Response to interpellation 2022/23:29 on biofuels
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD considers that a growing circular bioeconomy is important for the climate transition, regional development, and national supply capacity 1. KD argues that bioenergy is an important fossil-free base and that there is great potential to utilize harvesting residues 1. KD advocates for support for bio-CCS and Industriklivet 1. KD argues that the reduction obligation has led to unsustainable price increases at the pump 1. KD considers that Sweden should follow the EU's development 2. S believes that a competitive forestry industry can deliver climate-smart products and tax revenues 3. S wants the policy not to become a double blow against forestry. KD argues that the government protects forestry 4 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Landsbygdsministern Peter Kullgren (KD)
Madam Speaker! Anna-Caren Sätherberg has asked me whether I will work to ensure that the potential in the residual flow from agriculture and forestry is utilized in the green transition, and if so how, as well as whether I intend to take measures to ensure that the business sector will dare to invest in new technology for biofuel production.
A vibrant bioeconomy is important for Sweden. A growing circular bioeconomy has a role in the climate transition. It has a positive significance for sustainable regional development and rural development, and it is an important tool for strengthening the national supply capacity.
Our agriculture and our forestry industry produce large quantities of food, building materials and paper products of very high quality every year. As a byproduct, bioenergy is produced simultaneously in various forms, which constitutes an important fossil-free and domestic base in the Swedish energy system.
Since 1990, the use of bioenergy has increased manifold. This bioenergy has replaced large amounts of fossil energy and is an important explanation for why Sweden has reduced greenhouse gas emissions by over 30 percent compared to 1990. The Swedish Forest Agency further assesses in Skogliga konsekvensanalyserna 2022 - syntesrapport that there is continued great potential to increase the extraction of harvesting residues. There are also good opportunities to further refine the industry's waste products, for example into biofuels.
Within the EU cooperation, the level of ambition for the short-term carbon sink in forest and land is increasing. The Government's assessment is rather that active forestry with high growth and the use of products from renewable raw materials provides the greatest possible long-term climate benefit. Combined efforts for high growth, good forest health, and a growing circular bioeconomy are therefore of importance. National self-determination over forest issues shall be protected and detailed regulations of forestry shall be avoided.
In the budget bill for 2023, the Government proposes long-term and extensive support for negative emissions through bio-CCS, which will provide further incentives to utilize the energy from waste products from agriculture and forestry. Continued efforts are also required to develop competitive technology for the production of biofuels. By strengthening Industriklivet with 600 million kronor per year 2023-2025, Swedish innovations and solutions can be developed and exported, which contributes to reducing emissions both in Sweden and globally and accelerating the transition.
In the budget bill for 2022, 500 million kronor were allocated for the purpose of increasing the production of biogas and strengthening the producers' competitiveness. In the budget bill for 2023, the Government proposes that the support shall continue with 500 million kronor for the same purpose.
The reduction obligation is a policy instrument to achieve increased use of liquid renewable and fossil-free fuels. Unfortunately, the production of fossil-free fuels has not been expanded at a sufficient pace. In combination with a general price increase on fuel, this has resulted in high price increases at the pump, which has led to an unsustainable situation for many households and companies. The Bioeconomy Inquiry (dir. 2022:7) is tasked with analyzing and, if appropriate, proposing measures that promote efficient production of liquid renewable fuels based on domestic raw materials in Sweden, including proposals for long-term production support.
The Government is closely following the investigation, but I can neither or will not anticipate the investigation's work and proposals. The investigation is to submit partial reports of the work to the Government by February 15 next year at the latest. The Government has, however, signaled that it will propose that the reduction obligation be lowered to the EU's minimum level on January 1, 2024.
Anna-Caren Sätherberg (S)
Madam Speaker! Thank you, Minister for Rural Affairs, for the answer! For us Social Democrats, our Swedish agriculture and forestry and a faster climate transition are of the utmost importance. That is how we create the jobs of the future, and that is how we reduce our vulnerability and our unhealthy dependence on fossil inputs.
That is why the previous Social Democratic government acted in different ways to strengthen Sweden and Sweden's green industries. We introduced Klimatklivet, Industriklivet, bio-CCS, biogas support, wetland support and much more. Some of this that we Social Democrats introduced, we can now see that the new right-conservative government together with the Sverigedemokraterna considers to be a good policy that they seem to want to continue with, even though we who have sat in the Riksdag for a while will remember that there were not as strong rounds of applause from that side when we introduced these measures.
