Estonian state accused of illegal state aid and violating EU environmental objectives by oil company, prompting EU Commission involvement
Allegations of illegal state aid have been made against the Estonian government by AS Terminal, a leading oil company in the region. The accusations claim that the government has allowed AS Olerex, a domestic competitor, to breach environmental requirements and gain an unfair competitive advantage, hindering the European Union’s goal of promoting environmentally friendly transportation and distorting competition in the market.
On November 18, 2024, Rauno Raudsepp, the head of AS Terminal, submitted a complaint to the EU Commission, requesting an assessment and recovery of the alleged illegal state aid given to AS Olerex. The complaint states that the Estonian government has provided Olerex with illegal state aid, allowing them to avoid using renewable energy in transport. This not only goes against the EU’s efforts to promote environmentally friendly transportation, but also creates an unfair advantage for Olerex in the market.
The complaint estimates that Olerex has saved up to €35 million per year by not having to comply with environmental requirements, and could potentially face an additional €20 million per year in fines that the Estonian government has not yet applied. The responsibility for monitoring and enforcing these requirements falls on the Estonian Environmental Board, Tax and Customs Board, and central government.
As a result of these savings, Olerex has been able to increase their market share and profits at the expense of fair competition. This has led to higher fuel prices for certain consumer segments, as competition between market participants has decreased.
The Estonian government has cited procedural complexities as the reason for not fining Olerex or imposing insufficient fines for multiple breaches of the biofuel obligation between 2021 and 2023. However, AS Terminal argues that this is an unfair and unlawful excuse. “Ensuring the effective implementation of regulations is a fundamental responsibility of the government, and they cannot use their own failure as an excuse for illegal state aid,” says Raudsepp.
The complaint also states that the Estonian government has taken a favorable stance towards Olerex, allowing them to avoid fines despite confirming their failure to comply with biofuel obligations in the transport sector. This is in direct conflict with the government’s responsibility to ensure that regulations are applied to all market participants and that Estonia contributes to the EU’s renewable energy goals.
AS Terminal, previously known as AS Tartu Terminal, was founded in 1994 and has been operating since 1968. The company has 45 service stations and is currently developing a fast-charging network for electric vehicles nationwide. They employ 330 people.
This news story was distributed by https://pressat.co.uk/.