In response to rising wood pellet prices and supply difficulties over the past few weeks, Minister for Climate and Energy Jānis Vitenbergs met with representatives of the Latvian Forest Industry Federation and the Latvian Renewable Energy Federation. The minister stated that it is unacceptable for residents to repeatedly face pellet shortages and sharp price rises. The parties agreed it is essential that Latvian producers are able to meet sufficient domestic demand.
During the meeting, the parties discussed the causes of the current situation, the outlook for summer, and practical steps the sector needs to take immediately to ease market tension. The minister gave the industry a clear directive: when it comes to pellets for households, priority must go to domestic consumption.
Accordingly, the Ministry of Climate and Energy (KEM) will call on pellet producers to voluntarily commit to increasing production capacity, ensuring a clear pricing policy, and acting responsibly to secure domestic supply.
Minister for Climate and Energy Jānis Vitenbergs: “It is an absurd situation that a country ranking among Europe’s top five pellet producers faces pellet shortages in local shops and sudden price spikes every couple of months. I expect the industry to pull itself together rather than wait for the state to force it to. This is both a question of the sector’s reputation and a question of companies’ responsibility towards the people of Latvia.”
As one factor limiting the increase in production capacity, producers’ representatives cited a decline in the volume of high-quality raw material (wood shavings). To increase the availability of raw material, KEM will approach state forestry company Latvijas Valsts meži, asking it to promptly ensure contracted deliveries to those pellet producers who have joined the aforementioned responsible pellet producers’ initiative (i.e. committed to focusing on the Latvian market).
To curb speculative dealing, KEM will again ask the Consumer Rights Protection Centre (PTAC) to pay special attention to the pellet retail market, including transactions on the ss.com platform. KEM urges that if a potential fraud attempt is identified – for example, a pellet trader demanding prepayment or setting unreasonable deadlines – this should be reported to PTAC or the State Police.
Given that pellet prices are currently rising both in Latvia and across the Baltic states as a whole, and that such situations can create conditions for market distortion, KEM will, among other things, also call on the Competition Council to more closely monitor possible cases of unfair commercial practice.
J. Vitenbergs: “This market situation is clearly being exploited by speculators, or unscrupulous resellers, who on top of that create artificial demand and fuel price rises for both pellets and raw material. If you spot an attempted fraud, be sure to report it to PTAC or the State Police, so that together we can catch these operators.”
Energy supply security is a KEM priority. KEM will continue to monitor the situation on the fuel market and, in order to ensure a stable and secure heating season, will implement additional measures if necessary, not ruling out the development of emergency regulation should voluntary solutions fail to deliver results.