We Social Democrats want to strengthen Sweden, all of Sweden, and for that, a growing bioeconomy is needed. Therefore, we commissioned an inquiry into a national bioeconomy strategy. The inquiry has two main directions. It is partly about developing proposals for a national strategy for a sustainable, competitive, and growing bioeconomy, and partly about increasing our domestic production of liquid biofuels.
That this is urgent is shown, not least by Russia's invasion of Ukraine, which has created very high biofuel prices. We need to break the dependence on the fossil inputs that we have.
The Minister for Rural Affairs has not - at least not yet - said that the government intends to cancel the investigation. But the government has said that the reduction obligation, which applies to the biofuels mixed in when we refuel, shall be lowered to the EU's minimum level on 1 January 2024. This may result in that the large-scale planned and announced investments in Swedish biofuels are not completed.
It also means that in the commitments that the Swedish government negotiates with the EU regarding LULUCF - which sounds strange but is about how large a carbon sink Sweden should have - one can no longer rely on the reduction obligation without having to meet Sweden's conditions in other ways. Will it then be a matter of significantly reducing the logging of the Swedish forest?
The Minister for Rural Affairs is welcome to answer my questions, which I do not quite feel he has answered: What will the Minister for Rural Affairs do to ensure that the potential in residual flows from agriculture and forestry is utilized in the green transition? What will the Minister for Rural Affairs do to ensure that the business sector dares to invest in new technology for biofuel production?
He is welcome to also answer these questions: What will the government do to meet Sweden's commitment within LULUCF, where the reduction obligation was a part for Sweden to be able to have an active forestry, now that the government wants to introduce a reduction of the reduction obligation to the EU's minimum level? By how much forest does the Minister for Rural Affairs assess that we will need to reduce the logging to reach the agreement on LULUCF with the EU? And has the Minister for Rural Affairs calculated how many fewer jobs this could lead to in Sweden's rural areas, in Sweden's pulp industry and in Sweden's sawmills?
Isak From (S)
Madam Speaker! Thank you, Peter Kullgren, and congratulations on an important assignment for Sweden - not least for the forest land of Sweden! It is clear that we Social Democrats have high expectations - especially perhaps of the Christian Democrats, who have had a very high profile when it comes to forestry issues. The three government parties - including the Christian Democrats, right? - have also for several years clearly pushed for an increase of the reduction obligation. The reduction obligation was considered to be the most important tool to meet Sweden's climate goals.
This, in turn, was welcomed by the forest industries, which had announced investments of 15 billion kronor before the election. Not least Södra Skogsägarna, Stora and Holmen now express considerable skepticism towards the new government's total turnaround.
The question is: Are biofuels important? The reduction obligation has been a way to increase demand. Then there may also be reasons to, just as Peter Kullgren's party with several government parties have pushed the previous government to do, lower taxes, for example, on HVO 100 and RME to the EU's lowest level. Now we do not see that question is on the agenda on the government's table. My reflection is therefore: How can that be?
My question to Peter Kullgren is also: What does Peter Kullgren consider HVO 100 should cost at the pump? And are Peter Kullgren and the government willing to take measures to increase the demand for HVO 100?
HVO 100 is an important further processing from the forest industry and an important part for increasing returns and, just as Anna-Caren Sätherberg highlighted, creating jobs and industry in the countryside, taking advantage of the residual products from the forest and doing something that actually makes a difference - creating jobs and development in Sweden, reducing our harmful oil dependency and actually meeting the climate goals, all in the same basket. Now the right-wing government is cutting this.
In Peter Kullgren's response, he highlights Industriklivet. I welcome that it remains. Initially, before the S-government introduced it, this support did not exist. Now the government parties have seen that Industriklivet is still an important part, so I thank them for that part.
However, I look forward to the answers from Peter Kullgren, especially on what he believes HVO 100 will cost at the pump.
Landsbygdsministern Peter Kullgren (KD)
Madam Speaker! The Social Democrats now seem to want to portray themselves as the voice of Swedish forestry. But what was the reality when they were in government? Well, they were deeply divided, for at least seven of the eight years, regarding forestry policy—so divided that they had difficulty making Sweden's voice heard in the EU. When it mattered most, a Swedish voice speaking with a clear tone was missing in Brussels.
In March 2021, Austria, together with another ten EU countries, wrote a letter to the Commission protesting the Commission's proposal for a forest strategy. Finland, the Baltic countries, and Poland, our neighboring countries, were all among those who signed. Why was the then Swedish government not part of that outcry? I see it as a betrayal of Swedish forest owners, of the forest industry, and of the Swedish welfare, as forest exports are an extremely large export income.
