Estonia is currently navigating a strategic crossroads in its pursuit of a large-scale green hydrogen transit corridor, as a competing proposal for a direct undersea pipeline threatens to bypass the mainland entirely.
On March 23, the Estonian government initiated a special national planning process to determine the most effective corridor for a hydrogen pipeline crossing the country. According to Monika Korolkov, project manager at the Ministry of Economic Affairs and Communications (MKM), the project is in its early stages, with current efforts focused on introducing hydrogen technology and the project’s scope to local municipalities.
The first phase of this planning process is expected to cost approximately €1.5 million, with a public procurement tender for a consultant expected shortly. The initial planning area, which currently involves 24 municipalities from Jõelähtme to rural areas in southern Estonia, is based on a proposal from TSO Elering that considers existing electricity grids and gas infrastructure. Further alternative route corridors heading toward Latvia may be identified by early next year.
The Offshore Alternative
The viability of the overland route was challenged shortly after the planning process began. On April 9, an agreement was signed in Riga between Germany’s leading gas infrastructure company GASCADE, the German state-owned energy group SEFE (Securing Energy for Europe), and the Baltic Sea Hydrogen Collector (BHC) consortium—which includes Swedish and Finnish developers.
This group has announced cooperation to build a major hydrogen trunk pipeline directly along the floor of the Baltic Sea, connecting Finland to Germany. Both the overland and offshore options are driven by the German industrial sector’s goal to replace natural gas-produced hydrogen with green hydrogen generated by European Union wind farms during periods of low electricity prices.
“Clearly, it would not make sense to put both of them into operation at the same time. As a first approach, it would make sense to build only one of them,” said Elering CEO Kalle Kilk.
Kilk noted that the ultimate decision rests with the endpoints—Germany and Finland—who are currently evaluating the pros and cons of each route.
Economic and Strategic Stakes
While an offshore route would avoid disputes with local governments and landowners, Elering strongly advocates for the land-based pipeline, citing Estonian national interests. Kilk highlighted two primary advantages of the overland route:
- Economic Revenue: A land pipeline would allow Estonia to collect transit fees. “If we do not want this, we can immediately say they should bypass us, but that would not be sensible,” Kilk stated.
- Security and Funding: An overland project crossing several member states may have a better chance of securing high co-financing from the European Commission as a project of common interest. Kilk argued that such corridors create mutual dependence, suggesting that German industry’s reliance on a pipeline through Estonia could increase the interest of allies in protecting regional security.
Local Impact and Infrastructure
Because hydrogen must be transported in gaseous form via pipeline to remain economical over long distances, production facilities must be located near the route. The choice of path will directly dictate where infrastructure is developed within Estonia.
An offshore route could be connected to the Gulf of Riga offshore wind farm, though this would likely necessitate a hydrogen production plant in western Saaremaa. Conversely, such a route would jeopardize massive hydrogen plants planned for Pärnu County. Kilk acknowledged that Pärnu is distant from the offshore route and would find it easier to connect to an overland pipeline.
Monika Korolkov agreed that the future of the Pärnu County plants remains uncertain if the overland pipeline does not materialize, though she noted that It’s currently too early to make a definitive assessment.
The Road to 2035
Despite the competing interests, MKM reports that the German, Finnish, and Norwegian consortia interested in the seabed route have not yet officially approached the ministry. Both Korolkov and Kilk maintain that parallel planning is a necessary form of risk mitigation to determine the best business case.
Kilk noted that the process could be abandoned if it is eventually found to be insufficiently profitable, but maintained that the potential benefits currently outweigh the problems.
Given the long-term nature of the infrastructure, final investment decisions are not expected until 2030–2031, once planning is complete and the willingness of German industry to pay for Finnish hydrogen is confirmed. If the overland route is selected and the project proceeds as planned, hydrogen could potentially begin flowing through Estonia as early as 2035.
