Lithuania establishes monopoly over waste disposal industry

  • 2014-05-01
  • From wire report

STATE TAKEOVER: Reenergy, which had started construction on a new facility in Vilnius, says a new rule has forced it out of the waste incineration market..

VILNIUS - Reenergy, a company managed by the Icor concern and which had started construction of a waste incineration facility in Vilnius, has appealed to the Secretariat-General of the European Commission due to what it claims as Lithuania’s violation of EU legislation, reports ELTA.
The company was extinguished from the waste incineration market after the Lithuanian government decided that only state-controlled companies may be engaged in waste incineration.

“The state has monopolized the waste incineration market by illegally establishing a monopoly by the state-controlled energy company Lietuvos Energija, and its partner Fortum. We have requested the Secretariat-General to force the state to amend the national legislation, which contradicts EU law and restricts the free movement of capital and competition,” said Raimondas Petreikis, the head of Reenergy.

Fifty-one percent of Reenergy shares are owned by Helvita Holdings, a company registered in the Netherlands and which will bring international arbitration proceedings.
“Currently preparatory work is ongoing. We anticipate the International Center for Settlement of Investment Disputes to find Lithuania guilty of breaching commitments and to award compensation,” stated Petreikis.

Reenergy had planned to invest 250 million litas (72 million euros) into the waste incineration plant.
Meanwhile, the government approved the State Waste Management Plan for 2014-2020, which stipulates that Lithuania’s waste incineration facilities will be allowed to incinerate only local municipal waste.
“The strategy clearly states that waste, or fuel produced from waste, cannot be imported to Lithuania. This means that the capacity of the two planned incineration plants, in Vilnius and Kaunas, will not be higher than the amount of waste that results after sorting,” the Minister of the Environment told the press at the introduction of the waste management plan on April 16.

The Parliament had decided earlier that only companies of national significance, whose 51 percent of shares are owned by the state, will be allowed to incinerate waste. Such facilities should be built in Vilnius and Kaunas. Meanwhile, a waste-fired cogeneration plant owned by energy company Fortum has already been operational for about a year in the Klaipeda Free Economic Zone.

Next, apart from waste incineration, 8 to 10 sorting facilities should be established in the country. They will recycle household waste before it enters landfills. The government expects that textile and food waste will be sorted and recycled separately.

It is projected that by 2020 waste disposal in landfills will constitute 35 percent of to the levels of 2000. In 2016-2020 the amount of total household waste to be recycled, or otherwise used, should grow from 45 to 65 percent of. Whereas, by the end of the decade at least 50 percent of recyclable paper and metal waste will have to be re-used.
Lithuania has committed to the European Union to achieve that by 2030 no household waste at all is disposed of in landfills.