Response to interpellation 2022/23:74 on the process industry's announced investments
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD argues that industrial policy should strengthen competitiveness and that fossil-free fuels are crucial to achieving net-zero emissions 1. KD emphasizes that the forest provides great climate benefit and that the government wants to promote a growing circular bioeconomy 1. KD underlines that the reorganization of the reduction obligation is necessary due to unsustainable prices 2. KD wants to promote the production of liquid renewable fuels based on domestic raw materials 3. S argues that investments in the forest industry create jobs and growth 4. S emphasizes that biofuels are needed for heavy transport that cannot be electrified 4. S argues that the previous government prioritized fossil-free through tax reliefs 5. S argues that there is a basis for significantly increasing the production of biofuels 5. S considers that ethanol can be an important part of gasoline 6. S argues that alcohol can preferably be distilled from raw materials from the forest 6. S is keen that the industry should be able to be an engine in the climate transition and create jobs and development throughout the country 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Member of Parliament Isak From has asked me whether I will act to ensure the process industry's announced investments in fossil-free biofuel production and how, in that case, I intend to act to ensure that the business community will continue to dare to invest in new technology to increase the further processing capacity in the industry.
I can already say that this is going to be a rather long answer.
I want to begin by outlining the government's starting points. The goal of the industrial policy is to strengthen Swedish competitiveness and create conditions for more jobs in more and growing companies. The government's climate policy is based on the premise that emissions shall reach zero all the way over the coming years. Fossil-free fuels, including sustainably produced biofuels and electricity fuels, are crucial so that operations that cannot reasonably be electrified can reach net-zero emissions.
Sweden has a strong industry that contributes to solutions for green transition, which both creates jobs across the country and strengthens the conditions for Swedish business to succeed in global markets. Business, energy, climate, and environmental issues are closely linked. As the Prime Minister said in the Government Bill, we see the Swedish business sector as a greenhouse for prosperity and innovation and now also as an important environmental movement – world-leading in sustainability and green transition. We have also said that the government will be an offensive partner in that work.
Sweden's climate and environmental policy shall be ambitious. Our common climate and environmental policy is based on the concept of stewardship and strives to find the most cost-effective measures, which at the same time do not harm industries and the countryside.
There is a golden opportunity for northern Sweden to now lead the new industrial revolution and become an engine for green innovations that can benefit northernmost Sweden, the entire country, and in the long run, all of Europe. The northern regions' assets in the form of rivers, ore, and forest are the basis for the transition that creates jobs and competitiveness and strengthens the conditions for a good life for the people who live and work here. With a newly established department that links climate, energy, and business, the government will accelerate the green transition. This means, among other things, that the government will develop a strategy for northern Sweden. The strategy will be holistically long-term and promote the green re-industrialization.
The Government's view is that the business sector's competitiveness is best benefited by equal rules of the game within the common market. The EU's blending requirements for biofuels mean that the demand for biofuels will increase significantly across the entire European market, which benefits both the business sector's competitiveness and rural development. But it is important that we act nationally so that green businesses can be viable and sustainable, contribute to the climate transition, and create an enhanced supply capacity and reduced vulnerability in society.
The forest plays a major role for Sweden in many ways. When it comes to the forest's climate benefits and the consequences of climate change for forestry, the government assesses that active forestry with high growth and the use of products from renewable raw materials provides the greatest long-term climate benefit. Combined efforts for high growth, good forest health, and a growing circular bioeconomy are therefore important. A special investigator has been tasked with developing a strategy for a sustainable, competitive, and growing Swedish bioeconomy.
It is important to increase the production of biofuels. At the same time, there is a conflict of interest between climate and business interests with an increased extraction of biomass and the impact on other environmental goals. The amount of biomass that can be produced in a sustainable way is, and will continue to be, limited.
Even though there are extensive opportunities to increase the sustainable production of biofuels, the biofuels will need to be supplemented with e-fuels and hydrogen. Biomass is not enough for everything.
Long-term production support for biogas was one of several proposed measures submitted by the state Biogas Market Investigation in 2019, and 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. During 2023, 650 million kronor have been allocated for the same purpose.
