An excavator digs into the rock in an open-air mine in Tallinn, Estonia. Totally 97 percent of the electricity produced in Estonia comes from oil shale, Estonia’s own national mineral resource. File photos: AFP
The Baltic state of Estonia relies on shale oil, a locally mined fossil fuel, to generate power – and despite a short-term boost in production to fill a gap in electricity imports, it is sticking to targets to ditch the polluting fuel.
The government has committed to phasing out shale-oil power plants by 2035 and end production by 2040.
As part of the plan, it is also helping communities whose incomes are tied to the fuel to map out a new green future for their young people.
At the COP27 climate summit in Egypt in November, Kadi Ristkok, director of the climate department at Estonia’s Ministry of Environment, explained that the move away from shale oil in the northeastern county of Ida-Viru – where it accounts for almost half of GDP – will affect about 150,000 people.
Since 2020, efforts to create a “Territorial Just Transition Plan,” approved earlier in 2022, have consulted with local people – from youth to labor unions and government officials – on how they view their development needs as the shale oil industry is phased out.
“The approach we took since the beginning is that the ‘just transition’ is not just a matter of numbers,” Ristkok told an event on the sidelines of COP27.
“It’s also a matter of culture and people.”
The vision that emerged was of economic restructuring based on renewable energy and modern, greener manufacturing, as well as services, with young people – as in many other places – hoping to find jobs in the creative and IT sectors.
That has highlighted the need to provide reskilling, new forms of professional education and incubation for startups, besides environmental restoration work to rectify the damage to nature from shale oil mining over the past century, Ristkok said.
All of this costs money – which Estonia, as a European Union member state, has been able to win from an EU mechanism set up to fund a “just transition” under the bloc’s Green Deal, designed to help it meet its climate goals.
In October, the EU announced that Estonia would receive 354 million euros ($368 million) in grants from its “just transition” fund to support the phase-out of shale oil by developing renewable energy and “high value-added” green jobs.
“The transition to climate neutrality has to happen in a fair way, or it just will not happen,” the EU’s climate policy chief Frans Timmermans said in a statement.
European nations have a head-start when it comes to funding the social safety net and new employment creation efforts needed to back a low-carbon economic transformation that does not leave people behind.
Fossil fuel-reliant developing countries are now seeking support to do the same, said Rensie Panda, acting policy manager in the Papua New Guinea (PNG) National Energy Authority.
She pointed to the high cost of weaning her Pacific island nation – which exports oil and gas – off the diesel generators it depends on, as well as the polluting shipping and air transport it relies on for trade.
“It’s hard to move away from a business-as-usual approach,” she told the event on investing in just transitions, adding that oil and gas firms have for decades contributed to development and livelihoods in the places they operate.
To reach its goal of sourcing 70 percent of its energy from renewables by 2030 and becoming carbon-neutral by mid-century, PNG will need to start training its people for new jobs in clean energy, such as solar, she said.
But in many parts of the world, including Africa, those skills are still hard to come by, said Ben Odongo, an energy youth fellow with the UN climate champions team.
In his country, Uganda, young people have found it far easier to get training to work in the oil and gas industry – with the government planning to exploit and export its reserves via the East African Crude Oil Pipeline in coming years – than in renewables, he said.
The challenge of securing an energy transition that includes measures to help countries and communities deal with the fallout of cutting dirty power has been discussed at UN climate talks for several years – and is rising up the agenda fast.
The “Sharm el-Sheikh Implementation Plan,” agreed by governments at the COP27, includes a section on “pathways to a just transition,” including setting up a new work program on the topic and an annual minister-level dialogue from 2023.
The plan says “sustainable and just solutions to the climate crisis must be founded on meaningful and effective social dialogue and participation,” noting that a global transition to low emissions “provides opportunities and challenges for sustainable economic development and poverty eradication.”
The International Trade Union Confederation (ITUC) said after the COP27 that it welcomed the UN plan, but urged countries to commit to respect labor rights and human rights in any just transition, while also involving unions in decision-making.
Eric Manzi, ITUC-Africa’s deputy general secretary, said that on his continent funds “are desperately needed for transition skills training and ensuring informal jobs become formalized decent jobs with social protection.”
Donor governments are testing a new approach to providing that support for developing nations through “Just Energy Transition Partnerships [JETPs],” which have so far been launched for South Africa and Indonesia, backed by $8.5 billion and $10 billion of international public finance respectively.
Discussions are underway for similar deals with Vietnam, India and Senegal – although those have progressed more slowly, partly because the three countries are still planning to increase fossil fuel production and use.
The South Africa JETP investment plan, released in the runup to the COP27, includes steps to consult with communities in areas where coal mines and coal-fired power plants will be closed, as well as to put social welfare schemes in place, diversify the economy and provide training for future jobs.