shale gas, which is a by-product of the shale oil generation. The share of oil shale in Estonia's electricity generation has decreased significantly over the last decade, and it is set to decrease even more due to the European Union's climate policy as well as the country's recognition of the environmental impact of oil shale-fired power stations and need to diversify the national energy balance. According to the International Energy Agency, Estonia should adopt the energy strategy in order to reduce the share of oil shale in the primary energy supply by improving the efficiency of shale-fired power stations and increasing the use of other energy sources such as renewable energy. Eesti Energia owns the largest oil shale-fuelled power stations (Narva Power Stations) in the world. The increased carbon price has made oil-shale electricity less competitive and will affect it even more in the future. In June 2021, Eesti Energia announced it will stop burning oil shale for electricity generation by 2025 and burning oil shale gas by 2030. The government coalition of Estonia has decided that Estonia will stop oil shale power generation by 2035 at the latest. Heat produced by co-generation at the Balti Power Station is used for district heating of Narva, the third largest city in Estonia with 58,700 inhabitants (2013). The co-generation plants in Kohtla-Järve, Sillamäe, and Kiviõli burn oil shale to produce electrical power and supply district heating to nearby towns. In addition to raw oil shale, the Kohtla-Järve Power Station uses oil shale gas, a by-product of shale oil production, for the same purposes. Shale oil extraction In 2008, Estonia was the second largest shale oil producer in the world after China. Production was 1.173 million tonnes of shale oil in 2019. About 99% of shale oil production was exported. In 2018, 34% of the mined oil shale was used for shale oil production. There are three shale-oil producers in Estonia. In 2019, VKG Oil (a subsidiary of Viru Keemia Grupp) produced 637,000 tonnes of shale oil, Enefit Power (a subsidiary of Eesti Energia) produced 442,000 tonnes, and Kiviõli Keemiatööstus (a subsidiary of Alexela Energia) produced 94,000 tonnes. Two processes – the Kiviter process and the Galoter process – are in use for shale oil extraction. Enefit uses the Galoter process while VKG Oil and Kiviõli Keemiatööstus use both – Kiviter and Galoter processes. The government coalition of Estonia has decided that Estonia