Latvia is at risk of missing its 2030 climate targets for the transport sector due to a fragmented policy approach and a lack of strategic coordination, according to a critical audit by the State Audit Office (Valsts kontrole). The report warns that public resources have not been directed toward measures with proven impact or high cost-efficiency, leaving the country vulnerable to both environmental failure and social instability.
The findings highlight a systemic failure in how the state manages the transition to greener mobility. While significant funding has been poured into electric vehicles and charging infrastructure, the audit suggests these investments have been made without a unified long-term vision. This disconnect is particularly acute in the fuel sector, where the state has been slow to implement European Union requirements and has failed to prepare the industry for necessary structural shifts.
The stakes are high: the transport sector accounts for approximately 31% of Latvia’s total greenhouse gas (GHG) emissions. Without a course correction, the transition may not only be ineffective but “socially unjust,” as the costs of climate policies are likely to fall disproportionately on the most vulnerable citizens.
“This audit shows that the problem is not in individual measures—the problem is in the overall approach,” said Mārtiņš Āboliņš, a member of the State Audit Office Council. “Latvia’s climate policy in the transport sector is currently being implemented without a unified direction and clear priorities. In other words that with the current approach, it is difficult to achieve a result.”
A Fragmented Roadmap to 2030
The National Energy and Climate Plan (NEKP) outlines 35 specific measures to reduce emissions in the transport sector by 2030. However, the State Audit Office found that the plan lacks a clear primary direction. A staggering 66% of these measures have no defined impact on GHG emission reductions, and 69% carry a high or medium-high risk of failure. 31% of the planned actions have not even been started.
Financial transparency and prioritization are similarly under scrutiny. Of the approximately 2.9 billion euros required to implement these measures, only 41% of the funding has been identified. The audit further notes that some funds have been diverted to projects that do not contribute to the 2030 goals. For example, over 100 million euros were allocated to the Rail Baltica project, which is not included in the NEKP and does not provide a direct contribution to these specific 2030 climate targets.
The audit points to a “fragmented institutional responsibility” as a primary hurdle. Responsibility is split between the Ministry of Climate and Energy and the Ministry of Transport, with the Ministry of Finance and the Ministry of Economics also playing significant roles. While the Ministry of Transport established a new structural unit in 2026 to coordinate these efforts, the audit concludes that the ministry still lacks the necessary tools for practical policy implementation.
The Fuel Crisis and ‘Transport Poverty’
Latvia’s transport energy remains almost entirely dependent on fossil fuels. To meet EU mandates, the country must achieve at least a 29% share of renewable energy or a 14.5% reduction in GHG emission intensity by 2030. However, the State Audit Office found that EU requirements were fully adopted only at the end of 2025, marking a significant delay.
The transition is expected to trigger a “price shock” for consumers. Starting in 2028, the introduction of the Emission Trading System (ETS 2) will incorporate CO2 emission costs directly into fuel prices. With taxes already making up 50–55% of the cost of fuel, further increases could devastate low-income households.
The social implications are severe. In 2024, Latvia had the sixth-highest share of people at risk of poverty or social exclusion in the EU. Currently, approximately 243,000 households suffer from “transport poverty”—a lack of affordable and accessible transport options. While 217 million euros are available from the Social Climate Fund to mitigate these effects, auditors believe the current planned measures are insufficient to address the depth of transport poverty.
The development of alternative fuels has also lagged. Latvia’s share of biofuels stood at 8.8% in 2024, trailing the EU average of approximately 11%. This stagnation is attributed to low local production, high import reliance, and a lack of a coordinated policy framework.
The Electric Vehicle Paradox
On the surface, Latvia’s shift toward electric vehicles (EVs) appears successful. Between 2020 and 2025, the number of EVs grew 21-fold, rising from 658 to approximately 14,000. The state invested roughly 31 million euros in purchase support, while other incentives—such as free registration and free parking in Riga and Liepāja—cost an additional 6 million euros. Free parking in Riga alone cost the budget between 1.5 million euros in 2025 and 3.7 million euros total from 2020 to 2025.
However, the audit reveals that this growth has primarily benefited the wealthy. The profile of purchased vehicles—including high-end models like Tesla, Volkswagen Tayron, and Audi e-tron—indicates that state support is largely reaching middle-to-high-income earners. For the most vulnerable, EVs remain unaffordable even with subsidies.
The infrastructure accompanying these vehicles is also underperforming. While the state has established 139 charging stations nationwide, the network loses an average of 380,000 euros annually. Between 2020 and 2025, the state covered 2.37 million euros in losses, and further inefficiencies in tariff settings added another 722,000 euros in burden to the national budget.
Looking forward, the state plans to use 70 million euros from the Social Climate Fund starting in 2026 to assist 4,000 vulnerable users purchase EVs. However, auditors warn that the target group is poorly defined, and actual support may reach only 3% of those truly in need.
Summary of Policy Failures and Recommendations
| Area | Primary Issue | Audit Recommendation |
|---|---|---|
| Strategic Planning | 66% of NEKP measures have no defined GHG impact. | Prioritize cost-effective measures with proven impact. |
| Social Equity | EV subsidies benefit high-income earners; fuel hikes risk “transport poverty.” | Create a unified support system for vulnerable households. |
| Infrastructure | Charging network generates ~380k EUR annual loss. | Reduce budget subsidies and use data-driven planning. |
| Fuel Transition | Late adoption of EU requirements; low biofuel share. | Promote modern biofuels and alternative energy sources. |
The State Audit Office has issued nine specific recommendations to the Ministry of Transport, the Ministry of Climate and Energy, and the CSDD. These include the creation of a unified state policy for EV growth, the implementation of data-driven infrastructure planning, and the development of targeted support mechanisms to ensure a “just transition” for the poor.
The next critical step will be the Cabinet of Ministers’ response to the request for a unified support system to mitigate fuel price increases for households suffering from transport poverty. The government must also evaluate how the redistribution of EU funds is impacting the overall achievement of the NEKP climate goals.
We invite our readers to share their perspectives on the transition to green transport in Latvia. Do you believe the current subsidies are reaching the right people? Let us know in the comments.
