Latvia
Latvia
March 27, 2024

Latvia's Journey Towards Electrification: Pioneering Sustainable Fleet Management

Advancing Towards a Greener Future Through Strategic Electrification and Policy Support in Latvia

Latvia's Journey Towards Electrification: Pioneering Sustainable Fleet Management
Latvia
March 27, 2024
Latvia's Journey Towards Electrification: Pioneering Sustainable Fleet Management
Advancing Towards a Greener Future Through Strategic Electrification and Policy Support in Latvia
Summary

Latvia's embrace of sustainable fleet management and vehicle electrification represents a decisive step towards a greener, more efficient transportation future. Supported by governmental incentives and a growing public interest in EVs, Latvia is paving the way for significant reductions in transportation-related emissions. The country’s low electricity emission factor further bolsters the case for electrification, offering a promising pathway to environmental sustainability. As Latvia continues to address challenges such as charging infrastructure and vehicle costs, its journey towards electrification provides valuable insights into the role of policy, technology, and community engagement in fostering sustainable transportation. This transformative approach not only contributes to Latvia’s environmental goals but also sets a precedent for others in the Baltic region and beyond.

Country General Overview

Introduction

Latvia, nestled in the heart of the Baltic region, stands as a pivotal hub for corporate fleet management in Northern Europe. With its strategic location, Latvia serves as a crossroads for various transportation and logistics operations, connecting the East and West. The country's growing economy and its commitment to sustainability make fleet management an essential aspect of its corporate sector. The challenge of optimizing fleet operations while minimizing environmental impact is ever-present, necessitating innovative solutions for efficient and sustainable fleet management.

Geographic and Infrastructure

Latvia's geography, with its flat terrain and extensive coastline along the Baltic Sea, offers unique advantages and challenges for transportation. The country boasts a total road network of approximately 72,440 kilometers, with a significant portion paved and well-maintained, facilitating smooth logistics and fleet operations. However, Latvia's weather conditions, with cold winters and moderate summers, require fleets to adapt to seasonal changes, impacting vehicle maintenance and route planning. The capital city, Riga, serves as a major logistical hub, but its congestion can pose challenges to fleet efficiency. Latvia's infrastructure supports its economic activities, making effective fleet management crucial for maintaining the flow of goods and services across the country and beyond its borders.

Economic

Latvia's economy, with a Gross Domestic Product (GDP) of around $40.14 billion in 2022 and a population of approximately 1.9 million, is characterized by its openness and diversified sectors. The transportation and logistics sector plays a vital role in its economy, supported by a significant density of motor vehicles, with 394 motor vehicles per 1000 people. This high vehicle density emphasizes the importance of robust fleet management systems to optimize operations, reduce costs, and support economic growth. Efficient fleet management is critical for enhancing competitiveness and facilitating smooth economic activities in various sectors.

Environmental Considerations

Latvia takes pride in its environmental stewardship, reflected in its impressive Environmental Performance Index (EPI) 2022 ranking of 15 out of 180 countries, with a score of 61.1. This high ranking underscores Latvia's commitment to preserving its natural environment and addressing climate change, which includes managing the environmental impact of its corporate fleets. The country's emphasis on sustainability calls for the adoption of green fleet management practices, such as using fuel-efficient vehicles, optimizing routes, and reducing emissions. These practices not only contribute to Latvia's environmental goals but also offer economic benefits through reduced operational costs and enhanced corporate reputation.

Sustainable Fleet Management

Scopes Data - Electrification Recommendation Rank Icon

Electrification Recommendation Rank

Latvia
's Category

Rank C : Low Emission, Favorable for EVs

These countries fall under low emission but only provide a possible environment for EV adoption, or they are moderate emission countries with a favorable environment for EVs. Here, the strategy for transitioning to BEVs must be considered. Start by introducing BEVs that are easy to adopt (daily mileage <200km, possibility of home charging) and gradually increase their proportion.

Same Category Countries

Canada, Hungary, Italy, Latvia, Luxembourg, New Zealand, Romania, Slovakia, Slovenia, Spain, Thailand

Info:

The Electrification Recommendation is derived from two aspects: each country's EV Readiness assessment (based on factors such as Electric Vehicle market share, environmental consciousness, GDP, etc.), and the Electricity Emission Factor (EF). Even if a country has a low Electricity EF, enabling CO2e emissions reduction through transitioning to BEVs, the adoption of BEVs could be challenging if the country lacks adequate infrastructure or faces financial constraints.

