Estonia: Sectoral Environmental Assessment on the' Utilization of Domestic Peat and Wood as a Fuel Source for Heating Systems" Executive Summary

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Estonia: Sectoral Environmental Assessment on the' Utilization of Domestic Peat and Wood as a Fuel Source for Heating Systems" Executive Summary"

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Prepared for Estonian State Energy Department, Ministry of Economy and Estonian Ministry of Environment Prepared with funding from the Swedish Board for Investment and Technical Support (BITS) Estonia: Sectoral Environmental Assessment on the' Utilization of Domestic Peat and Wood as a Fuel Source for Heating Systems" Executive Summary Swedish Environmental Research Institute Ltd. (IVL) Interforest/Jaakko Poyry Consulting AB Sweden Swedish Development Consulting Partners AB Institute of Ecology, Estonian Academy of Sciences Faculty of Forestry, Estonian Agricultural University Stockholm and Tallinn January 1994 '-

2 Estonia SEA Si (30) Executive Summary EXECUTIVE SUMMARY Introduction Estonia is in the mniddle of the transition from a centrally planned political and economic system to a political democracy and market economy oriented system. With the breakup of the former Union of Soviet Socialist Republics (USSR), Estonia has experienced a difficult political and economic adjustment period, resulting in a substantial drop in domestic agricultural and industrial production, a disruption in international trade relations - especially with the republics of the former USSR - and a severe deterioration of the national economy. However, several political, institutional, legal, and economic changes have recently been successfully implemented and thus improving conditions for future development. Further structural reforms and major investments are however required to ensure environmentally sound economic development. The energy sector is in this respect a priority area. The short and long term supply of fuel for industry and for heating, on which the development of most sectors of the society depend, is one of the most important and strategic issues to be solved. Estonia does not have any major sources of fossil fuels such as oil, coal or natural gas, except deposits of oil shale in the northeastem part of the country. A substantial part of the fuel used thus must be imported. During the USSR period Estonia was supplied with oil, coal, and natural gas from Russia and other USSR-republics at - in an intemational perspective - very low costs. Domestic biofuels and peat fuels were utilized only to a very limited extent. The reliable supply of energy at low costs did not support any energy conservation arrangements or investments in efficient heating systems and the current energy system thus is characterized by a very low energy utilization efficiency. Neither were any special environmental protection arrangements made, although the imported oil and coal, as well as the domestic oil shale, are of very low quality. Since the dissolution of the USSR and the re-establishment of Estonian independence, the energy situation has drastically changed. Political relations and trade relations to Russia and other CIS republics (Commnonwealth of Independent States) have seriously deteriorated and are partly disrupted. The import of fossil fuels has decreased substantially as prices of imported fuels have rapidly increased and have now almost reached a world market level. Political considerations, economic constraints and organizational problems became a common element of the energy negotiations and trading with the Russian Federation. The Estonian trade balance was adverscly affected

3 Estonia SEA S2 (30) Executive Summary and a shortage of fuci for heating and industrial use came about cspecially in winter months when pcak dcmand occurs. The current situation demands a drastically changed energy policy and major investments in modem facilities arc required in order to ensure the energy supply, reduce imports of fuel, and dependence of imported fuel, increase efficiency and improve environmental conditions. A new energy policy and strategy is under preparation and expected to be adopted by the Government of Estonia in the near future. Some actions have however been taken towards a new energy policy including a policy for an increased utilization of domestic fuels - wood fuels, peat fuels and other biofuels. A comprehensive programmne for substitution of imported fossil fuels and conversion of boiler plants from fossil fuels to domestic fuels - A National Programme on Utilization of Domestic Peat and Wood Fuels has been adopted. The increased utilization of wood fuels and peat fuels require that a partly revised forest management regime has to be implemented, peat deposits will be exploited, and new harvesting, fuel processing, transportation and combustion technologies will be introduced. The new energy strategy is associated with various environmental, social, economic and other effects - positive and negative, direct and indirect, short-term and long-term. In order to assess the potential environmental impacts, review alternatives, and prepare overall mitigation and monitoring plans, a Sectoral Environmental Assessment (SEA) on the Utilization of Domestic Peat and Wood as a Fuel Source for Heating Systems has been carried out, consistent with the provisions of the Estonian "Procedure for Carrying Out Environmental Impact Assessment" and World Bank operational Directive 4.01, "Environmental Assessment". The SEA has been financed by the Swedish Board for Investment and Technical Support (BITS) at the request of the Government of Estonia and conducted jointly by the Swedish Environmental Research Institute Inc. (IVL), Interforest/Jaakko P6yry Consulting AB Sweden, Swedish Development Consulting Partners AB, the Institute of Ecology, Estonian Academy of Sciences and the Faculty of Forestry, Estonian Agricultural University. The work has been supervised by the World Bank. The main findings and recommendations of the SEA are summarized in this report. National Programme for Energy Conservation and Increased Utilization of Domestic Peat and Wood Fuels Estonia's energy policy is focused on reducing fucl imports and

4 Estonia SEA S3 (30) Executive Summary opcration costs by converting energy plants to usc lower-cost domcsfic fucls, increasing operational cfficicncy through rchabilitation of existing facilities and promoting energy conservation. Its highest priority is for investments in the district heating (DH) sector, which is the most heavily dependent on imported oil and gas. To support these objectives, the National Programme for Energy Conservation was initiated in 1992, with the aim of converting small and medium heat-only-boilers in towns and counties throughout the country to use low-cost, indigenous fuels and to promote end-user efficient improvements in buildings. This program is currently being supported by a number of donors (EBRD, Swedish and Danish Governments, G24) as well as through budgetary allocations of the Estonian Government, A District Heating Rehabilitation Project is currently also under preparation of the World Bank. The project will support improvements in DH systems in Estonia's three largest towns, Tallinn, Tartu, and Parnu, and in smaller towns and villages throughout the country. The proposed District Heating Rehabilitation Project in Estonia is focusing on the following main issues and objectives: - to reduce fuel costs and import requirements by increasing the use of indigenous fuels in heat production, in compatibility with environment and nature protection principles, to introduce energy conservation and increase the efficiency and economy of major DH systems through rehabilitation and introduction of modern technologies and materials, - to improve environmental conditions in affected areas by improving the efficiency of fuel use, facilitating the conversion or replacement of boilers from using heavy fuel oil to peat and wood fuels, reducing losses of water in DHI systems, and promoting the environmentally sound use of peat and wood as fuels, and - to support the strengthening and development of DH enterprises. DH systems are used primarily in urban areas to provide domestic space heating and hot water, as well as steam for the industry. Heat is produced either in combined-heat-and-power (CHP) plants or in heat-only-boilers and transported through pipeline networks to buildings. These systems are, in most cases not designed according to economic or service criteria and their operation and maintenance have been inadequate. The energy and water losses in pipelines are significant. Currently, operational problems exist in all parts of the DH systems.

5 Estonia SEA S4 (30) Executive Summary Estonian cncrgy production is responsible for the mnijority of tlhc air pollution in thc country. Air quality problems of regional significance arc a rcsult of the oil shaic fired Baltic and Estonian power plants near Narva and a number of smaller plants. In urban areas and towns locally significant air quality problems occur during the winter heating season, due to the use of low-quality coal, oil shale and heavy fuel oil in low-efficiency boilers used for DH and heating of individual buildings. Estonian health authorities report human health effects associated with air pollution, principally heart and respiratory diseases, especially bronchial asthma. While levels of air pollution have declined during the last several years due to the economic restructuring process, they should be expected to increase in the medium term when economic recovery occurs, unless energy conservation and environmental protection measures are adopted. In Estonia, peatland and forest areas together cover about 60% of the territory, which means that the potential quantities of peat and wood fuels are large. The potentially available quantities of wood fuels are dependent on the amount of industrial wood which is harvested for domestic use or for export. Sectoral Environmental Assessment on the Utilization of Domestic Peat and Wood as a Fuel Source for Heating Systems The scope of work of this study has been to prepare a Sectoral Environmental Assessment (SEA) evaluating the potential short, medium and long-term environmental impacts, environmental management, and monitoring issues associated with the harvesting of peat and wood raw material and their processing and use as fuels in heating systems in Estonia. The assessment would provide an evaluation of the issues related to adopting and implementing a national program and provide environmental guidelines for use in activities proposed for funding by the World Bank and other institutions. The SEA includes an analysis of possible environmental impacts resulting from the propoced programme and an analysis of possible alternative programmes. A mitigation plan and a monitoring plan are included, as well as identification of institutional development measures required to increase use of local fuel resources in an environmentally sound manner. The SEA is focusing on the use of peat and wood fuels in district heating systems for which these fuels will become a new type of material to handle and burn. For the forest industry, which naturally constitutes a major user of wood fuels, only positive effects on the economy and the environment are forcseen of a boiler conversion and fossil fucl substitution programme.

