Vol. 15 No. 1 (2026)
Full Research Articles

The importance of wooden biomass in the transition to a bioeconomy in Latvia

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  • Vineta Tetere,
  • Jack Peerlings,
  • Liesbeth Dries
Vineta Tetere
Wageningen University, the Netherlands
Jack Peerlings
Wageningen University, the Netherlands
Liesbeth Dries
Wageningen University, the Netherlands
DOI: https://doi.org/10.36253/bae-16107

Published 2025-06-26

Keywords

  • biobased energy,
  • non-biobased energy,
  • product tax,
  • subsidy

How to Cite

Tetere, V., Peerlings, J., & Dries, L. (2025). The importance of wooden biomass in the transition to a bioeconomy in Latvia. Bio-Based and Applied Economics, 15(1), 3–12. https://doi.org/10.36253/bae-16107

Copyright (c) 2026 Vineta Tetere, Jack Peerlings, Liesbeth Dries

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

The EU Green Deal advocates decarbonising the EU’s energy sector, largely by transitioning to renewable sources. Latvia aims to increase the share of renewable energy production in total energy production to 50% by 2030 (it was 39% in 2017), prioritising biomass from forests and wood for bioenergy. This paper evaluates increasing the tax on non-biobased energy use alongside implementing a subsidy for biobased energy use, particularly from wood biomass, to promote the substitution of the first by the latter as a step towards climate neutrality and energy self-sufficiency. Furthermore, it examines technological advancements in the bioenergy sector as an alternative instrument. Using an applied general equilibrium model and 2015 supply and use data, the study allows for substitution between domestic and imported inputs and between the non-biobased and biobased energy product. Given Latvia’s heavy reliance on imported fossil fuels, these measures could lead to a 58% increase in bioenergy production compared to 2015, reducing CO2 emissions by 0.3–1.7%, and reducing non-biobased energy imports by 2.5–4.2%.

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