District heating activity licence in Estonia

Producing, distributing and selling heat through a district heating network in Estonia is regulated by the District Heating Act. An activity licence is required¹², and the Competition Authority decides on the application⁹; the act names the cases in which the licence obligation does not apply¹³. Separately from the licence, an undertaking that sells heat to consumers must have its maximum heat price approved by the Competition Authority¹⁵.

Information as of 10 November 2026. Every numbered statement of this page was checked in the official text named below and re-checked by a second reviewer on 2026-11-10. The page is general information, not legal advice; the authority decides on every application.

What the activity is

The District Heating Act (kaugkütteseadus, KKütS) governs the production, distribution and sale of heat in a district heating network and connection to the network¹. District heating is the production of heat and its distribution through a network to supply consumers with heat through a district heating system².

The act defines the three activities separately³:

Production of heat – activity that results in heat energy used in consumer installations.
Distribution of heat – transporting heat through the network to the consumer installation.
Sale of heat – handing over heat to a consumer, for a fee or free of charge.

A heat undertaking (soojusettevõtja) is an undertaking that carries on at least one of these activities and is responsible for the related commercial, technical or maintenance matters⁴. A network operator (võrguettevõtja) is an undertaking that uses a network to distribute heat⁵.

The "network" does not include consumer installations⁶.

The legal act and the authority

Act: District Heating Act (Kaugkütteseadus), redaction in force from 1 October 2026⁷.
General licensing rules: the General Part of the Economic Activities Code Act (majandustegevuse seadustiku üldosa seadus, MSÜS) applies to the application, its processing time and refusal, alongside the special rules of the District Heating Act⁸.
Authority: the Competition Authority (Konkurentsiamet) decides on the licence application⁹ and carries out state supervision under the act¹⁰. It also approves maximum heat prices (section 6 below)¹⁵.
Register: activity licences are entered in the Register of Economic Activities (majandustegevuse register, MTR); its chief processor is the Consumer Protection and Technical Regulatory Authority (TTJA), and the authority that grants the licence enters the data¹¹.

Who must apply

An activity licence is required for production of heat, distribution of heat and sale of heat¹². The act then lists when the licence obligation does not apply¹³:

production of heat, if the forecast annual production does not exceed 50,000 MWh per undertaking or the undertaking does not produce heat in a combined heat and power process;
distribution of heat, if the forecast annual volume distributed does not exceed 50,000 MWh per undertaking;
sale of heat, if the forecast annual sales do not exceed 50,000 MWh per undertaking;
sale of heat by a member of a group, if the group's total sales of heat in Estonia to persons outside the group do not exceed 50,000 MWh per year;
sale of heat, if the heat undertaking does not produce heat in a combined heat and power process;
a person who sells heat only to its members, lessees or tenants, where this is not its main activity and takes place within one immovable (or one building that is a movable) and the land needed to serve it.

Whether a particular undertaking falls under an exemption is specified for the client's case.

The duty to have the heat price approved depends on who the heat is sold to and on whether heat is produced in a combined heat and power process (section 6)¹⁵.

Requirements for the applicant

The act sets the following conditions for granting the licence¹⁴:

Legal form: the applicant must be a public limited company (aktsiaselts) or a private limited company (osaühing) entered in the Commercial Register or being founded.
Technical means and staff: it must have the technical means and staff with the necessary skills to operate in the activity stated in the application.
Capital: a heat undertaking that sells more than 50,000 MWh of heat a year must have share capital of at least 31,950 euros.

The licence may include secondary conditions: a development obligation under § 14(3) of the act, and other conditions¹⁶.

Ongoing duties after licensing include separate accounting for production, distribution, sale and unrelated activities¹⁷. A heat producer operating in a network area and a heat undertaking that is a network operator are providers of a vital service under the Crisis Situation and National Defence Act (kriisiolukorra ja riigikaitse seadus)¹⁸. An undertaking whose forecast production is at least 10,000 MWh a year per network area must secure fuel reserves or reserve capacity that ensure heat supply for seven days¹⁹.

Whether further requirements, such as a fit-and-proper test, anti-money-laundering (AML/CFT) rules or seat or IT requirements, apply is specified for the client's situation.

Documents filed with the application

Data required by the District Heating Act²⁰:

the requested area of operation (tegevuspiirkond);
a site plan and description of the networks located in that area.