6 Estonia SEA 5S (30) Executive Summary The SEA is limited to thc production and use of pcat aicls and of wood fucls, produced out of wood raw matcrial coming dircclly from forest operations, which would include: - logging residues - branches, tops, and small trees from cleanings, thinnings and final fellings - wood of species of no or low industrial value - surplus of industrial wood - dead trees, etc. Stumps are excluded as these are too expensive to extract and process. Neither a-e fast growing energy forests included. The possible future use of either of these resources will require further economic, technical and environmental studies. The use of bark, chips, sawdust and other by-products and wood residues from the forest industry as fuel are not included. Today these are only marginally utilized by the industry and are mainly causing problems and costs for their disposal. Conversion of boilers at the forest industry processing facilities to use these materials should be emphasized. Baseline Data Recyclable wood fuels, e.g. demolition wood, waste cg 1 lstruction wood and waste packaging wood are not included in the SEA. In 1992, use of fuels in Estonia reached 304 PJ/a, which corresponds to a per capita consumption which is about 20% higher than in Sweden. Domestic oil shale is the main fuel. Some 30% of the fuel is imported in the form of fuel oil, coal and gas. The use of domestic oil shale amounts to 64%, while peat, wood fuels and other domestic fuels make up 6-7% of the total fuel supply. Table 1. Utilization of ruels in Estonia in PJla % Domestic fuels Oil shale Frinwood Peat Peat briqucttcs Othcr fucls Subtotal Imported fuels Heavy fuel oil Light fuel cil Diesel oil Gasoline Coal Natural gas Liquiried gas Other rueis Subtotal Grand total (0.0

7 Estonia SEA S6 (30) Executive Summary The Use of Wood and Peat Fuels in the Nordic Countries In tlitn beginning tl' tiie 710's the Nordic countries werc hcavily dependent uptin importcd i'uel oil. In Swctden. f1or cxamiplc. impoted oil and oil products in 1970 made up 85% (1260 PJ or 350TlWh of the tota supply ot' fucis. Bioluels. mainly black liquor from thc pulp industry, madc up 10 % (155 PJ or 43 TWh), In addition 45 TWI clectric power was generatcd in hydroelectric powcr plants.thc oil crisis in 1973 drastically changed thc condition in the energy seclor. Prices of oil increased substantially and a general shortage of' oil on the world market became a reality. This implied a heavy burden to the economy and trade balance for the Nordic countrics and the susceptibility of the energy system and the whole society bccame obvious. The situation was in sonic respect comparabie with today's situation in the Baltic countries. Political measures were taken in all Nordic countrics to conserv energy. to reduce imports of oil, and to increase the use of domestic fuels. The strategy and development focused on differcnt domestic raw materials, dependent on the national conditions. In Sweden, rich on forests and peat land, and with a well built-up forest industry, the highest priority was given to wood fuels and peat, but also household wastes and various agriculture crops were considered as important domestic raw material sources. The development was similar in Finland. although peat. by tradition, was given a higher priority. The development in Denmark has focused mainly on straw and agriculture crops, wood fuels and household wastes. Norway. rich in domestic oil resources, focused the dcvelopment on the exploitation of these resources. To achieve the overall goals - i.e. energy conservation, reduced import. and increased use of domestic fuels - massive research and development programmes were started. Economic measures were taken in the form of increased general energy taxes, increased taxes and fees on fossil fuels, subsidies to peat and biofuel production projects and to boiler conversion etc. A massive technical extension and public awereness programme was also implemented. Parallel to the oil crisis and the rapidly increasing oil prices in the 70's an intensive discussion was also ongoing concerning environmental disturbances from the energy system and the need for environment conservation. The green house effect was brought to the knowledge of politicians and the public at large. During the 80's and early 90's when oil prices decrcased again and became more competitive to other fuels, the environmental considerations have had a more adjacent position. In Sweden for example. the environmental questions to a largc extent during the last decade have been the driving force for an increased utilization of domestic biofuels. Taxes and fees have been related more to the environmental damages caused through the use of various fuels - taxes on emissions of carbon dioxide (CO2) and sulphur (S), and fees on emission of nitrogen oxides (NOx). None of these taxes or fees fall upon wood fuels while the use of peat fuels requires payment of the sulphur tax and the NOx fee, but not the CO2 tax. The economic measures have been complemented with restrictions concerning the use of wood for fuel and the development of peat production sites, emission limits and flue gas cleaning. localization of fuel production plants and boiler houses, helth risks, etc. During the 70's and 80's specific permits were required in Sweden, according to th: Law on Utilizatioji of Wood Raw Material, for all wood fuel production plants and wood fuelled boiler plants, new or converted, consuming more than m 3 /a (solid volume) of wood raw material. The law was applicable to wood raw material which was a potential source of raw material for the forest industry. It was aimed to control the extension of the wood fuel sector and avoid competition with the forest industry. The law is no longer valid as there is now a substantial surplus of wood raw material in Sweden and there is no risk that the wood supply to the industry will be jeopardized. No specific restrictions, *n addition to what is specified in the Forestry Act and the Environmental Act for Conventional forestry, are applicable to wood fuel harvesting. Opening up of new peat bogs and harvesting of peat for fuel (or other purposes) are strongly regulated. Specific environmental assessments are required before any activities can start. Permits and approvals are also required for the design of drainage systems, water quality monitoring, road building, environmental mitigation actions, etc. Specific permits are also required for localization of fuel production plants or peat and wood fuelled heating plants. Allowable emission of sulphur is regulated by law, while only general guidelines are specified for emissions of nitrogen oxides and solid particles. However, in the permission process, individual judgments for a single production unit sometimes result in more strict limits than the guidelinespecify. 'Me energy conservation and fuel conversion programmes have been successful and today domestic fuels play a tnuch greater role in the energy systems in the Nordic countries. In Sweden peat and domestic biofueis in 1992 made up around 24% (256 PJ or 71 TWh) of the total supply of fuiels (1050 P3 or 292 TWh). This imnplies an increase of some 65% since 1970 or about 100 PJ. Electric power generated in hydroelcctric power plants or nuclear power plants is not included in above figures but reached some 138 TWh. Wood fuels madc up roughly 115 PI (32 TlWh) corresponding to some 16 Mm 3 of fresih wood (solid volume). Digester liquor from the pulp industry contributed with somc 103 Pl (29 TWh). Peat fuels made up around 12 PJ while thc use of houschold wastes rachcd some 17 ri. In a:ddition somc 9 PJ. mnainly wood fuels and digester liquor, were used l'or p(ower 8ecrieatio)n at the forest inclustry.

8 Estonia SEA S7 (30) Executive Summary Although not largc in arca (45,215 km 2 ), Estonia is rclatively rich in natural resources for energy production. Thc oil shalc. located in the northeast of Estonia, forms the basis for power production and to a lcsser cxtent heat production. The amount of registered deposits is about 4 billion tonnes, of which about 1.7 billion tonnes are suitable for mining. Annual oil shale production is currently million tonnes (1993). Peat resources are also large, with about 9,800 fens and bogs covering a total area of about 10,000 km 2 (Figure 1), corresponding to 22% of the total Estonian territory. Total peat reserves are estimated at approximately 2.7 billion tonnes, of which only about 1.4 million tonnes have been extracted annualy. ~~~~~~~~ ~r.c Figure 1. Peatland areas in Estonia. Source: Estonian SSR Encyclopedia. Forest resources are substantial as well, with about 2.0 Mha of productive forests in 1991 or 44% of the country (see Figure 2). The standing volume reaches (1991) some 270 Mm 3 s (solid volume). Harvesting has decreased substantially over the last years. During 1991 and the immediately preceeding years some Mm 3 s of wood were extracted as an average. For 1992 the harvested volume is estimated at 2 Mm 3 s, corresponding to % of the standing volume. The harvest for 1993 is supposed to be even lower. The tree biomass production (stemwood, tops and branches) has been estimated at about Mm 3 s per year, including alsc some volumes from non-forest land (bushland, reforested agricultural land). About 2-3 Mm 3 s is judged to be the pctential annual qouantity of biomass available for fuel at a harvest level corresponding to the average harvest the years before the independaricc, wood waste produced at the forest industry not included. As pcat fields and forests are evcnly

9 Estonia SEA SB (30) Executive Summary distributcd ovcr the country and havc only becti partly cxploitcd to-date, a grcat potcntial cxists for increased usc ol' Ilicsc rcsources in hcat production. The most natural user of wood fuels is the forcst industry. However, the forest industry inainly uses wood wastc produced in the own processes. Thus most of above mentioned potential supply at tree biomass for fuel will be available for private households and for district heating plants. Current use in the private sector, estimated at approximately I Mm's/a, would leave some 1-3 Mmn3s/a for the DH-sector. Figure 2. Forest areas in Estonia. Source: Estonian SSR Encyclopedia. - H-~~~N Ntm 4m I~~~~~~~~~~~ I'< Figure 3. Main nature protcction areas in Estonia. Sourcc: National Report of Estonia to UNCED 1992.

