On Thursday, the Saeima once again postponed voting on two key environmental bills — the draft Economic Sustainability Law and amendments to the Law on Pollution — which aim to transpose EU directives regulating the EU Emissions Trading System (ETS) and the new ETS for buildings, transport, and additional sectors (ETS2).
The decision to remove the bills from the agenda was made at the request of the Saeima Economic, Agricultural, Environmental and Regional Policy Committee. Committee chair Kaspars Briškens (Progressives) told LETA that the bills require legal adjustments. The committee therefore met on Thursday morning and decided to exclude them from the sitting’s agenda, but they will likely be reviewed at the next Saeima session.
Unofficially, however, it is said the bills were not put to a vote on Thursday because there were not enough votes to pass them.
Earlier, the amendments to the Law on Pollution were also on the agenda of the 4 September Saeima sitting, but the committee asked to move them to the 18 September sitting. This decision was made at the request of the Ministry of Climate and Energy (MoCE), as the draft Economic Sustainability Law was also included in the agenda of the 4th of September and, in MoCE’s view, should be considered together with the amendments to the Law on Pollution.
MoCE argued that
it would be better to discuss amendments to the Law on Pollution only after the draft Economic Sustainability Law
has been referred to the committee, because the provisions of the latter affect the former. At the same time, MoCE urged the committee not to plan the review of both laws so that they must be adopted simultaneously, as Latvia is already facing three infringement procedures from the European Commission (EC) over the delayed transposition of the Pollution Law amendments.
According to MoCE, Latvia has so far failed to transpose the relevant EU directives, leading to three EC infringement procedures. The transposition of amendments to the ETS Directive is already more than a year overdue, creating not only a risk of EC fines but also administrative obstacles for ETS operators and complicating ETS administration for all involved parties.
The draft law aims to update and improve the regulatory framework for ETS operation in Latvia and align the law with institutional changes. Since 2001, the law has been amended 21 times, making its ETS provisions hard to follow, and its structure now needs to be reorganized.
The bill introduces a new chapter on the EU ETS,
setting out rules for ETS and ETS2 operation, including conditions, requirements, permits, and obligations. Provisions on ETS are removed from other chapters.
The amendments also establish requirements for operators, aircraft operators, shipping companies, and fuel suppliers. Operators will be obliged to implement measures to reduce greenhouse gas (GHG) emissions, and they will have to monitor their emissions to track changes.
The State Environmental Service (SES) will be responsible for determining which installations require GHG permits. If an operator runs a facility without a valid GHG permit, the SES will be able to issue an administrative order to suspend the facility’s operation.
The amendments also introduce ETS2 in Latvia, covering fuel and heating consumption in buildings, transport, and additional sectors (industrial sectors not covered by ETS). ETS2 will be based on similar principles to ETS, though the allocation and trading of allowances will be separate. From 2028, ETS2 fuel suppliers will be required to surrender allowances based on the amount of fuel placed on the market.
Emissions will be calculated indirectly from the amount of fuel or heating placed on the market.
Fuel and heating suppliers who place fuel on the market in Latvia will become ETS2 operators and will have to obtain a GHG permit from the SES. From the start of ETS2, data monitoring must be carried out according to an individual monitoring plan prepared by each operator.
ETS2 monitoring and reporting will follow ETS principles to ensure consistency between the two systems. Cabinet regulations will detail the monitoring procedure, reporting and approval rules, and a compensation mechanism to prevent double-counting of fuel in both systems.
The amendments also set a state fee for the issuance and review of GHG permits. The fee will apply to ETS (installations) and ETS2 (fuel and heating) operators that are legal entities requiring a GHG permit. During the fourth ETS period (2021–2030), Latvia issued GHG permits to 52 installations (38 operators).
To obtain an ETS or ETS2 GHG permit, operators must prove their monitoring allows accurate annual GHG emission calculations and compliance with reporting requirements. The fee’s purpose is to ensure regulation and oversight in the environmental field and to encourage proper permit applications.
The Cabinet of Ministers will determine the exact amount and procedure for the fee, together with existing fees for A and B category permits under the Law on Polluting Activities. These state fees will be administered by the SES. A single facility may require both an A or B category permit and a GHG permit, meaning several fees may be payable at once.
For public information, the SES will maintain a free, publicly available electronic register of GHG permits.
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