The International Energy Agency (IEA) regularly conducts in-depth peer reviews of the energy policies of its member countries. This process supports energy policy development and encourages the exchange of international best practices and experiences.

This report on Estonia is the first since the country became the 29^th member of the IEA in 2014. It discusses the energy challenges the country faces and recommends possible solutions to help it achieve a secure and sustainable energy future.

Estonia is on the brink of a major energy transition that will involve a substantial change in the role of domestically produced oil shale in the country’s future energy mix. The transition will require Estonia to carefully balance social, environmental, economic, and energy security considerations.

Estonia has already achieved its emissions reduction and renewable energy targets for 2020, but the country still has the highest carbon intensity of all IEA countries because of the dominant role of oil shale in its energy sector. Reaching Estonia’s ambitious targets for 2030 is possible but requires determined and timely action to decarbonise the country’s electricity and transport sectors.

Estonia also has considerable scope to review energy taxation of all fuels to better reflect their carbon content with a view to accelerating the switch to low-emission technologies, notably in transport.

In this report, the IEA provides recommendations for further improvements of Estonia’s policies to help the country guide the transformation of its energy sector.