A conversation between Māris Ķirsons and forester Māris Liopa regarding the bans purportedly intended to halt climate change in forestry and agriculture, and their impact on the Latvian economy.

“I am in favour of the EU Green Deal; I support it and want the Latvian government to have a clear position and a long-term plan on how to implement it sensibly and meaningfully. I want this plan to be developed by scientists in cooperation with land-sector entrepreneurs (and their organisations) and nature enthusiasts, without causing massive job losses in the regions, which would also reflect on the state budget or the desire of people to leave these areas. We must remember: Latvians have no other country and never will!”

The European Union (EU) Green Deal will significantly affect land management and jobs in Latvia.

It is not just about the companies in the agricultural, forestry and peat sectors and the associated jobs, but about price increases for almost all goods and services. This is a very important reason why Latvia must have its own scientifically grounded position in order to turn potential problems into benefits, explains Māris Liopa, Chairman of the Land Use Committee of the Latvian Chamber of Commerce and Industry and Chairman of the Forest Certification Council of Latvia.

What is the current situation?

In order to achieve a 55% reduction in emissions by 2030 (compared to the previous 40% target, relative to 1990 levels), the European Commission adopted the Fit for 55 legislative package in 2021. The amendments to the Land Use, Land Use Change and Forestry (LULUCF) regulation included therein set a target for Latvia to “achieve a reduction of 644 thousand tonnes of CO₂ equivalent by 2030”, looking specifically at the land-use sector, i.e., forests, agricultural land and peat extraction. It is important to realise that a “struggle” for reduction targets may occur (or begin) between sectors (for example, people need and will continue to need food). Cross-sectoral fighting is unacceptable. Land is Latvia's most important resource; we use it for food and timber production, peat extraction, tourism, and also for nature conservation. In Latvia, land actually generates more than 40% of national export revenue. Specifically, export revenue from agriculture plus food processing reached 2.7 billion euros, another three billion euros are provided by the forest sector (forestry plus wood processing), to which one must add export revenue from peat substrate products – about 190 million euros (average annual figures over the last three years – Ed.). All these sectors are both significant employers, especially in the regions, and taxpayers. Unfortunately, in recent years, new unsustainable bans and stricter requirements have been proposed with alarmingly increasing and shortsighted intensity in agriculture, forestry, and even more so in peat extraction. These trends are incomprehensible to many land managers, but the consequences will be felt in the income of the individual farmer and forester. The increase in various restrictions and bans visibly affects state tax revenues, jobs, and related fields such as education, healthcare, and infrastructure in the regions. People cannot live without food, which is why food production issues are essentially matters of national security. If we are unable to provide food for ourselves (produce it), the hope that “it will still be brought in, for example, from Spain or Poland” may not be realised. Foresters are being intimidated with new logging restrictions and the additional “setting aside” of areas for nature conservation. Peat extraction, meanwhile, is considered undesirable at the European level, with “no future in Europe”, even though Latvia, according to scientific estimates, has about 1.5 billion tonnes of peat, the volume of which increases every year (the annual extraction volume is less than the annual accumulation). It must be taken into account that Latvia is one of the largest exporters of peat substrate in Europe, a product used not only for growing vegetables (i.e., food production) but also for growing various seedlings. All the above clearly shows that the Latvian state's position must be firm: it is impossible to fulfil EU rules without additional investments from the EU. Moreover, any data that Brussels “imposes” as requirements must be carefully and scientifically analysed locally in Latvia. What does this mean? For example, in calculating CO₂ emissions, only data from research conducted in Latvia should be used, not other data based on assumptions and wishes. Monitoring conducted in Latvia shows significantly lower CO₂ emission levels than those included in documents drafted in Brussels.

Where do the data on CO₂ emission volumes come from?

The existence of the peat sector is overshadowed by a lack of understanding regarding the differences between using peat in energy and in horticulture, and by inaccurate accounting of greenhouse gas (GHG) emissions (based on the IPCC methodology). Data from the LIFE Restore project research conducted by the Latvian State Forest Research Institute (LVMI) “Silava” shows that CO₂ emission volumes in the peat sector in Latvia are significantly (in some categories even more than twice) lower compared to those indicated in the aforementioned methodology. Data on CO₂ emissions for Latvia's forests and fields show a similar picture. EU structures, however, stubbornly “ascribe” CO₂ emission volumes for Latvia (the Baltics) as being in the same climatic zone (with similar soils) as Germany and France. As mentioned earlier, research by LVMI “Silava” shows that their amount (CO₂ emissions) in Latvia is much smaller. The problem lies in the fact that it is precisely these inappropriate data that form the basis for European regulations, emission levels, and reduction requirements.

