Estonia’s energy production is dominated by fossil fuels, including domestic oil-shale. The share of renewable energies (biomass, wind power) has rapidly increased since 2007. Although CO2-intensity has been falling in recent years, it still remains more than twice as high as the EU average. Both the energy sector and industry remain significant emitters of greenhouse gases.

The main potential for energy savings and increased efficiency lies within the building sector: better insulation of buildings, improved transmission networks, introduction of heat metering, stricter thermal standards. Furthermore, there is a potential in the transport sector: more efficient cars, e-mobility. Measures are supported by government through credit guarantees and direct investment grants. Estonia has implemented a range of policy measures: quantitative goals and targets, new energy efficiency requirements, tax reform with increased taxation of fossil fuel products, research and development. Altogether, this has raised the awareness of energy efficiency, energy saving and climate change. Most importantly, energy gained from renewables is promoted with purchase obligations and feed-in tariffs. However, the government has not yet abolished subsidies to oil-shale energy production.