The Lithuanian government has stated that it wants to achieve the goal of carbon neutrality by 2050 in the National Climate Change Management Agenda (NCCMA). The National Energy and Climate Plan (PNEC)has defined medium-term mitigation and adaptation measures (2021-30) to support it, with particular attention to transport and agriculture. However, according to the OECD, existing policies will be insufficient to meet the energy revolution targets for 2030 and beyond. Greenhouse gas (GHG) emissions have remained mostly flat since 2009. Transport emissions have increased by 50% since 2005, mainly due to an increase in the volume of goods transported by road and higher emissions from passenger cars. Energy consumption has increased since 2005, mainly driven by transport demand. In addition to domestic biomass and wind energy resources, the country relies on fossil energy and electricity imports to meet its needs. At the same time, energy supply from renewable sources more than doubled to about 22% in the period 2005-18. Lithuania plans to use European Union (EU) funds, in particular the Recovery Fund, to support the renovation and upgrading of heating system buildings, alternative fuels in industry and transport, electric vehicles and rail freight transport, and renewable energy production and storage.
In less than a decade, Lithuania has gone from landfilling almost all waste to recycling and composting. This impressive progress is the result of increased separate collection, the construction of sorting facilities, improved labeling requirements, almost complete service coverage, education and awareness campaigns, and the expansion of deposit-refund systems to cover glass, plastic, and aluminum beverage containers. However, the per capita production of municipal waste has been increasing since 2009. The country should now focus on reducing waste generation and improving material productivity by adopting and implementing cross-cutting circular economy policies.
Water pollution is getting worse. More than half of the rivers monitored in agricultural areas are not reaching a ‘good’ status under the EU Water Framework Directive, while all coastal waters fail to achieve good ecological or chemical status. The main pressure on water bodies is nutrient pollution from diffuse sources. The most significant driver is the increase in the use of mineral fertilizers, following a shift from mixed-crop mixed agriculture to intensive cultivation. A second important cause of nutrient water pollution is insufficiently treated wastewater. The government plans to increase the share of the population linked to public wastewater treatment from 77% in 2019 to 85% in 2025 and 95% in 2030, as well as to build or rehabilitate 12 wastewater treatment plants by 2023. In addition, the consolidation of small water services into larger ones would help to ensure the necessary investments inadequate water supply and treatment infrastructure.
Lithuania has expanded its network of protected areas: they cover 17% of the earth’s surface and 23% of the country’s exclusive economic zone at sea. Forest area (about 34% of the territory) has been increasing in recent years, promoted through afforestation payments to private landowners and restrictions on the conversion of forest land to other uses. There are fewer threatened species in Lithuania than in other OECD member countries. The government is planning to consolidate numerous regional agencies for protected areas into a single national agency with more harmonized management.
Environmental regulation has been strengthened over the past 20 years through the alignment of the country’s environmental legislation with EU directives, most recently through increased reliance on electronic document processing. The adoption of good practices for the implementation of environmental law has been slow. The share of planned and risk-targeted inspections, just over half of the total, is lower than that of most OECD member countries, indicating that compliance monitoring is largely reactive. Information on regulated companies is poorly maintained, which may lead to gaps in inspection planning. High non-compliance does not seem to be adequately discouraged by administrative sanctions, the average level and collection rate of which appear to be too low.
Public spending on environmental protection fell from 1.3% of gross domestic product (GDP) in 2000 to 0.3% in 2018, below the EU average of 0.8%. At the same time, investment needs in sustainable energy and climate policies alone are estimated at 3% of GDP per year over the next decade. Lithuania intends to rely on EU funds and other external sources (50%), state funding (21%), and the private sector (29%) to finance these investments. In addition, the Lithuanian budget for research and development (R&D) on the environment has declined over the last decade. In 2019, the public budget for energy-related R&D per unit of GDP ranked third among OECD member countries. The government’s action plan to strengthen the country’s energy innovation includes more than 50 measures in the areas of infrastructure, human resources, products and services, regulatory environment, science, and technology. Lithuanian companies and research and development institutions have accumulated important expertise in the renewable energy sector.
Lithuania is making positive changes to vehicle taxation policies. It introduced a new tax on car registrations in 2020. The country is also considering an annual tax on motor vehicle ownership, which would vary depending on the vehicle’s environmental performance. In addition, the government plans to replace the time-based road use tax for heavy-duty vehicles with a road use tax based on distance differentiated according to the Euro class of the vehicle. At the same time, taxes on energy products do not fully reflect the environmental costs of energy use. Effective tax rates on carbon dioxide (CO2) emissions from energy use are low, especially in the road sector. The country has one of the lowest excise duties on petrol and diesel in the OECD and a much lower tax rate on diesel than on petrol. Support for fossil fuel consumption has increased significantly over the past decade. It consists mainly of tax preferences for the use of petroleum products, in particular lower taxation of heating oil and diesel used in agriculture.
The transport sector is the largest emitter of greenhouse gases, accounting for 30% of the total in 2018. Transport emissions have increased by 38% over the last decade and are expected that, without further measures, they will soar at least until 2024. Transport is also the country’s main source of nitrogen oxide and fine particulate emissions. Lithuania’s dispersed settlement pattern and low population density make road transport the dominant mode of transport for both passengers and freight. In 2019, the average vehicle was 15 years old, and 68% of cars were powered by diesel. In this sense, the transport sector does not seem to be on a path consistent with the gradual decarbonization envisaged by the PNEC and with the new, more ambitious objectives of the NCCMA. The country plans to increase the use of alternative fuels and innovative transport technologies, electrify railways and strengthen relevant fiscal instruments. The 2021 Alternative Fuels Act requires support for biofuels and hydrogen to increase the share of renewable energy sources in the sector’s final energy consumption by 2030. However, achieving a zero-carbon transport system by 2050 will require stricter targets and additional measures to address growing car ownership and incentivize the shift to sustainable modes of transport.
Cities and small towns have developed Sustainable Urban Mobility Plans (SUMP) to encourage the shift to greener modes of transport. However, in the vast majority of municipalities, land use and transport planning remain the responsibility of separate authorities with limited or no coordination. This means that the transport plans and the territorial plan work separately. As a result, many development projects continue to be car-centric. Reducing dependence on private cars will require additional investment in public transport. For example, limiting road investment to the necessary construction and modernization of dirt roads would free up funds for public transport. The uptake of electric vehicles (EVs) has so far been reduced despite significant purchase subsidies. Challenges include the limited charging infrastructure of electric vehicles and the substantial price disadvantage of electric vehicles compared to diesel and gasoline cars. The absence of a national strategy for electric vehicles and the fragmentation of institutional responsibility for the construction of charging infrastructure for electric vehicles hinder its spread.