Data required by the MSÜS²¹:

name and registry code of the undertaking (for a company being founded, the document proving its founding instead of a registry code)²²;
contact details;
the name of the activity under the law and its classification code;
name and contact details of the person signing the application and the basis of their right of representation;
where relevant, data on the persons, places of operation, certificates or insurance that the licence requirements cover;
if the licence is also to be used by a subsidiary, the subsidiary's business name, registry code and address.

The authority may require additional data where needed to verify the requirements, giving its reasons and a reasonable deadline²³.

State fee, processing time and price approval

State fee. Under the State Fees Act (riigilõivuseadus) the fee for the licence is 260 euros for each year of validity per undertaking for production above 50,000 MWh a year, for distribution above 50,000 MWh a year, and for sale above 50,000 MWh a year (for sale also per group member, where the group's total sales exceed 50,000 MWh a year)²⁴. Reviewing an application to amend the licence conditions costs 50% of that rate²⁵. The fee is paid when the application is filed²⁶. Undertakings also pay a supervision fee on the terms of the Competition Act²⁷.

Processing time. Under the MSÜS the authority decides on the application within 30 days of filing; the time runs from the date all required data has been submitted²⁸. It may suspend the time limit for up to 30 days to allow a deficiency to be removed²⁹ and may extend it once by up to 30 days in a complex case³⁰. A licence that must be granted with secondary conditions is not deemed granted by silence³¹. These are the law's time limits, not a promise.

Maximum price approval. A heat undertaking must have the maximum price of the heat it sells approved by the Competition Authority separately for each network area if it (1) sells heat to a consumer, (2) sells heat to a network operator for resale to consumers, or (3) produces heat in a combined heat and power process¹⁵. It may then sell heat at a price not exceeding the approved maximum³², and must publish the maximum price in its network area at least one month before it takes effect³³. The Competition Authority decides on the price application within 30 days of a compliant application and may extend this to 90 days³⁴. The time limit is suspended while information the authority has requested is not provided³⁵. A heat undertaking may also apply for approval of a price formula for up to three years; a price application based on the formula is decided within ten working days³⁶.

What LexorCorp Global OÜ does and how to order

LexorCorp Global OÜ prepares the activity licence application documentation for the client's company and manages the filing process with the Competition Authority. We do not give legal or tax advice, do not carry out audits, and cannot promise the licence, a date or any decision of the authority; the authority decides. The state fee is paid by the client.

The price is given on request. District heating (heat production, distribution and sale) is listed in our guide Licensed activities in Estonia, where each activity has a "Request a price" button; the request reaches us like every other enquiry and we reply by e-mail. You can also send the request directly: request a price for activity licence application documentation.

Sources

KKütS § 1(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 2 p 1 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 6(1)-(3) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 4(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 2 p 10 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 2 p 3-4 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
Riigi Teataja header of KKütS — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
MSÜS § 2(1); KKütS § 19(2) — text in force from 01.09.2025
KKütS § 19(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 28(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
MSÜS § 8(1),(4),(5); § 51(1) p 2 — text in force from 01.09.2025
KKütS § 18(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 18(2) p 1-6 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 20 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 9(1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 23 — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 7(2) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 7(3) — text in force from 01.10.2026 (RT I, 30.06.2026, 55); provision added by RT I, 30.06.2026, 1
KKütS § 7(3^1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55); provision added by RT I, 30.06.2026, 1
KKütS § 19(2) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
MSÜS § 19(2) with § 15(1) p 1-4, 7 and § 15(2)-(5) — text in force from 01.09.2025
MSÜS § 19(4) — text in force from 01.09.2025
MSÜS § 19(6) — text in force from 01.09.2025
RLS § 136^5(1) — text in force from 01.11.2026
RLS § 136^5(2) — text in force from 01.11.2026
MSÜS § 19(7) — text in force from 01.09.2025
KKütS § 1(2^1) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
MSÜS § 20(1) — text in force from 01.09.2025
MSÜS § 20(2) — text in force from 01.09.2025
MSÜS § 20(3) — text in force from 01.09.2025
MSÜS § 20(4) — text in force from 01.09.2025
KKütS § 9(4) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 8(4) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 9(5) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 9(7) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)
KKütS § 9(10) — text in force from 01.10.2026 (RT I, 30.06.2026, 55)

Official sources

The laws this article names, each linked to its official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

State Fees Act — Riigi Teataja, English translation

Sources in the text are named without links; the official texts are linked under Official sources. To see which of our services your company needs, open the Business Navigator.

District heating activity licence in Estonia: production, distribution and sale of heat