10 Estonia SEA S9 (30) Executive Summary Nature protection has a long tradition in Estonia. In 1910 a bird sanctuary was cstablished on the Vaika islcts in the westcrn Estonian archipelago, and Lahcmaa National Park was established after World War II. In 1991, about 12% of the Estonian tcrritory was protectcd under diffcret types of nature protection regimes (national parks, nature reserves, protected arcas, etc.). Thc main nature protection areas in Estonia, illustrated in Figure 3, include many peatland areas and forest areas. Estonia is heavily dependent for its heat production on imported fossil fuels. The boiler plants were constructed prior to the break up of the USSR, at which time the price of oil and gas within the USSR was kept considerably below world market prices. For this reason, most boiler plants were designed to use only gas or heavy oil as fuel. Estonia has traditionally exported surphls electricity generated from oil shale to Russia and Latvia, in exchange for import of oil and gas. The economic recession throughout the former USSR has resulted in a dramatic reduction in the demand of clectricity, and since 1990, imports from Estonia has declined with some 60%. During 1992 and the first half of 1993, Estonian import of fuels accounted for about 30% of total volumes of fuel utilized for all purposes in the country. Although the share of imported fuels has been declining during recent years, it still accounts for a substantial part of Estonia's total expenditures for imports, siice the CIS prices of oil and gas have increased towards world market prices. Investments which would allow for efficient use of low-cost domestic fuels would significantly contribute to improved trade balance and balance of payments. Preliminary estimates of the potential available quantities of peat and forest biomass for fuels, have shown that 1-2 million tons peat/year can be excavated and about 2-4 million m 3 s of wood (stemwood, tops and branches) should be possible to harvest. The wood fuel quantity is of course very dependent on the quantity of industrial wood (saw logs, pulp and boardwood) taken out. The lower part of the interval refers to a harvesting level of the same magnitude as the years before independance. The upper part of the interval refers to a harvesting level of industrial wood, guided by the mechanical wood industry, approximately twice as high as the earlier level. These quantities of peat and wood fuels represent PJ/year, corresponding to about 50% of the imported fuel in 1992 (see Table I above). The benefits to be derived from the proposed investments comprise savings in cost of fuels and lower environmental fees due to lower emissions. These savings are in relation to costs of operating the boiler using fuel oil alone. The financial implications of emission reductions have been assessed on the basis of current Estonian and Polish environmental fees. The Polish fee structure is similar to the one used by thc Baltic states,

11 Estonia SEA S10 (30) Executive Summary bit rcnccis bcttcr thlc "world market price", althougih it is lowcr than in several Wcstcrn European countrics, suchi as Swcdcn. Thcre is no world market price for fuel peat and wood chips and the calculations arc based on currcnt Estonian prices. The projections are based on the following prices for fucl, including 30 km transport (Table 2). Table 2. Assumed prices for alternative fuels, delivered to boiler houses. EEKIM EEK/GJ EEK/tonne Wh Fuel oil Wood chips Sod peat The economic internal rate of return (ERR) has been calculated over a period of 20 years, which has been assumed to be the technical life of the installation. The table below (Table 3) summarizes the projected economic results for boilers converted and fueled by respectively wood chips and peat. At the current Estonian environmental fee level, the ERR could be considered high, especially if peat is used as a fuel. If higher environmental fees were introduced, the rate of return would increase especially for wood chips. Table 3. Projected economnic rate for return (ERR, in per cent) for boiler conversions. Environmental ree level Estonian Lalvian Polish Wood chips Peat To achieve zero economic return, current price of EEK 65 per MWh for wood chips could increase with about 45 per cent, and the price of peat with about 57 per cent, at present environmental fee level. If Estonia introduced a carbon dioxide tax for fossil fuels similar to the Swedish one, the price of wood chips and peat could increase considerably. The main risk with the proposed boiler conversions would, in addition to increased fuel prices, appear to be capacity utilization and increased cost of investment. A sensitivity analysis indicates that the project remains economical viable under severe conditions.

12 Estonla SEA Si 1 (30) Executive Summary Major Environmental, Socio-Economic and Other Impacts Major environmental, socio-economic and othcr impacts of the proposed wood and peat fucl programmc arc summarized in Table 4. It should be noticed that the potential impact of the proposed programme can currently only partly be quantified, as no stratcgy or detailed implementation plan yet has been prepared and officially presented. Nor are the financial and cconomic conditions prcsently clear. The level to which domestic peat and wood fuels will be introduced in DH systems in substitution for fossil fuels can be decided only after their potentially available physical volumes are established, including necessary reductions in their amounts, due to environmental considerations. Cost and price competativeness to the price of other fuels, as well as the paying capacity for these fuels of DH companics in comparison to other potential consumers needs to be assessed in greater detail. The futurc development of the forestry and the forest industry sector will in this respect have a great influence on to what extent wood fuels are available to and possible to introduce to DH systems. An overall supply-demand balance should be prepared, giving full consideration to the future development of the forest industry and its use of industrial wood and wood fuels and corresponding production of wood wastes usable for fuel. In general, the proposed fuel conversion programme will have mainly positive effects compared to the alternatives. It will reduce the need for imported fuel, thus improving the balance of trade. It will improve environmental conditions, especially air quality through reduced emissions to the air (SOx, NOx, CO) and especially when considering wood fuels. It will create a market for small dimension wood, thus improving the economy in forest cleaning and thinning operations. Employment will increase, especially in rural areas. Opportunities will increase for private business (entrepreneurship) related to fuel harvesting, processing, transportation, maintenance, business services, etc. Implementation of the full programme would result in some 2-4,000 new jobs. Cleaning up and extraction of logging residues would facilitate access to the forests for recreational purposes and are generally considered positive for the public at large. The modernization of DH plants and heat distribution systems, and the introduction of modern fuel production technoiogy will substantially improve the efficiency in energy utilization. Local manufacturing of boilers, fuel production and fuel handling equipment would create opportunities for the domestic manufacturing industry. The proposed program would significantly increase the reliability of fuel supplies to secondary cities and villages, thus improving the reliability of heat and hot water supply during the winter season. The influence of the program on air quality is strongly depcndent on the amount and type of fuels which will be ravored for con-

13 Estonia SEA S12 (30) Executive Summary version, and the extent to whichi liuc gas cleaning cquipimcnit is Used in racilitics. or Ihc importcd fuel prcsently used natural gas is the cleanest regarding the cnvironmental aspects wlhilc hcavy fucl oil and coal can give relatively high emission lcvcls. Or the domestic fuels, wood is the most favorable from the cnvironmental point of view compared to peat. Thus a replacement of natural gas generally gives a negative contribution to air quality while substitution of coal, heavy fuel oil and oil shale will reduce the air emission levels. The co-firing of wood with a sulphur containing fuel generally can reduce the SOx emissions. The use of flue gas cleaning equipment can generally reduce the emissions of particles, SO, and NOx by 60-95% at a combustion plant. It should be noted that the emission of alkaline particles can in many cases contribute to a reduction of the acidification effects of SOx and NOx. Thus installation of pollution abatement equipment to remove only particles can eventually have a net negative environmental effect. The improved air quality will reduce health problems in general. Specific health risks connected to spores and dust are associated with the production, storing and handling of both wood fuels and peat fuels; however, these are not considered to be a significant risk to workers under normal conditions. Possible negative effects may occur from the harvesting of raw material and fuel processing in forest areas or at peat production sites from noise and dust at these locations. If not properly located the occurrance of noise, dust and heavy traffic may cause disturbances to people near the transport routes and in the surroundings of the DH plant. Regular forestry operations, including drainage of wet areas, soil preparation, cleaning, thinning and final felling may have an adverse impact on the ecological characteristsics of the forests. Modem forestry methods decrease the occurrence of dying and dead wood, change the tree species composition and age distribution, and decrease the number of old trees in forest stands. The occurrance of forest fires is mitigated. These changes of habitats lead, in most cases, to a reduction of biodiversity. Certain forest ecosystems with high biodiversity, like deciduous wet forests and old growth forests, are more sensitive to changes of habitats than others such as coniferous forests on dry soils. In comparison to the impact on flora and fauna caused by conventional forestry and extraction of industrial wood, the additional impacts from harvesting of biomass for energy purposes are, in most cases, marginal. However, the adverse impact caused by the convcntional forestry opcrations are strcngthened and certain restrictions and guidclincs should bc

