On the Approval of the Programme for the Promotion of the Production and Use of Biofuel in 2004-2010


Published: 0000-00-00

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.
 
Government of the Republic of Lithuania
Resolution No 1056
 
of 26 August 2004
 
ON THE APPROVAL OF THE PROGRAMME FOR THE PROMOTION OF THE PRODUCTION AND USE OF BIOFUEL IN 2004-2010
 
Vilnius
 
Acting pursuant to Article 4(1) and Article 5(1)(1) of the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils (Valstybės Žinios (Official Gazette) No 64-1940, 2000; No 28-870, 2004), the Government of the Republic of Lithuania has resolved:
To approve the Programme for the Promotion of the Production and Use of Biofuel in 2004-2010 (appended).
 
 
 
Prime Minister                                                                                 Algirdas Brazauskas
 
 
 
Minister of Agriculture                                                                   Jeronimas Kraujelis
 
 
Approved by
Resolution No 1056 of the Government of
the Republic of Lithuania
of 26 August 2004
 
 
Programme for the Promotion of the Production and Use of Biofuel in 2004-2010
 
I. General Provisions
 
1. The Programme for the Promotion of the Production and Use of Biofuel in 2004–2010 (hereinafter referred to as this Programme) has been prepared in accordance with:
Law of the Republic of Lithuania on Environmental Protection (Valstybės Žinios (Official Gazette) No 5-75, 1992);
Law of the Republic of Lithuania on Pollution Tax (Valstybės Žinios (Official Gazette) No 47-1469, 1999; No 13-474, 2002);
Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils (Valstybės Žinios (Official Gazette) No 64-1940, 2000; No 28-870, 2004);
Law of the Republic of Lithuania on Electricity (Valstybės Žinios (Official Gazette) No 66-1984, 2000; No 107-3964, 2004);
Law of the Republic of Lithuania on Excise Duty (Valstybės Žinios (Official Gazette) No 98-3482, 2001; No 26-802, 2004);
Law of the Republic of Lithuania on Energy (Valstybės Žinios (Official Gazette) No 56-2224, 2002);
Law of the Republic of Lithuania on Heat Sector (Valstybės Žinios (Official Gazette) No 51-2254, 2003);
National Energy Strategy approved by Resolution No IX-1130 of the Seimas of the Republic of Lithuania of 10 October 2002 (Valstybės Žinios (Official Gazette) No 99-4397, 2002);
National Energy Efficiency Programme approved by Order No 319 of the Minister of Economy of 26 October 2001 (Valstybės Žinios (Official Gazette) No 59-2094, 2004);
Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport.
2. The purpose of this Programme is to ensure the development of the production of biofuel from the raw material originating in the Republic of Lithuania and its use, by implementing the organisational, economic and legal measures of this Programme.
3. This Programme shall be implemented in the years 2004–2010.
4. Terms as used in this Programme:
Set-aside land means areas of agricultural land not used for agricultural purposes and not producing any crops for commercial purposes. The land set-aside may be used for producing materials not directly intended for human or animal consumption, provided that effective control systems are applied.
Renewable energy sources mean natural resources: potential hydro energy, solar energy, wind energy, biomass energy and heat energy, which is brought out from deep in the earth (geothermal energy). The origin and renewal of this type of energy is conditioned by processes created by nature or human activity; it may be used for energy production.
Energy crops mean plants grown for the production of biofuel, electric and thermal energy.
Other terms in this Programme are used within the meaning of the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils.
 
II. Analysis of the Current SITUATION
 
 
5. The development of energy production from renewable energy sources is one of the main objectives of the European Community energy policy defined in the White Paper for a Community Strategy and Action Plan “Energy for the Future: Renewable Sources of Energy” (COM(97)0599–C4–0047/98). The European Union legislation is aimed at achieving the share of energy produced from renewable energy sources in the total energy consumption to be between 6% and 12% by 2010, as well as at implementing the obligations under the Kyoto Protocol to reduce greenhouse gas emissions by 8%. Combined heat and power generation is promoted. It is also foreseen that one third of new biomass will have been consumed in the European Union by 2010.
 
