Opinion of Andris Vanags, Head of the Latvian Wind Energy Association
The European Union has agreed to increase its CO2 reduction target for 2030 between 55% to 60%. The set bar is high and requires serious planning and dedication. National goals and legislation will have to be adapted to the new circumstances accordingly. It is clear that the role of renewable energy sources in climate policy will increase.
European Parliament declared a climate emergency a year ago, asking the European Commission to ensure that all legislative and budgetary proposals are fully in line with the goal of limiting global warming to 1.5 ° C and taking action to significantly reduce greenhouse gas emissions. Although part of society is still wrongly perceiving climate change as something that it is far away and does not affect us – we are already facing climate change in Latvia – forest fires and prolonged droughts alternating with rainfall affect both individuals and entrepreneurs, especially farmers.
At the same time, the Ministry of Economics has submitted to the Latvian parliament Saeima a proposal of to significantly reduce the excise tax on one of the fossil energy types – natural gas (CNG) used in transport, stipulating it 1, 91 euros per 1 MWh from 2021 to 2025 and 10 euros per 1 MWh as of 2026. Such excise tax reduction will allegedly promote the use of environmentally friendly transport. This inevitably raises the question of whether we are making rational, competitive and sustainable decisions under the guise of climate goals.
The use of CNG results in an average of 25% lower CO2 emissions compared to, for example, diesel vehicles. The drafters of the law envisage that the use of CNG in the transport sector will reduce CO2 emissions by 30%. Perhaps such a goal could theoretically be achieved if the entire transport sector switched to CNG, which would be difficult to imagine. CNG in Latvia has already had a significant competitive advantage over other fossil transport fuels, nevertheless such a rebate has not been sufficient to make CNG competitive with other fossil fuel transport fuels.
Latvia is going to stimulate transition solutions in the name of the short-term goal, while the rest of Europe is on the road to zero-emission electric or hydrogen-powered transport. Decisions like these are fooling the transport sector into encouraging the use of uncompetitive technologies with short-term support. For example, the Volkswagen Group has stopped producing new CNG cars because the carmaker wants to switch to electric car production more efficiently and as quickly as possible *. Or another example – a study by VRT News in Belgium comparing the environmental and air quality impacts of different transport fuels found that the process of extracting and transporting compressed CNG is more than environmentally unfriendly due to the release of large amounts of methane, which has up to 28 times larger negative effect on the atmosphere than CO2. **
The public transport sector could attracting co-financing from the European Union for the purchase of zero-emission buses, which is already done in some EU countries but will most definitely be done on a larger scale in the next 5 years together with the development of the wind energy sector. Use of renewable energy – green hydrogen, biomethane and electricity – will become economically advantageous in a very near future. This is an opportunity for Latvia today to make decision that will benefit climate and economy even after 50 and more years.
European Commission in it’s assessment of the Latvian National Energy and Climate Plan 2021-2030 (published mid-Coctober) points out that Latvia risks not achieve the targets set for 2030 if the pace of deployments of renewables is not maintained. Latvia is criticised for the lack of a concrete and purposeful plan. We are also quite clearly called upon to phase out fossil fuel subsidies by 2030.
Taking into account the renewable energy targets for 2030, which envisage a 7% share of RES in final energy consumption in transport, state support to promote an uncompetitive fossil energy is not a smart move and may significantly delay the deployment of RES and increase their cost. Latvian Wind Energy Association therefore call on legislators to work on sound, non-restrictive, long-term solutions, rather than using short-term “patches”.
*https://europe.autonews.com/automakers/vws-electric-push-puts-future-cng-cars-doubt
**https://www.vrt.be/vrtnws/en/2020/01/11/which-car-is-the-best-choice-for-the-climate-and-which-one-for/
