The Impact of Pollution Charges, Ash Handling and Carbon Dioxide on the Cost Competitiveness of the Fuel Sources Used for Energy Production in Estonia

The goal of this paper is to estimate the effects of pollution charges, ash handling and of the carbon dioxide quota trade on the competitiveness of natural gas, oil shale, peat and wood chips in Estonia for 2010 and 2015. The pollution charges and levels are calculated based on the Environmental Charges Act, and Regulations No 99/2004 and No 94/2004 of the Estonian Minister of the Environment. The calculations show a considerable change in the cost competitiveness of fuels. Fuel related costs of the fossil fuels with high CO2 emission factors and other environmental impacts may be doubled.