Estonia profile

Overview

In 2023, Estonia’s final energy consumption reached 2.6 million tonnes of oil equivalent (Mtoe), representing an increase of approximately 5.6% compared to 2000 (2.45 Mtoe). The share of the residential sector, which remains the largest energy consumer, has decreased by 2 percentage point, from 39% in 2000 to 37% in 2023. The share of the industrial sector declined substantially, by 11 percentage points, falling from 24% to 13%. During the same period, the transport sector increased its share from 23% to 33% (+10 percentage points). The tertiary sector grew by 2 percentage points, while the agricultural sector increased by 1 percentage point. 

The index of energy efficiency progress, known as ODEX, measures improvements in energy efficiency across sectors or for the entire economy. It is calculated by aggregating changes in unit energy consumption at a detailed level, by sub-sector or end-use, over a specified period. The Technical ODEX excludes negative efficiency trends, meaning it can only decrease (indicating improved efficiency) or remain stable. Between 2000 and 2023, end-use energy efficiency, as measured by Technical ODEX, improved by an average of 2.1% per year. The fastest progress was recorded in industry (5.4% annually). Improvements were more modest in the transport sector (1.3%), households (1.4%), and the services sector (0.4%).  

The Energy Efficiency Directive defines three key indicators:
•New annual energy savings –  savings achieved within a given year from measures implemented in that same year; 
•Total annual savings – all savings achieved in a specific year from measures implemented in previous years; •Cumulative energy savings – total savings achieved over a defined period through all actions carried out during that period. 
Between 2000 and 2023, cumulative energy savings in Estonia reached 1.3 million tonnes of oil equivalent (Mtoe). The industrial sector accounted for the largest share (0.7 Mtoe), followed by households (0.3 Mtoe), transport (0.2 Mtoe), and the commercial and public sector (0.03 Mtoe). 

In 2023, Estonia’s total energy supply amounted to 4.15 Mtoe, representing a decrease of about 29,1% compared with 2010 (5.85 Mtoe). The most significant factor behind this reduction was the transition to new, more efficient energy production technologies and the substantial decline in the use of old, polluting systems, particularly oil shale power plants, in the energy conversion sector. Together, these technological and structural changes reduced total energy supply by approximately -1.75 Mtoe between 2010 and 2023. Additional contributions came from increased renewable energy production and improved energy efficiency across end-use sectors.

Final energy consumption in Estonia reached 2.56 Mtoe in 2023, which is over 11% lower than in 2010 (2.88 Mtoe). The decline was driven by several factors, including the implementation of energy saving measures (-0.58 Mtoe), milder climatic conditions (-0.19 Mtoe), and structural and activity changes in the economy (-0.03 and -0.35 Mtoe, respectively). However, growth in certain sectors, particularly in business and public services such as IT and national defense, partly offset these reductions by increasing energy consumption. Overall, efficiency improvements and favourable climate conditions remain the main contributors to the downward trend.

Estonia has set a target to maintain final energy consumption at 32-33 TWh/a (approximately 2.84 Mtoe) by 2030. Under the updated EU Energy Efficiency Directive (2023), Estonia's energy-saving obligations are tightened, with the maximum allowed final consumption for 2030 reduced to 30 TWh (2.58 Mtoe) instead of the previous 33 TWh (2.84 Mtoe). In 2023, final energy consumption amounted to 2.59 Mtoe, representing a decrease of roughly 6% compared to the ten-year average of 2.8-2.9 Mtoe.

A structural shift is also evident: energy demand in the service sector (notably information and communication, trade, as well as professional and technical activities) has increased, while industrial energy consumption has declined due to rising carbon dioxide prices under the EU Emissions Trading System and the impact of the COVID-19 pandemic during 2020–2023. 

Buildings

Final energy consumption in buildings increased by approximately 5.6% over the period 2000-2023, primarily due to higher consumption in commercial and public sector buildings. Household energy consumption remained relatively stable, fluctuating within the range of 0.9-1.0 million toe. In contrast, energy use in commercial and public sector buildings varied more widely - from 0.3 million toe in 2000 to 0.5 million toe in 2020.

Figure 7 illustrates the changes in household energy consumption by end-use categories in 2000, 2010, 2020, and 2023. While energy consumed for space heating accounted for 75% of final household energy consumption in 2000, its share decreased to 72% in 2023—a reduction of 3 percentage points. The shares of energy consumption for hot water preparation declined by 0.9 percentage points, while the share for lighting and household appliances increased by 3.9 percentage points, in 2023 compared to 2000.

