Latvia approved a biomethane support package: EUR 21.5 million

The Latvian cabinet approved on 18 November 2025 a support package for biomethane production with a total value of EUR 21.5 million, funded from the European Regional Development Fund (ERDF) and the state budget. It is an example of a modest but comprehensive programme: it covers not only producers but also refuelling infrastructure and vehicles.

Structure of the support

The instrument combines a loan or guarantee with a capital grant that reduces the principal. The maximum grant is EUR 4.2 million per applicant. The state development bank ALTUM provides loans of up to EUR 10 million and, for larger amounts, guarantees commercial bank loans – guarantees can cover up to 80% of eligible costs.

Eligible for funding are: biomethane production equipment, refuelling infrastructure, connections to the gas transmission system and biomethane-fuelled vehicles. Support intensity is 45% for large companies and 50% for SMEs for equipment and infrastructure, and in the Latgale region 45%, 55% and 65% for large, medium-sized and small companies respectively. For vehicles it is 30%, 40% and 50% regardless of location, and the de minimis rule applies. The ministry and ALTUM have drawn up a new methodology for calculating state aid, which the European Commission was to approve by mid-November. The call was due to open in December 2025, and projects are to be completed by 31 March 2029. Priority will go to undertakings with the greatest contribution to national energy targets and a higher degree of readiness.

Why it matters

Latvia, like Estonia or Lithuania, has large potential in agricultural feedstocks and access to underground gas storage in the region, but the biomethane market is only now taking shape. Combining grants with guarantees lowers the capital barrier for smaller companies, and covering refuelling stations and vehicles as well tries to solve the "chicken and egg" problem: without buyers there is no production, and without production there is no fleet.

Significance for the industry in Poland

For Polish investors the programme is interesting for two reasons. First, the Baltic biomethane markets may in future compete or cooperate with Polish producers, using the same gas infrastructure in the region. Second, the scheme shows an alternative to pure grants: guarantees from a state development bank can speed up commercial financing. In Poland, BGK (Bank Gospodarstwa Krajowego) is beginning to play a similar role.

What to watch

The description gives no production volumes or targets, so the scale of the effects is hard to assess. Latvia is one of the countries that built frameworks for biomethane in 2025; the key questions will be whether the total of EUR 21.5 million is enough to launch a larger number of projects, and whether the Commission approves the methodology without delay.