State Audit Office recommends that issuance of extraction permits for new peat bogs be suspended for 20 years

Toomas Mattson | 7/20/2005 | 12:00 AM

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TALLINN, 20 July 2005 - The State Audit Office recommends that the Minister of the Environment suspend issuance of new extraction permits for undisturbed bogs until 2025, in order to direct production to the numerous deserted areas where the resource has not been exhausted, to stop wasting the peat resources and spare natural bogs.

Heat and electricity can be produced using the well-decomposed peat found in the lower layers of a bog. Over the recent years the little decomposed peat found in the upper layers, which is used for gardening, has been extracted a lot more. Entrepreneurs are interested primarily in little decomposed peat, because it sells well. In terms of exporting gardening peat Estonia shares 3rd and 4th places in the world next to Germany and Canada.

According to the permits issued by the Ministry of the Environment, peat may be currently extracted on 19,500 hectares. In addition, there is about 8000 to 15,000 hectares of former peat-mining, but now deserted land in Estonia, which has not been re-cultivated after extraction and where often a large amount of the peat resource has not been exhausted.

However, companies want to drain more and more bogs instead of producing heating peat on the half-mined deserted land. When the so-called pot plant peat is skimmed away and the lower layer remains unused, the bog will perish. Usually, the peat moss will not start growing in a drained and mined area by itself.

Peat mines are left without re-cultivation

Extraction permits according to which the company has the right to extract only the upper, the so-called flower pot peat layer and is obliged to leave the mine in a condition which allows for extraction of the well-decomposed peat have been issued. In that case the company does not have to re-cultivate the mine, as a result of which there is a threat that if there is no next miner the area will remain half-mined and not be re-cultivated.

There is also the threat even if the extraction permit allows the company to fully exhaust the mine, it will not always be done. The reason may lie in the fact that well-decomposed peat cannot be sold or the income earned from its sale is smaller than that from the sales of little decomposed gardening peat.

Since the costs of re-cultivation of a bog are high, some companies may prefer going bankrupt by referring to insolvency after completion of extraction, as a result of which the area of deserted peat mines will increase further. This is a waste of our limited peat resources.

The State Audit Office recommends that the Government develop a financing scheme for covering the re-cultivation costs in an event where the peat mining company becomes insolvent, for instance by creating a national guarantee fund or a sub-fund under an existing financial institution. Another opportunity is to establish a procedure pursuant to which the company extracting peat must, as a prerequisite for obtaining the mining permit, give a guarantee that it has enough funds for re-cultivation of the exhausted peat bog in the future.

The former peat extraction areas which have not been re-cultivated cause continuous environmental pollution and pose a great fire threat. Since the deserted areas have been drained the remaining peat is starting to decompose, vanishing in the air as carbon dioxide. In the first ten years after the drainage 15 to 20 tons of peat will decompose per hectare. The decomposing peat emits carbon dioxide, which is an essential factor causing the greenhouse effect.

For instance, according to estimates the amount of carbon dioxide emitted by drained bogs exceeds the amount generated by traffic by approximately nine times.

Later, the decomposition of peat will slow down, but it will not stop before all the peat has decomposed. In all drained bog areas 2.5-6 million tons of peat vanishes in Estonia annually. It means that we waste twice as much peat as we extracted, for example, in 2002. It is a considerable waste of the peat reserve.

Most of the deserted mining areas are located on state land. Although restoration of a deserted area is an obligation on the land owner, the state still does not have a clear picture of the condition of the remaining resources or the level of environmental damage in these areas. Thus, the state does not know whether these areas should be reopened for mining or be re-cultivated.

So far the state has not found resources for re-cultivation of the deserted areas. In his reply to the State Audit Office the Minister of the Environment noted that the issue is a pressing one and promises to begin with a review of the deserted peat mining areas.

Renewable or non-renewable natural resource?

Until now, the government has considered peat a renewable natural resource, which, according to the principles of sustainable development, should not be used more than it is replenished. The annual rate of using the peat reserves established by the Government is 2.78 million tons, which probably will not be extracted entirely. According to the calculations of the researchers of the Institute of the Ecology of the University of Tallinn published in March 2005 all bogs that are in a natural condition annually produce only 400,000 to 550,000 tons of peat in total.

When comparing these estimates with the actual usage rate it becomes evident that the Government allows for extraction of five times more peat than is annually regenerated. The actual extraction rate has annually exceeded the increment by two to three times. The load of peat mining is different in different counties. For instance, in Saare County the peat extracted in 2002 exceeded the increment by 16 times, while in Harju County, Pärnu County and Võru County the increment was exceeded by 5 times.

If we wanted to continue extraction of fuel at the permitted rate, but within the limits of the increment, the total area of the near-natural bogs should be 2.4 million hectares, which is 7-9 times more than currently, i.e. a half of the territory of Estonia.

Since the extraction volumes exceed the increment of peat, the usage of the peat resource as a renewable natural resource is not organised in a sustainable manner. At the same time, according to the renewable energy directive of the European Union and the Long-term Public Fuel and Energy Sector Development Plan adopted by the Riigikogu, peat is considered as a non-renewable energy resource or a fossil fuel, because all energy sources which do not renew themselves in a hundred years are treated as non-renewable energy sources.

