Peat tax could ruin local industry

  • 2005-07-13
  • Baltic News Service
TALLINN - Heido Vitsur, adviser at the Ministry of Economy and Communications, has warned that a planned increase in the extracting tax for peat would deliver a deadly blow to the local peat industry.

He told the daily Postimees that the effect of the more than threefold tax increase could be lethal on the peat industry, as the fuel doesn't have the competitiveness of oil and gas.

Also, peat used for generating electricity and thermal energy may become subject to carbon dioxide emission quotas if peat is declared a non-renewable natural resource, he added.

The newspaper pointed out that shortly before coming forward with his wish to make changes in the planned ecology tax reform, Vitsur, together with Economy Minister Edgar Savisaar, met with leaders of the Vapo group of companies in Finland.

Vapo owns shares in the largest Estonian peat extractor, Tootsi Turvas, as well as shares in the OU Langham company specializing in growing and exporting gardening peat.

Local peat extractors have been producing a million tons of peat annually on average in recent years. Over half this is extracted by companies owned by foreign capital, and most of the peat is exported.