6. The use of renewable energy sources is one of the main objectives of the Lithuanian energy policy set out in the Law of the Republic of Lithuania on Energy and the National Energy Strategy approved by Resolution No IX-1130 of the Seimas of the Republic of Lithuania of 10 October 2002 aiming at a 12% share of renewable energy sources in the total energy consumption by 2010.
 
7. The promotion of the production and use of biofuel is foreseen in the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils providing for the competence of institutions. The Law obligates to prepare measures to ensure that by 31 December 2005 the share of biofuels for transport shall amount to at least 2% of the total energy content of all petrol and diesel for transport purposes placed on the national market, and by 31 December 2010 – at least 5.75%. The production of biofuel is attributed to new, environment-friendly technologies. The status of a pilot project may be accorded to such activities by a resolution of the Government of the Republic of Lithuania. Tax relieves may be applied to biofuel and pilot projects intended for technological development of environment-friendly products or related to biofuel from renewable energy sources.
8. The Law of the Republic of Lithuania on Electricity provides for certain priorities of electricity produced from renewable, waste or local energy sources.
9. Fiscal measures to support the production and use of biofuel are foreseen in the following legal acts of the Republic of Lithuania:
9.1. The Law of the Republic of Lithuania on Excise Duty provides that exemption from excise duty is applied to electricity produced from renewable energy sources. Excise relief shall apply to the share of biofuel corresponding to the share (percentage) of biological additives per ton of the product;
9.2. The Law of the Republic of Lithuania on Pollution Tax provides that natural and legal persons implementing measures intended to reduce pollutant emissions from stationary pollution sources at least by 10%, calculating from the established maximum permissible pollution standard, shall be exempt from the pollution tax. Natural and legal persons shall be exempt from the tax on those pollutants the emissions whereof are reduced by 10%. The Law provides for exemption from the tax on pollution from mobile pollution sources for natural and legal persons who use biofuels for transport complying with the established standards and have submitted documents confirming the consumption of biofuels for transport.
10. The Law of the Republic of Lithuania on Environmental Protection promotes waste recycling for energy purposes.
11. The growing of raw materials for the production of biofuels for transport is promoted in Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2592/2001. An aid of EUR 45 per hectare per year shall be granted for areas sown under energy crops. In addition, energy crops may be grown on set-aside land (10% of arable land), granting the same payments as for crops on main areas. Lithuania does not apply the requirement to set aside arable land eligible for use for non-food crops, granting the same payments as for crops for food purposes.
12. Organic waste from agriculture and food industry as well as urban sewage sludge produced 0.04 TWh of the total energy in 2002. At present, there are six biogas power plants in operation, treating urban sewage sludge, food industry waste and farm manure. Two power plants process manure together with waste from food industrial enterprises. All the power plants may treat about 350 000 tons of organic waste per year. The total energy capacity of the biogas power plants is 16 MW, of which generated thermal capacity – 13 MW, and electricity capacity – 0.5 MW.
13. In Lithuania, about 1 million tons of municipal waste is generated every year. Biodegradable waste accounts for about 0.3–0.5 million tons of all municipal waste annually. Separated from other types of municipal waste and recycled at biogas reactors, they may be used for energy production. The energy value of municipal waste is 0.10 TWh.
14. In 2003, the annual felling amounted to 6.49 million solid metres, or an average of 3.9 cubic metres per hectare. 7.67 TWh of energy was produced from wood in 2002.
15. In Lithuania, from 300 000 to 500 000 hectares of arable land are unused every year; there is also barren land where crops for energy purposes could be grown. They could be grown on 10-15% of agricultural land. According to preliminary calculations, energy crops could produce about 0.72 TWh of energy per year.
16. In 2003, there were 2 894 900 tons of straw in Lithuania. In 2002, the technical potential of the straw amounted to 250 000 tons (0.99 TWh). At present, nine heating boiler houses use straw as fuel in five settlements and villages. The total installed capacity is .5 MW.
