Chapter 4: Lithuania

4.1 Summary of Findings

In 1996, environmental expenditures in Lithuania amounted to USD 31.1 million, or 0.4 percent of GDP.

The main priority areas of Lithuania's environmental strategy in recent years have been wastewater management and air pollution control. Wastewater management investments constituted more than 90 percent of the total environmental expenditures between 1994 and 1996. A shift in investment, however, is giving focus to wastewater treatment and the reduction of wastewater discharges, hazardous waste management, the clean-up of contaminated territories, and air pollution reduction. These priority areas are expected to remain for several years.

It is somewhat difficult to estimate the size of the Lithuanian environmental market and its growth because of a lack of data and the limited access to state statistical institutions.

Pollution of water, especially that of rivers, remains the most acute ecological problem in Lithuania. The situation of the Curonian Lagoon is critical. High quality groundwater is used to serve everyday needs in Lithuania, however, in rural areas, shallow well water, often polluted with nitrates, is used. The eutrophication of lakes, the Curonian Lagoon and the Baltic Sea is another serious problem.

Atmospheric pollution in Lithuania has declined in recent years. However, as is the case in most European countries, problems such as acid rain, ozone layer depletion and climate change are characteristic of Lithuania. Transport, energy and industry are the major causes of air pollution in the country. Mobile pollution sources (i.e. road transport, railway and civil aviation) constitute the major source of air pollution, emitting approximately 362,000 tons of CO, NO_x and SO₂ into the atmosphere each year. Emissions from stationary sources total 149,000 tons annually.

Another important problem is soil contamination caused by biogenic and toxic materials, a result of agricultural activities. Former Soviet military activities have also left 67,762 hectares, or 1.04 percent of Lithuania's territory, contaminated. More than 50 percent of this land is contaminated by oil products and heavy metals. In places where pollution has reached greater proportions, damage has resulted not only in the aeration zone but in the groundwater as well.

There are approximately 800 municipal landfills in Lithuania, though most have little consideration for their environmental impact and for modern technologies to ensure their proper operation. Waste separation takes place only in the largest Lithuanian cities. About 101,000 tons of hazardous waste was accumulated in Lithuania during 1996. Most oil product waste, materials polluted with oil, solvents and other flammable hazardous waste is incinerated in boilers not equipped for this purpose.

The operation of power generation companies is unavoidably linked with various environmental problems. The main energy companies are primary sources of air pollution in Lithuania, while 94 percent of the water extracted from Lithuanian water bodies is used for power generation purposes. This water is mainly discharged from the Ignalina nuclear power plant and Kruonis Hydro Pump Storage Plant. This brings about the serious environmental problems of radioactive contamination in the Druksiai Lake sediments and the ecosystem in general.

Radiation, electromagnetic fields, thermal pollution and noise are the most characteristic physical pollution sources, and their impact upon the environment is recognized and registered. Transport and industry are obviously the major sources of noise, with certain urban centers suffering noise levels well above acceptable standards.

Future projects in Lithuania will include cleaner production, waste minimization, recycling, energy saving measures and the introduction of environmental management systems such as ISO 14000 and EMAS.

Trade fairs, exhibitions, business presentations, product and service catalogs, direct mailings as well as personal and professional contacts are the main sources of information used for identifying potential suppliers of environmental technologies. Tender calls are the most reliable source for obtaining information on a specific project.

Demand for environmental technologies was found to be moderate to relatively high. The highest demand was identified in the energy and waste management sectors, however demand for environmental technologies in other sectors is also relatively high. Generally, supply meets demand although some sectors are poorly represented. In the air sector, emission abatement and cleaner production technologies are highest in demand, while a shortage has been identified for instrumentation and process control/software technologies for industry.

