Even if gas supplies stop, it'll be forbidden to burn peat briquettes in the fireplace from 2030. Getting €184 million from EU funds is more important than surviving

In order to get its hands on €184 million of EU funds, the government of Krišjānis Kariņš is ready to let the population freeze during the energy crisis. Although Latvia is the world's largest exporter of peat for the fourth year running, in the middle of July the Latvian government suddenly backed the abandonment of using peat for energy.

Despite the global energy crisis, the government of Krišjānis Kariņš backed the so-called "Fair Territorial Realignment Plan", which foresees the phase-out of peat for energy from 2030. Whatever happens in Ukraine and Russia, whatever happens to oil, gas and firewood prices, climate neutrality is paramount. Therefore, if there is no natural gas, it will be forbidden to burn peat briquettes in the fireplace. The population of Latvia will freeze to death in winter, but it will be forbidden to use peat for heating. This is the only way the Kariņš government hopes to achieve its strategic goal of climate neutrality by 2050.

It should be recalled here, however, that this will supposedly allow the €184 million from the EU's Just Transition Fund to be absorbed, distributed and redistributed.

Let us recall that peat is a local Latvian resource that has been the basis of Latvia's social stability and survival in very critical situations. During the Second World War, it was the main source of energy for the inhabitants of Riga and large cities. There was not enough firewood, so in March 1940, the inhabitants of Riga were allocated peat fields where they could cut and dry peat to use for heating during the winter (Brīvā Zeme, March 6, 1940). During the Nazi occupation, from 1942, each working family in Riga was allocated a peat field where non-working family members had to extract peat and dry it during the summer, as there was not enough firewood for winter heating (Tēvija, May 26, 1942).

For the Krišjānis Kariņš government, siphoning off €184 million from the EU is even more important than investment from foreign investors, because the foreign capital tenants of the peat fields were categorically opposed to such a strict closure of the energy peat sector.

However, regardless of officials' desire to siphon off €184 million of EU funds, Latvia was still the world's leading peat exporter in 2021.

According to International Trade Center calculations, Latvia was the world's top exporter of peat in 2021. In 2021, Latvia exported 2.23 million tons of peat, Germany 1.72 million tons and Canada 1.64 million tons. In 2021, Estonia exported 1.37 million tons, the Netherlands 1.33 million tons and Lithuania 0.97 million tons of peat.

Latvia was also the world's number one exporter of peat in 2020. In 2020, Latvia exported 1.97 million tons of peat, Germany 1.50 million tons and Canada 1.42 million tons. In 2020, Estonia exported 1.32 million tons, the Netherlands 1.24 million tons and Ireland 0.93 million tons of peat.

On the world market, the main importers of peat are Germany, the USA, France, Italy, China, the Netherlands, Belgium, Poland, Spain, UK.

In monetary terms, Latvia was the second largest exporter of peat in the world in 2021, behind Canada. Latvia's peat export earnings were $282.7 million in 2021, $237.9 million in 2020 and $209.4 million in 2019.

Latvia's share of the global peat market was 14.5% in 2021. Latvia mainly exports agricultural peat, so we do not have enough peat of our own to produce it and we import raw peat and also peat products mainly from Estonia and Lithuania. Peat extraction in Latvia is not only an important export sector. The peat sector also has very important strategic potential in the event of various global threats. Peat extraction is a natural specialization for Latvia, which gives Latvia a stable export income that provides more than 3,000 people with jobs and income in Latvian regions outside Riga.