By Lynn L. Bergeson

On October 8, 2020, the European Commission (EC), under the European Union (EU) State aid rules, approved the prolongation of tax exemptions for biofuels in Sweden. Having exemptions for liquid biofuels from energy and carbon emissions taxation since 2002, Sweden’s scheme aims to increase biofuels use while reducing the fossil fuels use in transport. With EC’s decision, the tax exemption has now been prolonged by one year from January 1, 2021, until December 31, 2021. EC stated that the tax exemptions are not only appropriate, but necessary for stimulating the production and consumption of domestic and imported biofuels in Sweden. In addition, EC found that the Swedish scheme will contribute to the delivery of the EU’s goals in the Paris Agreement and EU’s move towards its 2030 renewables and carbon emissions targets.

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On March 24, 2017, Neste, a member of BRAG^®, announced its approval of draft proposals by the Swedish government regarding mandated reductions in traffic fuel emissions and the continued tax exemption for high-blended biofuels.  By 2030, the government aims to reduce carbon emissions from transportation by 70 percent.  In addition to reducing carbon emissions, the ambitious targets and long-term perspective will help support innovation and investments in biofuels.  Neste, which has a strong focus on developing cost-efficient technologies to convert forest residues into biofuels, stated that the substantial amount of forest-based raw materials in the country will likely play a key role in achieving the proposed goals.

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