By a decision published on Wednesday, the European Commission approved the allocation of free carbon dioxide emission quotas to Estonian power plants during a transitional period to help modernise the sector. A similar transitional free allocation was endorsed for Cyprus.
The Commission concluded that certain provisions of Cyprus's and Estonia's development plans for the electricity sector allocating carbon emission trading allowances free of charge are in line with EU state aid rules. The Commission found that the funds granted, 371 million euros for Estonia and 194 million euros for Cyprus, will be used to modernise the production infrastructure, diversify the energy mix, and build new installations to replace capacity. This will contribute to liberalising energy markets, reducing greenhouse gas emissions, and increasing the security of supply, which is in line with EU objectives, the Commission said.
According to information published earlier, the bulk of the free emission allowance in Estonia will go to the state-owned Eesti Energia, which is building a new power plant working on oil shale and biomass.
Commission Approves Giving Free Emission Credits to Estonian Power Plants