The intention to develop the Climate Act is too general

The Ministry of Climate Affairs has prepared a plan for the development of the Climate Act in order to set climate objectives based on economic sectors, their implementers, financial resources and related obligations, which take into account the impact of global and local climate change as a whole. The Chamber is of the opinion that the intention to develop the Climate Act is too general and broad, there are no references to more specific activities and the effects arising therefrom.

The content of the Climate Act is unclear
In the feedback sent to the Ministry of Climate Affairs, the Chamber of Commerce pointed out that at the moment it is not unambiguously clear what the objective of the Climate Act is, what measures will be used to achieve the objective, there are no references to more specific activities and the effects arising therefrom. The intention to develop the Climate Act should have created legal clarity, legal certainty and thus investment security for companies, but since the document is very general, the intention to develop has failed to achieve this objective. 

Among other things, the Chamber found that the principles that must be taken into account in order to achieve the objectives are not currently set out in the intention to develop the Climate Act. According to the intention to develop, during the drafting process, the main principles will be elaborated on (e.g. ensuring climate security, "no significant damage" and "polluter pays"). The Chamber is of the opinion that in order to develop a Climate Act, it is very important to have both the purpose of the Act and the principles necessary for achieving it in place and clear, as these are the foundations of the creation of the Climate Act. Thus, the intention to develop the Climate Act must already lay down the principles on which the drafting and implementation of the Climate Act must be based. 

Companies' competitiveness and compensation mechanism must be ensured
In the feedback sent to the Ministry of Climate Affairs, the Chamber pointed out that if, as a result of the climate law to be created, new restrictive requirements will be imposed on companies, which they could not to take into account earlier, the state must establish a mechanism to compensate for these negative effects. As companies need to change and restructure their activities in order to implement the objectives of the Climate Act, they need to be given full support so that they can make these changes and not have to stop their activities.   

In addition, we pointed out that when developing the Act, it is important to consider that the implementation of the Climate Act would not impair the competitiveness of Estonian companies within Europe or in the main target markets. The Chamber is of the opinion that an impact assessment of the economic consequences of the Climate Act and the possibilities of adapting to it must be developed in order to assess how the proposed Climate Act will affect the activities, exports and competitiveness of companies. We believe that it is crucial for the creation of such an important and comprehensive Act that a proper and thorough impact analysis has been carried out during the drafting of the Act in order to assess how the proposed Act will affect all areas of life.

Involvement of companies in the creation of the law is essential
The Chamber expressed the opinion that it would be necessary to expand the circle of representatives of companies in working groups for the development of the Climate Act so that companies would be involved in the creation of the Act. Since, in practice, companies will be the main implementers of the Climate Act, it is important that they are also significantly involved in the creation of the Climate Act.   

Among other things, we highlighted that if the Climate Act is to create sectoral objectives, it is important that the working groups prepared for the development of the Climate Act are set up according to the sectors for whom the aim is to set intermediate targets. In this case, it would be ensured that the working groups deal with the specific area for which the objectives are to be set. For example, there is currently no separate industry working group, but there is an industry sub-group, but if the working groups are drawn up on the basis of who they want to set intermediate targets for, then the industry would also have its own working group.   

According to the intention to develop, the planned Climate Act will enter into force on 1 January 2025. According to the schedule set out in the intention to develop, the first version of the draft Act will be completed in April 2024. 

The overview of the intention to develop the Climate Act can be viewed HERE.