2006 metų balandžio mėnesio 10 diena The Ministry of Environment of the Republic of Lithuania1 Economic Instruments for Environmental Protection in Lithuania

2006 metų balandžio mėnesio 10 diena

The Ministry of Environment of the Republic of Lithuania 1

Economic Instruments for Environmental Protection in Lithuania



Main purposes of economic instrumentsMain purposes of economic instruments

• To reduce the pollution in to the atmosphere from the stationary and mobile sources

• To reduce waste generating and to provide incentives to producers and importers invest in to the waste recycling measures.

• To create incentives for users to use more friendly goods and products



Structure of economic instrumentsStructure of economic instruments

Economic instruments

Pollution charges

Others (subsidies, soft loans, etc.)

Taxes on natural resources



Pollution chargesPollution charges• Charges on pollutants discharged in to the atmosphere,

water bodies and surface from the stationary sources (from 1991, reform 1999)

• Charges on the pollutants discharged from the mobile sources, (charge is set on the fuel used) (from 1991, reform 1999)

• Product charges on goods (tires, lamps, filters, batteries) harmful to the environment (from 2003)

• Filled packaging (paper, glass, metal, plastic) charges (from 2003)



Taxes on natural resourcesTaxes on natural resources

• Tax on extracted gravel, sand, dolomite, peat and others (from 1991)

• Tax on water resources (from 1991)• Tax on oil and gas (from 1991)• Tax on hunting (from 2002)• Tax on fishing (from 1995)



Other economic instrumentsOther economic instruments

• Subsidies (grants, soft loans, tax allowances)• Deposit refund system (reusable items)• Market creation schemes (CO2 emission trading)• Enforcement incentives (non compliance fees)• Compensations for environmental damage



Distribution of revenues from charges and taxesDistribution of revenues from charges and taxes

• Pollution charges: 70% to the municipalities; 30% to the Lithuanian Environmental Investment Fund (LEIF)

• Goods and packaging pollution charges: 100% to the Program of goods and packaging waste management

• Tax on natural resources: 100% to the State Budget, excluding hunting/fishing taxes

• Penalties and environmental damage compensations: 100% to the Program of Support to the Environmental Protection



Grants and soft loans provided by LEIF Grants and soft loans provided by LEIF for environmental projects in 2005for environmental projects in 2005

• Soft loans – €3,48 million• Loan subsidies – €0,34 million • Subsidies / grants – €2 million • Projects financed – 43



Emission trading scheme in LithuaniaEmission trading scheme in Lithuania

• Emission trading scheme was set in place in 2005:– Policy maker – Ministry of Environment– Register administrator - LEIF– Participating 93 energy and industry companies – Total number of allocated allowances - 36 796 184



Deposit refund systemDeposit refund system

• Deposit was imposed on glass refillable used for all types of beverage. Deposit rates are set depending on the volume of the refillable

• €0,1 – per unit of packaging with a volume of 0,5 liters or less

• €0,12 – for the containers with a volume of greater than 0,5 liters

This deposit-refund scheme is not yet operational.



Enforcement incentivesEnforcement incentives

Non compliance fees are applied:• for the pollutants discharged above the set

limits in the IPPC permit • for the resources extracted above set limits

in IPPC permit



Charge/tax payersCharge/tax payers

• Legal and natural entities who pollute from the stationary sources and are obliged to have the IPPC permit

• Legal entities who pollute from mobile sources used for commercial purposes

• Producers and importers who put in to the market taxable goods and filled with goods packaging

• Legal and natural entities who extract natural resources and are obliged to have the IPPC permit



How many tax/charge payersHow many tax/charge payers

• The entities who were obliged to have a IPPC permit and pay the charge for emission of pollutants– 3343 stationary sources

• Polluters from mobile sources – 100 000 units• Charge payers who put the goods and filled

packaging in to the market – 6 000 (provided declaration forms)



Revenues from Environmental Charges Revenues from Environmental Charges and Taxesand Taxes

6,310,3 11,6 11 13,5 14,54,2

4,46 5,08

4,65 512,7

23,9

25,7

16,83 12,68 9

2,62,6

0

10

20

30

40

50

2000 2001 2002 2003 2004 2005

years

€ m

illio

n

Goods and packaging

Tax on oil and gasextraction

Natural resourcetaxes

Pollution charges(air, water pollution)



Allowances for tax/charge payersAllowances for tax/charge payers

Exemptions are applied to those:• Who invest in to the environmental measures reducing

pollution by 5 and more percent from maximum allowable pollution

• Who use cars with installed catalytic converters• Who use biofuels in stationary and mobile sources• Who achieve waste recycling targets set by the Government



Economic Instruments foreseen in Economic Instruments foreseen in National Strategy of LithuaniaNational Strategy of Lithuania

• To increase the effectiveness of charges applied to mobile sources (cars, vessels, trains and aircrafts)

• To revise the pollution charges on packaging waste in order to achieve waste recycling goals

• To increase the charge on VOC discharged in to atmosphere from the stationary sources

• Encouraging Public Green Purchasing

Documents

2006 metų balandžio mėnesio 10 diena The Ministry of Environment of the Republic of Lithuania1 Economic Instruments for Environmental Protection in Lithuania