.

Ten European Union member states recently issued a statement saying the emissions trading system (ETS) should be reviewed. Although Estonia was not among the signatories, Minister of Energy and the Environment Andres Sutt (Reform) confirmed that the government also believes the system should be reformed.

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