Regarding the reduction obligation, which is what this is about, we would have ended up in a situation where the price at the pump became far too high. We have not managed to achieve the production of biofuels that we would need for our extremely high level of blending of biofuels in the Swedish diesel tanks. If we compare our level with the level in other European countries, it says for itself that we get an enormous competitive disadvantage.
Only within, say, five or seven years is the assessment that the entire EU will double the inclusion of biofuels in its diesel tanks. How can one believe that there then would not be a market for Swedish producers? We are one of Europe's largest forest countries. It is only Finland that has more forest on its land area than we do. It is clear that our industry will be involved and be driving this.
People often talk about the importance of long-term conditions for entrepreneurship. I am the first to agree. Can it be any clearer than us saying that we shall follow the EU's development of the level? It is good to lead sometimes, but one cannot lead so far ahead or so fast forward that the country's own entrepreneurs, farmers, and foresters cannot keep up.
Anna-Caren Sätherberg (S)
Madam Speaker! Thank you for the answer, Minister for Rural Affairs! It was not quite an answer to all the questions I asked, but the Minister for Rural Affairs has the opportunity to follow up.
I want to start by saying that no one is painting anything. Within the Social Democrats, we have never been in disagreement about where we stand on Swedish forest policy. The Minister for Rural Affairs has probably misunderstood.
For the Social Democrats, the idea of sitting in the back seat and waiting for others is not what has made Sweden successful. That Sweden takes the lead in so many transitions that the world is now demanding, whether it concerns fossil-free steel, battery factories or other things, is what ensures that we have jobs in Sweden's rural areas. It is what ensures that we have jobs with decent conditions. It is what ensures that we have exports.
I believe that waiting for the EU has never been a Swedish model when the Social Democrats have been in power. I truly hope that is not what the Minister for Rural Affairs imagines the government should do in all matters – that we should be the country of Lagom. A small, export-dependent country like Sweden cannot manage that. We fare best when we are at the forefront and develop the opportunities, and we do that if we sit down together with the business community and discuss which path we should take and give them the long-term rules of the game.
I agree with the Minister for Rural Affairs that we import far too much biofuel. But if you know that you have a market, you will also produce, and that is what we see. Those initiatives are taken.
I agree with the Minister for Rural Affairs that the price at the pump is far too high. But one can change that in other ways than by changing the reduction obligation. We know that if Sweden produces more biofuels, we will also ensure that it becomes a market where the price becomes lower at the pump.
I do not know what the Sweden Democrats have promised. Well, they promised a reduction at the pump of 10 kronor. It became 14 öre. But the Social Democrats want to introduce a tank discount, which is something completely different. Industry is developing while we take responsibility for them in the rural areas that have long distances.
Once again, the Minister for Rural Affairs - I asked four questions. I do not know if the Minister for Rural Affairs will remember them. Two of them were even in the interpellation. I really want to know how the Minister for Rural Affairs views that Sweden's entrepreneurs should dare to take the planned and announced investment decisions so that we can get production of biofuels and more Swedish in the tank started. It is important. I would rather see that biofuels are produced in Sveg than in Saudi Arabia.
The Minister for Rural Affairs actually has to explain what he thinks about the industry's development and conditions if one wants to wait for the rest of the EU, if Sweden is not to go ahead and simply wants to lower itself to the EU's minimum level. We in politics have been very much in agreement that we should work on it and go ahead.
Isak From (S)
Madam Speaker! Peter Kullgren! It is another government party that has been even clearer about saying one thing before the election and something else after the election. But all promises of price reductions at the pump have proven to be difficult to fulfill.
I can understand that Peter Kullgren finds it difficult to answer what HVO 100 will cost. But today, quite a few people drive around in a diesel car and want to make climate-friendly choices and at the same time want us to become independent of Saudi Arabia, Qatar, or for that matter, Iran. One can, given the shift in politics, wonder how much more oil we will import to Sweden from Qatar, Iran, Saudi Arabia, and several others. Russian oil will probably not be imported for a very long time - thank goodness.
Oil dependence clearly reduces the possibilities to increase our own production from the forest. We have residual products that it is important to make use of. It is an important innovation and further processing part.
For us Social Democrats, the welfare state is the foundation. In order for the welfare state to be financed, the industry in Sweden is the engine that drives it forward. A competitive forestry industry, which has the right conditions, has the opportunity to provide us with climate-smart products, with tax revenues for the welfare state and a long, good prosperity.
Peter Kullgren can now reflect on or return later regarding what he considers HVO 100 should cost at the pump.