The future of the peat sector is therefore shrouded in thick fog.

Worse still, the draft of the forthcoming Taxonomy Regulation provides that investors will only grant funding or loans on the condition that peat or peat-containing products are not used in production processes. This applies not only to its extraction but also to its use in horticulture and all types of seedling cultivation. What does this mean? If a company wants to get a bank loan, it will open the green list and conclude whether a particular business qualifies as green or not. If it meets the green conditions, the bank will lend the money; if not, it will not. If Latvia does nothing and allows things to drift, there is a possibility that by 2030, peat extraction and the peat substrate produced from it, which is used by nurserymen in more than 100 countries around the world, will become a thing of the past. One will be able to talk about the sector as in fairy tales – “Once upon a time...”. In such circumstances, it is unlikely that the peat sector can expect significant investments. Of course, a lot can change within the EU itself over these eight years. This is evidenced by the example of Ireland, which “managed” to ban peat extraction, leaving vegetable growers empty-handed, resulting in the original decision being changed. Latvian entrepreneurs supplied the Irish with about 20,000 tonnes of peat substrate; jobs and taxes were generated and went into the Latvian, not the Irish, state purse. It should be noted that currently, about 70% of substrates used in professional horticulture worldwide are peat substrates in which food is grown – vegetables, mushrooms, herbs, tree seedlings. Demand for food is forecast to increase as the planet's population grows. At the same time, there is another risk: whether Latvia's bogs (land) will not be sold off for the creation of emission sinks and to cover the climate damage caused by other countries, and whether Latvia will not become a reserve where other European natural values are protected at the expense of our economy and people.

How to understand this?

As a result of the so-called nature census, more than 300,000 hectares of habitats of European importance have been found in Latvia. As these are mostly located in forests that have reached felling age (about 450,000 ha of commercially valuable species in commercial forests), the amount of area potentially to be “removed” from commercial circulation could range from 60,000 to 260,000 ha. This will have a significant impact not only on specific companies but also on the sector and related fields. Although 260,000 ha, relative to the total forest area of 3.2 million ha, is not even 10%, if they are “removed from commercial circulation”, it will cause huge changes in employment, the number of companies, competitiveness, and the national economy. The state will likely compensate the forest owner for the unsold m³ of timber, but there is no compensation mechanism for wood processors, whose volume of wood for processing will shrink or disappear entirely, which will mean the liquidation of companies and more unemployed people. There will be no other way, as Belarus has closed exports of roundwood by introducing export duties, Ukraine has done the same, and Russia has also closed its borders to wood exports. Significantly increasing timber import volumes from Lithuania or Norway will not be possible. Currently, a government decision regarding the obtained nature census results is awaited. Of course, the area of protected territories will increase. There is a requirement for at least 30% of land and 30% of maritime territory to be under strict protection and to protect at least a third of EU protected areas in this mode, including all primary and old-growth forests in the EU. It is, however, unclear how to carry out these tasks. In Latvia, protected areas, including the North Vidzeme Biosphere Reserve, are only 18%, and now 30% is needed. Where to get the missing 12% is unclear. If there are already so many natural values of European importance in Latvia, it would only be logical if the funding (compensation) for their protection came from the EU purse, rather than just and solely Latvia's tight budget. It should be noted that the EU Green Deal also affects the Renewable Energy Directive – and woody biomass (which can be used to create other wood products) will be removed from the list of renewable biomass energy. This means that only wood chips (including wood pellets) obtained during the processing process – sawing, planing – can be used for burning, not wood that could be used for the production of other wood products. Thus, Latvia will return 20 years into the past from being the third-largest producer of wood pellets. In large cities, it will no longer be allowed to heat with firewood, because it supposedly harms air quality. It is strange that forests cover 52% of the territory, yet heating with firewood will not be permitted. What could be greater energy security than having your own stove and fuel? Does the Green Deal require using imported natural gas for heat production? Modelling the impact of potential restrictions set by projected EU regulations, scientists have concluded that a significant decrease in logging volumes is expected in Latvia, by 3–4 million m³ per year (in recent years, these volumes in Latvia have been in the range of 12–13 million m³). By rough estimates, this will affect Latvia's export of wood products – reducing it by about 800 million euros per year (about a third of the 2020 exports – 2.59 billion euros) – and about 14,000 jobs. Do these essential issues really seem unimportant to anyone?!

What to do?