Demand for water and wastewater technologies is moderate to high. In the potable water sector, demand was identified for treatment processes, inspection and reconditioning of existing supply networks, and sampling/laboratory analysis. Technologies in increasing demand include instrumentation/process control/software, monitoring equipment, and water recycling and reuse. In the municipal and industrial wastewater sector, the following technologies are found to be in demand: pollution prevention/waste minimization, instrumentation/process control/software, inspection and reconditioning of existing collection networks, and physical, chemical, and biological treatment processes.

In general, waste management technologies are in relatively high demand in Lithuania. The highest demand exists for municipal waste management, industrial/hazardous waste management equipment and radioactive waste management. Site remediation and clean-up of contaminated land is an area of growing demand. In the municipal waste management sector, high demand was identified for waste collection/transportation and storage equipment, landfill disposal, and incineration technologies. Improper management of old landfills is also of major concern. The industrial and hazardous waste management sector indicates high demand for pollution prevention/waste minimization technologies, and transportation and storage equipment. Technologies in high demand related to hazardous waste were site remediation/cleanup of contaminated land, and landfill disposal.

The demand for energy related technologies was high in comparison with other sectors. Three main types of technologies for energy and power generation ranked high in demand are new/efficient energy and heat generation systems, retrofitting/rehabilitation of existing systems, and heat recovery and energy savings technologies. Technologies where demand is expected to grow concerned instrumentation and process management and control.

The demand for environmental technologies related to industrial safety and noise control is just above moderate. The demand for general consulting services and research and development into environmental technologies in this sector is a growth area. The demand for instrumentation/measurement and control devices indicates a lack of equipment within companies for monitoring and for the collection of information concerning hazardous issues in the working environment.

Municipalities are the primary end-users of environmental technologies and services in all sectors except air. Industrial companies and water and energy supply companies make up other significant end-users.

The strongest characteristic of local environmental technologies was their low price (listed by 76 percent of survey respondents). The ability to customize and adapt local technologies to specific needs was mentioned by 45 percent of respondents. According to their answers, it was also clear that "good value for money," "reliability and durability" and the availability of credit or financing schemes are not characteristic of today's local technologies and the market.

The evaluation of foreign environmental technologies is rather different. Eighty-three percent of the respondents mentioned the high quality of their products as an asset. Other characteristics mentioned in more than 70 percent of answers were "good value for money," "reliability and durability," and "user-friendly and easy to operate technology." Characteristics such as "easy to customize and adapt for specific local needs" or "low price" were less common answers.

The most common obstacle to buying environmental technologies is the lack of reliable product information. Some 46 percent of respondents cited this as the main obstacle to buying local technologies, and the second largest barrier (54 percent of respondents) for foreign technologies. The major obstacle to buying foreign technologies is the high price (cited by 88 percent of respondents). The second largest barrier to purchasing local technologies is the changing environmental regulations. Finally, the statement "products not suited to local conditions and technical culture" collected the lowest number of answers for both local and foreign technologies.

Environmental businesses said "new environmental technologies," "in-country environmental regulations," and "domestic tenders for projects" were the most important information sources required for business development. International tenders for large projects were deemed "important."

An analysis of the responses regarding the obstacles to business development pointed primarily to "tax regulations," which ranked very important. "Access to credit and finance" and "market demand for products and services" were listed as further obstacles.

Companies from Germany, Denmark, Sweden, Finland, Poland and Belgium are considered to be the most active in the environmental technology market in Lithuania, followed by firms from the United States, Canada and Great Britain. Danish, German and Swedish companies have the largest market share in waste and water related environmental technologies. Market shares in other areas are evenly spread among all countries, with German and Scandinavian companies best represented.

Larger foreign suppliers that already have established markets in Lithuania have started to set up local subsidiaries. This approach allows them greater control of their activities and the ability to respond better to market needs. The scenario is also profitable to Lithuania in terms of job creation and tax contribution.

The major local suppliers of environmental technologies in Lithuania are companies providing environmental services (such as design, laboratory analysis, research and consulting). The majority of local environmental companies operate in the wastewater sector. These companies produce specialist technologies for low-capacity wastewater and stormwater treatment plants.