Environment at a Glance: Estonia
Table of contents
The OECD Environment at a Glance Country Notes are designed to support transparent, evidence-based information. They provide concise and descriptive overview of progress across major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, and biodiversity conservation. They feature selected environmental indicators, building on harmonised datasets available on OECD Data Explorer. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. See the Reader’s guide to the Environment at a Glance Country Notes for more information.
Estonia is a small, sparsely populated country, with an open, market-based economy that has a highly skilled workforce and a business-friendly environment. The country has experienced strong economic growth although gross domestic product (GDP) per person remains lower than the OECD average. Estonia is notable for its pioneering digitalisation of public services. It is endowed with large oil shale reserves and abundant forestry and water resources.
Estonia restored its independence in 1991. Since then, the country has adopted market reforms and has joined both the European Union (EU) and the North Atlantic Treaty Organization in 2004. International trade plays a significant role in the economy. The country is a net exporter of several energy sources, notably primary solid biofuels, electricity and shale oil. However, the country fully relies on imports for the provision of liquid transport fuels, such as diesel and gasoline, and natural gas.
Forests cover about half of Estonia’s territory and forestry products represent a significantly higher share of national exports than in most OECD member countries.
From 2000 to 2024, Estonia greenhouse gas (GHG) emissions (excluding land use, land-use change and forests - LULUCF) decreased by 41.5%. Energy industries are the largest source of GHG emissions, accounting for 46.3% of the total (excluding LULUCF). Reductions in the sector were driven mainly by a sharp decline in electricity and heat generation from oil shale and a growing share of renewables in the energy mix, such as wind, solar photovoltaics and domestic forestry biomass. In 2024, emissions fell further as maintenance at several shale oil plants curtailed production. At the same time, lower electricity prices, coupled with EU carbon allowance prices remaining broadly unchanged from 2023, reduced the profitability and generation of oil shale-based electricity.
On the other hand, emissions from transport, the second largest source representing 26.4% of the total, continued to increase. Agriculture, the third largest source of emission, contributed 15.2% of the total in 2024. Decreasing livestock population and quantities of synthetic fertilisers and manure applied to agricultural fields contributed to decreasing emissions from the sector. Emissions from industrial processes and product use also decreased, thanks to reduced industrial activities. The LULUCF sector has switched from being a net sink of emissions to a source in 2014, due to increased logging and slower forest growth (Min.Clim., 2026). Like in most countries, carbon dioxide (CO2) represents the largest share, 79% of the total, followed by methane, at 10.5%.
The role of oil shale and forestry production is also reflected in the per person production-based (i.e. produced within the territory) and demand-based (or footprint, i.e. including emissions incorporated in imported goods) GHG emissions, which have fluctuated considerably since mid-1990s. This has also resulted in Estonia being one of the few OECD countries where the production-based intensity has long been higher than the demand-based intensity.
Estonia is well endowed with fossil fuels mainly in the form of oil shale1. Oil shale was historically the main source of electricity, supplying around 80% of the electricity consumed in Estonia in 2018. The use of oil shale has been decreasing, dropping to 57.4% of total energy supply in 2024. Meanwhile, the use of renewable energy sources has been increasing mainly in the form of biomass, wind energy and solar photovoltaic. The oil shale-based electricity production has undergone major changes with the opening of the new Auvere Power Plant in 2018 and the closing of old ones. Estonia imports most of the natural gas and petroleum products it consumes.
The share of renewables in electricity production made a spectacular increase in recent years, from 16.1% in 2018 to 55% in 2025.
Except for ammonia, which emissions increased since 2000, emissions of major air pollutant are decreasing, sometimes by a large amount. The main reason for the significant decrease in sulphur oxide (SOx) emissions has been technology improvements in the oil shale fired Narva power plant, the largest power generator (OECD, Environmental Performance Reviews: Estonia, 2017). Additionally, newer plants have lower emissions levels. However, most emission intensities, both per person and per GDP, remain above OECD averages.
The main factor influencing overall trends in air quality has been the implementation of the EU Air Quality Directives 2008/50/EC and 2004/107/EC, which set legally binding limits for concentrations of outdoor air pollutants. Estonia’s Ambient Air Protection Act regulates polluting activities, as well as data reporting and collection. It entered into force in 1999, was amended numerous times and is supported by a large number of implementing regulations (OECD, Environmental Performance Reviews: Estonia, 2017).
Despite improvements, population exposure to PM2.5 remains above the World Health Organisation threshold of 5 µg/m3.
Estonia has relatively abundant per person freshwater resources and does not suffer from water stress. Cooling in electricity production represents the largest share of freshwater abstractions, which is favoured by low rates of abstraction taxes (OECD, Environmental Performance Reviews: Estonia, 2017).
Although around 16% of the population is still not connected to wastewater treatment plants, Estonia has made good progress in wastewater treatment, with nearly all wastewater treatment plants providing advanced, tertiary, treatment.
With 378 kg per person in 2024, generation of municipal waste is well below the OECD average. Estonia has also made good progress in municipal waste management. In 2000, nearly all municipal waste treated was landfilled. The country is recycling an increasing share of its municipal waste, while nearly half is incinerated with energy recovery and a growing proportion is composted.
