Even with a small territory, Estonia has large oil shale reserves and extensive forest and water resources. Its EU membership has led to the incorporation of EU directives into domestic environmental legislation and to a greater interconnection with European energy networks. Estonia has achieved considerable progress in decoupling environmental pressures from economic growth. However, its dependence on oil shale, which dominates the energy mix, makes its economy very carbon- and energy-intensive, with low material productivity. Greenhouse gas emissions have risen significantly over the last decade. Estonia will need to align its energy and climate policies to reverse this trend and comply with its commitments under the 2015 Paris Agreement.

It is in this challenging context that we deliver the first OECD Environmental Performance Review of Estonia. This Review assesses the country’s progress in achieving its environmental policy objectives since 2005; it provides 30 recommendations to help Estonia advance towards a greener, low-carbon economy, better manage its natural assets and improve its environmental governance and management. The analysis places particular emphasis on managing waste and materials, as well as environmental impacts of oil shale mining and use.

Oil shale has long been considered essential for Estonia’s energy independence. The development of renewable energy and closer integration into European networks now provide welcome alternatives. Managing the transition away from oil shale mining and use is Estonia’s most important economic, environmental and social challenge. To ensure the sector’s viability in the near to medium term, the country needs to invest heavily to improve the efficiency of oil shale extraction, power generation and shale oil production. Oil shale is Estonia’s largest source of hazardous and non-hazardous industrial waste. Reducing the generation and increasing the reuse of such waste would substantially improve environmental quality in the whole country and particularly in the mining region of north-eastern Estonia. This will require a combination of economic incentives and increased targeted public and private-sector research and development.

Municipal waste management is another important issue for Estonia. Since 2005, the country has mobilised private sector investments to move from reliance on landfilling to incineration with energy recovery. Recycling has progressed, particularly in Tallinn, but it has yet to reach European targets. Estonia needs to establish a stable institutional framework at the local level to move towards a circular economy. The Review also recommends strengthening data gathering and information systems for waste management.

This Environmental Performance Review is the result of a constructive policy dialogue between Estonia and the countries participating in the OECD Working Party on Environmental Performance. We stand ready to support Estonia in the implementation of the recommendations outlined in this study. I am confident that this collaborative effort will be useful in addressing our many common environmental challenges.


Angel Gurría

Secretary-General of the OECD