14 Estonia SEA S13 (30) Executive Summary inmplenmentcd to mitigaic thcsc impacts (sec Propo.scd Miligafion Plan bclow). Loss of nutrients, dctcrioration of organic matter. lcakagc of nitrogen, physical damage to thc soil are olhcr adverse impacts that mav cause long-term effects to soil, ecosystems, and also on the future growth of the forest. Not only the forest area may be negatively affected, but also surrounding aicas, groundwater, and downstream surface water systems within the watershcd area. Careful planning and monitoring is required, as well as various mitigation actions that will reduce these potential adverse effects (see further below). Deterioration of the Estonian forest industry over the last years has resulted in a substantial surplus of especially small dimensioned wood. The saw mill industry is expected to recover quickest thereby increasing the demand for saw logs and incrcasing the imbalance between the demand for small and large dimension wood. Some small dimension industrial wood (pulpwood) is expected to be exported. As long as the surplus of small dimension wood is available, this raw material should be given the highest priority for use as fuel (besides forest industry wood wastes). This would be economically beneficial both for the forest industry and the energy sector, and the environmental impact in the forest area would in principle be restricted to the impact caused by the conventional harvesting. In the long term, when the forest industry has been restructured and is consuming the major part of the available industrial wood, the energy sector must focus rnore on logging residues, deciduous trees of no or less industrial value, dead trees etc., thereby increasing the potentially adverse environmental impacts. An overall wood raw material supply-demand balance should, as mentioned above, be prepared in order to avoid future environmental problems and incorrect investments in the DH systems. The positive effects mentioned above for the production and use of wood fuels are partly also relevant for peat fuels. The effects on the air quality are though not as positive as for wood fuels, but air emissions from peat are usually less than compared to buming of heavy fuel oil or coal. The environmental impacts are substantial, when developing a new peat harvesting site with adverse impacts to ecology and local water quality. However, by initially limiting the harvesting of peat for fuel to production sites already drained and to sites where harvesting of peat for fuel is currently occurring, or where harvesting operations have previously been undertaken for soil improvement material, additional environmental impacts can be significartly reduced. Adoption of an effective environmental assessment system for the development of peat resources could be used to minimize potential impacts for harvesting operations,

15 Estonia SEA S14 (30) Executive Summary Analysis of Alternatives dcvclopcd ovcr thc mcdiunm and long-tcrm. It should bc notcd that mnassivc harvesting of peat occurrcd in Estonia during thc USSR period, mainly for thc production of peat to be used for soil improvement material in the agricullural sector, for tree nurseries, and for use on the floor in stables. This harvesting has now significantly decreased, allowing for continued harvesting of peat fuels on the same sites. It should however also be noticed that peat usable for soil improvement is generally not of a quality suitable for fuel, while the competition for the peat from these two types of utilization is limited. Leaching of nitrogen and other substances with the run-off water, disturbances to the ground water, fire hazards, noise and dust are other adverse impacts that must be carefully considered in the planning and monitoring of the peat harvesting, storing and handling operations at the production sites. Noise, dust. heavy traffic, fire hazards must also be considered in site sclection and planning of the DH plant. Mitigation actions to address these issues are outlined below. The proposed programme, presented above, on the Utilization of Domestic Peat and Wood Fuels for Heating Systems, has been reviewed and compared with some alternative programmes, one of which is the No Action Alternative. The main characteristics of the proposed programme and the alternative programmes are sumnmarized in Table 5 The No Action Alternative implies that fossil fuels in the future will continue to be imported and used as a major type of fuel for heating, especially in district heating systems. The use of wood fuels and peat fuels will remain at the current low level. No arrangements will be made to improve efficiency in energy utilization or to reduce emissions. The No Action Alternative does not solve the problem with irregular and unreliable access of energy during the winter heating season. The No Action Altemative is not realistic, as there will be a strong economic and environmental pressure to rebuild and improve existing facilities, even if no substitution of oil and coal is made. Thus a second alternative, considering a continued use of imported fuel, but with extensive investments in new modern boilers and heat distribution nets, and with installation of flue gas cleaners is more realistic than the No Action Alternative. This would improve efficiency of energy utilization and reduce emissions but it would demand high investmcnt costs, and continued need for purchase of imported fuels. This alternative would not improve the trade balancc or create any local employment opportunities. Ncithcr would it crcatc any markct

16 Estonia SEA S15 (30) Executive Summary Proposed Mitigation Plan for small dimcnsion wood from clcanings and thinnings. In Table 5 two altcrnatives are also included considering substitution of imported fossil fuels with wood fuels only or substitution with only peat fuels. Ncither of these alternatives are considered as morc favourable than the proposed programme, which will allow for a much higher flexibility and adaption to local conditions and to the local availability of wood fuels and/or peat. Table 6 provides a summary of proposed mitigation actions, which should be considered for adoption by the Government of Estonia in order to reduce potential environmental adverse impacts from the proposed programme. It is recommended that the following actions are adopted: Energy Policy - analyses should be prepared to determine the optimal level of fuel substitution and boiler conversion;. a supply-demand balance should be prepared for both fuel woods and peat and used as a management tool: - that primarily heavy fuel oil and coal are substituted to the fullest extent possible based on the above analyses; - that wood fuel and peat prices be regularly reviewed and adjusted to assure they promote resource conservation, cover management costs, provide for rehabilitation of peat areas and reseeding of wood harvesting sites. Wood - that possible surplus of stemwood, that is not used by the domestic industry and not demanded on the export market, be given the highest priority for use (pulpwood, wood of species of non-industrial value, small trees etc); - that branches and tops are extracted only once during the rotation period and that the material is allowed, as much as possible, to dry in the stands, in order to have needles and leaves to fall off before extraction; - that branches and tops for fuel are extracted only from areas with fertile soils with enough organic matter. More detailed guidelines should be worked out; - that extraction of wood raw material for fuel is avoided on wet forest and other sensitive areas (e.g. old growth forests); - that harvesting of wood will not influencc the existing compcnsating network and sustainability of thc cnvironment;

17 Estonia SEA S16 (30) Executive Summary Monitoring * that harvcsting and wood lticl production systcicns arc primiarily dcsigncd for storing and chipping ol' wood raw rnaterial at roadside and that storing of fuel chips, cspceially at the DH plant, is reduced to a minimum; - that transportation of wood fuels are carefully planned to avoid road damages in autumn and springtimc and to secure accessibility to the fuel during the whole heating season; - that environmental guidelines be adopted for wood fucl production. Peat - that harvesting of peat for fuel purposes be concentrated on already drained peatlands: - that the preparation of the peat fuel production sites and their drainage systems are carefully planned; - that careful fire protection plans are prepared for peat fuel production sites and for boiler houses; - that storing and transportation of peat are carefully planned to avoid road damages in autumn and springtime and to secure accessibility to the fuel during the whole heating season; - that rehabilitation plans for the peat harvesting sites are included at the initial planning stage and required to be prepared within 12 months for existing harvesting sites; - that fully exploited peat areas should be considered for reuse as wetland areas or for other nature conservation and hydrologic management purposes; - that environmental guidelines be adopted for peat harvesting. The basic environmental monitoring programmes of Estonia, are of a quality and quantity sufficient to provide basic baseline monitoring data for the proposed program. The Environmental Information Center, of the Ministry of Environment, is responsible for data collection concerning the state of the environment. A Nature Management Geographical Information System (GIS) has been developed, on the basis of PCARCInfo, which includes data layers concerning water and air pollution sources and forests. The Ministry of Environment, has a responsibility to evaluate the present monitoring programmes, and the results obtained for the different monitoring activities, as well as suggest an updated content of the national and local monitoring programmres. The Regional Environmental Offices have an important task to participate with their knowledge for the specific regions. Table 7 illustrates potcntial monitoring issucs directly conncc-