Specific heat consumption per square meter decreased by approximately 28% (equivalent to 1.4% per year) between 2000 and 2023. This reduction is mainly attributed to the increasing use of heat pumps. Minor fluctuations in the long-term trend observed in some years (e.g., 2007–2008) can be explained by the fact that normalisation using heating degree days does not completely account for year-to-year variations in weather, particularly when those variations are significant. 

The average energy consumption per dwelling (excluding space heating) was 0.40 kWh/dw in 2000 and 0.38 kWh/dw in 2023. Regarding energy used for hot water production, consumption decreased from 0.197 kWh/dw in 2000 to 0.155 kWh/dw in 2023—an overall reduction of approximately 21%. Energy consumption for cooking declined by 9.6%, from 0.0704 kWh/dw in 2000 to 0.064 kWh/dw in 2023). In contrast, energy consumption per dwelling for lighting and household appliances increased by approximately 26% over the same period (from 0.131 kWh/dw in 2000 to 0.165 kWh/dw in 2023). 

Electricity consumption in households has grown significantly. In 2000, the average consumption was 2,463 kWh per dwelling, rising to 3,092 kWh in 2023 – an increase of approximately 25%. Electricity is primarily used for space heating, lighting, and various household appliances. Although absolute electricity consumption has increased, the proportional breakdown of uses has remained stable. Around 38% of electricity is used for heating, while the remaining 62% is used for lighting and appliances, and these shares have changed very little since 2000.

Household energy consumption decreased from 1.03 Mtoe in 2010 to 0.939 Mtoe in 2023, representing a reduction of approximately 0.09 Mtoe, or 9%. This decline is the net result of several contributing factors: energy saving measures (-0.171 Mtoe), climatic conditions (warmer winters, -0.132 Mtoe), and other factors (-0.029 Mtoe). At the same time, the use of new dwellings (+0.121 Mtoe) and the trend toward larger homes (+0.12 Mtoe) have contributed to an increased in energy consumption, partially offsetting the achieved savings.

Household heat consumption for space heating amounted to 0.749 Mtoe in 2000 and 0.665 Mtoe in 2023, representing a decrease of approximately 0.08 Mtoe or 11.2%. This reduction is the result of several combined factors, including energy-saving measures (-0.127 Mtoe), climatic conditions (warmer winters, -0.132 Mtoe), increased use of district heating (-0.02 Mtoe), etc. However, part of the achieved reduction has been offset by increases in new housing stock (+0.087 Mtoe), larger dwelling sizes (+0.09 Mtoe), and other factors (+0.017 Mtoe). Thus, although efficiency and climate-related factors have significantly reduced heat consumption, growth in the housing stock and floor area has counterbalanced these savings to some extent.

Both energy consumption and electricity consumption per employee increased steadily from 2000, reaching their peak in 2021. Since 2022, these indicators have been on decreasing. In 2023, electricity consumption per employee was approximately 3.8 MWh, compared to 3.92 MWh in 2000, corresponding to a reduction of 2.7%. Total energy consumption per employee reached the 2000 level again in 2023, amounting to 0.8 tonnes of oil equivalent (toe) per employee per year

To date, energy efficiency policy in the buildings sector has focused primarily on households, through various measures aimed at improving the energy performance of residential buildings. The government has confirmed that investments in improving building energy efficiency must continue, with the public sector expected to lead by example in both the maintenance and construction of buildings. Investments in improving the energy efficiency of apartment buildings must continue, and additional opportunities to expand state support measures for enhancing the energy efficiency of single-family houses should be identified. In the heating sector, funding is provided for the development and renovation of district heating systems. The central government also financially supports municipalities in preparing local energy supply development plans. In addition, support is planned for local heat supply solutions that serve as alternatives to district heating, provided these solutions are proven to be the most sustainable options for the region and ensure compliance with environmental standards.

Transport

In 2023, road transport accounted for 97% of total energy consumption in the transport sector. Compared with 2000, the share of road transport in increased by approximately 7 percentage points. Conversely, the share of rail transport declined by 5.9 percentage points, falling from 8.1% in 2000 to 2.0% in 2023. The share of water transport decreased slightly (by about 0.5 percentage points), while the share of air transport remained unchanged.

Between 2000 and 2023, the modal structure of passenger transport also shifted significantly. The share of buses in total passenger traffic decreased by 13.2 percentage points, and rail passenger transport decreased by 0.9 percentage points. During the same period, passenger transport by car more than doubled—from 6.7 Gpkm in 2000 to 14.7 Gpkm in 2023—resulting in an increase of 14.1 pp, between 2000 and 2023 in the modal share of cars. This increase is primarily attributed to the growth in the number of private vehicles.