The treatment of peat as a non-renewable natural resource would require making a decision about how long the peat resources which can be extracted will last in Estonia. No such decision has been made. It has also not been assessed what purposes this limited resource should be used for. Regardless of whether peat is considered a renewable or a non-renewable natural resource, the state must review the permitted usage rates and, where necessary, conduct additional surveys and decide whether and with what intensity the peat resources may be used in the future.

Upon approval of the Long-term Public Fuel and Energy Sector Development Plan at the end of 2004, the Riigikogu decided that drainage of the new peat-mining areas should be suspended until 2025 and so far only the peat extracted from drained bog areas should be used. However, this decision has not been stated in any laws and the preparations for using new bogs have not been stopped. The State Audit Office emphasises the need for suspension of issuance of extraction permits with respect to new bogs for the next 20 years in order to use the peat located in deserted mining areas and spare natural bogs from mining.

One possibility to regulate the use of the natural resources is to tax the right of extraction. Currently, companies pay the state 2.9 kroons for extracting one ton of well-decomposed heating peat and 4.9 kroons for extracting one ton of little decomposed gardening peat. The current fees have been established historically and without investigating the impact of taxation on the environment, the economy and the social sphere. Since the taxation rates do not have any underlying principle the state does not currently charge the extraction fee for the purpose of regulating the extraction volumes or directing the extraction activities to certain regions.

It appears from the reply of the Minister of the Environment to the draft audit report of the State Audit Office that the Ministry understands the need for attending to the peat reserve issue. The Minister finds that it is necessary to commission more surveys for determining the peat reserve and take various measures for ensuring sustainable use of the resources, incl. change the annual usage rates.

Environmental impact assessment

The extraction of peat causes irreparable damage to the environment. Upon issuance of extraction permits, it is necessary to assess the environmental impact of the planned operations before issuing the permit, regardless of whether extraction is to be performed in an undisturbed bog or whether a deserted former mining area is re-opened.

Assessment of the environmental impact has been required by law as of the 1 of January 2001. Upon issuance of extraction permits, assessment of the environmental impact is compulsory if the area of production exceeds 150 hectares, but the State Audit Office found that this has not always been done.
In case of areas smaller than 150 hectares the Ministry of the Environment and the environmental authorities have had to decide each time whether the environmental impact assessment is necessary. Despite this opportunity assessment of the environmental impact has not been required in case of areas that are smaller than 150 ha. Most of the extraction permits analysed by the State Audit Office did not stipulate any environmental requirements either. Without assessment of the environmental impact the destruction of naturally valuable bogs cannot be excluded, the opinion of the local people regarding the extraction operations has not been asked and no measures for reducing the environmental impact of the extraction have been developed. The State Audit Office finds that the limit of 150 hectares is not reasoned at all, because extraction of peat always has a significant environmental impact, which should be assessed while processing all extraction permits and permits for special use of water, regardless of the price of the mining area. In this way, for example, the Ess-soo bog court dispute could have been avoided. The dispute was sparked by the fact that no assessment of the environmental impact was made with respect to an area of 100 hectares and the local people have challenged the approval of the extraction operations in the area.

Background information
Facts and figures:
* The current Estonian peat bogs have formed over the last 10,000 years.

* According to the Geological Survey of Estonia, the state register of mineral resources accounts for a total of 1614 million tons of active and passive peat resources of which 16% is little decomposed peat and 84% is well-decomposed peat. According to an audit of bogs conducted 15 years ago, the total peat reserve in Estonia amounted to 235 million tons. According to the level of research of the peat reserve, not the entire audited reserve was entered in the state register of mineral resources.

* According to the audit of bogs, the bogs covered slightly over one million hectares: over a fifth of the total area of Estonia. Currently, the state register of mineral resources accounts for 281 peat mines the total area of which is slightly smaller than that of the audit, because bogs with an area of under 10 ha and a peat mass thickness of below 0.9 meters are not registered as mines.

* According to the Institute of the Ecology of the University of Tallinn the area of bogs which are in a near-natural condition is 270,000-350,000 ha. This is about one-third of the amount according to the data of the audit. The reason lies in the fact that many bogs were drained in the last century for mining or for forestry and agricultural purposes and therefore they are not in a natural condition anymore and there is no more peat increment.

* Natural bogs (mesothropic quaking bog, eutropic bog and raised bogs) are very diverse. Since in Europe most such wetlands have become extinct, Estonian bogs are unique. Currently, 103,000 ha of bogs are under protection, i.e. 11% of the total area of the registered peat mines. Usually, the mineral resources of mines located in protected land are considered passive resources. Upon taking Natura 2000 areas under protection, the number of protected bogs will increase to approx. 142,500 hectares, but the peat resources located in the Natural 2000 areas have not been declared passive resources yet.

* Peat production was the most intensive in Estonia in the 1970s and 80s, when the annual extraction volumes reached 2 million tons. At the beginning of the 1990s the use of peat in agriculture was stopped and the use of peat for heating decreased as well. As a result thereof the production volumes decreased and many opened peat mines were left out of use. Over the recent years the production of peat has been growing again.

Toomas Mattson
Communication Manager of National Audit Office
Telephone: 6400 777
Mob: 51 34900
E-mail: toomas.mattson@riigikontroll.ee

  • Posted: 7/20/2005 12:00 AM
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