“That is how we will secure the economic benefits – export earnings, jobs and tax revenue for our national budget,” explains Māris Liopa, Chairman of the Forest Certification Council of Latvia and head of the Latvian Forest Programme, in an interview. He points out that the European Union is slowly changing course, as the implementation of parts of the Green Deal's original agenda is being postponed or sent back for revision, which is a signal to Latvia and other forest-rich countries not to rush headlong into imposing so-called green shackles on land-use industries.
What is the current situation, given that over the past six or seven years an avalanche of change has been rolling across the world, particularly the European Union, affecting Latvia too and doing so ever more strongly?
You may like it or not, but you cannot ignore the fact that change is happening continuously and there is no way of predicting when it will give way to a predictable daily routine. This period could also be called an age of shifting change, because a great many different events each set off tectonic tremors of their own, while their interaction creates unprecedented situations that demand swift, competent action both from businesses, if they are to hold their market positions, and from every decision-maker. Unfortunately, we have lived through moments when there is no time for lengthy discussion to weigh up the positive and negative side effects of the decisions available. This can be seen clearly at both the Latvian and the European Union level.
What are the events that have turned life as we knew it upside down?
In 2020 along “came” Covid-19, which, figuratively speaking, distorted everything that had until then been the normal way of life – a whole range of industries were banned from operating, there was no way of leaving or entering the country, and you could keep your job if you had been vaccinated (if not, the employee had to be dismissed). On the pretext of curbing the spread of Covid-19, Latvia managed to introduce a ban on buying, say, socks and boots in shops in person, and on going out for a walk, while Sweden did things entirely differently. Globally, all these restrictions and prohibitions led to the rupture of logistics chains that had been working well until then, several products became scarce and prices rose accordingly. Yes, for consumers it was a shock, but for decision-makers it was a stark reminder of how great, indeed enormous, the value of essential goods is – food, medicines and so on. If they are produced in Latvia, their availability to the people living here will be far greater than if we wait for deliveries from abroad, but... that is not possible. You could say that Covid-19 restored a sensible view of what sustainability is and what has value – money or the actual goods.
Just as we had found ways of living with Covid-19, in February 2022 Russia's full-scale invasion of Ukraine began, and the pandemic and the harm it caused were “forgotten” across every information channel; it effectively vanished from the agenda. And once again – no predictable tomorrow, energy prices shot up to cosmic heights, and in August the electricity exchange price reached 4000 euros per MWh. In a situation like that, nobody needed convincing that additional electricity generation capacity was needed at home. The easiest route was to build solar panel parks, and within a few years they sprang up like mushrooms after rain; wind farms are now being built as well.
Another point certainly worth mentioning is the Constitutional Court's ruling on compensation for forest owners, which has provoked wide-ranging discussion, because in it the state's duty to protect nature collides sharply with private owners' right to fair compensation. In its judgment of 10 April 2026 in case No. 2025-09-03, the Constitutional Court found that the current level of support for micro-reserves is, in the court's view, compatible with the Constitution.
It seems incredible! The judgment lays bare the formal nature of the existing state system and the years of “special” treatment of forest owners in Latvia... It has to be stressed that compensation for restrictions on economic activity in Latvia is calculated using the so-called objective method, rather than by assessing each case individually. This means that an owner receives the same sum regardless of whether the forest holds a valuable mature stand or a young one. The level of compensation is not adequate.
It should be noted that annual payments of up to 190 euros per hectare come nowhere near covering the actual losses and the potential income from selling timber. This is plain discrimination. Owners are right to feel that the principle of legal equality is being breached, because the state, ostensibly in the interests of society as a whole, places a burden on particular individuals for the sake of nature protection, yet fails to provide fair consideration in return that matches the specific situation...
A “dramatic” error in the calculations, or deliberate deception?
The main task of the European Green Deal proclaimed at the time was, and still is, to mitigate climate change and cut greenhouse gas emissions, and Latvia's political decision-makers managed to agree to it without any understanding of whether it could be delivered. Electric cars were declared the transport of the future, and a date was set on which the production of internal combustion engine cars in the European Union would end. It seems that Europe's decision-makers do not live on our Earth, but on another planet. Specifically, to produce the quantity of vehicles and energy generators needed to achieve climate neutrality requires many times more minerals than devices running on fossil fuels consume, and with existing technology the extraction volumes for these minerals will not be able to satisfy even European demand, let alone the world's.
Europe “anticipated” that in 2030 the target would be met – 30% of cars would be electric and 30% of energy would be produced from renewable resources. To achieve that, according to estimates from the available data (figures from Professor Normunds Stivriņš), 124.2 million tonnes of copper would be needed. For comparison, worldwide copper production in 2019 was 24.2 million tonnes. According to scientists' estimates, meeting that European target would require some 40.5 million tonnes of nickel, even though world production in 2019 was a “mere” 2.35 million tonnes. The situation with lithium is similar: world extraction in 2019 was 0.095 million tonnes, while Europe's interim decarbonisation target alone calls for 26.7 million tonnes. The vanadium shortfall is just as striking – extraction stood at 0.096 million tonnes, while 16.9 million tonnes are needed.
To obtain the quantity of minerals needed to produce a single generation's worth of units would require 5.1 years' worth of global copper output, 17.2 years' worth of nickel output, while vanadium would take 175.5 years' worth, and lithium as much as 280.6 years of world extraction.