18 Estonia SEA S17 (30) Executive Summary Institutional Strengthening ted to thc proposed activitics and thcir assumllcd imilpacts in ror'est and pcatland areas, such as harvesting, transport and storage, and combustion of wood and peat fuels, rcsulting in cnissions to air and production of wastes (wood and peat ashes). The financing of the monitoring programmes that have to be conducted, because of the wood and peat fuel harvesting and associated activities, should be carried by the fuel production and boiler plant enterprises with quality control and review by the Ministry of Environment. Costs for the monitoring program may be provided by special fees for wood and peat harvesting. The content and extent of the monitoring in forest and peatland areas where harvesting and excavation for biomass fuel purposes are conducted, and emission monitoring at boiler plants, must be approved by District Environmental Offices, and in certain occasions also by national environmental authorities. Measurcs should be taken to strengthen local air quality monitoring capacities and to train Estonian experts in monitoring enforcement techniques. It is recommended that the proposed introduction of peat and wood fuels be combined with a comprehensive training and extension programme emphasizing efficient production methods. economic and environmental considerations. This should include a service of training activities directed to wood fuel producers, peat fuel producers, district heating utilities and District Environmental Offices. These training programmes should be of a practical nature and focus on the implementation of the proposed environmental guidelines for wood harvesting and utilization. Training should also be provided to peat fuel producers concerning the design and implementation of reclamation plans including effective techniques for the reestablishment of e.g. wetlands. With respect to an optimal organisation and collaboration between authorities involved in the environmental, technical, economic and legal issues, that are necessary to handle for the comprehensive boiler conversion programme, experiencies from other countries (e.g. Sweden and Finland) ought to be reviewed. Government and Non-Governmental Organization Consultation An important part of the preparation of an environmental assessment is to conduct consultation meetings with governmental authorities and non-governmental organisations (NGOs). This special task is also outlined in the World Bank's Operational Directive OD During the consultation meetings information on the project objectives and progrcss, findings and results, are to be discussed, and the invited authori-

19 Estonia SEA S18 (30) Executive Summary tics/organisations have possibilitics to discuss rcelvant topics. During thc prcparation pcriod (October Januaiy 1994) for the "Estonia: Sectoral Environmenial Assessmcnt on Utilization of Domcstic Peat and Wood as a Fuel for Hcating Systcns", a number of mcclings have been held, as follows: October 7, 1993 October 8, 1993 Ministry of Environment. Coalition Clean Baltic, Secretariat in Estonia, November 15, 1993 Estonian State Energy Department November 18, 1993 Estonian State Energy Department Decembcr 15, 1993 Estonia State Energy Department and Ministry of Environment December 16, 1993 Ministry of Environment and Tartu Environmental Office January 11, 1994 Estonian State Energy Department and Ministry of Environment January, 20, 1994 Coalition Clean Baltic, Secretariat in Estonia; Estonian Fund for Nature; the Estonian Green Party; Estonian Green Movement; the Botanical Society; the Estonian Geographical Society; and the Academical Society of Forestry.

20 Estonia SEA Sl9 (30) Executive Summary TABLE 4. SUMMARY TABLE OF POTENTIAL IMPACT OF PROPOSED WOOD AND PEAT FUEL PROGRAMME; WOOD FUELS Tvpe oimpact Description Wood Fuels A. Harvesting Landscape The actions connected with wood fuel harvesting will be marginal in comparison with conventional logging of stemwood. Nutrient Losses All wood harvesting causes losses of nutrients from forest areas. In comparison (Ca. Mg, K, P) to conventional logging of stemwood, the additional harvesting of logging residues will increase the loss of common soil nutrients by times. About 60% of most nutrients are found in the needles and leaves of thc trees. Changes in nutrient balance also depend on soil quality and deposition from the air. Deterioration of Organic Matter Extraction of stemwood and logging residues reduces the organic matter in the forest. The additional reduction caused by extraction of tops and branches should however not be any major problem, except on poor and degenerated soils, as long as the nutritional balance is preserved. Leaching of Nitrogen Wood-harvesting causes leaching of nitrogen from forest soils. Whole-tree harvesting has an insignificant effect on nutrient leaching from harvested art-as. Flora Wood harvesting damages the plant cover and changes drastically the ecological conditions in the forest area and adjacent areas. Plant species composition will be changed. For most species the conventional harvesting of stemwood is the most critical operation. The additional impact caused by extraction also of tops and branches is Iess critical. Some species will bc favoured (e.g. birch, bilberry. cowberry and grass). while the impact will be adverse to other (e.g. raspberry). The effects to some lichens, mosses and decomposing fungi mav be drastic. Fauna Wildlife is seriously disturbed by conventional forestry operations, especially by clear cuttings and by selective cutting/thinning, if also all old and dead trees are cut and extracted. The additional effect of extraction of tops and branchcs is marginal to mammals and birds, and limited to insects and other small species. provided that some tops and branches are left to rot. Soil Damage Operations with heavy machines may cause severe damages to soil and plant cover. Wet areas with low bearing capacity of the soil are especially sensitive. Erosion should not be a major problem in Estonia, neither should soil compaction. Cold winters with deep frost will break up the compacted parts and restore the soil. Emissions to Air, Soil and Water Mechanical harvesting implies emissions to the air from power saws and forest machines, as wcll as a risk for leakage of oil and lubricants to the soil and water. Careful operations and maintenance of the machinery should however reduce the impact to a minimum. Accidents and Health Risks The risk for accidents and injuries in harvesting of tops and branches is comparable to the risk in conventional forestry..b. Transn2ort and Storage Increased Traffic. Traffic Traffic intensity will increase, which may be disturbing in densely build-up Accidents, and Damages to Roads areas. Wear and damages to the road network will increase, especially to forest roads when used in springtime. Road maintenance costs will increasc. Emissions to Air, Soil and Water Emissions to the air from trucks and other diesel or gasoline machines. Risk for leakage of oil and lubricants. Noise and Dust Transport, processing and handling of wood fuels can cause high noise and dust levels, which may be disturbing when conducted or located close to houses and If other buildings.

21 ---onia SEA S20 (30) Executive Summary TABLE 4 cont. SUMMARY TABLE OF POTENTIAL IMPACT OF PROPOSED WOOD AND PEAT FUEL PROGRAMME; WOOD FUELS CONTINUED ':Tpe of Impact Description _ rc Ha:z.ards Extraction of tops and branches from ithe forest area reduces the material for possible forest fires. Storage of wood chips or otherwise crushed wood raw material in large piles implies an increased risk for spontaneous ignition at ; storage sites. ealth Risks There is a certain health risk (allergy) from spores and dust.. Combustion and Air Quality Ox-cmission Will be reduced compared to heavy fuel oil and coal combustion. Generally wood fuels contain only small amounts of sulphur and thus the generation of SOx in the combustion will be small. Ox-emission Will be reduced compared to heavy fuel oil and coal combustion. The nitrogen content in wood is fairly low, which will result in a relatively low emission of NOx. However, the NOx emission is strongly dependent on the combustion conditions and thus a higher emission level may occur under certain combustion conditions cmission The net contribution of C02 emissions from biofucis can be considered to be negligible in view of the C02 uptake through photosynthesis. D-cmission The emission levels of CO and hydrocarbons are mostly dependent on the combustion conditions and can be kept relatively low with a well controlled combus- tion process. irticle emission The particle emissions can be higher than for oil and coal firing, in spite of wood's lower ash content and thus particle cleaning equipment should be considered. I Mctal emisson Due to higher emission levels of particles, the emission of metals can be signiricant under certain circumstances and in some locations. Particie cleaning equipment should be considered. High metal concentrations can disturb biological processes in the soil and be toxic for flora and fauna. Thus the metal content of fuels and ashes should be subject to periodic analyses. Air Quality in Gencral The improvement of the total emission levels and also the air quality is dependent on which fuel is favoured for replacement. Thus if coal or heavy fuel oil is replaced with wood a slight improvement of the air quality can be expected. On the other hand, if natural gas is replaced, a slight deterioration of the air quality can be expected. The deposition will in many aspects follow the same pattern as l D. Wastes Solid Residues E. Other Issues _ Economic/Financial Trade Balance/Foreign Exchange Technical Knowhow Entrepreneurship Employmcnt Hcalth Problems air quality. With careful planning the ash from wood firing can be recycled back to the forest area. Alternatively, the ash can be deposited in ash pits with adequate control for leaching etc. Reduced cost of fuel and environmental charges would result in improved financial and economic return on investment. The return is sensitive to level of environmental fees and charges. Reduced dependency on imports, world market/russian price fluctuations,and allows for a more reliable fuel for heating requirements. Improved foreign cxchange balance. Transfer of technology in forestry and combustion technology would maintain and improve the high level of technical skills in Estonia. Opportunities for development of small and medium sized firms in several economic sectors. Seasonal employment opportunities will increase. There is a certain health risk (allergy) from spores and dust in the wood fuel. Therc is also a risk for increased levels of canccrogenic compounds locally

