The Climate-Resilient Economy Act Does Not Provide Investment Security for Companies

The Ministry of Climate has drafted the Climate-Resilient Economy Act, aiming to set targets for greenhouse gas emissions. However, the Chamber (ECCI) has identified several issues with the draft. It argues that the draft does not guarantee investment security for companies, fails to adequately address the preservation of companies' competitiveness, and contains an incomplete impact assessment, as only partial analyses have been conducted. As a result, the actual impacts of the draft remain unknown.

Maintaining Business Competitiveness Is Crucial

The Chamber found that the draft does not pay sufficient attention to business competitiveness. In its opinion sent to the ministry, the Chamber emphasized that fostering competitiveness must be more strongly articulated both in the draft and the explanatory note. Additionally, the draft reveals that the ministry views a small environmental footprint as a competitive advantage. The Chamber pointed out that one critical component of competitiveness is price, not solely the environmental friendliness of a product or service. A small environmental footprint may not provide a competitive edge outside the EU if the product or service is more expensive. The Chamber also highlighted that achieving climate neutrality should not harm Estonia’s competitiveness or its socioeconomic welfare.

Associated Impacts Have Not Been Adequately Assessed

At present, the draft lacks sufficient economic and social impact assessments, and the current analyses are incomplete. The Chamber emphasized that such impact assessments are essential to understanding the actual effects of the planned Climate-Resilient Economy Act on society and whether its goals are feasible. For example, the current analysis lacks assumptions or references to calculations used in assessing the impacts. Therefore, the Chamber requested the ministry to complete the impact assessment before moving forward with the draft.

Investment Security Must Be Guaranteed

The current draft does not provide companies with investment security. For instance, it is unclear what exactly companies need to do to meet the climate targets outlined in the draft. The draft merely creates a framework, but does not provide clarity since the specifics of the measures will only be determined later. If the law does not form a cohesive whole and various requirements are established in other laws or development plans at a later stage, it will make assessing the law’s overall impact impossible for companies. The Chamber pointed out that if the government wants to achieve the goals set in the draft, it must provide entrepreneurs with clarity and certainty about how the desired goals and changes will be achieved.

Enhancing the Value of Local Resources Is Important

In the Chamber’s view, one of the law’s key objectives should be the valorization of local resources. However, the draft appears to limit the utilization of local resources (such as wood, oil shale, and peat). For example, the draft restricts the issuance of mining permits for oil shale. The Chamber considers it crucial that, alongside climate neutrality, the valorization of local resources must also be assessed and valued in conjunction with other important aspects such as competitiveness and socioeconomic objectives. Therefore, the Chamber believes that the focus of the law should be on enhancing the value of local resources and that this should not be restricted.

The Draft Should Not Be Fast-Tracked

The Chamber expressed in its opinion that the Climate-Resilient Economy Act should not be fast-tracked because it is a highly significant law that will impact all sectors and individuals, setting long-term goals for everyone. Before moving forward with the draft, the impact assessments must be significantly improved, discussions with various stakeholders should take place, and other deficiencies in the draft must be addressed. According to the Chamber, there is no compelling reason to rush the process, especially since discussions about the EU's climate targets for 2040 are still ongoing. The Chamber argues that it would be premature to proceed with the draft before decisions are made at the EU level.