Freight transport has undergone a profound structural transformation as well. In 2000, rail accounted for 88.7% of total freight transport, but by 2023 its share had fallen to 20.4%, a decrease of 68.3 percentage points. In contrast, the share of road freight transport increased by 68.3 percentage points, rising from 11.3% in 2000 to 79.6% in 2023.

Energy consumption per passenger varies significantly across vehicle types. On average, a typical petrol car consumes approximately 0.175 kWh per passenger-kilometre, whereas an electric car consumes around 0.21 kWh per passenger-kilometre. Final energy consumption per person is influenced by vehicle characteristics, occupancy rates, road conditions, and driver behaviour. Overall energy consumption of cars per passenger-kilometre has improved notably between 2000 and 2023, decreasing from 0.038 koe/pkm in 2000 to 0.030 koe/pkm in 2023. Despite this progress, considerable potential for further improvement remains.

The fuel efficiency of the Estonian vehicle fleet has remained relatively stable over the years. Fuel costs are directly related to the fleet being older than the EU average. Slightly higher fuel consumption is observed among vehicles over 20 years old; however, these account for only 8% of total vehicle energy consumption.

Although the direct potential for energy savings from replacing short car trips with walking or cycling is relatively modest at the national level (around 1%), the development of pedestrian and cycling infrastructure is a crucial cross-cutting measure. It provides the necessary conditions for the effectiveness of other policy measures—such as improvements in public transport, car-sharing systems, revised parking policies, "Park and Ride" schemes, congestion charging, and road tolling. These measures rely on walking and cycling as attractive, safe, and widely accepted modes of transport.

In 2023, energy consumption in the transport sector was approximately 11.7% higher than in 2010. This increase is primarily driven by growth in passenger transport (+0.148 million toe) and by structural changes in the sector, notably the rising share of private vehicles and road freight transport in traffic (+0.166 million toe compared to 2000). These effects outweigh the energy-saving measures (-0.073 million toe) and other reducing factors (-0.153 million toe), resulting in a net increase in transport-sector energy use.

Transport plays a crucial role in the economy and daily life. It facilitates the movement of goods and people, supports economic activity and significantly enhances quality of life. At the same time, it presents considerable risks and challenges—most notably, the need to reduce energy consumption and environmental impacts now and in the future.

Historically, energy use in the transport sector has been shaped mainly by fuel excise taxes. Excise rates have been increased ten times over the past 22 years. The government has also taken steps to promote the uptake of vehicles with lower environmental impact and reduced energy consumption. Energy-efficiency initiatives in the energy sector have so far been financed primarily through the “green investment scheme”.

Looking ahead, Estonia plans to manage and reduce energy use in the transport sector through four main areas of action:

• reducing the need for transport, including improving the efficiency and environmental performance of freight transport and implementing measures to decrease forced mobility

• increasing the use of public transport

• improving vehicle efficiency

• introducing car registration and annual taxation starting in 2025.

Industry

Energy consumption in the Estonian industrial sector has decreased significantly between 2000 and 2023, by approximately 42%, or about 2.3% per year on average. Around one quarter of industrial energy consumption is attributed to energy-intensive sectors, primarily the non-metallic mineral industry and the paper industry. The remaining traditionally energy-intensive sectors, such as the chemical industry, non-ferrous metals, and steel, have only a minor presence in Estonia’s manufacturing landscape. Instead, the most important sectors for Estonia are the forest industry and the food industry, which together form the category of "other industries". 

The most energy-intensive industrial sectors in Estonia were traditionally the cement and paper industries. However, beginning in 2020, energy-intensive clinker production ceased domestically, with cement subsequently manufactured using imported clinker. As a result, by 2023, the energy consumption required to produce one tonne of cement had decreased by approximately 96% compared to the year 2000. Over the same period, the energy consumption associated with producing one tonne of paper declined by about 45%, corresponding to an average reduction of roughly 2.6% per year.

The implementation of energy -saving measures (-0.344 million toe), structural changes within the industrial sector toward less energy-intensive branches (-0.194 million toe), and other factors (-0.005 million toe) have collectively contributed to a substantial reduction in industrial energy consumption since 2000. Conversely, increased industrial activity (+0.291 million toe) has partially offset these savings. Overall, the total energy consumption of the industrial sector decreased by 0.242 million toe between 2000 and 2023.

Current estimates indicate that the industrial sector still holds significant energy-saving potential—approximately 30% for heat and 10% for electricity. Realising this potential, however, requires the adoption of modern technologies and increased awareness across the sector. Consequently, energy-efficiency efforts must prioritise improvements in both energy and resource efficiency. To support this transition, various measures have been introduced, including initiatives to inform industrial companies about existing energy efficiency opportunities and to carry out analyses of resource use.