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Estonia’s modified recovery and resilience plan puts a stronger focus on the green transition

The European Commission has given a positive assessment of Estonia’s modified recovery and resilience plan, which includes a REPowerEU chapter. The plan is now worth 953 million euros in grants and covers 17 reforms and 28 investments.

Estonia has added five additional investments to its original plan including the boosting of offshore wind farms development, support to companies to increase energy security and a hydrogen-powered ship to prevent pollution in the sea.

Importantly, Estonia has added a REPowerEU chapter to its plan, foreseeing a reform and two investments to deliver on the REPowerEU Plan’s objectives to make Europe independent from Russian fossil fuels well before 2030, in light of Russia’s invasion of Ukraine. These three measures aim at accelerating the take-up of renewable energy, by streamlining permitting procedures, strengthening the domestic electricity grid and facilitating the development of sustainable biogas and sustainable biomethane

To finance the increased ambition of its plan, Estonia has requested to transfer to the plan its share of the Brexit Adjustment Reserve (BAR), in line with the REPowerEU Regulation, amounting to 6.6 million euros. These funds, added to Estonia’s REPowerEU grants allocation of 83.4 million euros, make the approved modified plan worth 953 million euros.

The modified plan has a significantly stronger focus on the green transition, devoting 59 per cent (up from 41.5 per cent in the original plan) of the available funds to measures that support climate objectives.

The reform and two investments included in the REPowerEU chapter strongly contribute to the green transition. The reform will define suitable areas for wind energy, streamline the permitting framework and thus free up capacity within permitting authorities. The two investments will facilitate the absorption of renewable energy in the country’s distribution network and increase the production and uptake of sustainable biomethane.

The plan maintains support for the development of innovative green technologies, such as green hydrogen, for upgrading green skills and for facilitating the green transition in enterprises while also improving access to green finance for SMEs. Measures in the transport sector include the levelling up of the infrastructure of Tallinn’s capital region’s common public transport system and developing the Tallinn Old Port tramline and cycling paths in municipalities.

he Council will now have, as a rule, four weeks to endorse the Commission’s assessment. The Council’s endorsement would allow Estonia to present its first payment request under the RRF and a request for 18 million euros in pre-financing of the REPowerEU funds.

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