The Law on Alternative Fuels has been passed: How the transport sector will change over the next decade

More electric vehicles and charging stations, cleaner fuels and “greener” heavy transport are all provided for in the Law on Alternative Fuels (LAF) passed by the Seimas. Under the law, the transport sector will use more renewable energy sources and will see an increase in electrification; the use of biomethane and hydrogen gas will be encouraged, and biofuel blending requirements will be stepped up. 

The law was passed as a means of achieving climate-neutrality targets, since the transport sector is currently one of the largest energy consumers in Lithuania. RES made up just 4.04 per cent of final energy consumption in the transport sector in 2019; furthermore, advanced biofuels are not used and the infrastructure of alternative fuels is underdeveloped – this will have to change over the next decade.

“Lithuania has already made a breakthrough in other areas of renewable energy, and now it’s time to transform the transport sector as well. These changes will allow us not only to reduce environmental pollution, but to attract new investments as well,” says Vice-Minister of Energy Daiva Garbaliauskaitė.

The draft LAF establishes clear directions for the development of alternative fuel vehicles and the infrastructure required for them. Considerable attention is given to the promotion of electric mobility – financial support is planned to be provided until every tenth car in Lithuania is powered by electricity, and efforts will be made to ensure that Lithuania has 6,000 public electric vehicle charging stations by 2030. There are also plans to approve an action plan for the development of electric mobility, which will set the directions and priorities for development of the electric vehicle infrastructure.

Particular attention is devoted to transformation of the freight transport sector. There are plans to expand the network of alternative fuelling stations and promote the purchase of clean vehicles, while also ensuring the use of renewable fuels. The potential of biomethane and hydrogen gas will be developed in the coming years in order to ensure that biomethane and green hydrogen account for at least 5 per cent of final energy consumption in the transport sector by 2030.

The LAF introduces progressively increasing obligations for fuel suppliers regarding the use of biofuels, which will be possible to implement more flexibly over the course of the year. In order to encourage the use of biomethane and other advanced biofuels and hydrogen, their blending will be offset by twice the energy value.

As of 2026, all cars and buses purchased through public procurement will have to be clean, and by 2029, all public road passenger transport, including taxis and vehicles used by individuals providing transport services, will have to be adapted to use alternative fuels. The introduction of low-emission zones in cities will encourage switching to clean vehicles, thus improving urban air quality.

Implementing these changes in the 2021-2030 period will require significant investments, so the law also establishes the Sustainable Mobility Fund for the implementation of the alternative fuels policy; there are also plans to secure part of the funds from the European Recovery and Resilience Facility and the European Union Structural Funds.