Landsbygdsministern Peter Kullgren (KD)
Madam Speaker! When it comes to the fact that one within the Social Democrats is never in disagreement, I tried to say – the member may not acknowledge it here, and it was not necessary – that it was obvious that the Social Democrats and the Green Party did not have the same line regarding the forest. It is still noticeable. It was noticeable then, and it is noticeable now. That was what I meant and not that the Social Democrats themselves were in disagreement during the last year, even though that also occurs in most parties. But that was what was intended.
I believe that the fact that we were not united within the government had consequences for how we acted. We had a less clear voice in the forest issues that are important for Sweden. That has changed. Now we have a government that protects Swedish forestry and that speaks with a clear and distinct voice in Europe. We are united on forest policy.
Within perhaps five to seven years, the reduction obligation will double in total in the EU. We already have a level, and we do not know what the minimum level for the reduction obligation will be in 2024. It is therefore difficult to say exactly how much the fuel price will decrease when we lower the reduction obligation. But a lower diesel price somewhere between 4 and perhaps 6 kronor straight at the pump is welcome in Sweden. It is necessary for our competitiveness and so that households and families, those who have no alternative to the car as it is now, will fare better. It is a political priority that we have made.
At the same time, it is obviously important not to paint a picture that liquid biofuels would not be needed in the future. It is central that we take political responsibility and that we do not say that they would not be needed. Even with the reduction obligation that we will continue to have, it is good if the blend is of Swedish-produced raw material. It is central.
When the rest of Europe also comes to have a need for biofuels, it is clear that a large forest country like Sweden has great potential to export to our European friends instead of them having to import biofuels that have been produced in an unsustainable way far from Sweden's and Europe's borders. We have a great potential. As I explained in my answer, which will soon be available in writing, we will come forward with a number of different proposals.
It is important. The signal is: Invest in biofuels, because it will be important for the future. The government wants to see increased Swedish production of biofuels.
When it comes to the HVO issue, it is clear that it is good to have it as cheap as possible. I cannot stand here and say exactly what it will cost. I do not have that knowledge right now. But if we produce biofuels here in Sweden, we can hopefully have a lower price in the future compared to what we have today.
Anna-Caren Sätherberg (S)
Madam Speaker! Minister for Rural Affairs! It is an important issue to discuss. It is about Sweden's preparedness, it is about all of Sweden living, and it is about green jobs across the entire country. It is also, of course, about the matters that the Minister for Rural Affairs mentioned in the response and which the Social Democratic government introduced together with the Green Party, namely climate steps, industrial steps, bio-CCS, biogas support, and wetland support. Very much of the common ground, the Minister for Rural Affairs believes anyway, is good policy.
We want the whole country to live and that this should not become a double blow against forestry. I will once again pose the questions to the Minister for Rural Affairs. I would like to have answers to them. I have not received them yet. The double blow means that if we are to have less logging of forest, it simultaneously creates fewer forest residues for biofuels. I repeat the questions, so that the Minister for Rural Affairs will remember them in this speech.
What will the government do, now that the government wants to introduce a reduction of the reduction obligation to the EU's minimum level, in order to meet Sweden's commitment within LULUCF? There, the reduction obligation was a part for Sweden to be able to have an active forestry.
The second question was: How much less forest does the Minister for Rural Affairs assess will be able to be harvested for Sweden to reach the agreement that the government has negotiated with the EU regarding LULUCF? Has the Minister for Rural Affairs calculated or can he estimate how many fewer jobs this will be able to lead to in the Swedish countryside, in Sweden's pulp industry, and in Sweden's sawmills?
Landsbygdsministern Peter Kullgren (KD)
Madam Speaker! The Government makes the assessment that we have safeguarded Swedish forestry with the negotiated result we have and that we will not see demands for reduced logging in the negotiations on LULUCF.
To make this clear and distinct: The Government, through its policy, wants to create conditions for everyone living within Sweden's borders to realize fundamental values. It is a matter of us keeping the entire country running with the Swedish business sector, large and small companies, entrepreneurship, a clear property right, and a secure energy supply.
A growing bioeconomy based on raw materials from agriculture and forestry will be absolutely necessary for us to move forward in our climate transition. There is no question about that. It will be of great importance, just as the member is pointing out, for rural development, for regional development and for entrepreneurship in rural areas. These are self-evident tools to strengthen our national supply capacity.
To create a thriving business sector, we need people who dare to take risks and who are secure about what conditions will apply in the future. Then we must have stable and reasonable rules of the game, so that we create the right conditions. This applies to companies in a growing bioeconomy but also to the business sector as a whole. It does not happen through rules that result in higher fuel prices in Sweden compared to our neighboring countries.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.