Latvian manufacturing industry is faced with higher energy prices than most of its international competitors. The transition to zero carbon environment is harming the competitiveness of manufacturing industries especially those with high energy intensity. The appropriate energy policy could ease the transition period by reducing the energy costs and facilitating the efficiency of energy usage. Recent energy policy developments in Latvia are targeted to reduce energy costs for energy-intensive companies while imposing an obligation to implement an energy management system, which would increase the overall efficiency of the manufacturing industries.