The government needs to be more assertive in supporting new and innovative companies in Estonia, CEO of Viru Keemia Grupp (VKG) Ahti Asmann said Monday.
The EU’s Just Transition Fund on its own is not adequate to that task, he added.
VKG is a private sector holding group of oil shale industry, power generation, and public utility companies, with much of its activity based in Ida-Viru County, the main beneficiary area of Estonia when it comes to Just Transition funding.
Speaking to ERR’s Jüri Nikolaev, Asmann (pictured) said: “Do we just wait until other countries develop new tech, or will the state take on some of the risks and itself take part in the development?”
He then answered his own question: “From our point of view, the state has taken the choice, knowingly or unknowingly, to not consider the implementation of industrial production technologies important, and we think this is an error that needs correcting.”
Ivan Sergejev, who is coordinator of the Just Transition Fund at the Ministry of Finance, said that his ministry is aware of VKG’s projects and concepts, some of which are reflected in the European Commission’s regional support agency the Just Transition Fund as it pertains to Estonia.
In fact: “As is known, despite the criticisms, VKG has repeatedly applied for support from the Just Transition Fund,” Sergejev told ERR.
Sergejev went on to say that Asmann was likely speaking more broadly in any case.
“I think the criticism that Ahti Asmann is talking about does not relate to the Just Transition Fund specifically so much. He’s looking at the bigger picture, while on this we can only acknowledge that, indeed, the development of industrial enterprises is vital,” Sergejev said.
“Supporting it is very important, and must be carried out,” he continued, adding that the fund is just but one instrument required to meet the requirements as set out by the EU.
Ahti Asmann said the state may have taken an aggressive stance on climate neutrality, but achieving this goal is only viable with practical, tried and tested technological solutions.
At present such tech is at development stage, and Estonia faces choices, he went on.
Support amounts distributed by the Just Transition Fund are not decisive so far as making large investments goes, Asmann added.
A magnet production plant in Narva, often presented by the state as an example of success story of the Just Transition Fund, is not a very good example in fact, as the decision to build predated the fund’s launch, Asmann said.
A planned plastic VKG waste processing plant will cost €80 million to build, of which around €5 million can be counted on from the Just Transition Fund, he went on. “It doesn’t change the situation, it doesn’t reduce any risk.”
“Risk is something that developed countries take on. Estonia has not yet considered it to be good idea,” he said.
“However, we believe that if we don’t do it at some point, we will fall behind other developed industrial countries in terms of development times,” Asmann added.
Estonia should have its own domestic fund, independent of the conditions set by Europe, to help foster the development new large companies with high added value yet comparatively few employees, the VKG chief continued.
State co-financing for the implementation of new tech should be at least at a level of 20 percent, he added, while a project realization lead-time should be at least seven years.
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