Background information

In response to the high fuel prices followed by Russia’s war of aggression against Ukraine, the Swedish government has amended the Act of Reduction Obligation [2017:1201]. The Act requires all fuel suppliers to reduce greenhouse gas emissions of petrol and diesel. The amendment will enter into force on 1 January 2023.

Content of measure

High fuel prices risk worsening the economic situation of businesses and households dependent on cars. Therefore, the aim of the amendment to decrease fuel prices. Compared to the reduction levels under the current legislation, the proposal is expected to result in a pump price reduction of around 0.54-0.59 SEK/l for diesel and around 0.28-0.30 SEK/l for petrol (excluding VAT) in 2023.

The amendment is not expected to have any public finance implications, according to a report by Government Offices of Sweden. However, it would increase emissions of greenhouse gas by 880,000 tonnes in 2023, compared to if the measure implemented.

Use of measure

The measure is a general one applying to all citizens and companies that consume transport fuels in Sweden.

Target groups

Workers	Businesses	Citizens
Applies to all workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	Consulted
Form	Not applicable	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The proposal was open for consultative statements before being passed by parliament.

Views and reactions

Confederation of Swedish Enterprise [Svenskt näringsliv] supports the amendment. The peak-level trade union LO criticised the proposal, arguing that the model of travel deductions already primarily benefits high-income earners. LO also found the measure to be problematic from an environmental perspective.

Sources

• 26 October 2022: Suspended increase in the reduction obligation for petrol and diesel in 2023 (Pausad höjning av reduktionsplikten för bensin och diesel 2023) (www.regeringen.se)