Swedish govt parties agree to slash biofuels obligation

Sweden’s three government parties have struck an agreement with the far-right Sweden Democrats which will see the so-called biofuels obligation reduced to 6 percent for both fuels, down from today’s 7.8 percent for petrol and 30.5 percent for diesel.

The reduction will come into force from the start of next year, and would, the parties said reduce the price of diesel at the pump by 5.5 kronor, while the price of petrol would only fall slightly.

The biofuels obligation, or reduktionsplikt, requires fuel retailers to blend in a proportion of biofuels in the petrol and diesel they sell and was a key component of Sweden’s plan to meet its carbon emissions targets.

The fuel refinery Preem, which is investing heavily in biofuels, questioned the claim that reducing the obligation would make fuel 5.5 kronor cheaper.

The Swedish environment consultant Mattias Goldmann told that there was no way that growth in the use of electric vehicles could make up for slashing the obligation, at least not before 2030, when Swedish emissions are supposed to be 63 percent lower than in 1990.

The biofuels obligation was a “cost-effective measure”, as it uses existing vehicles and infrastructure, and was deemed essential for Sweden meeting its climate goals by both the Swedish Climate Policy Council and Sweden’s Environmental Protection Agency.