Estonian Climate Minister, Yoko Alender (second from right), and the Minister of Economy and Industry, Erkki Keldo (third from right), held a meeting with representatives from the Dutch firm Power2X. Photo: Ministry of Climate
Dutch company Power2X is set to establish the largest methanol plant in Europe, located in the resort town of Pärnu, Estonia.
Estonian Climate Minister Yoko Alender and Minister of Economy and Industry Erkki Keldo met with representatives of the Dutch company Power2X. At the meeting, it was confirmed that the planning of Europe’s largest methanol plant is ongoing. The goal is to bring an investment of over one billion euros to Estonia and support the transition to clean energy.
Climate Minister Yoko Alender said a favourable investment decision would be an important step for the country.
“Clean energy means clean industry. The methanol plant coincides with two important goals of Estonia: Estonia’s complete transition to clean energy and the reduction of fossil fuels and, thus, pollution in the industrial sector. The project helps to develop modern maritime and industry in Estonia while strengthening the competitiveness of our economy and reducing the environmental footprint of the industrial sector,” said the climate minister.
Estonia backs a billion-euro methanol plant development
The methanol plant would start producing 500,000 tons of green bio- and e-methanol per year, which can be used as an alternative raw material for chemicals in the production of plastics and durable building materials and as a substitute for fossil fuels.
The production uses locally sourced sustainable forestry residues and green hydrogen, which is produced using offshore wind farms built on the west coast of Estonia. A methanol plant and an electrolyzer are planned to be built in the Niidu industrial area in Pärnu.
A methanol plant and an electrolyzer are planned to be built in the Niidu industrial area in Pärnu. Pärnu is known as the “summer capital of Estonia” and as the country’s fourth largest city. Photo: Long-Nong Huang
According to the Minister of Economy and Industry, Erkki Keldo, his priority is to modernise the planning processes related to the significant investment.
“The plans for the future production area of the methanol plant and the environmental impact assessment were initiated in March this year; the deadline for the investment decision is 2026. However, a positive final decision to establish a project in Estonia also requires planning permits and a decision to transfer state land. This is an area where we at the Ministry of Economy are focusing our attention very strongly: reviewing whether and where laws can be changed and shorten the time required for planning,” explained Keldo.
“Establishing a methanol plant gives us a competitive advantage and the confidence to attract foreign investments with high energy intensity and high added value to Estonia, so we must not miss this opportunity. Estonia really needs this investment, and we also assured Power2X that they are welcome here,” emphasised the minister.
During development and construction, the project will create over 2000 construction jobs and over 200 jobs in the supply chain during operation. Production is planned to start in 2028.
GOOD TO KNOW
- As methanol, ammonia, and other alternative fuels are adopted, ship conversions will become more necessary. Therefore, in cooperation with the maritime sector, the Estonian Ministry of Climate plans to also help create the prerequisites for establishing a centre for ship modernisation and climate-friendly maritime technologies in Estonia.
- Estonia has the potential to become a significant player in the global ship conversion and modernisation industry, generating up to 70 million euros in tax revenue annually.
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