European Commissioner Sinkevičius on Lithuania’s fight against pollution: higher fuel excise duties and car taxation alone will not suffice
Delphi In an interview, he spoke about measures to reduce pollution and taxes, how to manage the energy crisis in Europe and what was achieved at the United Nations Conference on Climate Change (COP26).
– Let’s start with the news. Negotiations on the climate change conference ended this weekend. What essential and most important decisions do you think have been taken? What could not be agreed?
– Most importantly, the ambition of the Paris Agreement to maintain a global warming of 1.5 to 2 degrees Celsius has been maintained. But the main disappointment was about the coal that India and China need. The words “phase out” are now replaced by “phase down”. Such a big difference: from a complete abandonment to a reduction. So there were disappointing things, no clear message was sent, even though it has been talked about for some time. We are moving towards renewable energy, it is cheap. In fact, the cheapest. It takes projects, time, but there needs to be political will.
Fully ambitious to implement effective, but I think from the point of view of how excellent the EU Commission, our position was strong. We had a clear plan, recommendations for our work, we are the only ones who not only have commitments by 2030 and 2050, but most importantly, a very plan for how we will achieve 55%. a reduction in gas that no one in the world has yet. This allows us to speak and negotiate from solid positions.
– What is Lithuania’s contribution to this agreement in achieving the set goals?
– Like other countries, Lithuania has the required liabilities. They are not dramatic and are subject to change, as the dialogue on the package is not over yet, the parties have suggestions. The point is to stay close to the headline target of a 55% reduction. emissions. And as a result, each country will decide individually which plan is most acceptable and how to achieve it. There is no doubt that Lithuania will need to address the issue of transport, agriculture, and accelerate renewable energy projects. All this is in the Government’s program, even with EU funding. If the accents are placed correctly, Lithuania can gain a lot from that change.
– Minister of Energy Dainius Kreivys says that in the next 10 years about 10 billion LTL can be invested in energy infrastructure. public and private funds. The main will go to the field of solar and wind renewable energy, large investments can be expected and electric mobility. Where do you think investment should be a priority?
– I think that these accents are very correct. The first priority is renewable energy. Lithuania is already on the right track. Looking at the renewable energy targets we should achieve, we look good in the EU context. If we are talking about the transport sector, see the changes take place in the public sector, so that the electric car network expands, so that the electricity included in the network is clean. These are complex measures that will take time.
– In the short term, 2022 the budget does not provide for any new taxes, with pollution. In your opinion, is it good or bad?
– Next year is very close. With regard to the Green Course, it must be understood that this will not be an easy change. Such sudden changes should be avoided when, after 2-3 months, a major change occurs for which the population is unprepared.
As far as pollution taxes are concerned, initially that the government started right when it undertook a general review of all tax policies, where and what pollution taxes should occur, it might be possible to reduce taxes on labor taxation in order to balance and do so as an incentive. . . But now I don’t see such an offer, its at least or the group is still working.
Individual taxes are more proposed, which will always cause dissatisfaction in society, as the debate must always be broader and is not always the answer. It is possible that one or the other charge will occur, but no change will occur, this needs to be weighed at this point. We are the Ministry of Finance responsible for tax policy, and their involvement is essential when it comes to pollution taxes.
– Do you think that new pollution taxes should not be introduced in Lithuania? If not next year, then in terms of 2023?
– If from next year, it’s not, because it’s been two months. it would be difficult to announce the price when a business is supplied and the population is much more uncertain.
It is necessary to look at this in a complex way, what are the problem areas and whether one or the other knows how to find a positive change. All of this needs to be discussed and presented to the public in order to be clear. I think Governments need to test for the population that they know how to handle public finances, and specifically what one or the other tax will achieve because it will not be easily accepted. In this case, it should be looked at more broadly, as taxes are just one element. They alone will not reduce climate change. If it had been possible, we would have done it a long time ago.
– Can you give an example of what pollution tax has worked in another EU country and would it be justified in Lithuania?