22 Estonia SEA S21 (30) Executive Summary TABLE 4 cont. SUMMARY TABLE OF POTENTIAL IMPACT OF PROPOSED WOOD AND PEAT FUEL PROGRAMME; PEAT FUELS Tv e of Im act Description Peat Fuels A. Hartrestin Landscape Opening up of new peat production sites will drastically change the landscape and the aesthetic value of the area. Other uses of the peatland are not possible. Leaching of Nitrogen Changes in water table, oxygen levels and ph regimes can cause increased leaching of some substances (e.g. nitrogen, phosphorus and iron) from the soil. The rnain reason for increased leaching is however the absence of a nitrogen uptaking vegetation. rflora Pcat harvesting destroys the plant cover of peat fields and drainage will influence larger areas, where the conditions for plant growth can improve. Drastic effects occur when removing all vegetation before harvesting on former virgin peat lands. Comparably smaller effects occur on already drained peat lands. Fauna Wildlife on peatland will be destroyed by peat production and drainage. Used peatlands can be renovated as wetlands to provide habitat for rare and endaneered species (insects, birds, animals, etc.). Hydrology and Groundwater The groundwater table can be lowered locally in connection to draining of virgin peat land. High water flow and intensive rainfall cause crosion of harvc-sted areas. with episodic increase of organic and inoreanic particles in run-off water. Surface water and Run-off Water Increased run-off and losses of particulatc and dissolved organic and inorganic compounds during draining operations in virgin peat land would occur. The hydrology and water chemistry is stabilized after the dewatering phase and limited to a small increase of particulatc transport and concentrations of nitrogen. High water flow and intensive rainfall cause erosion of harvested areas. with episodic increase of organic and inorganic particles in run-off watcr. Noise and Dust Noise and dust will increase in the vicinity of the harvesting sites a little during.roduction periods (summer). Fire Hazards Substantial fire hazards during production periods (summer). Fires can be caused by self ignition in peat storage and by machines. cigarettes or other careless handling with fire. B. Transport and Storage Increased Traffic. Traffic Traffic intensity will increase, which may be disturbing in densely build-up Accidents. and Damages to Roads areas. Wear and damages to the road network will increase, especially to forest roads when used in springtime. Road maintenance costs will increase. Emission to Air. Soil and Water Emissions to the air from trucks and other diesel or gasoline machines. Risk for leakage of oil and lubricants. Noise and Dust Transport, processing and handling of peat fuels can cause high noise and dust levels, which may be disturbing when conducted or located close to houses and other buildings. Fire Hazards Substantial risks for fires in storing, processing and handling the peat. Sce Peat l Fuels above, A. Harvesting C. Combustion and Air Quality _l SOx-emission The sulphur content of Estonian peat is on average %, but this value can vary significantly. In general it is expected that SOx-emissions will be reduced compared to heavy fuel oil and coal combustion. Sulphur emissions cause local effects on human health and sensitive plants in addition to regional acidification effects.

23 -- onia SEA S22 (30)_ Executive Summary TABLE 4 cont SUMMARY TABLE OF POTENTIAL IMPACT OF PROPOSED WOOD AND PEAT FUEL PROGRAMME. PEAT FUELS CONTINUED. v'pe or Impact Description Ox-emission Will not significantly change compared to fuel-oil or coal. Thlc nitrogcn contciin of peat is usually fairly high however, which can result in a relatively hiigh emission level of NOx. However, the NOx emission is strongly dependent on the combustion conditions and thus the highest levels of NOz. emissions can be prevented. Effects from emissions include acidification, eutrophication and oxidant formation (regional) and direct effects on human and plant health (local). 02-emission The emission level of C02 is relatively high for peat in relation to its heat content. The net contribution of greenhouse gases from peat as an energy resource is however, not clear. 0-emission The emission levels of CO and hydrocarbons are mostly dependent on the combustion conditions and can be kept relatively low with a well controlled i- _r_ic _-emissioncombustion process. irnicle-emi.ssion The particle emission can be higher than oil and coal combustion and tlius - ~particle cleaning equipment is recommended. Metal-emission Due to high emission levels of particles (uncontrolled). the emission of metals can be significant under certain circumstances and in some locations.particle cleaning is recommended. Metals in high concentrations can be toxic for nora and fauna, and disturb biological processes (e.g. denitrification) in the soil. Thus the metal content of fuels and asheshould be subject to periodic analyses. Air Quality in General The iinprovment of the total emission levels and also air quality is dependent on which fuel is favoured for replacement. Thus, if coal or heavy fuel oil is replaced with peat the improvement of the air quality can be expected to be relatively small. On the other hand, if natural gas is replaced, a slight I deterioration of the air ql'ality can be expected. D. Wastes Solid residues The ash from peat firing can contain in some casesignificant amounts of toxic metals (e.g. Cu, Pb, Cd, Hg, U) and the disposal problem should be given special consideration. The ash can only be used for other purposes after a careful investigation including chemical analyses of the ash. Ash disposal options l should be reviewed on a case-by-case basis. E. Other Issues -Conomic/Financial Reduced cost of fuel and environmental charges would result in improved financial and economic return on investment. The return is sensitive to level of I environmental fees and charges. i 'ade Balance/Foreign Exchange Reduce dependency on imports and world market/russian price fluctuations to L fulfil fuel for heating requirements. Improved foreign exchange balance. Technical Knowhow Transfer of technology in peat harvesting and combustion technology would I maintain and improve the high level of technical skills in Estonia. Entrepreneurship Opportunities for development of small and medium sized firms in several l economic sectors. Employment Seasonal employment opportunities increase. especially in rural areas. Health Problems There is a certain risk form spores and dust from the peat fuel. Local effects on human health, caused by the NOx emission, as in the case of coal and heavy fuel oil. There is also a risk for increased levels of cancerogenicompounds locally

24 Estonia SEA S23 (30) Executive Summary TABLE 5 SUMMARY TABLE OF PROPOSED PROGRAMME AND POTENTIAL ALTERNATIVES Description or Programme - Main Features Summury Evaluation Proposed Programme: Extensive Use of Domestic There is enough wood raw material and peat available in Estonia for an Wood and Peat Fuels - Sub- increascd production and utilization of wood and peat fuels. howcver. imported stitution for Fossil Fuels fossil fuels can be substituted only to a certain extent. Trade balance will be improved, employment will increase and opportunities for entreprencurship will Increase the utilization of be stimulated, Environmental impacts will mainly be positive, especially when domestic wood raw material and considering use of wood fuels and potential reductions in air emissions. peat as sources of fuel for Conservation of fauna and flora and protection of water resources would require heating systems. especially in implementation of mitigation and monitoring plans by the Government of small and medium-sizedistrict Estonia. Investments in fuel handling and boilers will be higher than for heating plants. Reduce imports corresponding fossil fueled facilities. However, as most existing plants are old and utilization of fossil fuels by and worn out and have to be replaced within the near future, these expenditures substitution with domestic fuels. are only slightly above those which would be required for replacement with Convert existing boilers to wood conventional tcchnology. The proposed program would significantly increase fuels and/or peat fuels, reduce reliability of fuel supplies to secondary cities and villages thus improving operating costs and increas ef- reliability of heat and hot water during the winter heating scason. ficiency in fuel production and utilization. Alternative Progmmm: Alternative A Continued Use of Fossil Fuels The alternative is not realistic, The national and international pressure to - No Action Alternative improve the environmental situation and the national need to improve the energy supply security will demand comprehensive investments in new or rebuilt Continue the extensive import facilities. Most energy plants are old and worn out and must be replaced within and utilization of fossil fuels. the near future. However, reinvestments fossil fueled boilers will be lower No substitution with domestic compared with investments in boilers fueled with wood or peat fuels. Trade biofuels and peat fuels, no con- balance and energy effeciency will remain unfavourable which could continue to version of existing boilers. limit reliable access by many communities to adequate heat and hot water during Wood fuels and peat fuels are the winter heating season. used only to the degree to which they are used today in private houses in the country-side and some DH plants. 6