Estonia is one of the few OECD countries where per person domestic material consumption (DMC) and material footprint have been increasing since 2000. Since 2018 DMC is declining while the material footprint continues to rise. Although the share of fossil carriers (mainly oil shale) has somewhat decreased in recent years, consumption of biomass has stagnated, while consumption of non-metallic minerals has increased considerably since 2000. As a result, material productivity has stagnated and is well below the OECD average.
Compared to the rest of Europe, Estonia is considered to have preserved a relatively high proportion of its natural environment. The traditional methods of agricultural practices are responsible for the higher conservation rate observed, with more important habitat destruction in Estonia having begun during the Soviet period (later relative to most areas in Europe). An estimated 40 000 species inhabit Estonia but, as of 2008, only 60% or 23 500 species have been identified.
Natural grasslands are declining as a result of conversion of agricultural land into forestry. Semi-natural grassland areas, dependent on continual human intervention, such as mowing or grazing to prevent them from growing into forests, are also on the decline. Old forests are also declining (CBD).
With 20% of its terrestrial areas protected and a slightly lower share of marine areas under protection, Estonia lies between the OECD and OECD Europe averages. More efforts are needed to reach the 2030 Global Biodiversity Framework (GBF) target of protecting 30% of terrestrial and inland water areas, and of marine and coastal areas.
This section shows selected policy instruments based on data available for most OECD countries and does not provide a complete overview of countries’ policy mix to achieve their environment-related objectives. Interpretation should consider the country specific context.
Estonia’s excise duty rates are not based on GHG emissions or other environmental factors. In addition, Estonia has one of the oldest and least efficient vehicle fleets (IEA, 2023).
Nevertheless, with 2.1% in 2024, Estonia’s share of environmentally related tax revenue in GDP is well above the OECD average. Their share in total revenues has increased since 2000, up to 2019, to then fall. Revenues are largely dominated by the energy base. Unlike other OECD countries, transport makes up a small tax base, smaller than the pollution base.
In total, 73.9% of GHG emissions in Estonia were subject to a positive Net Effective Carbon Rate2 (ECR) in 2023. Explicit carbon prices in Estonia consist of emissions trading system (ETS) permit prices and carbon taxes, which cover 49.4% of GHG emissions in CO2 equivalent. With roughly 49.4% of total GHG emissions, coverage is largest for ETS. Fuel excise taxes, an implicit form of carbon pricing, covered 28% of emissions in 2023. About 68% of GHG emissions have a Net ECR above EUR 60 per tonne of CO2 equivalent, a mid-range estimate of current carbon costs. Net ECRs are highest in the road transport sector, which accounts for 17.2% of the country's total GHG emissions. The Net ECR is on average positive in all sectors (OECD, Pricing Greenhouse Gas Emissions 2024: Gearing Up to Bring Emissions Down, 2024).
The share of environmentally related government research and development (R&D) budget has fluctuated since 2002, but has recently settled on a downward trend, at only 1.1% in 2024. The share of renewables in public energy research, development and demonstration (RD&D) has also set on a downward trend in recent years, at about 17.8% in 2024.
Estonia is a minor player in environmentally related inventions, and their share in total inventions is around the OECD average.
Estonia’s development co-operation focuses on partner countries in its neighbourhood, with a strong emphasis on Ukraine, and a small number of selected priority partners in sub-Saharan Africa. The Estonian Foreign Policy Strategy 2030 signals Estonia’s growing contribution to global sustainable development as an objective of its foreign policy. Yet, despite a very large increase during 2019-24, the share of bilateral ODA for climate stands at below 9%, much lower than many other countries of the Development Assistance Committee (DAC). Similarly for biodiversity, which increased from less than 2% during 2019-21 to 11.1% in 2023-24 (OECD, Development Co-operation Profiles, 2026).
References
CBD. (n.d.). Country profiles: Estonia. Retrieved from https://www.cbd.int/countries/profile?country=ee
IEA. (2023). Estonia 2023: Energy Policy Review. OECD Publishing, Paris. doi:10.1787/9e91fe6a-en
Min.Clim. (2026). Greenhouse gas emissions in Estonia 1990-2024. Ministry of Climate, Estonia. Retrieved from https://unfccc.int/documents/656391
OECD. (2017). Environmental Performance Reviews: Estonia. OECD Publishing, Paris. doi:10.1787/9789264268241-en
OECD. (2024). Pricing Greenhouse Gas Emissions 2024: Gearing Up to Bring Emissions Down. OECD Series on Carbon Pricing and Energy Taxation, OECD Publishing, Paris. doi:10.1787/b44c74e6-en
OECD. (2026). Development Co-operation Profiles. OECD Publishing, Paris. Retrieved from https://www.oecd.org/en/publications/development-co-operation-profiles_04b376d7-en/estonia_42f7aec0-en.html
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← 1. In IEA statistics oil shale is aggregated with coal when measuring primary energy supply. Most of the shale production is transformed into other petroleum products that are exported, and is counted as negative to oil in total energy supply, resulting in a negative share in the energy supply mix.
← 2. Effective Carbon Rate (ECR) is the sum of fuel excise taxes, carbon taxes and tradeable permits that effectively put a price on carbon emissions. The Net ECR equals the ECR minus fossil fuel subsidies that decrease pre-tax fossil fuel prices.