CEO Andrus Durejko said in an ERR broadcast that the decision to close the Narva quarry was driven by a sharp decline in the company's demand for oil shale.

"Eesti Energia has sufficient oil shale resources in its existing mines. We are still operating Narva for now, as the closure process has only just begun. At the same time, we are working at the Estonia mine to ensure security of supply and maintain oil production," he said.

Last year, Eesti Energia mined 3.4 million metric tons of oil shale—less than privately owned VKG. At this level, the company's costs, including the unit cost of oil shale, are very high. "Our competitiveness, electricity prices, and everything related depend on that cost," Durejko added.

"We need to reduce the unit cost of oil shale, but we can only do that by concentrating production in a single mine and increasing volumes there," he said.

Durejko noted that the cost of mining oil shale is often confused with its market price. Producing oil shale costs about €30 per metric ton, including extraction, but there are no buyers willing to pay that price.

"I would be very happy if someone could tell me where I could sell oil shale at that price. I have three million metric tons in storage—I would sell it and earn €75 million," Durejko said. "That would significantly improve Eesti Energia's financial results. But that buyer does not exist."

According to Durejko, the company is aiming to reduce its internal cost to €20 per metric ton. "That would make both our oil and electricity production competitive. It would allow for more operating hours at power plants and help maintain stable oil production over the long term."

He added that only a few companies in Estonia—Eesti Energia, VKG, and Kiviõli Keemiatööstus—are capable of refining oil shale. Among them, Eesti Energia currently has the highest production costs.

Durejko also said there will likely be a global market for Estonian shale oil until around 2050. However, regulatory changes—particularly the potential phaseout of free CO₂ quotas for the sector by 2030 or 2035—could effectively end shale oil production.

"Without free quotas, or if CO₂ costs are added to our oil shale price, we become completely uncompetitive on the global market. We compete globally, not just within the European Union—that's the key difference. If CO₂ costs are added, oil shale production in Estonia will end by 2035. Unfortunately, there's nothing we can do about it," he said.

--

Follow ERR News on Facebook and X and never miss an update!