Factsheet for measure
SE-2023-1/3140
–
Updated
– measures in Sweden
Pausing the reduction obligation of transport fuel greenhouse gas emissions
Frysning av reduktionsplikten
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.
Updates
The following updates to this measure have been made after it came into effect.
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27 August 2024
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The Government has yet again proposed amendments to the reduction obligation rates, raising the rates from the current 6% to 10% in 2025.
The new 10% reduction obligation is expected to reduce emissions by a total of 3.1 million tonnes by 2030, according to the Government.
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30 November 2023
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Since 1 January 2024, the reduction obligation rates are 6% for petrol (7.8% in 2023) and diesel (30.5% in 2023) respectively, and 3.5% for kerosene used for aeroplanes. The amendment lowering the reduction obligation, proposed by the Government in 2023, was passed by the Swedish Parliament in November 2023. The new levels are valid for 2024-2026 and were proposed to be fully removed for 2027-2030.
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Use of measure
The measure is a general one applying to all citizens and companies that consume transport fuels in Sweden.
Target groups
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Workers
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Businesses
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Citizens
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Applies to all workers
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Applies to all businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
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No special funding required
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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Consulted
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Form
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Not applicable
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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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
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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)
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30 November 2023: Reduction of the reduction obligation for petrol and diesel
(www.riksdagen.se)
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27 August 2024: Reduced tax on petrol and diesel and reformed reduction obligation
(www.regeringen.se)
