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Biomethane reaches 90% share in Swedish vehicle gas

The proportion of biomethane in vehicle grade gas at Swedish refueling stations continues to increase. New figures from Statistics Sweden for the first half of 2018 show that the renewable share in vehicle gas is just over 90 percent. In addition, new car registrations for July suggests that the government's introduction of "bonus-malus" environmental rules for new vehicles may already have had a positive effect on natural gas vehicle (NGV) sales.

A biogas to biomethane upgrading facility at a wastewater treatment plant (WWTP) in Sweden complete with a refueling station.

Statistics for the first half of 2018 released by Statistics Sweden on August 17 show that the proportion of biomethane (also known as green gas or renewable natural gas – RNG) in vehicle gas sold to motorists at filling stations is at 90.8 percent, up almost 4 percent compared to the full year 2017 and up almost 8 percent on 2016.

The industry’s goal is to have 100 percent biomethane in vehicle grade gas by 2030. The new figures show that we are on track, and of course, it is very pleasing. In this area, Sweden is world-leading. But if we are to achieve our ambitious climate targets, the biogas market needs to continue to evolve. The government’s recently launched biogas inquiry has a key role for such a development, said Maria Malmkvist, CEO of the Swedish Gas Association (Energigas Sweden).

A bonus effect of bonus-malus?

Furthermore, new car registrations for July indicate that the government’s new “bonus-malus” emission rules for new vehicles that came into effect July 1 is already having a positive effect on gas powered vehicle (NGV) sales.

Under the new regulation, new (2018 model year) vehicles – passenger cars, vans, minibusses, and motorhomes – registered from July 1 and that have tailpipe carbon dioxide (CO2) emissions of 60 g per km or less can receive up to SEK 60 000 (≈ EUR 5 726) bonus whereas vehicles that emit 95 g CO2 per km or more receive a “malus” in the form of increased road tax for the first three years.

Showroom launch of Volvo's premium (bio)methane fuelled V90 Bi Fuel.

Showroom launch of Volvo’s premium (bio)methane-fuelled V90 Bi-Fuel in October 2016.

NVGs qualify for a SEK 10 000 (≈ EUR 955) “bonus” and in July, 290 new NGVs were registered up 84 percent compared to 158 new NGV’s registered in July 2017.

Biogas is an important part of the puzzle in dealing with the transport sector’s climate challenge. We believe in increased demand for gas cars, and thus for biogas, now that bonus-malus has been introduced. In addition, heavy transport, industry, and shipping all show great interest in biogas, said Maria Malmkvist.

Continued environmental tax exemption to end of 2020

In addition, the EU Commission has approved a request from the Swedish authorities for an extension of the existing tax exemption scheme for certain renewable fuels used for heat generation until the end of 2020. First introduced in 2007, the Commission had approved an extension in 2012 until the end of this year. The new extension approval is until the end of 2020.

Both energy tax and carbon tax are environmental taxes. Reduction or exemption from taxes may be designed to constitute measures as state aid. The aid may only compensate for additional costs for the production of biofuel in relation to the fossil fuel being replaced. Such support must be approved by the Commission before they are introduced to ensure that the beneficiaries are not overcompensated.

The decision is in line with the Commission’s guidelines for state aid for environmental protection and energy for 2014-2020 (EEAG) and means that certain taxable biofuels, including biogas, will continue to be exempt from energy taxes and carbon tax when used for heat production. Biogas used as a transportation fuel is not affected as this is already covered in another approved scheme until the end of 2020.

Proposals for biogas tax regulations for the period after 2020, both as heating and transportation fuels, will be investigated in the state biogas inquiry that was launched just before the summer.

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