17. Demand for electricity in Lithuania is expected to increase by 10% and it will account for 12.36 TWh in 2010. For the purpose of implementing the obligations of the Republic of Lithuania under the Treaty of Accession of 2003, at least 7% (0.934 TWh) of the total electricity output will have to be produced from renewable energy sources in 2010. Given that the majority of electricity is generated from water and wind energy, 0.204 TWh of electricity will have to be produced from biofuel.
18. In Lithuania, the main raw materials for the production of biofuels for transport are rapeseeds and cereals. In 2003, 864 300 hectares of the cereal area in Lithuania yielded 2 631 800 tons of cereals, 66 800 hectares of the rape area yielded 119 500 tons of rapeseeds.
19. For the purposes of implementing the requirements laid down in the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils, 7 200 tons of bioethanol and 13 800 tons of biodiesel (2% of the total fuel consumption) will have to be produced in Lithuania in 2005. By 2010 production will have to be increased, to 20 000 tons of bioethanol and 40 000 tons of biodiesel per year.
20. With a view to developing the production of biodiesel, 55 200 tons of rapeseeds will have to be produced in 2005, allotting 29 050 hectares for this purpose. 160 000 tones of rapeseeds will have to be produced, and areas sown under rapes will have to be increased up to 66 700 hectares by 2010. This constitutes less than 10% of the rape area. The current quantity of rapeseeds is sufficient for the first phase of the development of biodiesel production. In 2005, 21 600 tons of cereals grown on the area of 6 750 hectares will have to be used for the production of bioethanol. In 2010, the production of bioethanol will require 60 000 tons of cereals (16 220 hectares). The current quantity of cereals is sufficient for the development of bioethanol production until 2010.
21. The production of bioethanol and biodiesel for fuels in Lithuania is a new industry without traditions. Two large and one small-sized enterprises are ready to produce biofuels for transport. The production capacity of bioethanol is about 8 000 tones per year. Having doubled this capacity, it would be sufficient for the development of the production of biofuels for transport until 2008. The production capacity of biodiesel is about 12 000 tons per year. It will not be enough to fulfil the requirements laid down in the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils in 2005 already (i.e. to substitute 2% of diesel fuels by biodiesel).
22. The use of blends of bioethanol and petrol is low in the European Union states. Bioethanol is used for the production of bio-ETBE (ethyl-tercio-butyl-ether). Lithuania should draw on foreign experience and introduce ETBE production. The available MTBE (methyl-tercio-butyl-ether) production facilities may be used, without any substantial alterations, for ETBE production. The installed capacity in Lithuania would enable producing about 45 000 tons of ETBE per year. This capacity would be sufficient for processing the required quantity of bioethanol in 2010.
23. The production cost and wholesale prices of biofuels are higher than the price of mineral fuels; therefore, it is impossible for producers to increase the use of biofuels without support.
24. The Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils promotes the production of biofuel from the raw material originating in the Republic of Lithuania through programmes approved by the Government of the Republic of Lithuania and financed from the state budget. Direct state aid may be granted for the implementation of pilot projects.
25. Projects related to the use of renewable energy sources could receive support from the European Union structural funds. Demonstration projects may receive additional funding from the programme “Intelligent Energy” or the Sixth Framework Programme supported by the European Union.
26. Scientific research and experimental development related to the production, use and environmental impact of biofuel is a new trend supported by the European Union through the Sixth Framework Programme, “Intelligent Energy”, “Altener”, “Steer”, “Jouly” and other programmes, by allocating for this purpose about 20% of the total financial resources intended to support science. Due to inadequate funding of research work related to biofuel in Lithuania, scientists are not able to conduct fundamental research in the area of biofuel, provide versatile support to producers and users of biofuel, or participate in European Union research programmes.
27. The Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils provides that the status of a pilot project may be accorded to the production of biofuel. These pilot projects must be implemented with reference to research works and results of the development of use.
 
