Chemical Industry

The OSKA chemical industry study examines workforce and skills needs in the sector over the next ten years and provides recommendations for meeting these needs.

Workforce Structure and Trends
The chemical industry employs a modest share of Estonia’s manufacturing workforce (3.3%; around 3,600 people). However, chemical industry sales account for over 5% of total manufacturing turnover, with nearly 70% generated from exports. Productivity, particularly in shale oil production, exceeds the manufacturing average. Over the past decade, the number of companies in the sector has grown from 102 in 2014 to 165 in 2023, mainly in the production of cleaning, washing, and toilet products, where employment has tripled. The shale chemical subsector experienced a decline ten years ago, but employment has remained stable since 2017 (around 1,200 people). In 2023, the largest share of sales came from shale oil production (41%, €384 million), followed by basic chemicals, fertilizers, and nitrogen compounds (22%, €208 million), and paints, varnishes, and other finishing products (20%, €187 million).

The study focuses on main occupations—grouped by similar field-specific training and job content—with around 2,500 employees in these roles (1,410 in the chemical industry and 1,080 in shale chemicals). About 20% (450) are managers and top specialists, 15% (around 380) mid-level specialists, and two-thirds (over 1,660) skilled workers, mostly chemical process and production operators, along with industrial equipment mechanics.

Three major trends will shape the Estonian and EU chemical industry in the coming years: the green transition, digitalization, and geopolitical changes. EU environmental policies aim to reduce carbon emissions, increase energy efficiency, and implement safer production processes. Companies are being pushed to reduce the use of fossil raw materials and fuels and develop green technologies and circular economy solutions. At the same time, attention is increasingly focused on maintaining competitiveness and reducing administrative burden.

The industry is steadily moving towards digitalized and automated production. Geopolitical tensions and the energy crisis have made companies more cautious, prioritizing investments in energy efficiency and risk management. The shortage of skilled workers is deepening in Estonia and across Europe, as the intake of new specialists slows and the workforce ages.

Shale has been a strategic resource for Estonia’s energy and chemical industry for decades. Although legislation regulating its use is evolving, there is no official deadline for its extraction or use. Proposed climate laws set sector-specific greenhouse gas reduction targets through 2050. According to the 2035 Energy Sector Development Plan (ENMAK), shale oil production may continue beyond 2035, but future use will increasingly depend on EU-level climate policies and transition mechanisms.

Estonia’s chemical industry is entering a new phase characterized by lower emissions and higher-value production projects. Alongside traditional shale oil, development focuses on green hydrogen, ammonia, and methanol production, CO₂ valorization into new materials, and defense-related chemicals. Estonian researchers are working on next-generation shale technology, viewing shale not just as an energy source but as a valuable chemical raw material.

Workforce and Skills Forecast
According to OSKA, employment in main chemical industry occupations will grow slightly (7%) over the next decade, driven by innovation in areas such as green hydrogen, carbon-based materials, and explosives for defense and security. New companies generally require a moderate workforce due to high-tech and automated processes, though additional skilled labor may be needed during implementation. Around 40% of demand is for top specialists, such as product development and chemical engineers, as well as production managers for new companies. Mechanically intensive sectors require setup and maintenance, increasing demand for industrial equipment and machinery mechanics by around 15%. The number of chemical process and production operators should remain stable, but more than 200 new operators will be needed over ten years to replace retiring staff. Each year, roughly 80 new employees are needed in main occupations—60 to replace leavers and around 20 for new companies. Annually, 25–30 new higher-education specialists and 40–50 vocational specialists could join the industry. On-the-job training will cover some roles, particularly operators.

Key Skill Needs
Over the next decade, demand will grow primarily for four skill groups:

1. Knowledge and skills in chemistry, materials technology, and chemical engineering – the core of technological development for new processes and production solutions.

2. Digital technology and technical skills – increasingly important for operating and developing automated systems, supporting production digitalization and efficiency.

3. Knowledge of legal requirements, quality management, and occupational and environmental safety – ensuring compliance and safe operations.

4. Project and product management skills – essential for implementing new developments and coordinating international collaboration.

Strong general skills—learning and adaptability, teamwork, and collaboration—are also essential for acquiring and applying specialized skills in a rapidly changing work environment. Competitive production relies on effectively combining technical, digital, and social skills.

Workforce Challenges
Estonian chemical companies face a shortage of top specialists in chemical engineering, materials science, and technology. Although many chemistry-related programs exist, there are too few specialists with industry-relevant skills. Chemical engineering pathways need clearer structuring and increased visibility. Consideration should be given to a new industrial chemical engineering master’s program and more flexible learning options. Universities and companies should develop industrial graduate models linking studies to real R&D projects and strengthening practical learning.

The pipeline for chemical process operators and laboratory technicians is limited to Ida-Virumaa Vocational Education Centre, which does not cover nationwide needs. There is also a shortage of vocationally trained mechatronics, automation, and mechanical workers for operating and maintaining production equipment. Training for operators and lab technicians should expand beyond Ida-Virumaa, with increased intake in technical fields.

Technological development and the green transition require new knowledge in sustainable chemical engineering, materials science, legal requirements, and digital technology, as well as strong project and product management skills to support collaboration and development. Vocational and higher education programs should update curricula, integrate sustainable product development, legal compliance, and digital production management, and offer micro-credentials for rapid skill development in collaboration with companies.

Workforce growth is limited by young people’s weak STEM skills, low awareness of career opportunities, and the sector’s outdated image. Schools have limited connections to companies. The Estonian Chemical Industry Association and employers, working with teacher associations, career advisors, and schools, can raise the industry’s visibility and provide young people with more hands-on experiences, such as factory visits, internships, and company presentations.

Employers note that general education, especially in national gymnasiums, should better reflect state priorities and educational demand. Widespread basic mathematics does not sufficiently support the future supply of engineers or align with high-tech economic goals. The decline of chemistry teaching in upper secondary schools since 2011 has also reduced young people’s readiness to pursue chemistry-related studies.