Lithuania strong on renewables and recycling – must do better on transport, agriculture and emissions reductions, says OECD

27/09/2021 – Lithuania has significantly boosted its use of renewable energy and waste recycling but needs to do better in managing environmental impacts of transport and agriculture. Policies will also need to be strengthened considerably for Lithuania to reach its 2030 and beyond climate targets and to improve biodiversity and water quality, according to a new OECD report.

The OECD’s first Environmental Performance Review of Lithuania finds that while the share of renewables in Lithuania’s energy supply more than doubled to 22% over 2005-18, twice the OECD average, greenhouse gas emissions have remained at the same level for a decade, as rapid growth in car and truck use led to a 38% rise in emissions from road transport since 2009. With Lithuania’s low population density and dispersed towns making road transport the dominant mode of travel for passengers and freight, transport emissions are projected to rise steeply until at least 2024 without additional measures.

The Review also looks at pressures on water quality and biodiversity from agriculture and finds that a shift towards intensive crop cultivation is worsening river and coastal water pollution from mineral fertilisers. It calls for stricter limits for fertiliser use and awareness-raising initiatives for farmers.

“Lithuania has made very good progress on many environmental fronts. Its per capita emissions are also below the OECD average. However more needs to be done to meet its climate goals, including that of reaching carbon neutrality by 2050,” OECD Secretary-General Mathias Cormann said, presenting the Review in Vilnius alongside Prime Minister Ingrida Šimonytė and Environment Minister Simonas Gentvilas. “Further measures to accelerate the shift to more sustainable mobility will be necessary to bring the transport sector into line with overall climate targets,” he said.

The Review supports Lithuania’s plan to use European Union recovery funds to accelerate efforts to develop renewable energy generation and storage, to shift to alternative fuels in industry and transport, to introduce more electric vehicles and rail freight and to upgrade buildings and heating systems.

It calls for greater efforts to bring energy taxation in line with environmental costs. Lithuania is making ongoing improvements to its vehicle taxation policies, but tax rates on carbon dioxide (CO2) emissions from energy use are low, especially in the road sector. Lithuania has one of the OECD’s lowest excise duties on petrol and diesel and a much lower tax rate on diesel than petrol. Taxes on both fuels should rise to encourage a shift to green vehicles, and tax rates for all fuels should be linked to CO2 emissions. Lithuania should also phase out support to fossil fuel consumption, which has risen over the past decade, while taking measures to limit the burden on the most affected firms and households.

Lithuania also needs to continue its impressive progress in waste management. Having moved from landfilling almost all its waste to recycling and composting most of it in less than a decade, Lithuania should now focus on reversing the increase in per capita municipal waste generation and improving the productivity and lifespan of materials.

Among its Recommendations, the Review suggests that Lithuania:

  • Identify and exploit synergies between climate policies and priorities in business development, energy security, air and water quality, quality-of-life and housing. Develop a coherent roadmap for the transition to net zero that specifies the role of transport.
  • Optimise the use of EU funds, notably the recovery funding, to accelerate implementation and monitor progress of the National Energy and Climate Plan and other relevant policies.
  • Increase taxes on internal combustion engine vehicles with a view to gradually removing the cost differential with electric vehicles. Extend the network of charging stations, improve walking and cycling conditions, phase out free parking at workplaces and consider making public transport and bike-sharing services eligible for workplace benefits.
  • Reduce ammonia emissions by regulating mineral fertiliser application and implementing good farming practices such as integrated livestock manure management.
  • Maintain the strong progress to date in waste reuse and recovery by expanding programmes to encourage behavioural change and incentivise better waste sorting by households. Encourage a whole-of-lifecycle design of products and construction materials.

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