Since every company operates in a unique environment, this recommendation might not apply in all cases. However, it can be useful for setting a general direction.

Scopes Data - CO2e From Electricity Icon

Electricity EF Category

Latvia
's Electricity EF

0.216

CO2e kg/kWh

Ref:

Association of Issuing Bodies (AIB) 2021 in 2020

Latvia
's Category

Rank 1 : Low Emission Countries (0.00 - 0.25 kg/kWh)

Info:

Countries with high Electricity EF have less benefit for electrification

  • Rank 1: 0.00 – 0.25 kg/kWh (About 0 – 38 CO2e g/km)
  • Rank 2: 0.25 – 0.50 kg/kWh (About 38 – 76 CO2e g/km)
  • Rank 3: 0.50 – 0.75 kg/kWh (About 76 – 113 CO2e g/km)
  • Rank 4: 0.75 – 1.00 kg/kWh (About 113 – 151 CO2e g/km)
  • Rank 5: More than1.00 kg/kWh (About more than 151 CO2e g/km)
Scopes Data - EV Readiness Icon

EV Readiness Category

Latvia
's Category

Rank 3 : Possible Environment for EV Adoption

Market Share information
Scopes Data - BEV Icon
2022 BEV

6.4

%

2023 BEV

8.9

%

Scopes Data - HEV Icon
2022 HEV

6.5

%

2023 HEV

7.3

%

Scopes Data - Non-ICE Icon
2022 Non-ICE

34

%

2023 Non-ICE

39.9

%

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

2022 EPI Results
Rank

15

/180

Score

61.1

2022 EPI Results : Environmental Performance Index(EPI) provides a quantitative basis for comparing, analyzing, and understanding environmental performance for 180 countries.

Ref:Wolf, M. J., Emerson, J. W., Esty, D. C., de Sherbinin, A., Wendling, Z. A., et al. (2022). 2022 Environmental Performance Index. New Haven, CT: Yale Center for Environmental Law & Policy. epi.yale.edu

Introduction to Sustainable Fleet Management and Electrification Efforts

Latvia stands at a critical juncture in advancing sustainable fleet management and the electrification of vehicles. Embracing the transition towards Battery Electric Vehicles (BEVs) and the broader spectrum of electric powertrains reflects Latvia’s commitment to reducing its transportation sector's carbon footprint. With the government’s supportive policies and incentives for electric vehicles, coupled with a growing awareness and demand among businesses and consumers, Latvia is positioning itself as a leader in the Baltic region for sustainable transportation solutions. The shift towards electric vehicles (EVs) is driven by the dual objectives of achieving environmental sustainability and enhancing energy efficiency, making Latvia an emerging case study in successful fleet electrification.

Current Vehicle Landscape: Preferences and Powertrain Segments

The vehicle landscape in Latvia is transitioning, reflecting a mix of traditional and electric powertrains. The preference for Internal Combustion Engine (ICE) vehicles remains strong, yet there is a noticeable shift towards hybrid (HEV) and fully electric vehicles (BEV), particularly in the C-Segment and SUV categories. Popular models like the Toyota Corolla and RAV4 in both ICE and hybrid configurations underscore the diverse automotive preferences among Latvian consumers. However, the surge in electric vehicle registrations, highlighted by a 119% increase in new EV purchases in 2023, signals a robust shift towards electrification. The market is gradually accommodating a wider variety of electric models, including compact vehicles and SUVs, catering to both personal and corporate fleet needs. This evolving landscape is indicative of Latvia’s gradual transition away from fossil fuels towards more sustainable electric alternatives, supported by increasing consumer interest and government incentives.

Latvia

Grid.js Table

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

Electric Vehicle Market Overview and Trends

Latvia's electric vehicle (EV) market is experiencing remarkable growth, outpacing other Baltic states with a significant increase in EV registrations. This surge is supported by an expanding range of available EV models and government support for electric mobility. In 2023, the market share of EVs in new car purchases surpassed 9%, a testament to the growing consumer and corporate adoption of electric vehicles. The presence of a diverse EV lineup, from compact cars to SUVs, enables a broad spectrum of buyers to consider electric options. Despite challenges in charging infrastructure, with Latvia having 532 charging stations, the country shows competitive access to charging networks, fostering an environment conducive to EV adoption. Initiatives like the "Latvian E-car 2024/25" event further promote electromobility, engaging the public and stakeholders in a collective effort towards a cleaner transportation future. This trend indicates a shift in consumer preferences and highlights the potential for significant growth in Latvia's EV market, underpinned by supportive policies and increasing environmental awareness.

