12Events of 2021
January
Estonia’s new coalition wrote in the coalition agreement that the world will be saved when the oil shale industry packs up. According to the signed agreement, the aim is to end the production of electricity from oil shale by 2035 at the latest and to entirely give up the valorisation of oil shale by 2040. As the demand for our products continues to be high, we sell shale oil for export to the global ship fuel market, the volume of which is forecast to grow by another 2.5 times in the coming 30 years. We also gain assurance from the fact that no extensive climate neutral alternatives are foreseen in shipping in the nearest decade, and we still have oil shale resources for at least another 20 years. We plan to also valorise this resource over that time. We have taken the aim to explain to leaders and decision-makers the risks entailed in ill-conceived decisions.
In the middle of January, Ida-Viru County was represented at the Five Schools Competition the best students of sciences and natural sciences of the Jõhvi Upper Secondary School, who also won the preliminary round.
February
The second month of the year greeted us with the starting CO2 price spurt. Over the year, the CO2 quota price has tripled as a result of uncontrollable growth. The price of a CO2 credit was about 30 euros at the beginning of the year and approximately 85 euros in December. Such a pace is not sustainable. In the EU, Member States are discussing extensive electricity price mitigation packages and cast doubt on the reasonability and sustainability of a system where the consumers’ money goes to speculators in the emission trade system.
Regarding the COVID-19 virus, VKG wished to offer its employees all the available opportunities for protecting themselves and their close ones and preventing the spread of the virus. We therefore took steps to receive vaccines as a first priority.
March
A study was launched to determine the optimal buffer zone and time-limit for the performance of explosive work in the vicinity of the permanent habitat and courtship area of wood grouse at Kiikla. The Environmental Board gave its approval to a new monitoring methodology which is based on acoustic study (analysis is based on recorded sound). Pursuant to the Ojamaa mineral resource extraction permit, we have to perform an annual quantitative count of wood grouse at the Kiikla permanent habitat. As of last year, we authorised the Environmental Agency to find an entity to perform the monitoring and it is now covered under the national monitoring programme. For VKG, this means that the monitoring of wood grouse will now be done as an integral part of national monitoring.
April
In April, we focused on the topic of work safety from every angle and in every possible way. For the first time, we held a Work Safety Month instead of a Work Safety Week. In the framework of that, we organised various web seminars to discuss current issues, and announced competitions related to work safety. At the end of the month, we held a substantive discussion round, ‘Can the injury indicator be reduced to zero in a production company?’.
The Prime Minister of Estonia, Kaja Kallas, visited Viru Keemia Grupp during her first county visit. Representative of the shareholders and the management of VKG took part of the meeting. At the meeting, the parties discussed the coalition agreement clause concerning the termination of oil shale valorisation, the regulations related to the sector, and the impact of the Green Transition on the region and on the Estonian economy on the whole.
May
We started vaccinating the Group’s employees and their family members regardless of their age and of whether they belonged to any risk groups. In essence, we showed initiative and set an example in this area. Things got really bad in spring and the epidemiological situation in our county jeopardised not only the undisrupted provision of vital services in Ida-Viru County, but also our people. Thanks to the responsible attitude of our employees, we managed to keep the pandemic away from production and continued working in the ordinary mode.
June
Viru Keemia Grupp again took part in the corporate responsibility index survey held by the Corporate Social Responsibility Forum in order to obtain an assessment of the company’s responsible and sustainable activities also from external experts. Activities were assessed in three categories in 2021: governance, climate and the environment, and society and the social environment. The survey included 63 companies and 53 of these obtained a new badge. Our Group was awarded a bronze badge.
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Viru Keemia Grupp concluded a cooperation agreement with the Jõhvi Programming School in order to contribute to IT education. We think it is extremely positive that the spread of digital education is picking up pace in Ida-Viru County which is primarily known as an industrial region. For decades, VKG has been a supporter of specialised education, mainly focusing on encouraging the local youth and offering broader education opportunities. This cooperation initiative is valuable for both parties, as it benefits the future specialists as well as VKG as a future employer. One of VKG’s advantages is that it offers practical experience on site at a large industrial enterprise, thanks to which students gain an understanding of applying the knowledge they are acquiring in actual production processes.
