On June 25, the government approved the transport energy bill drafted by the Ministry of Climate and Energy (KEM).
KEM said the transport sector is the second largest source of emissions in Latvia, accounting for 37% of total emissions in the economic sectors. The regulation aims to promote the “greening” of the transport sector. The draft law is being advanced for further approval by the Saeima.
Gatis Titovs, head of fuel category of Circle K Latvia Ltd., said that increasing the share of renewable energy in the total fuel portfolio will definitely increase the price, because it is related both to the construction of additional infrastructure for fuel traders and to the fact that bioaddition is more expensive than fossil fuel.
“Already, circle K Latvia receives regular fuel from different suppliers in Europe, and biocomponents are ordered separately. In fact, we can say that our fuel is produced right here in Latvia,” Titovs added.
Thus, he expressed confidence that the company would adapt to the requirements, but the cost of fuel would in any case increase in line with the price of biodegradation.
JSC “Viada Baltija” representative Kaspars Tupiņš said that in the company's view, the draft law will not introduce much influence in the Latvian retail fuel market, because Viada Baltija as a trader already carries out retail sale of fuel with a mandatory addition of biofuel.
Janis Vība, Chairman of the Board of JSC “Virši-A”, pointed out that further progress of the transport energy law is a positive step in order to promote the development of a more environmentally friendly Latvian transport sector, as well as further investments in the country's green energy sector.
He also pointed out that renewable fuels are more expensive than fossil fuels, but the company believes it is too early to draw conclusions about the exact impact of the bill on fuel prices.
He said the advantages of the draft law are that requirements for renewable fuel types are clearly defined in the long term, which in turn provides opportunities for local businessmen to develop the production of fuel types in Latvia, but as a defect he mentioned that the objectives of the draft law are currently relatively moderate and are being introduced several years late compared to neighboring countries.
Armands Beizikis, Chairman of the Board of Neste Latvija Ltd, said that currently “Neste” cannot comment on the impact of the draft law and its possible impact on fuel market or prices, because the process has not yet been completed and has been sent to the Saeima for consideration. He said the company is keeping track of discussions and decision-making.
“It is important to recognize that the fight against climate change requires all available solutions to reduce greenhouse gas emissions,” Beizikis added.