25 stonia SEA S24 (30) Executive Summary ABLE 5 cont UMMARY TABLE OF PROPOSED PROGRAMME AND POTENTIAL ALTERNATIVES Description of Programme - Mauili Features Summary Evaluation Alternative U Continued Use of Fossil Fuels -Comprehensive Measures for Decreasing Emissions Continue the cxtensive imports and utilization of fossil fuels. Rcbuild and modernizexisting plants in ordcr to increas energy cfficiency and reduce emissions to the air. A high energy effcciency and a comparably low rate of emissions to thc air can be achieved by using modern boilers and flue gas cleaning equipment. Investments will not be significantly highcr than for the proposed programme. The impact on the fauna, tlorn, and trafric to the neighbourhood of the boiler plant will be lower than for the proposed programme. Emissions to the air will be higher with continued risk for local and regional acidification. The tradc balance will continue to be unfavourable. Employment opportunities will not increase. Problems due to constraints in funds available for purchase of imported fuels would make availability of imported fuels unreliable and continue reduced access to heat and hot water in the winter heating season. Alternative C: Extensive Use or Domestic Available resources of domestic fuels will in the long term perspcctive be re- Wood Fuels only - No Peat duccd comparcd to thc proposed programm.c Substitution of imported fossil Fuels fuels and potential improvement of trade balancc will be reduced correspondingly. However, in the short and medium term perspective. existing resources of Similar to the proposed wood wood raw material available for fuel would be enough to compensate for the and peat fuel programm except reduction in usc of the peat. The effects on the nature and the environment caused that peat will not be used as a by fuel production, transportation and handling will be lower. Emissions to the 'sourcc for fuel. The introduction air will in the short term be lower than for the proposed programme. but in the of wood fuels will be speeded long term stay on the same level. up. in order to compensate for the peat fuels, until a level considered in the proposed proerammc has been reached. Alternative D Extensive Use of Domestic Available resources of domestic fuels will be reduced. Substitution of fossil fuels Peat Fuels only - Nn and improvement of trade balance will be reduced correspondingly. However in Additional Use or Wood Fuels the short term an accelerated introduction of peat fuels should compensate for the drop off of the wood fuels. Emissions to the air will be higher while no cffects, in Similar to the proposed wood addition to those caused by conventional forestry, will be caused to fauna and and peat fuel programmexcept flora in the forests. In short and medium tcrm adequate areas of presently that no additional use of wood productive or drained peatland are available for harvesting. However, in the longfucis, in addition to current term additional areas would need to be developed which would locally result in utitization lcvel, is considered. adverse impacts to ecological values and water resources. rhe introduction of peat fuels will be speeded up, to compensate for the wood fuels, until a lcvel considered in the proposed projprammc has been reached.

26 Estonla SEA S25 (30) Executive Summary TABLE 6. SUMMARY TABLE FOR MITIGATION ACTIONS Tvpe or Imtpaet Mitication Action Wood Fuels Policy The Government of Estonla should adapt a policy that specifies that hiarvest of forest fuels should be coordinated with regular forestry operations and conducted according to environmentnl protection regularities. Responsible for implementation: the Government of Estonia. through national and local environmental and forestry authorities. A. Harvestin2 I Nutrient Losses Harvesting of tops and brancheshall be applied at any site only one time per rotation period. Harvesting of tops and branche shall be avoided in areas with poor soils, including Arciostaphylus-alvar, Cladonia sites and Calluna sites and in areas with a high pressure from soil acidity. Harvesting methods where the material is left to dry in the stand for some period are preferred (most nutrients from needles and leaves will be left in the stand). Compensation of nutrient losses by recycling of wood ash and artificial fertilization. Responsible for implementation: Fuel production enterprise. Deterioration of Organic See Nutrient Losses above. Matters Flora Extraction of tops and branches is acceptable. from the viewpoint of flora. if 10-30% of the material of various dimensions is left in the clear cut area (not relevant to thinning). if old and dead trees and individual broad leaved trees are left. Methods that allow the major part of needles and leaves to fall off in the stand is preferrced. Specific restrictions could be applied in deciduous forests with high biodiversity. especially wet forests and old growth forests. Responsible for implementation: Fuel production enterprise. Fauna Old trees and bird nest tree shall be left. Some tops and brancheshall be left to rot. However, to leave stumps and some whole trees is probably more importanthan to leave some tops and branches. Responsible for implementation: Fuel production cnterprise. Soil Damage Avoid extraction of tops and branches from wet areas with low bearing capacity. Use tops and branches as a brush mat to drive on for the conventional logging in these areas or harvest during periods with frozen soil. Use machines with low ground pressure. Responsible for implementation: Fuel production enterprise. Re-seeding and Re- A rehabilitation plan includes a re-seeding and re-planting of the area. plantinp Responsible for implementation: Fuel production enterprise. Emissions to Air. Soil and Maintain machinery continuously. Water Responsible for implementation: Fuel production enterprise. Accidents and Health Use protective clothes, protectivequipment (helmet, gloves, ear protection. etc.) and Risks safety frames on machines. Implement a training program. Responsible for implementation: Fuel production enterprise. B. Transport and Stora 2e Increased Traffic. Traffic Avoid localization of wood fueled boilers in densely build-up areas. Careful transport Accidents, and Damages planning. use main roads, avoid transport at night time. Make sure that transport to Roads. vehicles are properly equipped to transport logging residues (side walls, binding chains, etc.) or wood chips (containers).careful storage planning. Avoid using weak roads in springtime. Locate enough storages at strategic places at main roads. trafficable all year around. Do not overload vehicles. Responsible for implementation: Fuel production enterprise/regulatory authorities. Emissions to Air. Soil and Maintain trucks and other vehicles continuously. Water Responsible for implementation: Fuel production enterprise. Noise and Dust Avoid lo:ating wood fuel processing plants or boilcrs in densely build-up arcas. Specify maximum levcls to processing/bnilcr plants. Res nsible for im lementation: ucl roduction cntcrerise/regulatorx authoritics.

27 -- onia SEA S26 (30) Executive Summary TABLE 6 cont. SUMMARY TABLE FOR MITIGATION ACTIONS Type or Impact Fire Hazards Hcalth Problems C. Combustion and Air Quality SOx-cmission N 1itiatlon Action Store if possible the raw material unchipped/uncrushed until it will be burnt. Do not mix various assortments (various sizes of particles). Do not store in stacks higher than 7 m and avoid compaction. Do not allow open fircs at storage site and make sure thlat fire control equipment is available, Implementation of training programmes. Responsible for implementation: Fuel production enterprise. Through automatization and closed built in fuel handling systems the heallh risks from spores and dust can be almost eliminated. Responsible for implementation: Fuel production enterprise. Only low levels of SOx. With a co-firing process, where wood is burnt in combination with a sulphur containing fuel, a SOx reduction can be achieved. Responsible for implementation: Boiler plant enterprise. NOx-emission Low NOx combustion equipment. Combustion modifications. Flue gas cleaning equipment is applicable only for large boilers and power plants. I Responsible for implementation: Boiler plant enterprise. CO2-cmission No action needed. CO -emission Good control of the combustion conditions. Responsible for implementation: Boiler plant enterprise. Particle and Metal Particle cleaning equipment such as electro filters, fabric filters or cyclones should be emission used. Responsible for implementation: Boiler plant enterprise/regulatory Authority. D. Wastes Solid Residues and Ash Controlled handling and storing. Possible ash recycling. Avoid mixing with peat ash Handing and other types of ash.. Responsible for implemcntation: Boiler plant enterprise. Peat Fuels Policy Inventory of mapping of ecologically important and environmentally sensitive peatlands. Concentrate harvesting to peatlands already drained and preparcd for harvesting. Responsible for implementation: the Government of Estonia, through national and local environmental and peat management authorities. A. Harvcsting _ Landscape Careful planning of the area, especially adjacent areas. Save surrounding forest stands and leave if possible shelter trees along roads and open field. Prepare restoration aftcr peat production has finished. See also Policy section above. Responsible for implementation: Fuel production enterprice. Watcr resources Use only already drained peatlands. Careful water protection planning. Prefer repaludification after stop of harvesting. Responsible for implementation: Fuel production enterprise. Leaching Construction of runoff water purification systems. See Surface Water and Run-off below. Responsible for implementation: Fuel production enterprise. Flora and Fauna Careful restoration of the area after that peat harvesting has ceased. Restore to wetland or lakes to provide habitats for birds and other animals, and favorable conditions to the flora. See Policy above. Responsible for implementation: Fuel production entcrprise.

