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Continued tax exemption welcome but illustrates fundamental flaws – Svebio

Sweden has recently been given the green light by the European Commission (EC) to continue to provide tax exemption for high-blend ethanol, rapeseed diesel, and renewable diesel (HVO) fuels during 2021.
"The European Commission's decision is only valid for one year. The message is good, but at the same time illustrates fundamental flaws with the current order," says Gustav Melin, CEO of the Swedish Bioenergy Association (Svebio).

Sweden has recently been given the green light by the European Commission (EC) to continue to provide tax exemption for high-blend ethanol, rapeseed diesel, and renewable diesel (HVO) fuels during 2021.
“The European Commission’s decision is only valid for one year. The message is good, but at the same time illustrates fundamental flaws with the current order,” says Gustav Melin, CEO of the Swedish Bioenergy Association (Svebio).

Together with Swedish politicians, we will now act to get long-term rules, both in the State Aid rules and in the Renewables Directive, which will make it possible to continue with renewable and sustainable biofuels including biofuels derived from arable crops. There are very large untapped resources within Swedish and European agriculture that can be used to grow energy crops. In addition, crops such as maize, rapeseed, and wheat, provide valuable protein as a by-product when used to produce biofuels. The protein can be used to make food for the growing vegan market, explained Gustav Melin.

Utilize existing idled cropland

According to Gustav Melin, the national Climate Policy Path Choice study showed that Sweden will have increasing acreages of arable land not needed for food production. The study estimates that over 200 000 hectares (ha) of arable land will be taken out of food production by 2045 and 330 000 ha of the existing cropland will be set aside as long-term fallow, in other words, the land will not be cultivated.

In addition, we have already retired 230 000 hectares of arable land since 1990. In Central and Eastern Europe, there are many millions of hectares of abandoned arable land, and with the continued increase in harvest levels and a stagnant population, the set-aside area also increases in the EU as a whole. A large part of these lands could be cultivated with dedicated energy crops for biofuels that can replace fossil fuels. Right now, some of the EU institutions have misunderstood the situation and are actively working to counteract such a development. Here, Sweden now needs to work for a changed approach. Farmers in Sweden and Europe must be given an active role in the transition to fossil-free fuels, Gustav Melin concluded.

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