Ahti Asmann: Criticism of taxing supply security into an early grave not squabbling
In an opinion piece published on ERR, Minister of Energy and the Environment Andres Sutt described holding a different view from his own on the ETS as pointless "squabbling." Criticism of taxing something into extinction is not pointless rambling, writes Ahti Asmann.
According to Minister Andres Sutt, the emissions trading system (ETS) does not affect shale oil production because "shale oil production receives free ETS quotas." This claim misleads the public (one is tempted to say it is simply false).
In shale oil production, a byproduct called retort gas is generated, which is used to produce electricity, heating and industrial steam and which receives only partial free CO₂ allowances under the ETS system. As a result, approximately 25 percent of the CO₂ emissions from the shale oil production process are currently taxed.
The minister conveniently omits the fact that, under the current ETS regulation, these allowances are set to disappear entirely by 2040, which aligns neatly with the government's commitment to the European Commission to end shale oil production in Estonia no later than 2040.
Sutt's claim that abolishing the ETS system (for example, replacing it with an environmental tax) would end Estonia's shale oil exports is difficult to understand. A lower tax burden improves the competitiveness of goods in export markets.
A country's own capacity to produce fuel is of the highest value — this should be clear to everyone by now. In a crisis, Estonia could use shale oil to heat all of its cities and still have enough left over for export. Forgive me, but questioning the wisdom of taxing such capacity out of existence is not pointless "squabbling."
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Editor: Marcus Turovski