Energy Context: Electricity Emission Factors and Implications for Electrification

Latvia's strategic move towards vehicle electrification is significantly influenced by its electricity emission factor (EF) of 0.216 kg CO2e/kWh, positioning it among low emission countries. This favorable energy profile, characterized by a mix of renewable energy and efficient power generation, provides a solid foundation for the electrification of transportation. The transition from ICE vehicles to BEVs and PHEVs offers a substantial opportunity for reducing CO2e emissions, capitalizing on the low EF. For companies and consumers alike, this transition not only aligns with global sustainability goals but also enhances Latvia’s energy security and reduces dependency on imported fuels. Electrification in Latvia's context presents a viable pathway towards achieving significant emission reductions and fostering a more sustainable, clean energy future.

Challenges and Opportunities in EV Adoption

Latvia's journey towards widespread EV adoption navigates through a landscape of challenges and opportunities. While the country has demonstrated remarkable progress, with a surge in EV registrations, it grapples with issues like a relatively nascent charging infrastructure and the initial high cost of electric vehicles. However, these challenges are met with significant opportunities, including government incentives, an increasing variety of EV models, and a growing environmental consciousness among consumers. Latvia’s low electricity emission factor further enhances the appeal of electric vehicles, presenting a compelling case for both personal and corporate fleet electrification. Additionally, initiatives aimed at increasing public engagement and awareness, such as the "Latvian E-car 2024/25" event, play a crucial role in accelerating the adoption of electric vehicles. As Latvia continues to expand its charging infrastructure and leverages policy support to lower EV costs, the country is well-positioned to overcome these hurdles and embrace a future of sustainable transportation.

Additional Insights: Shaping the Future of Transportation

The trajectory of Latvia's transportation sector is increasingly aligned with sustainability and innovation, driven by the country's commitment to fleet electrification and environmental stewardship. This commitment is evidenced by the growing adoption of electric vehicles, bolstered by supportive government policies and a receptive market. The Latvian government's efforts to enhance charging infrastructure, coupled with events promoting electric mobility, signify a broader movement towards cleaner, more efficient modes of transportation. These developments not only contribute to reducing the country’s carbon footprint but also reflect a shift in societal values towards greater environmental responsibility. As Latvia continues to navigate the challenges and opportunities of electrification, its progress offers valuable lessons on the integration of technology, policy, and public engagement in shaping a sustainable future for transportation.

Country Case Study

The "Base Fleet" percentage is set according to the sales ratio of each powertrain in Latvia for the year 2023. (For countries where sales ratios cannot be obtained, it is assumed all are ICE vehicles.) The "Recommended Fleet" is designed to be realistic (based on a rank determined by the Electricity Emission Factor Category and EV Readiness Category, deciding a practical range) and efficient in reducing CO2e emissions. It is not expected that the entire fleet will switch to this mix at once but rather after one or two renewal cycles over about 4 to 8 years, considering the usual fleet renewal period is around 4 years. This is viewed as a recommendation for the fleet composition in 4 to 8 years.

The calculation of CO2e emissions is based on a fleet of 100 vehicles traveling an average of 30,000 km per year. Therefore, if your company's fleet size in Latvia is 1,000 vehicles, multiplying the results by 10 will give you an approximate value. For fuel, it is assumed all vehicles use petrol (2345.02 CO2e g/L), and for electricity, the average emission factor of Latvia is used. For PHEVs, it is calculated assuming 50% electricity usage and 50% fuel usage.

Analysis of Fleet Transition from Current State to Sustainable Future

This refers to the average CO2e emissions per kilometer calculated based on the actual energy (Fuel and Electricity) used. It also takes into account the size of the vehicles used in Latvia's fleet.