III. Objectives and tasks of the Programme
 
28. The objective of this Programme is to implement the provisions of the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils and the European Community provisions on the development of the production and use of biofuel, i.e. ensure that:
28.1. the share of energy derived from renewable energy sources in the total energy consumption accounts for 12% (including 10.5% derived from biofuel produced from the raw material originating in the Republic of Lithuania) by 2010;
28.2. the share of electricity produced from renewable energy sources in the total electricity consumption accounts for 7% (including 1.65% produced from biofuel) by 2010;
28.3. the share of biofuels for transport produced from the raw material originating in the Republic of Lithuania in the total fuel consumption accounts for 2% by 31 December 2005, and for 5.75% - by 31 December 2010.
29. The main tasks of this Programme are as follows:
29.1. to increase the production of electricity from biogas, wood and straw to 0.204 TWh per year and of energy – to 10.31 TWh per year by 2010;
29.2. to increase the production of biodiesel from the raw material originating in the Republic of Lithuania to 40 000 tons per year by 2010;
29.3. to increase the production of bioethanol to 20 000 tons per year by 2010;
29.4. to promote the growing and preparation of raw material for biofuel;
29.5. to promote the use of biofuel, to establish mandatory targets for the use of blends of mineral fuels and biofuels for transport;
29.6. to promote scientific research on the production and use of biofuel and to recognise it as a priority trend of scientific research;
29.7. to introduce measures intended for training, information and consulting on biofuel issues.
 
IV. Financing of Measures Implementing the Programme
 
30. The implementation of this Programme shall be financed from the total appropriations allocated in the state budget of the Republic of Lithuania to institutions implementing the Programme within the available financial resources of the state, as well as with the funds of the Lithuanian State Science and Studies Foundation, the European Union structural funds, other national and international foundations (programmes), private legal and natural persons.
31. Financing for the implementation of the tasks of this Programme should be allocated in an annual draft Law of the Republic of Lithuania on the Approval of Financial Indicators of the State Budget and Municipal Budgets.
 
 
V. Assessment Criteria for the Implementation of the Programme (Forecasted Results)
 
32. The assessment criteria for the implementation of this Programme (forecasted results) are as follows:
32.1. more agricultural production will be consumed for non-food purposes. In 2010, the area of 66 700 hectares will be sown under rapes intended for the production of biodiesel, and the area of 16 220 hectares will be sown under cereals intended for the production of bioethanol;
32.2. the share of energy derived from renewable energy sources in the total energy consumption will account for 12% (including up to 10.5% derived from biofuel produced from the raw material originating in the Republic of Lithuania) in 2010;
32.3. the share of electricity produced from renewable energy sources in the total electricity consumption will account for 7% (including 1.65% produced from biofuel) in 2010;
32.4. the share of biofuels for transport produced from the raw material originating in the Republic of Lithuania in the total fuel consumption will account for 2% by 31 December 2005, and for 5.75% - by 31 December 2010.
 
VI. Implementation and Control of the Programme
 
33. This Programme shall be implemented and controlled by state institutions within their competence as provided in the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils.
34. The results of the implementation of this Programme shall be evaluated by state institutions within their competence as provided in the Law of the Republic of Lithuania on Biofuel, Biofuels for Transport and Bio-oils.
35. Institutions responsible for the implementation of this Programme shall provide information about the state of the production and use of biofuel originating in the Republic of Lithuania to the Ministry of Economy within the set time limits; the Ministry of Economy shall present the summarised information to the Government of the Republic of Lithuania and, if appropriate, propose to revise state support intended for the implementation of the tasks of this Programme.
 
 
 
––––––––––––––––