Lithuanian lawmakers on Tuesday adopted a “green” package fuel excise duties. The new law will raise excise duty rates on polluting fuels, introduce additional pollution taxes and scrap exemptions.
However, no restrictions have been placed on the use of cheaper diesel by farmers. The excise duty on diesel will be gradually aligned with that on petrol to encourage the use of less polluting fuels.
Sixty-nine MPs voted in favour of the proposed amendments to the Law on Excise Duty, submitted to the parliament, Seimas, back in 2021, while 39 voted against and 20 MPs abstained.
Mindaugas Lingė, chairman of the parliamentary Committee on Budget and Finance, said higher excise duties would encourage transition to less polluting fuels. The opposition, however, warned that the “green” excise duties would weigh heavily on the economy, with higher taxes leading to higher prices and doing little to reduce greenhouse gas emissions.
The amendments keep the same exemption for the so-called farmers’ diesel, but increase the excise duty on red diesel for heating: the two fuels will be subject to the same excise duty of 60 euros per 1,000 litres.
A CO2 constituent will be added to the excise duty rates from 2025.
Finance Vice Minister Rūta Bilkšytė said earlier the increase in fuel excise duties would generate around 70-80 million euros in additional revenue for the government, adding that the CO2 constituent would double the revenue.
Lingė also said earlier the Green Deal package is important for Lithuania to access the Recovery and Resilience Facility (RRF) funds that were frozen due to the country’s failure to meet its environmental and pollution commitments.
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