Lüganuse rural municipality established Estonia’s first designated spatial plan for bioproduction

Yesterday, on 29 May, the Lüganuse Rural Municipality Council passed a decision with a majority of votes to establish the local government designated spatial plan which grants Viru Keemia Grupp the right to build a bioproducts production complex in the territory of the rural municipality. The establishment of the plan allows the company to move forwards with the development.

The Lüganuse rural municipality initiated the designated spatial plan and the strategic assessment of the environmental impact of VKG’s bioproducts production complex on 25 August 2021. According to the established designated spatial plan, the preferred area for building the production complex is 170 hectares located in the village of Aa, on the land of the Kohtla forest district. The industrial area of the Järve District of the city of Kohtla-Järve lies to the east of the area. The designated spatial plan was conducted in two stages: the most suitable location was chosen and a detailed solution for the production complex and the related infrastructure was prepared, and the related environmental impact assessments were carried out.

According to the Chairman of Management Board of Viru Keemia Grupp, Ahti Asmann, the designated spatial plan of the production complex has thanks to the professional work of the leaders and officials of the Lüganuse rural municipality moved exactly as fast as the laws of Estonia allow. The establishment of the designated spatial plan together with the long-term raw material supply contract with the State Forest Management Centre and the right of superficies concerning the land allows VKG to enter the next stage of development – engaging financing and a strategic partner.

“Throughout the entire development process, we had a constructive dialogue between the rural municipality, the local community, and the preparer of the report on the strategic assessment of environmental impact. Due to the cumbersome nature of the Estonian planning process, the process took nearly four years from VKG’s application for the initiation of the local government designated spatial plan, but we are very grateful to the Lüganuse rural municipality for their hands-on approach, openness and good partnership during that period. We are the only project for the chemical valorisation of wood, who has fully taken on the planning programme and completed it,” Ahti Asmann commented.

According to Asmann, the development of bioproduction is thanks to the establishment of the designated spatial plan about to reach a decisive stage. “We are carefully optimistic with regard to the construction of the production complex, although finding financing will be a significant challenge for us, considering the weak competitiveness of Estonia’s input compared to the neighbouring countries,” Asmann emphasised.

In the opinion of the Chairman of the Lüganuse Rural Municipality Council, Andrea Eiche, the Council’s decision is of iconic importance for the Lüganuse rural municipality. “We are satisfied that it is the Lüganuse rural municipality that has established the designated spatial plan for Estonia’s first bioproducts plant based on the best available technology. It has been a long and thorough process, during which we have gained assurance that VKG has a clear vision, a strong team, and a desire to contribute to the development of the region. It is important for us that the development will benefit both the local community and Estonia on the whole – be it through new jobs, tax revenue, or environmentally friendly industry. We would like to thank all the parties who have actively and substantively contributed to the process.”

Lüganuse Rural Municipality Mayor Dmitri Dmitrijev confirmed that the region needs new production facilities which will doubtlessly add development potential to the region. “VKG is a serious developer with long-standing experience in large-scale industrial development as well as a clear plan for bringing well-paid jobs to the region and increasing the local revenue base. Bioproduction fits the business profile of our region, as industry has been the driver of local life here for more than a hundred years,” Dmitrijev said.

The aim of the future production complex is to locally add value to low-quality wood that has until now been exported from Estonia, by using it to produce raw material for the paper, textile and biochemical industries. Considering Estonia’s energy price challenges, it is of no small importance that by its concept, bioproduction is energy-independent and will generate green electricity in the volume of 0.8 TWh a year and supply the region with green district heating. According to an analysis by KMPG, adding value to formerly exported wood in Estonia would generate more than 155 million euros of annual tax revenue and increase the added value created in Estonia by 485 million euros. In addition, the new production facility will create at least 250 direct jobs and up to 1,000 indirect jobs, while also having a positive impact on the socio-economic environment of the region.

Further information:
Irina Bojenko
VKG Head of PR and Marketing
+372 523 2700

Dmitri Dmitrijev
Lüganuse Rural Municipality Government
Rural Municipality Mayor
+372 5302 0940