Põllumajandusministeeriumi ja Maaelu ... - bioenergybaltic

Taking into account the considerable production of rapeseed oil in Estonia, an interest has
arisen to develop the fatty acid-based polyol production. Polyurethanes synthesized from
polyols are the basis for the production of specific materials - ecoplastics which have not been
widely advertised. A question arises whether the projects of respective applied research would
be launched and what would be the results and output of these projects. The appropriate small
scale production could improve the economic efficiency of rapeseed industry, especially in the
situation where the technology of biodisel production will be declared uneconomical and its
further subsidizing terminated.
Support measures for production and utilization of biomass energy
In Estonia the measures taken to promote the energy use of biomass have been very modest
ones. As the result, the impact of these measures has been quite modest as well. The measures
taken can be grouped as follows:
• operating support;
• investment aid;
• indirect measures: tax exemption, pollution charges and some others.
Since 1998 a direct scheme for supporting the use of renewable energy sources (RES) for
electricity generation has been in use. At present, the scheme includes an obligation for
network operators to purchase electricity generated from renewable energy sources (RES-E)
applying a special feed-in tariff which has several rates depending on the energy source. No
impact analysis of this measure has been carried out. In May 2007 an amendment to the
Electricity Market Act was made stipulating some important changes in support schemes for
RES-E generation, including the increase of feed-in tariffs. Two alternatives were introduced
as options for a RES-E utility: either to select the combination of purchase obligation with the
feed-in tariff, or to apply for a special subsidized tariff only. Up to now, wood fuels are not
utilized for electricity generation. Nevertheless, at present two or three large cogeneration
plants firing wood chips and peat are being constructed.
Up to now, the investment aid in the district heating sector may be considered as the best
working instrument aimed to foster the wider use of biomass based energy. Some projects for
fuel switch (e.g. conversion from coal or fuel oil to wood chips) of boilers have received
financial support from the state budget, but a larger amount of financial assistance has been
received from foreign aid programmes, both international and bilateral ones. All these support
measures (grants, soft loans, etc.) have been project-based only. Some financing has been
provided in frames of joint implementation (JI), for example replacement of old oil-fired
boilers with biomass-firing ones at the district heating boiler houses in Tamsalu, Kadrina and
Paide.
In Estonia there have been no regular national subsidies granted for production of biomass.
Nevertheless, the expansion of the area under energy crops is supported by direct aid provided
according to the Council Regulation 1782/2003 establishing common rules for direct support
schemes under the common agricultural policy and establishing certain support schemes for
farmers. Some investment support for the production of biofuel could be applied for also
under the Estonian national development plan for the use of EU structural funds – single
programming document 2004–2006. Currently, the support measures have been planned in
frames of the Development plan 2007−2013 for enhancing the use of biomass and bioenergy
and are being provided in frames of the National strategic reference framework 2007–2013.
The most general economic measure supporting all investments is related to taxation of
income – the corporate income tax is imposed only on the amounts collected as profits, i.e. the
reinvested profit is not a subject to income tax.
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