The aim of the study is to identify the socio-economic effects of the reduction of the oil shale industry in Ida-Viru County and to make proposals for the development of activities supporting the adaptation of the region’s economy, labour market and infrastructure to the forthcoming changes.

Major findings (check the summary in English in the published file):

  • The core companies of the oil shale sector are the heart of Ida-Viru County’s economy, both in terms of their turnover and due to their very large impact on the companies that depend on them. 40% of the largest employers registered in Ida-Viru County are oil shale companies.
  • As much as 42% of the revenue of Alutaguse Rural Municipality and 11% of the revenue of Narva-Jõesuu come from either mineral resource extraction charges or water abstraction charges, and a decrease of the charges immediately endangers the ability of the local authorities to provide services.
  • The loss of high-paid jobs due to the rapid reduction of the sector, if accompanied by a continuing depreciation of the housing stock, will entail a reduced capacity to change the economic structure, but also a deepening of negative emigration trends, especially among young people.
  • The closure of the oil shale sector means the loss of wages for the employees of the sector. Together with household members, at least 8000 people are at direct risk of falling into poverty.
  • The government should focus on supporting the establishment of new companies in different branches of manufacturing industry as well as the development of existing ones, while also promoting the growth of industrial diversity in Ida-Viru County. The manufacturing industry must be supported by the development of the ICT sector. Other important areas are environmental and green technologies, renewable energy, circular economy, hydrogen production and the tourism sector, as well as cultural and creative industries.
  • With the reduction of the oil shale sector, around a half of today’s workforce (2800 people) will need in-service training and retraining, as their jobs are closely related to the specifics of oil shale. The other half of the workforce has skills that are more easily transferable to other sectors, but they may also need labour market services to support job search.

Policy recommendations:

  1. Manufacturing industry and ICT should nationally be the top priority areas for the development of the economy of Ida-Viru County in the context of the reduction of the oil shale industry. Activities to be carried out for the development of priority areas and the need for them should be communicated to all parties at the governmental level.
  2. Increase the amount of grants provided within the framework of the activity “Support for Industrial Investments in Ida-Viru County” and the budget of the support measure.
  3. Improve the visibility and availability of existing services and grants related to entrepreneurship and the business environment in Ida-Viru County by bringing government agencies closer to the region and thereby providing additional advice on the services and grants.
  4. Support research and development with a view to reducing CO2 emissions in economic sectors, including the oil shale sector, developing the circular economy and extracting and adding value to natural resources, in particular earth elements that are of critical importance for the developing technologies.
  5. Support the diversity of curriculum options in the region’s educational institutions and training provision based on areas of growth and the region’s needs.
  6. Increase the supply of in-service training and retraining and active labour market measures in Ida-Viru County to the workforce losing jobs in oil shale companies due to the shrinking of the oil shale sector.
  7. Ensure that the information on the websites of state agencies, grants offered to companies and application forms are equally available in both Estonian and Russian.
  8. Develop a comprehensive housing stock modernisation plan for Ida-Viru County.
  9. Offer transitional support to Alutaguse Rural Municipality and the town of Narva-Jõesuu in case of rapid reduction of the sector.
  10. Carry out a thorough cross-sectional study of the health effects of oil shale mining in the county.
  11. Agree on a change management scheme to support the achievement of a just transition in Ida-Viru County – the main person(s) in charge, the institutions and bodies to be involved, the main roles of the parties and the organisation of cooperation and engagement – and enforce the agreed decisions.
  12. Ensure effective management and implementation of public communication of the planning, implementation and results of the intended changes, including the preparation of a marketing plan to promote the attractiveness of Ida-Viru County aimed at the main target groups (tourists, investors and entrepreneurs and current and new potential residents).