The government's realignment of climate policy aims to create the conditions to reach all the way to zero. Good access to fossil-free energy, including fossil-free fuels, is an important prerequisite. It is important that the production of these increases. It is rational that part of the need is met with biofuels, especially in the near term. Electrofuels will also be needed to meet the need, not least from long-distance shipping and aviation. During 2023, the government intends to present its climate policy action plan to the Riksdag. In this, we will account in more detail for the government's climate policy for the mandate period.
The government is now restructuring energy, business, and climate policy. Our policy aims to strengthen the willingness to invest in Sweden, not least regarding new technology and fossil-free energy.
Isak From (S)
Mr. Speaker! I thank the Minister for Enterprise for the answer and welcome her to the chamber. It took the Minister for Enterprise almost two months to produce the answer. And I am not thinking about the fact that the Minister for Enterprise had to cancel the debate on Friday. One should be careful of procrastination. That time disappears so quickly.
But perhaps it was good that it took two months, because it is still a sobering up. The long answer that the Minister for Enterprise read out, I still think is relatively good compared to what has been communicated previously. There have been very sharp words from the business community regarding the significant changes that the government has nevertheless signaled. The government has communicated it as if biofuels were something harmful. I still think this answer is good. It is a sobering up.
It is clear that the investments that SCA, Södra, Holmen, ST1, Preem and others have announced - upwards of 15 billion kronor - could build the future and increase the investments, innovations, and profitability in the forest industry. It creates jobs and growth across the entire country. The forest industry is our largest industry. Our largest export value comes from the forest industry. It is clear that when they hesitate about what the government and the politics want, it harms the whole.
We need to take the lead because we see that there are also other interests trying to break in. EU policy has an impact. The EU is now pushing for already restored forests to be restored even more or not be used. The LULUCF proposal also has an impact. Taken together, this also risks the industry and, in the long run, the climate goals, the emissions, and the conditions to actually transition.
As we have touched upon in previous debates, electrification is extremely important. But the vast majority of vehicles rolling today that are fueled with diesel will also be rolling in ten to fifteen years. It is also about sustainability. The entire heavy transport cannot be electrified, in any case not at any faster pace.
I am still somewhat positive. And I can also encourage the Minister for Enterprise here by saying that this also, in one way or another, challenges the Tidö Agreement. I think the previous communication relied very heavily on SD's rhetoric that it is about the reduction obligation and that the biofuels are expensive and so on. Now we received a different answer, and I welcome that.
We also have the other situation that we must be clear about. Almost 60 percent of the diesel that we drive around with in the tank is Russian. At the EU level, there is a fairly large consensus. And I have nevertheless perceived that we are quite in agreement in Sweden that we should not have any Russian diesel in the tank. Then we should have other things in the tank and be able to afford to fuel it. Then I think we should produce it in Sweden.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! I would like to begin by thanking you for the kind words about vab.
Given that we will be together all afternoon here in the chamber - and probably well into the evening as well, albeit perhaps in a somewhat different setup - I also want to say that it is important for me to be able to provide answers as quickly as possible. That says something about the many pressing issues on the table of the Ministry of Climate and Enterprise. For me, it is a matter of honor that interpellations can be submitted on current issues and that answers should be given as soon as it is possible.
I also want to say that it is an informed and pressing question that the Member of Parliament has asked. I believe there are good conditions for broad cooperation regarding how we pave the way for what is happening within the further processing industry and regarding the potential that exists in biofuels and other related areas in Sweden.
The Swedish forest is one of the best things we have. It represents an enormous competitive advantage and provides very great climate benefit given that it binds such a large share of Swedish CO2 emissions. The forest is also an export issue to be very proud of. Here, things look different within the European Union, and there are some dark clouds regarding the different member states' specific characteristics, different conditions, and different management traditions for the forest. We need to find ways to continue cooperating broadly politically so that the perspective that is to be the basis for cooperation in the union is always safeguarded.
