AGP Executive Report

EU Climate Finance: Eastern and Central European governments, including Lithuania, urged the EU to boost the “modernisation fund” as the Commission prepares an ETS overhaul due July 15, warning predictable carbon-market funding is key for the energy transition. Baltic Power Grid: Lithuania approved the territorial plan for the Harmony Link 220 kV overland electricity interconnector with Poland, moving the project into technical design with possible construction earlier than 2028. Heat Pumps Market: Heat pump sales across 21 European countries rose 13% in 2025 to 2.88 million units, with Lithuania included in the dataset, as the sector positions itself as a hedge against LNG import costs. Aviation & Logistics Tech: Lithuanian drone firm RSI Europe and Ukraine’s The Fourth Law signed an MoU to jointly produce drones in Lithuania, aiming to scale manufacturing and autonomy modules for NATO’s eastern flank. Defense Industrial Push: Estonia received its first medium-range air defense system (IRIS-T SLM), while Germany said it’s ready to call up troops to fully staff a new armored brigade in Lithuania. Energy Aid Flows: Since 2026 began, Ukraine has received 4,007 units of energy equipment, including shipments from Lithuania, with more arrivals expected. Lithuania–Taiwan Talks: Lithuania and Taiwan paused negotiations on an economic cooperation action plan, citing domestic political changes ahead of a new government taking office. Construction/Infrastructure: Lithuania’s territorial planning milestone for Harmony Link and the broader grid synchronisation effort underline continued investment in cross-border energy resilience.

Lithuanian Defence Industry: RSI Europe and Ukraine’s The Fourth Law signed a memorandum to jointly produce drones in Lithuania under “Build with Ukraine,” with RSI preparing facilities and The Fourth Law supplying AI and battlefield feedback; thousands of drones are expected, and Ukrainian citizens get hiring priority. Energy & Grid Flexibility: Litgrid connected an 80 MW / 186.26 MWh battery energy storage system in Panevėžys district, adding to Lithuania’s growing BESS pipeline aimed at faster balancing as renewables rise. Port Decarbonisation: Klaipėda Port launched “Rasa,” the first waste collection vessel powered by green hydrogen and electricity, designed to cut emissions while supporting Baltic Sea environmental cleanup. EU Budget Talks: EU leaders agreed to push a preliminary deal on the €2 trillion long-term budget (2028–2034) by October, with agriculture funding concerns clashing with defence-driven spending pressure. Tech & Security Monitoring: A Lithuanian startup’s Android app uses crowdsourced acoustic signatures to help detect Shahed-type drone activity and map likely strike areas. Diplomacy Watch: Reports say Lithuania is seeking to restore China ties via lower-level consular steps, while critics warn Vilnius must address Taiwan-related “red lines” with concrete actions. Local Business & Resale Economy: Vinted’s Lithuanian roots keep fueling second-hand parcel growth, with post offices seeing a surge in resale deliveries.

Lithuanian Laser Boom: Vilnius University’s first ruby laser in 1966 has grown into a fast-exporting laser industry, now shipping to 80+ countries and expanding at 16%+ a year. Drone Industry Push: RSI Europe and Ukraine’s The Fourth Law will jointly manufacture drones in Lithuania, aiming for thousands of units and prioritizing Ukrainian hiring. Counter-Drone Tech for Civilians: A Lithuanian app turns verified Android phones into a crowd-sourced acoustic network to spot Shahed-type drone signatures and map likely strike locations. Grid Flexibility: Litgrid has connected an 80 MW / 186.26 MWh battery storage system in Panevėžys, adding to Lithuania’s growing BESS pipeline. Green Shipping in Klaipėda: The hydrogen-and-electric waste collection vessel “Rasa” begins operations, targeting lower emissions while cleaning port waters. EU Trade Tensions: Lithuania is among countries urging EU action to reduce over-reliance on China as the bloc’s trade gap widens. Defense Financing Watch: Latvia signed a nearly €3.5bn SAFE defense loan to scale drones, anti-drone tech, and defense industrial capacity.

