Analyst: What happens to Estonia's Ida-Viru County once the €340 million fund runs dry?
University of Tartu researchers warn that the Just Transition Fund has kickstarted new projects in Ida-Viru County, but it remains unclear what will happen once the fund's money runs out. Commentator Erik Gamzejev calls for planning the fund's next phase now.
Researchers from the University of Tartu have published on the ERR Novaator portal part of their study on the socio-economic well-being of residents in Ida-Viru County. The study, expected to run for several years and cost nearly €1.5 million, is financed by the Just Transition Fund — a support mechanism meant to help the region survive after EU climate policy effectively ends the era of the oil shale industry.
Main finding is no surprise
Survey results show that when a region has decently paid jobs, schools, access to healthcare, and affordable opportunities to build a home, people don't rush to leave. Without these, they move away. High unemployment and low incomes breed insecurity. The author notes the same holds true for other regions far from Tallinn and Tartu — Ida-Viru's distinction is that EU carbon quota trading rules accelerated the decline of its oil shale industry.
The fund has already delivered results
With the fund's support, the first stage of a magnet factory in Narva has been completed, a large spa hotel complex opened on the shore of Lake Peipus, film studios in Jõhvi are nearing completion, an industrial park is being built in Kohtla-Järve, and an oxygen plant is under construction in Auvere. Dozens of small businesses have received support for new buildings and equipment, and local college and municipal projects have also benefited, including a new municipal building in Alutaguse parish, a new social house in Jõhvi, and the renovation of a kindergarten in Kohtla-Järve.
Concerns about pace and the future
However, the author stresses that compared to the jobs and revenue once generated by the oil shale industry, the fund's support is relatively modest. Many approved projects have not even begun construction, and some companies have abandoned their plans due to excessive risk, since securing state support alone is not enough — creditors and investors must also be convinced. The author urges politicians to firmly defend Estonian industry's interests in upcoming reforms of the EU emissions trading system, and calls for preparations to begin now on a possible second or third phase of the fund so that started projects do not stall.
