Improving energy efficiency in Lithuania (LIFE IP EnerLIT)

About the Project:
Lithuania has ratified the Paris Agreement and, together with other EU Member States (MS), has made a binding commitment to reduce greenhouse gases (GHG) emissions from all sectors of economy by at least 40% by 2030, compared to 1990. Following the requirements set out in the Governance of the Energy Union Regulation (EU) 2018/1999, Lithuania has drawn up a National Energy and Climate Action Plan for the period 2021–2030 (NECP), that sets 43% GHG reduction target for the sectors covered by the EU Emissions Trading System (ETS) and 9% GHG reduction target for non-ETS sectors by 2030, compared to 2005.

For non-ETS sectors (transport, agriculture and non-ETS industry), NECP ’existing measures’ scenario forecast GHG emissions increase by 6% compared to 2005. On the other hand, NECP ‘planned policy measures’ scenario forecasts GHG emissions reduction of -21% by 2030.

On energy efficiency, the European Commission evaluates Lithuania’s contribution to the EU target as modest1. It is expressed in terms of primary and final energy intensity and should be 1.5 times lower in 2030 compared to 2017 (while it was still increasing in 2016-2018). Lithuania has adopted an obligation of the cumulative amount of 27 TWh energy savings to be achieved over the period 2021-2030 according to the Energy Efficiency Directive (EU) 2018/2002.

However, NECP ‘planned policy measures’ scenario requires EUR 14.1 billion investment. The identified sources of funding are EU funds (not yet guaranteed) and other external sources (50%), state funding (21%) and the private sector (29%). The largest investment categories are for transport and energy efficiency investments. Even though NECP development involved consultations with socio-economic partners and the public, the planned policy measures (hereafter – NECP measures) are indicative and lack clear justification for their implementation and impact assessment as well as commitment from managing authorities and implementers.

Lithuania is supporting EU ambition to achieve net-zero GHG emissions and become climate-neutral by 2050 and increase the ambition to reduce GHG emissions by 55% for the next decade. The new ambitions would cost around EUR 2.6 billion more. Therefore, planning the higher target is even more uncertain.

“Increasing energy efficiency is one of the key priorities and Lithuania attempts to continuously and consistently increase energy efficiency, introduce new and less energy-intensive technologies, increase consumer awareness and alter consumer behaviour”. “The industry, building and transport sectors have the greatest potential for energy efficiency improvement in terms of the cost-effectiveness of efficiency measures” (NECP, section 2.2), therefore, it is especially important to ensure the cooperation between the sectors aiming to reach the set targets.

In the transport sector, fuel and energy consumption increased by 42.4% between 2010 and 2018. GHG emissions for the transport sector increased by ~40% between 2005 and 2017 while it has to reduce to the level of -9% in 2030 (compared to 2005 level). Therefore, the transport has be seen as the biggest challenge with the following problems:

• The most polluting in transport sector is road transport. The number of passenger cars is growing every year, together and GHG emissions. The average age of the vehicle is about 15 years and 69% of passenger cars are powered by diesel (that also dominates in public transport fleets and freight transport);
• Insufficiently attractive public transport (old, very polluted, high prices, etc.), lack of restrictions on the use of polluted vehicles (annual fees, entry restrictions) and promotion of zero-emission vehicles (financial and other incentives for the purchase of electric vehicles, infrastructure creation and development);
• There is a need for a consistent initiation of the shift of heavy duty vehicles to green rail and inland waterway transport (and multimodal transportation).

In Lithuania buildings consume about 40% of primary energy and are one of the largest sources of GHG emissions. The low energy performance of buildings results in high energy consumption and high maintenance costs, leads to inefficient use of public financial resources to modernize the energy sector, as well as to compensate for inefficient energy use and does not reduce energy poverty rates. However, existing building refurbishment measures and the scale of their implementation are insufficient due to following challenges:

• 75% of the building stock was built before 1992, when EE requirements were not set and low thermal performance construction products were used;
• Insufficient volumes of building renovation (modernization): decreasing heat energy price do not encourage building owners to implement EE measures, insufficient financing of EE measures, long renovation (modernization) process, lack of motivation of participants;
• Insufficient inter-institutional cooperation: measures are implemented in a segmented way, without coordination in time; uncoordinated priorities, resulting in insufficient use of public finances;
• There is a lack of information for consumers about the importance, benefits and opportunities of saving energy and increasing EE: there is no clear leadership (competence center) in the field of EE of buildings; limited municipal resources and competencies.

The industry sector represented 19% of the final energy consumption in Lithuania in 2017. The final energy consumption in industry was 0.28 Mtoe higher in 2017 than in 2000. But the Law on Energy Efficiency sets the obligation of 5.5 GWh energy savings to be achieved over the period 2021-2030 in industry sector. Common problems in Lithuanian industry are:

• workplaces/jobs are mainly focused on increasing the amount of production, but not on the efficient use of resources and energy;
• the potential of climate change mitigation technologies of the circular economy is almost not used;
• focus on low value-added outsourced production and limited/insufficient extent of high value-added jobs;
• lack of knowledge and skills in installing eco-innovations and low awareness of consumers in climate friendly products and services;
• energy saving investments are capital-intensive;
• weak ecosystem links provide no possibility to increase the competitiveness using the potential of cross-sectoral cooperation.

This project will facilitate transport, building and industry sectors in achieving their GHG reduction and EE goals by overcoming the following gaps and shortcomings that hinder the effective implementation of NECP:

• Lack of cooperation and coordination between different institutions, poor understanding of responsibilities, insufficient involvement of social partners;
• NECP monitoring, evaluation and coordination system not developed;
• Modelling of EE policy measures is inconsistent; there is no common methodology, lack of competencies and expertise;
• Legal framework requires consistent review of climate and EE objective;
• Lack of financial resources and their effective mobilisation; shortage of innovative financial instruments and private funding;
• Disperse, not holistic planning of renovation: there are no conditions for the preparation and implementation of complex, integrated, larger-scale quarters, etc. territorial renewal projects, which would combine measures and financial resources administered by different ministries;
• Lack of cooperation between building renovation and energy/heat supply industries;
• Low level of awareness and behavioural patterns of local residents;
• Slow shift to alternative fuels;
• Lack of engagement in sustainable mobility in cities;
• No examples of climate friendly public mobility in rural areas and lack of ideas for promotion of eco-driving;
• Hesitation to no-till technology;
• Industrial companies are slowly moving towards the implementation of circular economy measures and higher EE;
• Energy savings target is not integrated into industry policy;
• Society is not sufficiently involved in achieving climate change goals and does not change its behaviour, like still buying polluted cars or not applying energy saving measures;
• Underused Green Public Procurement.

 
Projekt number: LIFE20 IPC/LT/000002

Call: LIFE 2020 – Climate change mitigation and adaptation

Total Budget: 11 046 098,00 EUR

Coordinator: Environmental Projects Management Agency under the Ministry of Environment of the Republic of Lithuania (EPMA), Lithuania