As part of the Nordic Baltic region of Europe, for Lithuania and its population of 3 million people, the dependence on imported fossil fuels from Russia was an economic and political challenge. In 2014 when Lithuania became a Member State of the EU, it paid the highest price for imported gas—a price regarded as “political” as it was not comparable to the market situation.
Meanwhile, indigenous biomass resources were (and still are) abundant. From 2000 to 2016, biomass use in the district heating sector increased from 2% to ~65% — the first time the share of biomass used in district heating exceeded the share of imported gas. The main reason for this switch is the enormous renewable energy resources in Lithuania, where forests cover ~33.2% of the country (2.2M hа). In addition, the price of using biomass for heating is up to 3x lower than the price of natural gas. The amount of biomass per capita in Lithuania is one of the highest in the European Union and it is estimated that in 2020, Lithuania will take the lead in the EU with regards to the quantity of available biomass for energy needs.
As a result, the transition from imported gas to local biomass fuel has resulted in lower prices of heat for local consumers as well as reduced CO2 emissions. The main benefits of using biomass are much more than just ecological. Biomass helps to ensure stable energy prices, a more reliable energy system, regional development, an export/import balance and other economic and social benefits. More than 7,500 people (expected to be 10,000 people in 2020) are employed by companies related to the technology, production and supply of biomass. The export of equipment and technology reached 100M EUR in 2015, but is expected to grow to 300M EUR in 2020. The average salary in this sector is approximately 1.5x higher than the average salary in Lithuania. Annual turnover of this sector is about 410M EUR.
Thanks to the fast pace of bioenergy development, Lithuania has already achieved the EU Directive Regarding the Incentives for Consumption of Renewable Energy Resources. For Lithuania, the target is to increase this share to 23% by 2020. In 2016, the share of RES in the total energy balance of the country reached 25.86 %.