The Ministry of Climate's proposed fee hike plan could spell doom for the peat sector, producers warn. The plan aims to triple peat extraction fees over a decade, but producers fear this will stifle competitiveness. The ministry, however, argues that the current pricing system fails to account for the environmental impact of peat extraction, which releases significant greenhouse gases. The proposed increase, from 6.5% annually to 13.5% by 2036, is seen as a necessary step to reflect the 'polluter pays' principle and ensure the state receives a fair price for its resources. However, peat producers are in disagreement.
Jüri Tiidermann, chairman of the Estonian Peat Producers Association, warns that the proposed fee hike would render the sector uncompetitive within a few years. He suggests a compromise of 7-10% annual increases, aligning with neighboring countries' rates. In Latvia, for instance, a compromise was reached, with fees rising to €3.50 per ton by 2027. Tiidermann proposes a similar one-time 50% increase to €3.50, followed by a freeze for a set period. The ministry, however, counters that producers can handle the proposed increase, with the final rate in 2036 making up only 5% of total production costs.
The Ministry of Climate plans to submit the draft law for public consultation by the end of this year or early next year, inviting public input on this controversial issue.
