In a bid to reduce consumer "pain at the pump", the new Swedish government has announced that it intends to dial back the biofuels quota to the minimum level as required by the European Union (EU). This a bad idea, both for Swedish climate politics and for the companies that produce or plan to produce biofuels from domestic raw materials says the Swedish Bioenergy Association (Svebio).
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The new Swedish government, a right coalition consisting of the Conservative Party (M), Liberals (L), and Christian Democrats (KD), backed by the Sweden Democrats (SD) that formally transitioned into power on October 18, 2022, intends to reduce the biofuels quota as a means to reduce the consumer price of gasoline and diesel at the filling station.
According to the Swedish Bioenergy Association (Svebio), such a decision would result in increased transportation-related greenhouse gas (GHG) emissions and make it impossible to reach the 2030 climate target.
The new government has plenty of time, until January 1, 2024, to prepare a better proposal that would meet the climate target, provide biofuel producers with long-term conditions, as well as keep consumer prices low. We are happy to engage in conversation to develop such a solution, said Gustav Melin, CEO of Svebio.
According to Eurostat, the official statistical office of the EU, Sweden achieved over triple the “10 percent by 2020” target for energy from renewable sources in transportation.
The country reached 31.9 percent of gross final energy consumption from renewable energy sources such as liquid biofuels, hydrogen, biomethane, ‘green’ electricity, in transportation in 2020.
Sweden is going from being a European leader in terms of climate change in the transport sector to adapting to the EU´s passive and risky fuel policies that have led to total dependence on fossil fuels and includes restrictions on domestically produced biofuels. This EU adaptation will be directly harmful to Sweden, both in the short- and longterm, Gustav Melin said with reference to ongoing investments in refinery conversions and advanced biofuels plants.
According to a survey of Nordic biofuel producers conducted by the Swedish trade publication, Tidningen Bioenergi in December 2021, biofuel production capacity increased by 20 percent in 2021 to reach approximately 9.2 TWh compared to around 7.6 TWh in 2020.
Furthermore, capacity is expected to grow a modest two percent during 2022 before picking up to reach a total production capacity of about 39 TWh in 2026.
Nonetheless, Svebio approves of other areas of the new government agreement. For example, emphasizing combined heat and power (CHP) and wanting to abolish taxes on waste incineration and bio-oils. Abolishing grid connection subsidies on offshore wind power is also positive. However, if technology neutrality is to be taken seriously, this should apply to nuclear power as well, ended Gustav Melin alluding to the new government’s and the new energy minister’s vurm for nuclear power.