The Latvian Peat Association categorically opposes the approval by the Cabinet of Ministers of the Just Transition Territorial Plan prepared by VARAM, which provides for the closure of energy peat extraction and use in Latvia from 2030 in exchange for receiving 184 million euros from the European Commission and an unclear, poorly defined use of this funding that is disconnected from the peat industry. Energy peat is an essential, traditionally used local energy resource that can contribute to Latvia's energy security and independence, as well as reducing reliance on Russian natural gas. It is possible to extract up to 700,000 tonnes of energy peat annually in Latvia, thereby providing an additional 2 million MWh of energy. The Cabinet of Ministers meeting, where a conceptual decision will be made regarding the closure of the peat extraction sector or the use of peat in Latvia's energy sector, is scheduled for 14 July.
Neither the European Commission regulation establishing the Just Transition Fund (JTF), nor Latvia's National Energy and Climate Plan obliges the state to close the energy peat sector, but VARAM is prepared to do so for the sake of obtaining one-off funding, justifying this step with informal comments from the European Commission. It is in Latvia's national interest to decline the 184 million euros in JTF funding, an amount smaller than the direct taxes paid by the peat industry over ten years, without even evaluating the industry's significant impact on other sectors of the economy. The Latvian Peat Association believes that such a ban, which would destroy an economic sector vital to energy independence and security, is unacceptable.
During the development of the JTF territorial plan, the Employers' Confederation of Latvia, the Ministry of Economics, the Seedling and Peat Innovation Fund, and the Latvian Association of Local Governments also spoke out against the closure of the energy peat sector, especially under current geopolitical conditions.
Latvia is a global peat power; due to favourable climatic conditions, the volume of peat increases annually, meaning peat is not a fossil fuel, but a slowly renewable resource. Over the last five years, an average of 1,088,000 tonnes of peat has been extracted annually – 29,000 tonnes of which, or 2.7%, was energy peat, the extraction of which could be significantly increased. Increasing the use of peat in the energy sector will also increase generated GHG emissions; these can be effectively balanced through compensatory measures and support for emission reduction in technological processes or by implementing best extraction practices. For example, by promoting and supporting the modernisation of existing boiler houses so they can reduce CO2 emissions, which will also be accounted for in transitional biomass after 2030.
JTF plan is poorly prepared
The JTF territorial plan, developed under the leadership of VARAM over two years, is of poor quality and contains fundamental problems. Implementing the plan in its current form will achieve the opposite effect – emission levels will increase, and there are indications that peat industry operators are halting investments in modernisation and the introduction of new technologies that reduce emissions from economic activities.
During the development of the plan, VARAM indicated that "abandoning the use of peat in energy production by 31 December 2030 is the only prerequisite of the Just Transition Territorial Plan for Latvia to receive 184.2 million euros in Just Transition Fund financing". However, only a small portion of the funding is allocated to activities related to the peat industry – in fact, only for the recultivation of historic peat extraction sites owned by the state.
It is telling that private landowners who would give up energy peat extraction would receive no compensation at all and, contrary to the EC's guiding principle for the implementation of the Green Deal, would be left behind. Furthermore, the ban on energy peat extraction on private property unjustifiably restricts property rights.
Instead, if a conceptual decision is made to reduce the extraction and use of energy peat, a solution should be developed to compensate operators and landowners for damages caused, and voluntary schemes should be created to facilitate the repurposing of businesses in this sector.
The JTF plan also provides for a significant reduction in emissions in the peat industry as a whole – both in the energy and horticultural peat sectors – yet no funds are provided for this. Emission reductions can be achieved through the modernisation of the peat industry, research and development of peat products, and by increasing the local consumption of peat, for example, by establishing nurseries for food and tree seedlings.
Most importantly, the JTF plan does not clearly define that the closure applies only to the energy peat sector and that peat extraction for horticultural and food production purposes will not be restricted. The question of what will happen to the horticultural peat sector once it is no longer protected by the 2020-2030 Guidelines for Sustainable Peat Use after 2030 remains unanswered.
The Latvian Peat Association defends the interests of national land and resource owners and peat producers for sustainable long-term peat extraction. The Association's goals are to promote the inclusion of peat as a slowly renewable natural resource in the Green Deal, which includes the modernisation and emission reduction of both the energy peat and horticultural peat sectors, the promotion of local peat consumption, and the development of innovative, value-added peat products. More at: www.peatsociety.lv
Just Transition Territorial Plan in its current draft:
https://tapportals.mk.gov.lv/legal_acts/2e7ee42f-afe8-41f0-9350-5c2922ed5ee2#