Latvia lacks discussions that use scientifically proven (obtained) data and facts. The tone is increasingly set by armchair or Twitter experts. For example, if a pine forest is thinned, there is more sun in it, and pasqueflowers (a protected plant) begin to grow. A micro-reserve is created! The pines grow, the pasqueflower begins to lack light, but the “green” friends stand and die for the further thinning of pines. The result? The pasqueflower is no longer noticeable or found. Scientists talk about this, but a large part of society “does not accept” these findings. It is similar with CO₂ – young stands absorb it, while old stands generate it as they rot. This means that old forests (which are not protected) should be harvested and new ones planted. Many benefits for forest owners: income, work for loggers and wood transporters, raw materials for woodworkers to manufacture products, jobs, taxes, and also CO₂ absorption. What is happening? The findings of scientists are being ignored, using the propagandists' slogan – “They want to cut down all of Latvia!”. It looks even more paradoxical when it is known that, compared to timber growth, significantly less is cut in Latvia each year. Our timber is accumulating in a “green warehouse”, where a large part will simply rot without any economic or social benefit for those living in this land. The same applies to bark beetle damage – if the damaged spruces are not cut down, after some time, as the bark beetle multiplies, the neighbourhood will look like a horror movie. Such scenes can be seen in the territory of the Gauja National Park. Do scientists not talk about such a risk? They do! Do decision-makers hear them? Unfortunately, not always. However, in any case, Latvian scientists and especially scientifically based conclusions will be of great importance in the future when thinking about what and how should be done in Latvia. What is good and useful in a southern land where forests are a rarity is not and cannot be applicable in Latvia, where forests occupy more than half of the country's territory.

Are problems also expected for farmers?

From the perspective of a simple consumer, the EU Green Deal is very attractive – fewer emissions, healthier food (grown with fewer or zero mineral fertilisers and plant protection products). At the same time, there are a great many unanswered questions about this beautiful future. For example, there is a wish to reduce fertiliser use by about 20%, alongside a second goal to reduce the use of plant protection products by about 50%. This also means lower yields and more intensive mechanical tillage of soil. There is also a climate neutrality policy that requires farmers to move towards the least possible tillage and lower greenhouse gas emissions. Currently, various projects are being developed in offices – how farmers will be allowed to work in the future. It must be emphasised that this is not only about farmers but also about food consumers – i.e., absolutely all Latvian residents. At the same time, a small part of society is trying to motivate European and also Latvian politicians and officials to “make bold decisions” with various campaigns. Specifically, some time ago, events took place against the consumption of animal products. Many people considered it good, hardly thinking and understanding that animal products also include milk, cream, butter, cheese, cottage cheese, and eggs. I doubt whether the majority of society has an understanding of what food store shelves look like without animal products. It would be useful to open people's eyes by explaining specifically what this means, and when the next such campaign is held, agree with grocery stores that animal products will not be sold on that day. No meat, fish and products thereof, no milk, cream, butter, cheese, cottage cheese, and eggs. Reducing CO₂ emissions and the use of plant protection products in agriculture will most likely mean significantly higher food prices. It is unknown (because it has not been calculated) whether the income of Latvian residents will allow them to be purchased. Are we going to “transfer” milk and meat livestock farming from the EU to another country that is not an EU member state and which does not have to comply with any EU guidelines on climate neutrality and restrictions on the use of plant protection products and mineral fertilisers? In fact, such an arrangement is an incentive to move agricultural production from the EU to elsewhere. This is a dangerous trend because it brings with it the issue of employment in the regions, tax payments and livelihoods (income), as well as the security of food supplies. Therefore, a situation must be reached in Europe where all producers of a certain product are subject to the same requirements and the same restrictions (if necessary), thus preventing unfair competition. For example, those working in the EU are forced to submit to higher requirements and stricter bans compared to competitors in third countries, who would become all the more competitive for the mentioned reasons.

Is the Green Deal a threat or an opportunity?

The EU Green Deal will affect not only land managers – farmers, foresters, but also food production, wood processing, energy, transport – in fact, every person and every company in Latvia. Therefore, a clear socio-economic analysis is needed on how the Green Deal will affect Latvian residents and the national economy and what the state policy appropriate for Latvia's situation will be for the implementation of this course. It is unacceptable that, without any impact analysis, based solely on assumptions which in turn are based on other assumptions, decisions are taken or intended, as a result of which specific sectors will suffer and people will lose their jobs and income. A great many live in illusions about the impact of the EU Green Deal on their lives, which in reality will mean a significant increase in the cost of goods and services that not everyone will be able to afford. Instead of the paradise proclaimed by the well-intended EU Green Deal, Latvia could end up in hell. That must not be allowed!

Greenhouse gas emissions per capita in 2019* (t)

*https://ec.europa.eu/eurostat/databrowser/view/t2020_rd300/default/table?lang=en

Changes in forest area globally (% vs previous period)

Photographs by Frank Horvat, Snapwire, zemeunvalsts.lv used