Lithuanian Energy & Grid Flexibility: Litgrid has connected an 80 MW / 186.26 MWh battery energy storage system to the transmission grid in Panevėžys district, boosting fast balancing capacity as renewables rise and the region moves beyond BRELL. Lithuanian Defence Industry: RSI Europe and The Fourth Law have signed a memorandum to jointly manufacture drones in Lithuania under the “Build with Ukraine” initiative, with Ukrainian staff prioritized and battlefield feedback built into upgrades. Baltic Green Shipping: Klaipėda Port has launched “Rasa,” the first waste collection vessel powered by green hydrogen and electricity, aiming to cut emissions while cleaning port waters. Lithuanian Agriculture: Harsh winter damage is expected to kill around 90% of Lithuanian-variety apple trees, threatening output for years and raising pressure on imports and supply contracts. EU Security Funding: Latvia signed a nearly €3.5bn SAFE defence loan to scale drones, guided missiles and anti-drone tech, as EU members accelerate deterrence on the eastern flank. EU Budget Talks: EU leaders in Brussels are pushing toward an October preliminary deal on the €2tn long-term budget (2028–2034), with agriculture funding and defence spending at odds.

Lithuania Grid Flexibility: Litgrid has connected an 80 MW / 186.26 MWh battery storage system in Panevėžys, adding to four other commercial BESS projects and boosting fast balancing after the end of BRELL. Green Shipping in Klaipėda: The port’s hydrogen-powered waste collection vessel “Rasa” has started operations, using green hydrogen and batteries to collect bilge water and sludge with only water vapour emissions. Defence Industry & Drones: RSI Europe and The Fourth Law signed a memorandum to jointly manufacture drones in Lithuania under the “Build with Ukraine” effort, with Ukrainian staff prioritized and battlefield feedback built into upgrades. EU Budget Talks: EU leaders agreed to aim for an October preliminary deal on the €2 trillion long-term budget (2028–2034), with agriculture and cohesion funding under pressure from rearmament priorities. Baltic Security Finance: Latvia signed a nearly €3.5bn SAFE defence loan to scale drones, guided missiles and counter-drone tech, citing Russian jamming impacts on regional airspace. Orchard Losses: Lithuania’s harsh winter may have killed about 90% of some apple trees, threatening multi-year output and increasing reliance on imports. EU Security Politics: The European Parliament condemned Russian drone incursions into EU states, linking them to destabilisation and disinformation. Energy Storage Expansion: European Energy is also commissioning a 25 MW / 65 MWh battery park in Anykščiai, reinforcing Lithuania’s storage build-out. Wolf Hunting Ruling: Estonia’s Supreme Court struck down a 2020 wolf hunting quota as unlawful for failing to account for the Bern Convention’s strict protection rules. Ukraine Support via PURL: Luxembourg, Lithuania, Latvia, Iceland and Australia pledged over $1bn total for US weapons for Ukraine under the PURL initiative, alongside additional pledges from other partners.

Lithuanian Defence Industry: The Fourth Law and RSI Europe have signed a Build with Ukraine deal to jointly manufacture drones in Lithuania, with RSI Europe preparing production facilities and The Fourth Law bringing UAV manufacturing tech and AI; Ukrainian staff will get hiring priority and battlefield feedback will feed upgrades. Green Shipping in Klaipėda: The Port of Klaipėda has started operations with “Rasa,” a €12m waste collection vessel powered by green hydrogen and batteries, built with Estonian and Lithuanian shipbuilders to cut emissions while servicing ships in port. EU Budget Fight: EU leaders in Brussels agreed to push a preliminary deal on the €2tn long-term budget (2028–2034) by October, with net payers seeking cuts and southern/eastern states warning agriculture and cohesion could lose out to higher defence spending. Agriculture Impact: Lithuania’s orchards face long-term losses after a harsh winter freeze, with growers estimating up to 90% of Lithuanian apple trees may have died, potentially reducing output for years. Energy Transition Watch: Latvia saw solar become the biggest electricity source in May for the first time, while Lithuania’s electricity price also rose across the Baltics. Drone Security Politics: The European Parliament condemned Russian drone incursions into EU states, linking them to broader destabilisation and disinformation efforts.

