The Transport Energy Law, which will replace the previous Biofuel Law, will come into force in Latvia on January 1. It marks a significant turning point in transport energy policy, introducing a unified and modern regulation aimed at reducing greenhouse gas (GHG) emissions from transport, promoting the use of renewable energy, and developing alternative fuel infrastructure.
What does the new regulation provide?
The Transport Energy Law establishes a new regulatory framework for the circulation of transport energy in Latvia. It includes:
- requirements for transport energy quality and conformity assessment;
- market surveillance and certification procedures;
- obligation for transport energy suppliers to modernise transport energy by setting a minimum share of renewable fuels in the total volume of energy sold;
- gradual increase in the share of renewable fuels in the period from 2026 to 2030 – to at least 5.5%, of which at least 1% must be renewable fuels of non-biological origin;
- requirements for the submission and monitoring of ESG and sustainability data.
These measures are closely linked to the European Union’s climate policy and the goal of moving towards a climate-neutral transport sector.
Impact on alternative fuel producers
The new law creates several positive impulses for alternative fuel producers – developers of biofuels, biomethane, renewable fuels of non-biological origin, and other solutions.
First, a clear and predictable framework of sustainability and market targets is established. This gives industry and investors clear signals about the increasing demand for renewable fuels, as suppliers will have to ensure a certain share of renewable components in the overall market.
Secondly, the law provides for the development of alternative fuels and charging infrastructure – for electric vehicles, biomethane, hydrogen and other fuels. This can significantly improve market access for local producers and promote the development of new business models.
If the regulation is implemented consistently and effectively, it can reduce Latvia’s dependence on imported fossil fuels and promote the use of domestic and European alternative fuels.
At the same time, challenges must also be taken into account – initially, some manufacturers may depend on imported raw materials or technologies, and the increase in production volumes will be closely linked to stable market signals and available investment incentives.
Local production or imports – what will be the reality?
The Transport Energy Law does not require a certain amount of alternative fuel to be produced directly in Latvia. This applies to both local and imported products, as long as they meet the specified sustainability criteria.
Consequently, the growth of local production will largely depend on:
- stability of market demand,
- infrastructure development,
- state aid instruments and availability of European funds.
The potential for local production exists, but how quickly and with what support entrepreneurs are able to invest in production capacity and technologies will be crucial.
Fuel prices: myths and reality
The claims made in the public sphere about fuel prices increasing to +0.40 €/l are not based on currently available economic estimates.
Data published by Latvian Radio and LSM show that:
- In 2026, the fuel price increase could be approximately 0.01–0.02 €/l,
- in 2027 – up to 0.05 €/l,
- by 2030 – around 0.19 €/l, compared to 2025.
Industry representatives indicate that some of the future cost increases may be related to other factors, such as the emissions trading system (ETS2) or tax changes, rather than directly to the requirements of the Transport Energy Act.
It is important to emphasize that fuel prices are mainly influenced by global oil prices, exchange rates and tax policy. The Ministry of Climate and Energy has indicated that a sharp jump in prices due to this law alone is not expected, and solutions are being sought to mitigate the increase in costs.
In conclusion
The Transport Energy Law is a significant step towards a more sustainable transport sector in Latvia. It creates new opportunities for alternative fuel producers, a clearer investment environment, and a basis for reducing GHG emissions, while not creating a rapid and disproportionate burden on consumers.