Estonia "under pressure to cut air standards"

Finance ministry calls for relaxation of emissions limits on power stations due for privatisation

Estonian environment minister, Heiki Kranich, is under pressure to relax environmental controls to facilitate the privatisation next year of two oil-shale-fired power stations, a leaked letter has shown. The plants, two of the heaviest polluters in the Baltic state, seriously affect air quality in Russia and Finland as well as Estonia. A US firm, NRG, is hoping to buy 49% of the state-owned company which runs the plants.

In a letter to Mr Kranich that was leaked to environmental group Friends of the Earth, finance minister Mikhel Parnoja suggested that NRG's investment would be helped if current particulate emissions limits for each plant were applied instead to the whole company, and averaged out over the whole year. He also suggested that tighter limits drawn up in 1998 could be imposed only from 2007. He hoped that proposed rises in carbon dioxide (CO2) emission charges, waste charges and water and oil-shale extraction charges could be made smaller or delayed.

Mr Kranich has claimed that "rapid increases in environmental charges towards much higher EU levels could bankrupt several Estonian enterprises," and the government has apparently agreed to minimise the increases. The tax on CO2 emissions, for example, is set to rise from EKr5 (euros 0.32) per tonne to EKr7.5 in 2001, but then "could be stabilised at that level for some time".

The leaked letter also proposes changes to a bilateral agreement with Finland under which it has funded improvements in Estonia to limit sulphur dioxide (SO2) emissions. Estonia's contributions to this would be cut and controls on SO2 emissions would be relaxed, with a target of a 65% reduction in SO2 emissions on 1980 levels by 2005 instead of 80% reductions sooner. According to a ministry source, "Estonia has taken on a task beyond our powers".

Mr Kranich stressed, however, that "it cannot be our objective to create an image of Estonia as an environmentally unfriendly country". "Actually reducing environmental charges would be inconceivable," he pointed out, warning industry that international demands on Estonia may change in the longer term.

Follow Up:
Friends of the Earth Estonia, tel: +372 7 422 532; Estonian environment ministry, tel: +372 626 2800.

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