Lithuania: Ambitious Biofuel Goals
5 April 2007 A report by the US Department of Agriculture’s Foreign Agriculture Service (USDA-FAS) states that the government is incentivizing the biofuel sector, giving producers of grain ethanol 114 Lithuanian Litas (about US $38) per MT, and producers of biodiesel 160 Litas (about US $53) based on raw input. However, USDA-FAS reports that even with these subsidies, these companies are not making a profit. (Government sources speculate that biofuel production is only profitable when oil prices rise above US $70.00/barrel.) Additional incentives are under consideration by the Lithuanian Ministries of Agriculture, Environment and Economy. Lithuanian farmers receive the EU-based subsidies of 45 Euro per hectare for selling crops for energy production.
On the consumption side, the government is developing regulations and policies based on their National Energy Plan that will promote biofuel use. They are looking into technological advances, such as cars and machinery that can operate using fuel that contains 40% to 50% biofuel, and considering setting mandatory levels of biofuel use in transportation and other sectors.
Current Biofuel Activity
Currently the country produces 33% of its energy from nuclear power, 33% from oil, and about 24% from natural gas. Renewable resources such as biomass, biofuel, geothermal, and hydropower generate the majority of the remaining 10%. Lithuania began producing biofuel in 2004 in two plants, Rapsoila located near Mazeikiai, and Biofuture in Silute.
In 2006, the country produced 25,000 MT of biofuel, 10,000 biodiesel and 15,000 ethanol. Domestic agricultural production supplies all the raw material for the two biofuel plants. Canola is used for biodiesel production, and wheat, rye, and a wheat/rye blend is used for ethanol production. Lithuania permits 5% biodiesel and 7% ethanol components in fuels. The government believes they will surpass the EU target of 5.75% biofuel components in fuel used for transportation by 2010, and it supports making these EU goals mandatory.
In 2007, Lithuanian biofuel production should reach 60,000 MT. Ethanol production will increase to 20,000 MT, with increased production in the Biofuture plant. Mestila, a new biodiesel production plant that was completed near Klaipeda in an economic free zone, is due to begin production this spring and will increase national production of biodiesel to 40,000 MT.
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