28 Estonia SEA S27 (30) Executive Summary TABLE 6 cont. SUMMARY TABLE FOR MITIGATION ACTIONS Type of imgnct Mitigation Action Hydrology and Avoid draining neargroundwater wells. See also Policy above. Groundwater Rcs nnsible for impliementation: Fuel production enicrprise/re ulatorv aulhoritics. Surface Water and Run- Construction of load retention in field ditches and sedimentation basins. Apply surlicc off drainage and peat filtration when nccessary. Responsible for implementation: Fuel production enterprise. Noise and Dust Planting of shallow belts of trees, ir not already existing, to reduce winds and spreading of noise and dust. Responsible for implementation: Fuel production enterprise, Fire Hazards Avoid too large storage piles and avoid compaction. Forbid the use of open fire and forbid smoking on harvesting sites. Carcful fire protection plans and construction of fire wells. Responsible for implementation: Fuel production enterprise. Emissions to Air, Soil and Maintain machinery continuously. Water Responsible for implementation: Fuel production enterprise. Accidents and Health Use protective clothes. protective equipment (helmet, gloves, ear protection, etc.) and Risks safety frames on machines. Implement a training program. Responsible for implementation: Fuel production enterprise. B. Transport and Storage Increased Traffic, Traffic Avoid localization of peat fueled boilers in denscly build-up areas. Careful transport Accidents and Damages to planning, use main roads, avoid transport at nighltime. Make sure that transport Roads vehicles are properly equipped to transport peat fuels (containers).carcful transport and storage planning. Avoid using weak roads in spring-time. Locate enough storages at strategic places at main roads, trafficable all year around. Do not overload vehicles. Responsible for implementation: Fuel production enterprise/regulatory authorities Emissions to Air. Soil and Maintain trucks and other vehicles continuously. Water Responsible for implementation: Fuel production enterprise. Noise and Dust Avoid locating peat fuel processing plants or boilers in densely build-up areas. Specify maximum levels to processing/boiler plants. Responsible for implementation: Fuel production enterprise/regulatory authorities. Fire Hazards Avoid storage at boilcr sites. Do not store in large piles and avoid compaction. Careful design of peat fuel storage and handling facilities at boiler plants. including fire detection and fire fighting facilities. Implementation of training programmes. Responsible for implementation: Boiler plant enterprise. health Problems Through autornatization and closed built in fuel handling systems the health risks from spores and dust can be almost eliminated. Responsible for implementation: Fuel production and boiler plant enterprises. C. Combustion and Air Quality SOx-emission SOx cleaning equipment applicable only for large boilers and power plants. Responsible for implementation: Boiler Plant enterprise. NOx-emission Low NOx combustion equipment. Combustion modification. Flue gas cleaning equipment applicable only for large boilers and power plants. Responsible for implementation: Boiler plant enterprise C02-emission No action needed. CO-emission Good control of the combustion conditions. Responsible for implementation: Boiler plant enterprise Particle- and Metal- Particle cleaning equipment such as electro filter. fabric filters or cyclones. emission Responsible for implementation: Boiler plant enterprise D. Wastes Solid residues and ash handiling Controlled handling storage and deposition Responsible for implementation: Boiler plant cnterprise/regulatory Authority.

29 --onia SEA S28 (30) Executive Summary ABLE 7. SUMMARY TABLE FOR MONITORING "vy of irtiplact Monitoring Action Wood Fuels encral I 1 Nutricnt losscs and Lcaching of substances Deterioration of Organic :.Iattcr Most factors related to harvesting, transportation and storing of wood l'uels can not be continuously monitored to an acceptable cost level. Instead of specific monitoring actions, a comprchensive research and follow-up program should be implemented. aiming at increased knowledge of specific impact to the environment. forest. soils, etc. An important contribution should initially be obtained from the know-how and experiences available in the Nordic countries (especially Sweden and Finland). Based on the research results, regulations and guidelines for the extraction of wood fuels shall successively be changed and improved. It is assumed that forest inventories and environmental monitoring (e.g. ICP-Forest, EMEP) are done independently from the fuel production and boiler plant entcrprises. Rcsponsible for implemcntation: National and local environmental and forestry managemcnt authoritics. See General above and long-term monitoring of nutrient balance, experimental plots on clear-cutting areas in different site-types and for certain harvesting methods.. See General above..lora and Fauna See General above and special monitoring of rare and endangered species possibly l affected by whole tree harvesting. Special monitoring of indicator specics Ilicreased Traffic. Traffic No specific monitoring foreseen. Accidents, and Damages to Roads! Noisc and Dust Random control that specified maximum levels are not exceeded.! Responsible for implementation: District Environmental Office. Fire Hazards Random controls that regulations are followed and fire control cquipmcnt availablc. Responsible for implementation: District Environmental Office. Accidcnts and Heahth Continues follow-up of accidents and injuries. Health statistics. Responsible for implementation: Ministry of Health. isox-emission Not relevant, since emissions are low. W Ox-emission NOx measurement instrumentation combination with basic control instrumentation for the combustion processuch as 02. CO and C02 for large boilers and power plants. Responsible for im lementation: District Environmental Office.!COemission Basic control instrumentation for the combustion process. I Responsible for implementation: District Environmental Office. CO0-emission Basic control instrumentation for the combustion process. Responsible for implementation: District Environmental Officc. Particle emission Monitoring of particle emissions from boilers and power plants. Responsible for implementation: District Environmental Office. IMetal emission Periodic toxic metal analyses for fuels. particulates and ashes. Responsible for implementation: District Environmental Office. Solid residues Chemical analyses of the metal content in ashes. Monitoring of wood-ash impact on the nutrient status in different forest types. Responsible for implementation: District Environmental Office. Employment Evaluation of employment statistics, supplemented by special interviews. Responsible for implementation: Ministry of Social Affairs Trade balance/ Trade statistics. ForeiEn cxchange Responsible for implementation: Ministry of Finance

30 Estonia SEA S29 (30) Executive Summary TABLE 7 cont. SUMMARY TABLE FOR MONITORING Tine of Imnact MIonitorinLt Action Peat Fuels General Landscape Nutrient losses Leaching of Substances Flora and Fauna Hydrology and Groundwater Surface water and Runoff Water Increased Traffic. Traffic Accidents, and Damages to Roads Noise and Dust Fire Hazards Accidents and Health SOx-emission NOx-emission C02-emission CO-emission Particle emission Several factors related to the harvesting. transportation and storing of peat fuels can not be satisfactorily monitored at an acceptable cost level. Instead of specific monitoring actions a comprehensive research and follow-up program should be implemented. aiming at providing authorities, producers and other parties. relevant know-how of specific impact to the environment, such as the case of hydrological impacts. A close cooperation with authorities and research institutes in especially Sweden and Finland is proposed. Responsible for implementation: National and local environmental and peat management authorities. See General above. No specific monitoring is foresecn, excepthat development plans and rehabilitation plans are followed and possible mnitigation actions fulfilled. See General above. Long-term monitoring of hydrological balance on peatland exploited and areas under construction. Monitoring of groundwatcregimc. Resoansibic for implementation: District Environmental Office. See General abovc and long-term monitoring of chemical composition of run-off waters from peat excavation areas and non-affected areas. Responsible for implementation: District Environmental Office. See General and Lanscape above. See General above. See General above. No specific monitoring foreseen., Random control that specified maximum levels are not exceeded. Responsible for implementation: District Environmental Office. Random controls that regulations are followed and fire control equipment available. Responsible for implementation: District Environmental Office. Continues follow-up of accidents and injuries. Health statistics. Responsible for implementation: Ministry of Health. SOx instrumentation combination with basic control instrumentation for the combustion processuch as 02, CO and C02 for large boilers and power plants. Responsible for implcmentation: District Environmental Office. NOx measurement instrumentation combination with basic control instrumentation for the combustion processuch as 02. CO and CO2 for large boilers and power plants. Responsible for implementation: District Environmental Office. Basic control instrumentation for the combustion process. Responsible for implemcntation: District Environmental Office. Basic control instrumentation for the combustion process. Responsible for implementation: District Environmental Office. Monitoring of particle emissions from boilers and power plants. Responsible for implementation: District Environmental Office.