Lithuania’s Drone Manufacturing Push: The Fourth Law and RSI Europe signed a deal to jointly manufacture drones in Lithuania under the “Build with Ukraine” initiative, with RSI Europe setting up production facilities and The Fourth Law bringing UAV manufacturing tech and AI; Ukrainian citizens get hiring priority and battlefield feedback will feed upgrades, with volumes “in the thousands” but types and output not yet disclosed. Green Port Tech: Klaipėda’s first green hydrogen-powered waste collection vessel, Rasa, has started operations, built by Lithuanian and Estonian shipbuilders and designed to cut shipping emissions while collecting bilge water and sludge using green hydrogen and batteries. Lithuanian Agriculture Shock: A harsh winter may have killed about 90% of Lithuanian-variety apple trees, risking reduced output for several years and potentially shifting demand toward imports. Defense Supply Chain Momentum: Lithuania is among countries pledging to buy US weapons for Ukraine via PURL, with Zelenskyy citing over $1B pledged and additional air-defense and ammunition funding. Industrial Tech Growth: Vilnius-based femtosecond laser startup LITILIT is expanding with a new factory planned to scale production of lasers for semiconductor and medical uses.

EU Budget Clash: Ahead of Friday’s Brussels summit, “Friends of Cohesion” led by Italy and Romania are pushing to protect agriculture and regional funding, warning that the share could fall from ~60% to 44% in the 2028–2034 plan, while “frugal” net payers led by Germany and the Netherlands back a €32.8bn cut and resist any spending increases. Lithuanian Defence Tech: Vilnius-based PDKINEMATICS raised €2m to scale drone precision guidance systems for mass production, while another Lithuanian defence engineering firm, LITILIT, is expanding femtosecond laser manufacturing in Vilnius with a planned 4,000 sq m factory. Ukraine Support via NATO: NATO chief Mark Rutte called it a “window of opportunity” as allies pledged new air-defence and drone funding through the PURL mechanism, with Zelensky citing $2.5bn in new commitments. EU Security & Industry: The European Parliament condemned Russian drone incursions and urged faster delivery of air-defence, ammunition and drones, including more support for Moldova. Local Business & Labour: Lithuania’s industrialists and unions accuse the government of failing social-partnership commitments over a wage/tax-free income deal, warning the Tripartite Council could lose relevance. Transport Connectivity: airBaltic will make the Vilnius–Berlin route year-round, adding winter flights. Tech & Mobility Watch: Sweden is urging EU regulators to block Tesla supervised self-driving approval unless speed-limit overrun ability is disabled.

Lithuanian Coalition Deal: Social Democrats, Democrats “For Lithuania” and Farmers & Greens signed a new coalition agreement, aiming to put defence and social security first, including a pledge of at least 5% of GDP for defence and a push to “normalise” ties with China. Social Partnership Clash: Lithuanian employers and unions hit back at the government’s refusal to back a wage and tax-free income deal, warning the Tripartite Council risks becoming pointless. Drone Precision Funding: Vilnius-based PDKINEMATICS raised €2m to scale drone precision guidance systems for European and Ukrainian operators, targeting better accuracy in contested conditions. Circular Cars Push: The European Parliament backed new rules to make vehicle design more circular, including higher recycled-material targets and limits on exporting end-of-life vehicles. airBaltic Route Lock-in: airBaltic will make Vilnius–Berlin a year-round connection, adding winter flights to keep direct links steady. Energy for Ukraine: Lithuania pledged €7m for Ukraine reconstruction, including solar upgrades for schools and hospitals, transport repairs, and municipal capacity support. EU–China Trade Tension: EU leaders are set to debate tougher measures as the bloc’s trade deficit with China grows and dependence on critical supplies remains high. Defence Industry Momentum: Giraitė Armament Factory starts producing anti-drone cartridges, while Poroshenko says joint anti-drone missile production talks with the US and Baltic states are advancing.

