Approximately 25% of the energy consumed in Estonia is spent by the transport sector. Liquid fuels are imported from abroad for that purpose.
94% of the transport sector energy consumption is attributable to transport by road and vehicles. As Estonia has no oil resources, we do not produce or process oil and liquid fuels are mostly imported from works at Porvoo, Finland, and Lithuania; smaller quantities also come from Belarus and Sweden.
Over the last 10-15 years, the volume of energy and fuels consumed by transport sector has increased by more than 33%; only in the recession years, 2008-2009, fuel consumption somewhat decreased. The increase in fuel consumption has been rapid, mainly due to the increasing popularity of passenger cars, vans and trucks that use diesel fuel.
Fuel consumption volumes rank among the highest in the European Union
The energy consumption of the Estonian transport sector and greenhouse gas emissions were analysed, more substantially, in the sustainable transport report of 2010 of the Government Office, which concluded that the consumption of fuel has mainly increased due to the rapid growth in the use of passenger cars and transport by road, the spreading of suburbs and a decrease in public transport and cycle and pedestrian traffic.
The consumption of fuel on roads has grown at a speed equal to economic growth and, therefore, the Estonian economy is among the most transport and fuel intensive in Europe – Estonia uses twice as much fuel for transport per GDP unit than the respective European Union average.
Estonia is under the obligation of achieving a situation by 2020 whereby 10% of the transport sector’s energy consumption is provided by renewable sources of energy.
The main measures applied to ensure the availability of the required quantities of energy from renewable sources are the obligation to supply liquid fuels with a bio component and facilitation of the use of alternative types of fuel.
The last measure includes continued implementation of the ELMO programme and facilitation of the use of bio methane in the transport sector. The new Transport Sector Development Plant 2014-2020 also establishes long-term goals for that purpose.
Production of liquid fuels in Estonia
Shale oil, which is mostly exported – for example, more than 619,800 tons in 2011 – is produced in Estonia.
There are a few companies that produce shale oil in Estonia:
Shale oil production is increasing, but the long-term development perspectives are largely depend on the environmental policies pursued in the European Union over the coming decades; unfavourable developments in this sphere may considerably reduce the possibilities for the sale of shale oil based engine fuels in the European Union in the near future.
Liquid fuel stock management
The establishment and management of liquid fuel stocks is regulated by the Liquid Fuel Stock Act. Stock management is organised by the state-owned AS Eesti Vedelkütusevaru Agentuur (OSPA).
OSPA will constantly keep the liquid fuel stock at a level equivalent to the average net import of energy product for the period of 90 days, or average internal daily consumption of energy products over the period of 61 days – depending on which quantity is bigger.
Liquid fuel stock is kept in Estonia, Finland, Sweden and Denmark. In Estonia, in 2013, the liquid fuel stock matched the internal consumption volume of 47 days.
Liquid fuel stock can be treated as a short-term buffer that the fuel companies operating in Estonia can draw upon and buy fuel in a situation of crisis – for example, in case of a situation comparable to the Arab oil embargo of 1973. Where in regular situations most of the fuel consumed in Estonia is delivered from Finland and Lithuania, the buffer stock will replace the regular sources of supply in the event of liquid fuel delivery problems.
Stock management is funded by the payers of stockpiling fees or filling stations that put liquid fuels into consumption. The rates of stockpiling fees will be established for every year with the directive of the Minister of Economic Affairs and Communications.
Fuel market regulation
The fuel market is regulated by the Liquid Fuel Act, which determines the grounds and procedure for ensuring the quality of liquid fuels.
Requirements for fuels are established with a regulation of the Minister of Economic Affairs and Communications, stating that fuels sold in Estonia must meet the European standards. Registration in the state register of economic activities will be required for the sale, export, import of fuel and the provision of fuel storage services.