– There are different taxes that each country adapts to its specifics. We are talking about a challenge in Lithuania – transport. It is clear that the much lower excise duty on diesel in Lithuania clearly signals that buying diesel cars is good, because this fuel is cheaper.
In this place, regardless of the other country, the first emphasis must be, and I know the Government will do that, to compare excise duties. Talk about further transport taxation: there is corporate transport, the second or third car, the issue of engine volume and so on.
There are many ways to move on. each country looks at its own specifics. I think that something needs to be copied and adapted for Lithuania, whose population is everywhere and the population is scattered in the country. For example, in Belgium, which is twice as small as Lithuania, but has a population of 12 million. population, the problems there are dealt with in a completely different way.
– Regarding the European energy crisis, how do you assess Lithuania’s measures to manage the energy price shock for the population? The growth of gas and heat prices will be spread for up to five years, and in order to stop the growth of electricity prices, the deadline for choosing an independent electricity supply has been postponed for six months. How do you assess such an example of Lithuania?
– On the one hand, Lithuania is one of the EU member states with the highest energy poverty. In the EU enough to heat housing about 7 percent. In Lithuania, more than a quarter of the country’s population (27%). This is especially dangerous for Lithuania. The management measures put in place by Lithuania are in line with what was proposed by the EC and what other EU countries have taken, ie a longer-term pricing of prices.
Another important point is to increase the number of people receiving heating compensation. A key principle of the Commission’s proposals is to reduce the burden on the most vulnerable groups in particular: families in small pajamas, seniors, etc.
The right step in the long run – to increase energy efficiency in renewable energy projects, to create energy communities. These are not fast-track projects, but they will benefit more in the long run, as prices may jump unpredictably in the short term and there is little left to do.
– What else can Lithuania take to fight the energy price shock?
– The Commission is also proposing to use offsets from the collection of pollution permits and to expand the groups that could receive compensation. As far as I know, Lithuania will also use this measure. Probably the most important thing is to actively involve the population in the new renovation wave projects. For example, next year the Environmental Project Management Agency (APVA) will propose the renovation of boilers for connection to central heating. There are about 30 thousand of them left in Vilnius. This requires the activity and involvement of the population, and the problem with solid fuel boilers would be solved.
The next stage will be the so-called wave of renovations. Here, it is very important that Lithuania is ready in time, involves the population, so that the country’s component is attractive enough for the population to get involved. Not only Vilnius, but also municipalities have enough experience with contractors and population involvement. Of course, the involvement of banks is also important for the population to obtain loans.
Accelerating innovation is a key element in tackling energy poverty and efficiency. We have a problem that some of the energy is wasted before it reaches the population. If we look at more remote areas, such as Salininkai, there are high heating prices just because the residents are more remote and the tracks release a lot of heat before it reaches the residents. Therefore, it is necessary to emphasize the renewal of the routes as well.
– What measures have other EU countries taken to control energy prices?
– The measures in the Member States are very similar, but not many. First, everyone is looking for as much as possible to set prices for a longer period of up to 5 years. Some have introduced voucher schemes, expanding the number of beneficiaries. Third, it looked at the price component and where the role of the state could be, whether it was through a state-owned enterprise or otherwise. Undoubtedly reduced the price by reducing the profits of the state-owned enterprise or otherwise. This has been particularly the case in the South, where the rise in prices has been felt the most, and governments have been forced to come up with plans to fight it.
When you are dependent on third countries, their list is not very long due to the competition that supplies gas to Europe. I think the crisis and the anxiety are under control. This is a clear signal for the future that we must reduce our dependence on third countries, increase the number of our renewable energy sources and ensure that Europe produces energy.
The Commission will also try and talk to the parties on joint procurement and maintenance of our gas storage facilities so that they can offer on a regular basis, synchronize as much as possible the refurbishment and use the Commission’s leverage in the negotiations for a larger joint procurement.
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