Latvia and Lithuania lead the way in biomass sustainability

By Tomas Jorudas, Head of Commerce at Baltpool

As the European Union tightens regulations to reduce greenhouse gas (GHG) emissions, biomass certification is becoming crucial—even for small-town heating plants. The Renewable Energy Directive II (RED II) sets ambitious targets for EU countries: increasing the use of renewable energy sources to 32% by 2030 and reducing GHG emissions. It also introduces strict requirements for biomass sustainability. Biomass is a vital component of the EU’s decarbonisation strategy, and RED II is one of the key tools to implement this vision.

Since January 1, 2023, RED II has brought new rules to the biomass market—biomass is no longer automatically considered sustainable and carbon-neutral. Producers and suppliers must now prove the sustainability of their products by providing detailed data on the origin of raw materials and other criteria. While these new requirements may seem challenging, I view these changes positively. We are taking a significant step toward a more transparent and sustainable biomass market across the European Union. The recently implemented RED II directive lays the groundwork for the upcoming RED III update, which will make sustainability an integral part of all energy policies. Enhancing transparency and efficiency opens up new opportunities and strengthens trust among market participants.

Latvia and Lithuania are excellent examples of how to strive for sustainability. Both countries have adopted the biomass sustainability certification scheme RED BP, which helps companies meet EU requirements while reducing administrative costs. Certification is conducted centrally, relieving individual companies of this burden. This is a significant advantage for market participants. Most importantly, the scheme ensures that biomass meets strict environmental requirements: forest protection, soil quality maintenance, GHG emissions reduction, and many other safeguards. This approach also aims to reduce Europe’s dependence on distant, polluting imports by ensuring the sustainable use of local resources.

In May 2023, the Latvian government recognized the RED BP scheme as suitable for use by businesses in the country. “Rīgas Siltums,” the largest biomass consumer in Latvia, has already experienced the benefits of this scheme in their daily operations. According to them, the scheme has reduced administrative workload and increased transparency in the supply chain. Centralized data collection and management help simplify processes when preparing for audits and other procedures. Additionally, lower biomass and boiler costs allow for reduced heating prices for end consumers, providing tangible benefits to the population. This demonstrates that regulation is not just empty talk—we are moving in the right direction by collectively creating a more efficient and sustainable biomass market, with all process stages being monitored and controlled.

Estonia’s biomass sector has so far chosen a different path to meet the directive requirements. Estonian market participants are participating in international voluntary schemes, which are also expensive, increasing administrative burdens and the risk of errors. In my opinion, this is a risky path, considering that RED II sets strict sustainability and transparency standards, non-compliance with which can lead to additional costs due to emission quotas. At this point, it’s important for Estonia to ask itself a few questions: Is it beneficial to learn from the lessons of Lithuania and Latvia? Should the country consider joining the RED BP scheme, which could help ensure compliance with sustainability requirements at lower costs?

Looking ahead, the RED III directive, planned to come into force in 2025, will further tighten requirements by reducing the minimum certifiable boiler capacity from 20 to just 7.5 megawatts. This means that more companies will have to meet sustainability requirements, including the smallest biomass consumers. For example, in Lithuania, about 95% of biomass-burning entities will fall under these requirements, pushing the entire supply chain to further improve transparency. RED III aims to integrate renewable energy sources even more into the overall energy system, making it essential for companies to prepare for these changes.

The biomass sustainability verification process, such as the RED BP scheme, is one way to ensure that the biomass supply chain meets all requirements. The scheme provides a high level of data confidentiality—each party in the supply chain sees only information related to them, and the entire supply chain data remains accessible only to Baltpool. This allows businesses to maintain confidentiality while ensuring transparency throughout the supply chain. Market participants can be confident that their data is secure and that the entire sustainability process meets the necessary standards.

As the RED III directive approaches, the bar for EU environmental standards will be raised even higher, making sustainability certification a necessity for an increasing number of companies. While this undoubtedly creates new challenges, it also unlocks new opportunities. Latvia and Lithuania have demonstrated how to efficiently and transparently manage sustainability processes—this is a lesson from which Estonia and other countries could benefit.

In conclusion, Latvia’s example in ensuring biomass sustainability is solid proof that decisive actions and cooperation between business and government institutions can yield tangible results. This is not only beneficial to the country’s economy but also provides a quickly felt effect for every resident—reduced heating prices. As we collectively move toward stricter sustainability requirements, it’s essential for all EU countries to consider efficient and collaborative approaches like the RED BP scheme to ensure compliance, reduce administrative burdens, and promote a sustainable energy future.