For decades, the Ida-Virumaa region in north-east Estonia relied on shale oil, often called the country’s ‘brown gold’. This fossil fuel provided energy, electricity and economic stability to the region. But as Estonia looks toward a greener future, the country is preparing to phase out shale oil.
Shale oil, while historically vital for Estonia, is a major contributor to the country’s CO₂ emissions. The transition away from it has significant implications for the Ida-Virumaa economy, long dependent on oil shale extraction.
“In the 1990s, more than 200,000 people lived in this area. Today, the population is around 130,000 and the decline will continue,” says Meelis Kuusk, CEO of the Association of Local Authorities of Ida-Viru County.
To support the transition, Ida-Virumaa is receiving targeted assistance through the European Union’s Just Transition Fund, aimed at diversifying the local economy, creating new jobs and helping the community adapt to a low-carbon future. Kuusk emphasises the importance of local engagement. “When we were planning the Just Transition Fund, we brought together more than 52 local organisations,” he says.**
Many projects have already received support from the fund. One notable initiative is Europe’s first rare-earth magnet plant in Narva, one of the region’s main cities. When operating at full capacity, the plant will employ around 1,000 people, offering some relief to the local community, which faces higher unemployment than the national average. The plant is also expected to attract additional industrial investment to the city.
Estonia’s national mining company is exploring new uses for oil shale and its byproducts, anticipating a future when shale oil can no longer be burned for electricity. CEO Lauri Karp highlights plans to exploit ash tailings as a key ingredient for cement, a critical material for the construction sector. He also hopes the permanent magnet industry will expand in Estonia, potentially opening new opportunities for mining:
