On October 23, 2024, the European Commission re-approved the Swedish tax exemption for biogas and bio-propane, a move that has been welcomed by biogas trade bodies.
In December 2022, the European General Court annulled the two 2020 Commission decisions on procedural grounds.
The General Court concluded that the Commission should have opened a formal investigation procedure to assess whether the tax exemptions combined with support from other Member States, such as Denmark, led to the overcompensation of biogas producers.
The tax exemption was subsequently removed by the Swedish Tax Agency in March 2023, resulting in SEK 5.5 per kg additional cost, which is why biomethane (aka renewable natural gas – RNG), and bioLPG suddenly became more expensive than their fossil counterparts – natural gas, and liquefied petroleum gas (LPG) respectively.
This caused large price increases for both public transport and other consumers of biogas and led to numerous biogas investments being put on hold or canceled.
The Commission has completed the investigation and reaffirmed that the Swedish tax exemption schemes comply with EU State aid rules.
Many investments have been delayed and the uncertainty surrounding biogas taxation has been so frustrating for many companies. That the Commission made a positive decision is welcomed by many. Now, we hope that the government will quickly reintroduce the tax exemption and that they grant tax exemption retroactively for 2023 and 2024 as previously indicated, said Anna Törner, CEO of the Swedish Bioenergy Association (Svebio).
Energigas Sverige (the Swedish Gas Association), which has been working on the issue of the halted tax exemption since December 2022, is also elated.
It feels so incredibly good that the Commission is finally done with the in-depth review so that the tax exemption can be reapplied. Of course, we are curious to read the decisions in their entirety but we have to be patient, said Maria Malmkvist, CEO of Energigas Sverige adding that the association will be in touch with the Government Offices and the Tax Agency to ensure that the tax exemption can begin to be applied immediately.