Lithuanian Defence & Security: At GlobalFact in Vilnius, Lithuania’s defence leadership framed “cognitive warfare” as a real conflict domain and said regulators have blocked 1,000+ domains and 8,000 IP addresses tied to Russia-linked sanctions violations. Energy Storage Expansion: Hungary’s Futureal Energy Partners enters the Baltic battery market via a Latvia acquisition of a 45 MW/120 MWh BESS portfolio near Riga, targeting construction in July 2026 and operations by November. Infrastructure Digitalisation: Rail Baltica and RTU opened BIM for Rail Bootcamp 2026 in Riga, bringing 100+ rail and engineering professionals to push Building Information Modelling for cross-border delivery. Engineering Software Growth in Vilnius: Bentley Systems opened a new Vilnius office and plans to grow its local team by nearly a third over three years, supporting tools used on projects like Rail Baltica. Agri-Food Investment: Signet Bank backed the acquisition of Lithuania’s Baltic Champs mushroom producer by Latvian Global Champs, aiming to modernise production and expand exports. Inflation Watch: Eurostat data put Lithuania’s May annual inflation at 5.1% (among the higher EU rates), with services and energy driving the euro area increase.

Vilnius Tech & Engineering: Bentley Systems opened a new Vilnius office and plans to grow its local team by nearly a third over the next three years, building on two decades of engineering work for tools used in major infrastructure projects like Rail Baltica. Rail Infrastructure Digitalisation: Riga hosted the BIM for Rail Bootcamp 2026, bringing 100+ rail and digitalisation experts together with RTU and Rail Baltica partners to push Building Information Modelling and digital delivery across cross-border rail works. Agri-Food Investment: Signet Bank backed the acquisition of Lithuania’s Baltic Champs mushroom producer by Latvian Global Champs, aiming to scale production, improve efficiency and expand exports across the Nordics and beyond. Energy Finance: The EIB expanded financing for Lithuania’s Kelmė wind farm with an additional €150m loan to Ignitis Group, lifting total support to €250m and pointing to future storage development. Defence & Security Signals: Lithuania’s political leadership is reshuffling as Social Democrats name Mindaugas Sinkevičius as prime minister, while President Nausėda warned the country is entering a more dangerous era—emphasising defence readiness, air defence and resilience. Inflation Watch: Eurostat data showed eurozone inflation at 3.2% in May, with Lithuania at 5.1% and Latvia at 3.5%, underscoring uneven price pressure across the Baltics.

Lithuanian Politics: Social Democrats named Mindaugas Sinkevičius as prime minister after coalition turmoil, replacing Inga Ruginienė and following the expulsion of the populist Nemunas Dawn party over an anti-Semitism conviction; the reshuffle aims to tackle living-cost pressure, inequality and poverty. Energy & Grid: European Energy brought a 25 MW/65 MWh battery storage system online in Anykščiai, integrated with its 78.5 MW solar park, to boost grid flexibility and balancing services ahead of full commercial operation. Defense Tech & Manufacturing: AB Giraitė Armament Factory started producing anti-drone cartridges for NATO-standard 5.56mm/7.62mm weapons, targeting short-range UAV threats for training and protection of strategic facilities. EU Policy Impact on Healthcare: Lithuania’s health minister joined an EPSCO meeting in Luxembourg on how extended producer responsibility rules could affect medicine supply and prices, urging an objective impact assessment and sector involvement. EU Environment & Industry: Eurostat estimates show EU greenhouse gas emissions down 17.2% since 2015, but Lithuania up 9.5%—a reminder that decarbonisation paths are diverging across sectors. Security & Procurement: The U.S. Army signed a letter of intent at Eurosatory to expand a Counter-UAS Marketplace, with Lithuania among participating NATO allies to speed up acquisition and training. UN Human Rights: A UN report says at least 58 states and territories remain contaminated by anti-personnel mines, with civilians making up about 90% of recorded casualties in 2024.

Lithuanian Defence Industry: Giraitė Armament Factory has started producing anti-drone cartridges, with trial batches already shipped to Sweden and France; the plant says it aims for about 5 million cartridges a year and is investing roughly €26m in a second line, with cooperation planned with Northrop Grumman and Norway’s NAMMO. Energy Storage & Renewables: European Energy has brought its first Baltic battery project online in Anykščiai, Lithuania—25 MW/65 MWh integrated with a 78.5 MW solar park—aimed at boosting grid flexibility and balancing services. EU Aviation Rules: The EU has agreed updated air passenger rights, keeping free cabin luggage and delay compensation for flights over three hours late, with the new framework set to apply from 2027. EU Climate & Industry Signals: Eurostat estimates show EU greenhouse gas emissions down 17.2% since 2015, but Lithuania is among the countries with rising emissions (+9.5%). Baltic Security Context: A U.S. Army letter of intent at Eurosatory 2026 pushes faster counter-UAS acquisition and interoperability, with Lithuania among participating NATO allies.