I also completely agree that biofuels are an important part for heavy transport on land. But there is also a lot of exciting development with biofuels that can have a major impact on aviation, to an even greater extent than today. I want to emphasize that the realignment of the reduction obligation that the four coalition parties are now carrying out is absolutely necessary. We have electricity prices and fuel prices that are simply unsustainable for ordinary people, households and families with children, as well as for very many entrepreneurs and for large parts of the industry.
The price of biofuels can, however, go up and down, and now the demand for biofuels will increase in the long term. It is hoped that we will have a positive effect both for the industries and actors that have the potential to deliver more and for the price formation in the long term. That would be best for us to be able to keep prices down, increase competitiveness and at the same time seize the great opportunity that exists.
So there is no principled opposition to biofuels, but rather against the price structure - that it has become so incredibly expensive, quite simply - and the impact it has had on very large parts of the Swedish business sector. I would, however, say that the future for biofuels is bright in the long term.
Isak From (S)
Mr. Speaker! The Minister for Enterprise mentioned that an investigation is underway regarding a strategy for a sustainable and competitive Swedish bioeconomy. That assignment was given by the previous S-led government. Now a revision has been issued, and I have not quite understood why. The revision may be good, but perhaps the Minister for Enterprise can elaborate on this.
I also think it is quite important to add that the previous Sledda government applied for a long-term reduction of the tax on biofuels, for example pure HVO 100, and that it was granted. It is an important signal that the policy actually wants to take responsibility and prioritize the fossil-free over the fossil.
We have had a number of debates here in the chamber, and there are other parties that are happy to rave about crude oil in principle. We Social Democrats do not belong to that category, but unfortunately, that applies to a part of the government base, even though they stand outside. Now that party is not here, but it is always possible to sign up for the debate.
I think it is important that this is clearly stated, and I think it is good that the Minister for Enterprise emphasizes that biofuels are needed and should be produced in Sweden.
It has emerged earlier that we do not quite have the resources. As a forest owner, I would say that it is also an economic issue. In northern Sweden, or roughly from Dalälven and upwards, no branches and tops are collected. All those parts called the tops could become something else that one could further process if there were the economics for it and if one actually put in the effort. Then one might need to talk about transport infrastructure as well, but there is a basis for significantly increasing biofuel production. It is quite important.
It is currently quite a few companies that are procuring their transports, and in the procurement it is included that they want the transports to run on fossil-free diesel. Regions and municipalities also do this, and it is important that they can feel that they are doing good - that the procurement actually does good. Therefore, it is important that we hold on to this that we shall produce what we can in Sweden.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Yes, there are indeed good opportunities to further refine the industry's existing waste products and see if we can get hold of that gold in the dross.
As I have mentioned previously, work is underway on a climate policy action plan that we intend to return to the Riksdag with. It is about further enabling the business sector's climate transition, and biofuels are an important part of this. There is also an excellent opportunity here to praise some of the investigations that the previous Social Democratic government has commissioned and which we will do our best to carry forward.
Now we also have a special investigator who has been tasked with producing proposals for a strategy for a sustainable, competitive and growing Swedish bioeconomy. That assignment also includes analyzing and – if appropriate, of course – proposing measures that promote efficient production of liquid renewable fuels based on domestic raw materials in Sweden. This is to be delivered in October this year, and parts of it will be presented in March this spring.
I therefore look forward to having the opportunity to return to this issue and, where possible, join forces.
Isak From (S)
Mr. Speaker! The industry has also been a bit hesitant - Sweden had an idea that ethanol was entirely the future. But when mixed in gasoline, ethanol can naturally be an important part. Ethanol is, in fact, cheap; when I fueled up in Skellefteå yesterday, the diesel was 24.30 while ethanol - E85 - was 15.10. If one has an ethanol car, it is therefore perhaps time to fuel up with a bit more spirit. And spirit can advantageously be distilled from raw materials from the forest. All the best products come from the forest - let us agree on that!
I can promise the Minister for Enterprise that we will continue to follow the issue. When it comes to the industry's development, we are very keen that the industry should be able to be an engine in the climate transition and create jobs and development in the whole country.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Out of respect for everyone's time, I refrain from laying out the text further. I look forward to being able to discuss these issues in more detail in the future instead.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.