Latvia’s pellet producers must give priority to meeting domestic demand, Climate and Energy Minister Jānis Vitenbergs said on Wednesday after meeting representatives of the Latvian Forest Industry Federation and the Latvian Renewable Energy Federation.
The Ministry of Climate and Energy (KEM) said the meeting was convened in response to the recent rise in wood pellet prices and supply shortages reported in recent weeks.
Vitenbergs stressed that it is unacceptable for households to once again face pellet shortages and rapidly increasing prices.
All parties agreed that Latvian producers must be able to meet sufficient domestic demand. During the meeting, they discussed the causes of the current market situation, forecasts for the summer, and practical steps the industry should take immediately to ease market tensions.
According to the minister, household pellet supplies should be prioritised for the domestic market.
KEM will therefore ask pellet producers to voluntarily commit to increasing production capacity, ensuring transparent pricing policies, and acting responsibly to secure supplies for Latvian consumers.
Vitenbergs described it as “absurd” that Latvia—one of Europe’s five largest pellet producers—continues to experience recurring shortages in local stores and sudden price spikes every few months.
“I expect the industry to get its act together instead of waiting for the government to force action. This is both a question of the industry’s reputation and of companies’ responsibility towards the people of Latvia,” the minister said.
Industry representatives identified the declining availability of high-quality raw materials, particularly wood chips, as one of the key obstacles to increasing production.
To improve raw material availability, KEM will ask Latvijas valsts meži (Latvian State Forests) to prioritise contractual deliveries to pellet manufacturers that join the ministry’s voluntary initiative and commit to focusing on the Latvian market.
To curb speculative trading, KEM will once again ask the Consumer Rights Protection Centre (PTAC) to closely monitor the retail pellet market, including transactions on the ss.com marketplace. The ministry urged consumers to report suspected fraud—such as demands for advance payment or unreasonable delivery deadlines—to PTAC or the State Police.
As pellet prices continue to rise across Latvia and the wider Baltic region, KEM will also ask the Competition Council to closely monitor the market for possible cases of unfair commercial practices.
According to Vitenbergs, the current market situation is clearly being exploited by speculators and dishonest resellers, who are creating artificial demand and further driving up prices for both pellets and raw materials.
The ministry stressed that safeguarding energy security remains its top priority. KEM said it will continue monitoring developments in the heating fuel market and, if necessary, introduce additional measures—including the possibility of emergency regulation—should voluntary solutions fail to stabilise the market.
Earlier, Didzis Palejs, chairman of the board of the Latvian Biomass Association (LATbio), told LETA that pellet prices in Latvia have now reached around €300–310 per tonne, including VAT.
By comparison, pellets cost around €220 per tonne last summer, meaning prices have increased by approximately 38.6% over the past year.
Palejs said the increase was partly driven by higher raw material costs as well as strong demand.
At the same time, he noted that most consumers and retailers are responsibly preparing for the coming winter by purchasing their pellet supplies well in advance. According to Palejs, such strong early demand has not been seen for a long time and is generally viewed as a positive sign
Read also: Will the U.S. reduce its troop presence in Latvia? Defence Ministry responds