The renewable energy charge rebate is necessary, but some conditions should be eased

The Estonian Chamber of Commerce and Industry (the Chamber) supports the Ministry of Climate’s plan to allow large electricity consumers to apply for a lower renewable energy charge from 2026, but considers that some of the conditions set out in the draft are too restrictive and may hinder the broader use of the rebate.

According to the draft, companies that consume more than 1 GWh of electricity per year would be able to apply to Elering for a renewable energy charge rebate, as a result of which their renewable energy charge would be reduced by 75–85%. This would lower the price of one megawatt-hour by an average of 6.8 euros.

The conditions for receiving the rebate are burdensome for large consumers

Several conditions must be met in order to receive the rebate. For example, the beneficiary must increase the share of renewable electricity to up to 50% by 2029, conclude a power purchase agreement with a renewable energy producer, carry out regular energy audits or implement a certified energy management system or environmental management system, and operate in a sector listed by the European Commission as being at risk of carbon leakage.

For years, the Chamber has been pointing out to the state the need to reduce the final price of electricity, including via the renewable energy charge. The Chamber therefore welcomes the fact that the Ministry has finally developed a measure that helps reduce the costs of large consumers and supports bringing investments to Estonia.

At the same time, we informed the Ministry that, due to the strict conditions, some large consumers may not be able to apply for the rebate at all, or that it may not be economically viable, as it involves considerable bureaucracy and additional costs.

The requirement for direct contracts does not reflect current market practice

We made several proposals to the Ministry on how to simplify the planned support measure. For example, one issue we highlighted was the requirement that the beneficiary must have a power contract with a renewable energy producer. As companies can also purchase renewable energy via electricity sellers, we proposed allowing the consumption of renewable energy to be demonstrated on the basis of the share of renewable energy purchased through an electricity seller and confirmed by guarantees of origin, and not only via a direct contract with a producer.

The restriction to the main area of activity unjustifiably excludes some companies

Under the draft, only those whose main area of activity is included in the EU list of sectors at risk of carbon leakage would be allowed to apply for the support. In the Chamber’s view, this unjustifiably excludes several energy-intensive companies whose activities are diversified or whose actual energy use is not reflected in their main area of activity. We recommend using an extended concept of “area of activity”, which would also be in line with the EU state aid guidelines.

At present, it is not known to what extent the Ministry will take the Chamber’s proposals into account, nor the date when the changes will enter into force. According to the draft, large electricity consumers would be able to apply for the renewable energy charge rebate retroactively from 2026.