Since 2003, the Group motivates the most successful TalTech students in acquiring needed professions with scholarships twice a year. This way, we send a clear signal that we welcome young purposeful specialists to join our Group.
July
VViru Keemia Grupp introduced its new development project ‘Estonia’s Own Bioproduction’. We started exploring a possibility of creating a bioproducts production complex in Ida-Viru County by submitting an application to the Lüganuse rural municipality for initiating a local government special spatial plan. A bioproducts production complex would allow adding value to Estonian wood locally, broadening the possibilities of developing wood chemistry and diversifying the economy in Ida-Viru County. The proposed plant would add value to paper wood generated in Estonia and produce bioproducts and renewable energy.
Our development plan drew active feedback from various experts, stakeholders, organisations and communities – there was approval and support as well as neutral and anxious opinions. As the developer of the future production facility, we placed great importance on a constant and open dialogue with the local community and therefore held four public meetings in the subsequent months – at the villages of Aa and Saka and in Kohtla-Nõmme and Kohtla-Järve – in the course of which we presented a more thorough overview of the planned facility, answered questions and received important feedback.
The new development would create 250 direct new and well-paid jobs in the region. The estimated investment volume of the project is 800 million euros and production would commence in 2027 at the earliest.
The EU climate policy assumed an even more ambitious aim: on 14 July, the European Commission announced a package of draft acts called Fit for 55, the goal of which is to set even higher objectives with regard to reducing carbon emissions. According to the new ambition, all of the EU should instead of 40% achieve a 55% reduction of greenhouse gas emissions compared to 1990. The 3,200 pages of the document brought no clarity, instead raising even more questions and confusion. Without agreed legal boundaries, the Green Transition would mean an insecure business environment where no long-term decisions and investments can be made. The Estonian state has to adopt its own climate policy positions, determine its boundaries and establish processes for implementing changes.
August
In connection with the Green Transition, we have been more cautious in investing into oil production. Viru Keemia Grupp made a decision to work more actively in finding eligible investment projects also outside the oil shale sector. For this purpose, we renamed the formerly non-operating subsidiary VKG Diisel as VKG Invest and invited Sten Pisang to lead our investment activities. The new companye is seeking investment opportunities outside VKG’s traditional fields of activity and does not influence VKG’s investment strategy.
The Lüganuse rural municipality council approved the initiation of the special spatial plan for the proposed bioproducts production complex of VKG. Two possible planning areas are located near VKG’s current production complexes. The local government special spatial plan will be prepared in two stages. In the first stage, the possible locations of the production complex are compared and analysed and the most suitable one will be selected. In the second stage, a more detailed solution will be developed, such as the number of buildings, the exact location on the plan, etc. The special plan process includes a strategic environmental impact assessment with regard to both potential locations and the overall impact of the proposed production unit. An environmental analysis of the combined effect with other production facilities will also be conducted.
On the Wisdom Day, 60 children of VKG’s employees started school for the first time and were all invited to the traditional school-bell party in Rakvere. Although we have suspended several of our beloved traditional events in recent years due to the spread of the coronavirus, we decided that children must have their party. We naturally applied various precautionary measures in order to minimise the possibility of spreading the virus, and the very high level of vaccination in the Group favoured the event.
September
We submitted a proposal to the parliamentary parties and the Prime Minister’s Office to develop the Estonian Climate Act that would express the social agreement necessary for fulfilling Estonia’s climate goals. The Estonian state has supported the EU’s climate neutrality goal and the incorporation of that into a regulation. In order to achieve climate neutrality, the entire social arrangement of Estonia has to be thoroughly reorganised, including the reorganisation of and tax policy management in the areas of transport, waste management, construction, agriculture, energy, industry and forestry. There is currently a legal vacuum in the area of climate neutrality in Estonia, which urgently needs to be filled, as the fulfilment of the EU’s climate policy goals requires the regulation of conduct in the Estonian society across sectors as well as the assignment of obligations to specific sectors.
The Climate Act would allow us to clearly and in detail stipulate Estonia’s national and area-specific climate goals, their timeframe, links to other acts, the EU law and international agreements, the climate terminology, appropriate and proportionate restrictions of personal rights and freedoms, the rights and obligations in fulfilling the climate goals, and the necessary standards for ensuring the fulfilment of the rights and obligations.