Lithuanian Defence Tech: Aktyvus Photonics says it is tripling output of ultra-compact UAV laser-designation systems for NATO-linked integrators, aiming to better match Ukraine’s need for small, lightweight guidance gear. Counter-Drone Manufacturing: Lithuania’s Giraitė has started producing anti-drone cartridges, shipping trial batches to Sweden and France, with plans for large-scale output and new production investment. US-Lithuania Drone Trials: The U.S. Army tested German-made Helsing HX-2 loitering munitions in Lithuania, reporting successful target strikes during Project Flytrap. Energy Infrastructure: Gasum secured long-term LNG capacity at the Klaipėda terminal for 2033–2040, supporting supplies to Northwestern Europe and maritime customers. Nuclear Decommissioning & Tourism: Lithuania is dismantling Ignalina’s RBMK reactor cores with robots, while Visaginas plans to turn the site into a nuclear tourism hub. EU Aviation Rules: EU lawmakers agreed to keep free cabin luggage and delay compensation after a decade of talks. EU Industry Pulse: Eurostat data shows EU and euro-area industrial production rose slightly in April (+0.1%).

Lithuanian Defence Manufacturing: Kaunas-based Giraitė has started producing anti-drone cartridges, with trial batches shipped to Sweden and France; the plant targets about 5 million cartridges a year and is investing ~€26m in a second line, with cooperation planned with Northrop Grumman and Norway’s NAMMO. Energy Infrastructure: Gasum secured long-term LNG terminal capacity at Klaipėda for 2033–2040, aiming to supply Northwestern Europe and expand maritime LNG/bio-LNG options. Nuclear Decommissioning & Tourism: Lithuania is preparing to dismantle Ignalina’s RBMK reactor cores using robots and international specialists; about 45% of equipment is already dismantled, while Visaginas plans a nuclear tourism hub. EU Industry Pulse: Eurostat estimates EU industrial production rose 0.1% in April vs March, with mixed sector performance and country-level swings. Automation & Connectivity: Private 5G passed 2,000 enterprise deployments globally in Q1, driven by industrial automation needs. Security & Drones: The U.S. Army tested German-made Helsing HX-2 loitering munitions in Lithuania, reporting 15 successful target strikes out of 17 drones. EU Enlargement: The EU is set to move Ukraine’s membership bid to the next “cluster” stage, but the path remains long and politically complex.

EU Carbon Border Rules: EU ministers agreed to tighten when countries can suspend the carbon emissions fee on imports like steel, cement and fertilisers, aiming to protect low-carbon investment certainty—though Lithuania was among the dissenters. Lithuanian Defense Drills: Lithuania, Poland and France will run “Brave Boar” infantry exercises near the Suwałki corridor (June 16–26), with Lithuania’s Mechanized Dragoon Battalion and Žemaitija Infantry Brigade taking part to boost joint response. Klaipėda Energy Move: Klaipėda Port opened Lithuania’s first green hydrogen refuelling station, adding a new link in the country’s clean-fuel infrastructure push. EU Enlargement Politics: The EU formally moved Ukraine’s membership bid to the next negotiation stage (June 15), starting alignment talks on the first legal cluster—progress is real, but the workload remains huge. Lithuanian Tech & Mobility: Tesla’s Supervised Full Self-Driving got approval in Belgium, following earlier authorisations including Lithuania—another step for driver-assist rollout across Europe. Industrial Reshuffle: Pon.Bike plans to close the Cannondale factory in the Netherlands by end-2027 and shift production to existing facilities in Lithuania and Germany, affecting about 120 jobs. Fintech Governance: ECB restrictions on Revolut’s ability to launch new products across the EEA highlight growing regulatory pressure on fast-growing fintechs.