Authored by Associate Partner / Attorney Mindaugas Jablonskis.
Authored by Associate Partner / Attorney Mindaugas Jablonskis.
As of 1 January this year, the abolished VAT relief for heating in Lithuania passed surprisingly quietly, yet deeper challenges for the country’s energy sector await. How changing regulation is forcing a fundamental review of heat production and consumption habits, and why Lithuania is still stalling due to a lack of internal agreements, is explained in Verslo tribūna by Mindaugas Jablonskis, Associate Partner at the law firm Glimstedt, energy law and market regulation expert, and lecturer of EU energy law at Vilnius University.
The abolished VAT relief for heating did not spark significant passion in society, says the interviewee: “This is a sign that there is no longer social tension on this issue.” This may indicate a rising standard of living in the country or changes in society’s priorities in light of more serious problems and the war in Ukraine.
The EUR 100 million earmarked for state heating compensations will likely be insufficient; the low temperatures this January will also contribute to increased bills and the need for compensations.
However, the biggest bottleneck remains apartment building renovation. Last year, only 350 houses were renovated, which accounts for just one per cent of all apartment buildings in the country. The expert notes that at such a pace, it would take a century to fix all buildings. The main reason is often not money, but the inability to act together, which the lawyer identifies as a lack of “the spirit of association”. Sometimes we prefer disputes over a single radiator rather than investing in a shared future.
Listen to the Verslo tribūna conversation with M. Jablonskis for more on this, as well as why biofuel may soon be taxed and how the Vilnius combined heat and power plant found a new life in Ukraine.
