Mikail Akhtar, University of Birmingham
The Just Transition Mechanism is an initiative launched by the EU to help its member states transition to a climate-neutral economy, specifically targeting the most carbon-affected regions within the EU. Each region will have objectives depending on their needs, which are aimed to be met by 2030 and implemented via dedicated Territorial Just Transition Plans (TJTP) prepared and approved by each member state. Alongside the TJTP, each affected region will be allocated funds from the EU’s Just Transition Fund (JTF), aimed at helping with the socioeconomic effects of transitioning to a climate-neutral economy. The Just Transition Mechanism (JTM) represents a crucial step in aligning environmental goals with social justice, ensuring that heavily carbon-affected communities are not left behind in the shift to a carbon-neutral future.
Estonia’s Territorial Just Transition Plan
One of the most carbon-affected regions within the EU is the county of Ida-Virumaa in Estonia. The county has a long history in the oil industry, and its eastern border with Russia is where a significant proportion of the country’s Russian-speaking minority resides. For decades this region has been at the heart of Estonia’s fossil fuel extraction and use, particularly oil shale, which is a carbon-intensive fossil fuel used primarily to produce electricity. The state-backed company Eesti Energia is one of the world leaders in oil shale extraction and exploitation technology, but the prolonged operation of oil shale mines has had a detrimental impact on the environment of Ida-Virumaa and has made Estonia one of Europe’s largest emitters of CO2 per capita.
Ida-Virumaa has been singled out as one of the target areas for the JTM, with a TJTP approved in 2022 that aims to facilitate regional divestment away from oil shale and the eventual closure of the mines. However, the oil shale industry is one of the region’s largest employers which presents a huge barrier to diversifying the economy away from fossil fuels. The JTF has allocated €354 million to Ida-Virumaa to help with the diversification process, with €250 million being used to help reskill and upskill 11,000 workers and help create 1,000 new jobs. Furthermore, on the issue of employment, a Project Fiche was implemented to tackle the issue of job losses during transition to carbon-neutrality and cover the loss of wages for workers in the oil shale sector. There will also be a focus on creating a circular economy through investment in renewable energy and reducing the carbon footprint of shale oil-related industries through innovative technology.
Importantly, the Estonian TJTP adopted a bottom-up approach ensuring that the transition is not simply top-down policy imposition but a collaborative process involving local communities — for example, there was the use of public consultation activities, such as public seminars and written consultations. Also included was the creation of a science council consisting of academics within the region, and the creation of a Youth Climate Assembly involving 100 young people from across the region, both will help with the implementation of the plan. In the context of significant distrust towards the state by Russian-speakers, and the growth of the far-right nationalist EKRE party that explicitly opposes climate change mitigation policies, the participatory elements of the plan for the general public are an attempt to create local buy-in for the TJTP.
Evaluation of the Plan: opportunities and challenges
While the TJTP sets out ambitious and commendable goals, there are still substantial challenges that could impact its overall success.
One of the primary concerns is the risk of unemployment. As the oil shale industry contracts, many long-standing jobs are at risk. For decades, employment in the industry has been the economic backbone of Ida-Virumaa, and entire families have worked in the sector across generations. The cultural attachment to these jobs is strong and replacing them with new employment opportunities in unfamiliar industries is not straightforward.
Furthermore, although Estonia is gradually increasing investment into renewable energy, such as wind power, there remains a concerning lack of divestment from oil shale. A particularly stark example is the approval of a new oil shale plant in 2025, which was granted an environmental permit valid until 2035. This move undermines the transition goals and signals mixed messages to both investors and citizens. Part of the reluctance to divest may be attributed to the underperformance of Eesti Energia’s investments into renewables, particularly through its transnational subsidiary Enefit Power, which has struggled to yield an expected return on investments and led to Eesti Energia buying back the shares of Enefit Green.
Another obstacle lies in governance and communication. There appears to be limited coordination between national and local government institutions in Ida-Virumaa, making the implementation of the plan more complex. Additionally, Ida-Virumaa’s population is predominantly Russian-speaking, with its biggest city, Narva, being about a 97% majority. While there are significant generational and socioeconomic variations, the relationship between Estonia’s Russian speakers and the central government has been historically fraught, especially in the north-east (including Ida-Virumaa) where the minority’s socioeconomic disadvantage has been more marked — and the Kremlin’s influence more persistent. The resulting linguistic, social, and trust gap hinders effective community engagement and creates a disconnect between the local and public policymakers.
On a broader scale, the change of political agenda within the EU poses a threat to the potential success of the plan. While the European Green Deal, which launched in 2019, was presented as a significant shift in the EU’s economic strategy, since its inception there seems to have been a progressive shift away from green initiatives. Already the Green Deal has been marked by significant lobbying from fossil fuel companies, which were at least partially successful in watering it down and protecting their interests. More recently, pressures against the green transition have accelerated, and the EU side-lined experts in discussions that revolved around simplifying and reducing sustainability-focused policy, which could have led to a lack of expertise on crucial elements of policy. This political agenda shift may result in weaker oversight, reduced funding, and lower accountability for national and regional actors, thus compromising the goals of the transition.
Despite this, there are some notable local and domestic pressures that might keep the green transition alive in Estonia, or at least make its abandonment more difficult. While public opinion about climate action in Estonia remains divided , climate activists have had some success. In 2023 the Estonian Supreme Court ruled in favour of Fridays For Future Estonia, which temporarily halted construction of the Enefit 280-2 shale oil plant. Although the government later amended laws to resume the project, via the creation of a time-limited complex permit, the court decision highlights growing civic engagement and legal activism around environmental issues. 88% of Estonians recognize the need to adapt to climate change, which although this is six points below the EU average, it still shows that there is growing engagement with climate issues.
Additionally, the collaborative structures established, such as youth assemblies, academic councils and stakeholder panels have led to increased community awareness and participation. This engagement lays a solid foundation for long-term change, even if current results are still unclear.
Conclusions
The Estonian plan demonstrates a strong commitment to inclusive policy-making and offers a blueprint for regional transformation. However, for it to be truly successful, greater attention must be paid to the challenges of economic restructuring, cultural resistance, linguistic inclusion, and political consistency.
Furthermore, there needs to be stronger accountability mechanisms, especially if targets are not met. A possible path forward may involve market reforms that recognize the circular and regenerative nature of renewable energy and de-prioritise profit and shareholder interests, thereby altering supply-and-demand structures to favour sustainable alternatives. Only by addressing these complex dynamics can Estonia, and indeed the wider EU, ensure a just, inclusive, and effective transition to climate neutrality.
Mikail Akhtar is a third-year law undergraduate at the University of Birmingham. He has an interest in energy policy, particularly focusing on renewable energy. He took part in an internship with the College of Social Sciences at the University of Birmingham, funded by the Birmingham Institute for Sustainability and Climate Action (BISCA), where he worked under the supervision of Dr Licia Cianetti to research and critically analyse the effectiveness of Estonian energy policy and EU policy mechanisms, aimed towards decarbonisation.
This paper is the intellectual property of the author. No part of this work may be reproduced, distributed, or transmitted in any form or by any means without the prior written permission of the author.
© 2025 The author. All rights reserved.