The world extracts considerably less of the minerals needed for production than the European Union alone requires in order to meet the targets it has set for 2030. A few years went by and an “awakening” began within Europe's institutions; it is slowly being understood that the target set is NOT technologically achievable, and car manufacturers are resuming production of internal combustion engine vehicles. At the same time, in many draft documents being prepared in Europe “everything is still going ahead”, it all continues, even though it is clear that the targets set, unfortunately utopian ones, cannot be met with the current technological and financial capacity, still less in an utterly unpredictable and threatening geopolitical situation…
That is the scale of the wider Europe, but not the situation in Latvia!
Latvia is a European Union member state and, like it or not, every member state fights for its own opportunities and rights in Europe. If it does not, it risks becoming a kind of nature reserve. All the more so if, whether knowingly or not, a group of people in Latvia – small in number, yet highly proactive and fond of aggressive rhetoric – is urging society towards precisely such a future and exerting corresponding pressure on political decision-makers.
What kind of reserve could Latvia become?
This is about land, which together with our people is our most significant resource, one that can be used for a variety of needs, while what is grown on it – agricultural produce, timber – serves as an important resource for manufacturing industry. Land is an important sphere of the national economy that provides jobs and tax revenue and reduces various risks. In recent years ever greater importance has been attached to preserving biological diversity, and there are ideas about how Latvia could reduce its CO₂ emissions simply by cutting the extraction of timber resources. Nobody wants to look at the CO₂ emissions produced by the war in Ukraine!
Modelling has been carried out on the effect of the European Green Deal and other commitments on annual timber extraction volumes in Latvia, since instead of the current 13 million m³ it might be possible to extract a little over 12 million m³; there are also scenarios in which the volume of timber extracted would be 8.2–9.5 million m³. That is an enormous impact not only on the economy but also on jobs and so on, because the forest sector – forestry and the timber industry – currently accounts for more than 6% of Latvia's GDP, and together with agriculture and other bioeconomy sectors the figure is around 12% of GDP. Meanwhile, counting the sectors linked through indirect effects – transport, construction, education and others – around 20% of GDP already arises from land use in Latvia. In effect, every fifth euro in Latvia comes from land management. In the name of natural diversity and its preservation, millions of cubic metres of timber, worth billions of euros in monetary terms, could simply be left to rot in the forest through sheer irresponsibility.
Forest resource monitoring data show that Latvia's total growing stock of timber is 671.5 million m³, and the amount of deadwood reaches 64.1 million m³. Over the past 16 years the amount of deadwood has increased by 7.7 million m³, or 13.7%. In future the volume of deadwood will continue to grow, because the share of old forests in Latvia will increase. A great many spruce stands were planted after storms back in Soviet times, and in future the area of such stands in hectares (by dominant stand) will be almost twice as large as it is now. As is well known, spruce stands over 50 years of age are far more vulnerable both to infestation by the European spruce bark beetle and to windthrow.
That is why in recent years the volume of timber felled because of such damage has risen substantially, but for the most part what can be obtained from it is energy wood, which carries little added value. Increasing the supply of firewood (energy wood) will bring no meaningful benefit either to society or to the state budget. What is needed is decisiveness and responsibility from decision-makers – replacing old spruce stands with new, more productive ones, and creating mixed stands where conditions suit them, which would allow both economic and ecological goals to be met.
It has to be concluded that the Green Deal scenario described above will mean a “shrinking” of the sector, that is, smaller production volumes, lower earnings, fewer people employed, less tax in the state coffers, a smaller population and an even more striking “frailty” of the state budget in the face of society's growing needs. Can the only solution really be a larger state budget deficit, given that this political term will not have to deal with rolling it over (refinancing it), and that this will be on the agenda of the next political leadership of the country, or the one after that? Ideas are being voiced that land, forests and bogs could become a CO₂ bank for large transnational companies, an element offsetting their emissions rather than a productive asset on which to grow trees, potatoes, grain and so on. This is by no means a utopia or some bleak fairy-tale land, but a harsh and frightening prospect for the future. Judged globally, Latvia's 64,000 square kilometres, in which all processes happen only “naturally”, would be no enormously large reserve. It is just that Latvians have no other country… If there is no economic activity, the state has no tax revenue, there will be nothing to pay for security, healthcare and education services, and no money for pensions or for the salaries of those working in public administration.
How are political decision-makers acting?
There is no denying that the action or inaction of political decision-makers has had, and will continue to have, a substantial effect on Latvia's economy, employment, tax receipts and prosperity too. I have stressed this many times already. The tomorrow of the Latvian state, of the people living here and of the entrepreneurs who create value has depended, does depend and will depend precisely on the work of political decision-makers. As for decisions that matter to the forest sector, it has to be said that the current Minister of Agriculture, Armands Krauze, has been a very courageous politician, one who has not been afraid to take specific decisions and put them to the government for approval, despite his political rivals' “amnesia” about the decisions taken collectively at the end of 2023. And in 2026 the so-called government order continues to stir things up, requiring the state forest manager Latvijas valsts meži to make adjustments to long-term cooperation agreements, changing the price indexation mechanism and applying weighted average prices, thereby essentially saving the large timber companies from the threat of insolvency. From the second quarter of 2022, softwood sawlog supply contracts under the longer-term cooperation programme lost their competitiveness, because they were 40% more expensive than in the main competitor country – Sweden.