Ida-Viru County is Estonia’s third largest economic region, producing 6% of the country’s GDP. However, it is also the county most affected by rapid and abrupt transition to a climate-neutral economy, which means that it has great potential for the future.
Despite also being one of the most educated regions in Estonia, Ida-Viru County is still underused. On average, the area has twice as much free labour force than any other region in Estonia and spends a third less on wages.
Ida-Viru County also has close relations with Nordic countries: there is a shipping line between Sillamäe and Kotka, and many successful Nordic companies have invested in the region. One such company is Fortaco, a Finnish steel product company that has hired many locals and advocated for the Narva community. In addition, Narva Gate, a Swedish company, is currently developing the Kreenholm area of Narva.
Ida-Viru region is known for its long tradition of oil shale mining. However, compared to 2018, oil shale extraction and use have decreased by 50%. Ragn-Sells, a waste management company, is building a plant in Narva to valorise oil shale ash. The plant can process up to a million tons of ash in a year, which will be used to produce limestone afterwards. The produced limestone will be so pure that it can be used to make plastic, paper and construction materials.
The power plants in Narva plan to replace oil shale by producing more hydrogen and to be used as a transport fuel, for example, in hydrogen buses in another Estonian city, Tartu. Hydrogen has been electrolysed in Narva power plants for more than half a century, and there has been a broader interest recently thanks to the green transition. Until now, hydrogen was used to cool generators. In the future, the high-quality hydrogen electrolysed from water can also be used for other purposes.
Millions of euros boosting the region
Developments like these will gain momentum. In October, the European Commission approved the territorial plan of the Just Transition Fund, which provides 354 million euros to Estonia for replacing oil shale use in energy production in Ida-Viru County. Ursula von der Leyen, the president of the European Commission, visited Ida-Virumaa a day later.
Von der Leyen, whose great-grandfather Ludwig Knoop was the founder of the Kreenholm textile factory, also visited the former territory of the factory. “It was amazing to see Kreenholm, as all of my childhood fairy tales are from this place,” Leyen said during her walk in the Kreenholm area.
The Just Transition Fund will help to alleviate the social, environmental and community impact of the green transition in Ida-Viru County. “This is an opportunity to reform the economy on a more sustainable basis, promote new investments and increase the companies’ competitiveness,” said Kaja Kallas, the prime minister of Estonia. These investments will allow Estonia to create a new circular business environment that, in cooperation with local educational and research institutions, will encourage research and development activities.
For example, the Estonian energy production company Enefit Power will receive financial aid to replace oil shale with alternative fuel in communal heating. Silmet, a company based in Sillamäe, plans to build a factory in Narva to produce magnets. “It is not enough to build the factory, but it can speed up the process,” says Raivo Vasnu, NPM Silmet board member. “It gives a signal to shareholders that the local region is interested in developing the production.”
€153M to support investments
EU’s green transition support to Estonia consists of 11 different activities for € 354M, of which the biggest one is the support for investments in the Ida-Viru business in 153 million euros.
The project offers the perfect opportunity for green investments for foreign companies who plan to create new jobs in the area. They can apply for investment support from the Estonian Business and Innovation Agency. The minimum support is 500,000 euros, and the company’s own contribution must be at least 35%. As a result, 153 million euros will be distributed between companies.
The support applicant must be a company registered in the Estonian commercial register. Their occupation and project field should be one of the following: mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; information and communication or other professional, scientific and technical activities.
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