31. March 2021Towards a Just Transition – Ida-Virumaa Regional Fact Sheet
Ida-Virumaa is a former industrial centre with rich natural resources. The county contains large deposits of shale oil that are used in the power plants and oil industry, also situated in the same region. This article presents a short economic profile, employment issues, the regional just transition plan as well as recent actions and decisions.
Ida-Virumaa county, or Ida-Viru, is one of 15 counties of Estonia located in north-eastern Estonia. 133,888 people (as of 01.01.2021) live in the region and the population is rapidly ageing and decreasing. If the current trend continues then by 2045 the county is going to have 50,000 fewer inhabitants. Only 17.5% of the county’s residents speak Estonian as their mother tongue.
Incomes in Ida-Viru county are among the lowest across the country (€ 1161 per month compared to Estonia’s average that was € 1448 in 2020) with the exception of the oil shale sector, where an average monthly salary is € 1663. Low wages are one of the reasons why young people leave the county. Ida-Viru has the largest gender pay gap in Estonia (27.9% in 2019).
The unemployment rate in Ida-Virumaa has been exceeding the Estonian average for a long time. Pre-COVID unemployment rate in Ida-Virumaa was 10.2%, which is twice the national average.
Ida-Virumaa economic profile
There are more than 5,900 companies and public sector entities in Ida-Virumaa. The total number of employees in the whole region is approximately 40,800. Quarterly turnover of companies is 505 million euros, with 76 million euros paid in state taxes and 59 million euros in labor taxes.
There are 15 large employers in the area, 11 of which are businesses. 40% of the largest employers registered in Ida-Virumaa are in the oil shale sector, out of which 67% are private.
The transition is ongoing
The peak of oil shale mining and processing in Ida-Viru was in the 1980s, with over 14 thousand people working in the mines alone. Since the 1990s, the sector has been in decline.
The transition process of the region is now on its way. However, these recent developments are only a small step in a process that has been going on for several decades and will continue for years to come. The main negative impact of transition is loss of jobs in the oil shale sector. The county is facing a challenge of diversifying its economy and creating new jobs. The EU’s Just Transition Fund will provide some support for this.
Figure 1: Number of people employed in the oil shale sector. Source: IVOL
Profile of oil shale industry workers
In January 2020, 5,800 people worked in the oil shale sector in Ida-Virumaa; 3,500 of them were employed by Eesti Energia, which is the largest state-owned energy company. During 2020, 1,033 of them were laid off and another 43 employment contracts were suspended.
The average duration of employment is 10 years and the average monthly income is 1,663 euros (a quarter of all employees in the region earn less than 1,180 euros and a quarter 1,950 euros or above per month). The average age of an employee is 47 years. The share of people under 35 is 16%, while the share of women in the workforce is 20%.
Approximately 16,000 people (including 3,500 miners) live in households depending on the oil shale sector. 65% of households do not have any miners as their household members. 34% of households have only one person earning income. In the context of the decline of the oil shale sector, about 8,000 people are at direct risk of falling below poverty line. Employees in the oil shale sector account for 13% of all employees in the region. However, their contribution to the region’s labor tax income is about 25%.
Ida-Viru Just Transition Plan
- The Ministry of Finance is in the process of extending the Ida-Virumaa action plan until 2030.
- The Association of Local Authorities of Ida-Viru County has started the process of renewing the county development strategy to add stronger focus on the transition process
These are the two main strategic documents for the regional transition process.
Figure 2: Ida-viru transition process structure and related documents. Source: IVOL
The Ida-Viru regional just transition platform was founded in Feb 19th, 2020 by the council of the Association of Local Authorities of Ida-Viru County. It covers 52 organizations incl. local authorities (8), oil-shale enterprises (3), labor unions (4), environmental associations (3), ministries (5), NGOs, business representatives and so on.
The Ida-Viru science council was founded in Feb 5th 2020 by the board of the Association Local Authorities of Ida-Viru County. It comprises 3 universities and 7 academic members.
Association of Local Authorities of Ida-Viru County, IVOL