VKG takes part in the World Clean-up Day that was started in Estonia and has grown into an international movement in the course of which public attention is drawn to the global waste problem. The team of VKG’s employees contributes to improving the living environment in Kohtla-Järve: last year, we cleaned the Forest Park greenery zone and planted chestnut trees there.
We took another step towards making VKG’s shale oil production waste depository green. We concluded a cooperation agreement with our neighbouring company Järve Biopuhastus, in the framework of which we will test the reuse of stabilised wastewater sediment (in other words, compost) in planting the slopes of VKG’s waste depository. In the coming years, we shall test how the compost facilitates the growth and resilience of grass. In the course of the testing, the compost will be mixed with ash generated in oil production and grass seeds will be added to the mix. The mix will then be spread on the slopes. We chose the ash hill slopes facing the City of Kohtla-Järve as the testing area, as these will definitely be more pleasing for the eye and the city landscape when they are green. If the results are good, we shall extend the cooperation and permanently introduce the environmentally friendly and reuse-based greenery technology.
October
By October, 1,417 (87%) of the Group’s employees were vaccinated against the coronavirus with at least one dose, with 97% of them having completed the entire vaccination treatment.
Safety First! At the end of October, VKG Elektrivõrgud and the Rescue Board held a joint exercise in central Narva in order to practice cooperation in the case of a fire in the electrical installations of a junction substation. Practical experience and the necessary knowledge with regard to communication and access for rescue equipment will help ensure maximum safety and the functioning of the power network also in an emergency situation.
November
The Chairman of the Management Board of the Group, Ahti Asmann, and the Chairman of the Management Board of the Estonian Unemployment Insurance Fund, Meelis Paavel, signed a cooperation agreement between the two organisations. The cooperation agreement is a practical outlet for private and public sector cooperation so far and has several objectives: to offer development opportunities, increase qualifications and organise training in increasing labour demand and competition conditions and to apply support measures in jobs where the education system has not produced a sufficient number of suitable employees.
In November, court proceedings that had lasted for years were closed and Tartu Circuit Court made a decision in favour of VKG in the matter of unfair pricing of oil shale. In essence, it was not a dispute between us and Eesti Energia – the core issue was how competition law is interpreted in Estonia.
The Lüganuse rural municipality appointed Hendrikson&Ko as the performer of the strategic environmental impact assessment. This is followed by a preliminary selection of location and then the environmental impact assessment process, all of which will take approximately three years. Considering that the construction of such plants takes two years, the earliest possible time of commencing operation would be 2027, provided that preparations go smoothly.
December
President Alar Karis visited VKG on his tour in Ida-Viru County. In the course of the meeting, thoughts were exchanged about Estonia’s choice on the road to climate neutrality. VKG’s bioproducts production complex development plan was also an important discussion topic.
VKG again recognised successful students and held a festive ceremony for awarding scholarships. We motivate and support successful TalTech students with VKG’s scholarships. This is our contribution to the future, as educated, purposeful, forward-looking and broad-minded people are capable of doing great things. Over the years, we have awarded scholarships of over 120,000 euros in total.
Viru Keemia Grupp bought the Tallinn and Riga department stores from Stockmann. We are pleased to be cooperating with Stockmann in the Baltic countries. Both department stores are located in the heart of the growing capitals of Estonia and Latvia and we are therefore excited to explore further investment opportunities in order to support Stockmann’s core activities in the future. The price of the transaction was about 87 million euros in total.
We continued our good tradition and instead of hundreds of corporate presents we made a donation to the maternity department of the Ida-Viru Central Hospital. This kind of a Christmas present is doubtlessly notably important and valuable, and we hope that this good deed will make the first days of adaptation more pleasant and safe for mothers and newborns at the Ida-Viru Central Hospital. The donation will be used to purchase two scales for weighing newborns, two bilirubin measurement instruments and two bags for carrying equipment.
The end-of-the-year ‘Moving for Your Health!’ initiative announced on YuMuuv in the middle of November included four health challenges – three individual ones and one joint challenge. We achieved the joint goal of making 30 million steps and even exceeded it by making 3 million steps!