The climate policy pursued by the European Union in recent years has been strongly promoting the use of alternative fuels, resulting in significant developments in the European compressed natural gas (CNG) market. By reorienting towards this emerging product, JSC “Virši-A”, the largest domestic fuel trader in Latvia, has set an example of a far-seeing and sustainable business planning, being the first operator to introduce CNG, a previously publicly unavailable but demanded product, in Latvia.

Virši is currently the only operator offering CNG in the country, through its growing network that currently counts three different stations, bringing not only environment benefits, i.e. reducing CO2 and NOx emissions, but also cost savings to their clients.

Description of the project

In May 2019, the first CNG filling station in Latvia opened on the A6 national road in Jēkabpils. Continuing to develop the availability and infrastructure for CNG, in January 2020, another Virši refuelling station opened in Riga, and in July 2020 the third CNG station opened in the municipality of Babīte, close to the capital. All stations are publically accessible, they have one CNG dispensing unit, each equipped with two refuelling nozzles, one for cars and the other for trucks.

The EU Directive on the deployment of alternative fuels infrastructure requires Member States to ensure that, an appropriate number of CNG refueling points is available in urban/suburban areas by end 2020, and along the TEN-T core network by end 2025. Thus, the network of Virši service stations contributes significantly to reaching this objective, creating and expanding CNG availability in Latvia, and ensuring connectivity with neighbouring countries.

Project goals

  • Contribution to the EU climate objectives
  • Development of the CNG market in Latvia
  • Promotion of the use of CNG vehicles

More about CNG

CNG consists mainly of methane, compressed to less than 1% of the volume it occupies at standard atmospheric pressure. It can be stored at a pressure of 200-230 bar and easily be used to fuel car engines.

CNG brings benefits to the environment. CNG-powered engines produce 23-35% less CO2, 98% less harmful fine dust particles and 87-90% less nitrogen dioxide emissions than petrol or diesel engines. Moreover, it has a higher energy content than petrol or diesel. It is a cheaper fuel for a given mileage in Latvia. A CNG-powered vehicle is quick and easy to refuel, making it convenient to consumers.

Implementation

Over the last decade, the network of CNG filling stations in Europe, as well as the number of CNG-powered vehicles has been growing rapidly. However, in Latvia, it is only kicking off: Virši saw the potential in this alternative fuel and commit to open new CNG filling stations throughout the country.

Although CNG is an economic, environmentally friendly, safe, and easy-to-use fuel, the necessary distribution infrastructure for it is just starting to develop in the country. Virši therefore took a leading role, partnering with JSC Latvijas gāze, a Latvian natural gas company which deals in the importation and sale of natural gas, and JSC Gaso, a local natural gas distribution system operator.

Challenges 

Other countries’ experience in the implementation and development of the use of CNG showed the tendency of this product to initially be used by municipal fleets and only later by private companies and individuals. Currently, the number of CNG-powered cars in Latvia is small, but with the development of the refueling infrastructure, it is bound to increase significantly in the coming years.

Another challenge is the excise tax policy for CNG in Latvia. Currently, the excise tax for CNG is one of the highest in Europe, however, the government is now evaluating options to reduce this tax which would make the CNG even more affordable to the customer and thus, contribute to further developing demand for CNG  in Latvia.

Long term strategy

Virši chooses the location of new CNG stations in accordance with the availability of the infrastructure and the potential in terms of customer reach. Virši is planning to open the fourth CNG refueling point, a brand new Virši service station, in Rēzekne at the end of 2020, through an investment of more than EUR 1 million. It will offer not only CNG, but also conventional fuels and other services.

Besides the standard CNG product, the Latvian market curently sees an increased interest in biomethane as a future source of renewable energy. In order to develop biomethane, there are certain challenges to be met. Firstly, the local legislation needs to be developed in order to support the use of biomethane as an energy source in the transport segment. Secondly, there is currently no infrastructure established in the country for the production  of biomethane. Investment support programmes from the government are necessary to incentivise the production of biomethane for the Latvian market. 

First compressed natural gas stations in Latvia - VIRŠI Image 1

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Contact

Lauris Kalve, Head of Business Development

T + 371 29401401

Undīne Priekule, Communication specialist

T + 371 26866079