Scopes Data - ICE Icon

ICE

(CO2e g/km)

Scopes Data - HEV Icon

HEV

(CO2e g/km)

Scopes Data - PHEV Icon

PHEV

(CO2e g/km)

Scopes Data - BEV Icon

BEV

(CO2e g/km)

ICE

HEV

PHEV

BEV

Latvia's journey towards sustainable fleet management marks a pivotal shift in corporate vehicle strategy, aligning with global sustainability goals. The transition from the current fleet composition to a more environmentally friendly and electric vehicle (EV)-centric fleet underscores a significant reduction in internal combustion engine (ICE) vehicles, from a dominant 85% to a mere 10%. This transformation is complemented by an appreciable increase in hybrid electric vehicles (HEVs) from 6% to 44%, plug-in hybrid electric vehicles (PHEVs) from 2% to 15%, and a noteworthy leap in battery electric vehicles (BEVs) from 6% to 30%.

This strategic shift not only reflects Latvia's commitment to reducing its carbon footprint but also aligns with the country's emerging status as a frontrunner in EV adoption in the Baltic region. With an astonishing 119% increase in new EV purchases in 2023, Latvia's fleet transition strategy is backed by both governmental support and a robust increase in EV demand. Despite challenges in charging infrastructure, with 532 charging stations, the country's proactive approach, including public engagement and awareness initiatives like the "Latvian E-car 2024/25" event, ensures a comprehensive and inclusive move towards greener transportation options.

This transition leverages Latvia's low electricity emission factor and the potential for substantial CO2e emissions reduction, setting a precedent for a sustainable and environmentally responsible future in corporate fleet management.

Analysis of CO2 Emission Reductions Through Fleet Transition

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

Base Fleet Mix Case
Reasonable Recommended Fleet Mix Case

The transition towards a more sustainable fleet in Latvia is marked by a strategic shift in vehicle powertrain composition, yielding substantial reductions in CO2 emissions. Initially, the fleet's reliance on ICE vehicles contributed significantly to its carbon footprint, with emissions totaling 321 tons of CO2e. The move to a recommended fleet mix showcases a dramatic decrease in ICE emissions to 38 tons, highlighting the environmental benefits of reducing dependency on traditional fossil-fuel-powered vehicles.

Introduction of HEVs and PHEVs, increasing to 44% and 15% respectively, introduces a more efficient use of fuel, contributing to a significant reduction in fuel-based CO2 emissions. Meanwhile, the adoption of BEVs, expected to constitute 30% of the fleet, leverages Latvia's low electricity emission factor (0.216 kg CO2e/kWh), resulting in a total CO2e emission of 27 tons from electricity for BEVs. This transition demonstrates a holistic approach to reducing the fleet's environmental impact, with total CO2e emissions dropping from 348 tons in the base case to 225 tons in the recommended mix.

This dramatic reduction in emissions underscores the effectiveness of Latvia's fleet transition strategy, which aligns with its ambition to foster a cleaner, greener transportation sector. The focus on increasing the share of electric vehicles, supported by governmental incentives and the growing public interest in EVs, showcases a promising path toward significant CO2 emission reductions, contributing to Latvia's environmental sustainability objectives.

Comparative Analysis of CO2e Emissions Across Fleet Scenarios

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

Latvia's approach to corporate fleet management reveals insightful comparisons across various fleet scenarios, highlighting the impact of vehicle electrification on CO2e emissions. The base fleet mix, heavily reliant on ICE vehicles, produced a total of 348 tons of CO2e emissions. In contrast, the transition to a recommended fleet mix significantly reduces emissions to 225 tons, exemplifying the profound environmental benefits of shifting towards HEVs, PHEVs, and BEVs.

Further exploration of fleet compositions reveals that an all-ICE scenario would result in 374 tons of CO2e emissions, the highest among the considered scenarios. Conversely, adopting an all-BEV fleet, with Latvia's average electricity emission factor, would dramatically lower emissions to 91 tons, showcasing the potential of full electrification under current energy generation conditions. Moreover, scenarios with increased renewable electricity usage for BEVs illustrate even more substantial reductions, with emissions plummeting to 45 tons with 50% renewable electricity, and reaching a remarkable low of 23 tons with 75% renewable energy.

These comparisons highlight the critical role of vehicle electrification and renewable energy in achieving significant CO2e emission reductions. Latvia's potential transition to a fully electric fleet, coupled with an increase in renewable energy usage, presents the most promising scenario for minimizing environmental impact. This analysis underscores the importance of strategic fleet transition planning, government support, and the development of renewable energy infrastructure in driving forward Latvia's sustainability agenda in corporate fleet management.

https://scopesdata.com/sustainability-country-information/latvia-2023

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