Response to interpellations 2023/24:426 and 455 on tax exemption on biogas
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M argues that the government is actively working to have the tax exemption for biogas approved again without additional requirements 1 2 3. M emphasizes that the Riksdag is in agreement regarding the biogas, that the commission made a mistake in the handling 2 and that Sweden shall grow through cooperation for the green transition 3. M cannot promise a specific timetable since the issue lies with the commission, but promises to work actively for a swift solution 4. S argues that biogas is important for sustainability, competitiveness and preparedness 5. S criticizes the government for not restoring the tax exemption 6 and argues that the lack of clarity regarding additional requirements creates uncertainty for companies 7 8. S questions the government's climate policy 9.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! Peder Björk has asked me if I intend to take the initiative so that those who have previously been granted tax exemption for biogas will not be required to repay the money. He has also asked me if the government intends to actively participate in the initiated review with the aim of ensuring tax exemption for biogas in Sweden. Johan Löfstrand has asked me how I and the government are working with the issue of tax exemption for biogas and when I believe the issue will be handled.
The questions are posed against the background that the tribunal, which is the court of first instance of the Court of Justice of the EU, in December 2022 annulled Sweden's approvals for tax exemptions. The reasoning was that the European Commission should have initiated a so-called formal review procedure in the decision-making process. This resulted in the Swedish Tax Agency notifying in March 2023 that tax exemptions cannot be granted at this time.
The Government is working to ensure that the tax exemption is approved as soon as possible. The Commission has taken far too long. The Government has maintained an active dialogue with the Commission so that it would begin its review, and I am pleased that it has finally done so. This means, among other things, that Sweden has been asked to submit comments to help the Commission make a final assessment. Of course, we will participate actively in the review. The Government's starting point in the review is that the tax exemption shall be approved again and that the question of reclaiming the tax amounts will not be relevant.
When Johan Löfstrand (S), who submitted one of the interpellations, reported that he was prevented from attending the meeting, he granted the first deputy speaker permission for Anna-Caren Sätherberg (S) to participate in the interpellation debate instead.
Peder Björk (S)
Mr. Speaker! Biogas is an important part of the transition to a more sustainable society, particularly when it comes to reducing emissions from transport. This is especially important for heavy transport, where electricity or some other alternative might not really work now and perhaps will never work. In order to be able to lower the emissions from those transports, we need biogas. I am thinking, among other things, of the transports that take place within the forestry industry.
With government support, biogas has been able to develop in a positive way in Sweden. It has created conditions for both production and distribution of biogas all over the country. In addition to the government support, many private companies and public actors have also invested a lot of their own money in biogas. A basic prerequisite for wanting to make these investments has been that there has been a tax exemption. In that way, the calculations have been able to add up.
When this tax exemption disappeared, it meant that costs increased significantly for those who chose transport with vehicles that run on biogas. It also meant that the sale of biogas decreased significantly. For those who produce biogas, revenues have therefore decreased dramatically. Due to the uncertainty now that the tax exemption has disappeared, many are also now hesitating to invest in new vehicles powered by biogas.
Therefore, Mr. Speaker, the tax exemption is extremely important in order to be able to ensure a future use of biogas in Sweden.
It is good that the government is active in the matter. But the fact remains: So far, there is no announcement, and it has taken up to 14 months for the commission to even begin the review. The question is whether we have to wait 6 months, 12 months, or 18 months before we receive an announcement from the commission.
Mr. Speaker! In addition to the uncertainty about what will happen with the tax exemption going forward, there is also a great uncertainty about what will happen with the tax exemption that has already been granted, from 2021 until the judgment was delivered at the end of 2022.
Regarding my question on precisely the clawback, the Minister for Finance refers to that "the government's starting point in the review is that the tax exemption shall be approved again and that the question of clawback of the tax amounts will not be relevant." That answer leads to two follow-up questions regarding precisely the clawback. I would very much like to receive answers to them from the Minister for Finance.
To begin with, I wonder if the Minister for Finance can be sure that a new positive decision will cover the entire period, from 2021 onwards, so that clawbacks never become relevant. Or will a new decision only apply from the date the decision is made? And if it were to become so bad that there is no positive decision, is there any plan for how one should then handle this issue with clawbacks?
Anna-Caren Sätherberg (S)
Mr. Speaker! I would like to thank the Minister for Finance for the answer, even though the answer may be the same as what we have heard for over a year.
The social democratically led government invested in biogas and introduced, among other things, biogas support in Klimatklivet. If the Speaker wonders, Klimatklivet is also something that the social democratically led government introduced. Together, the measures that have received support from Klimatklivet are expected to contribute to an annual reduction of greenhouse gas emissions of 2.5 million tons. There, biogas comes in second place when it comes to emission reductions.
I have visited many farmers who have invested in using manure for the production of biogas. It must be the most fantastic circular economy that exists. Some facilities are smaller. Others are larger. Some have also collaborated with municipalities that have signed contracts to be able to fill the municipality's buses with biogas and use it in public transport. In 16 out of 21 regions, Swedes ride buses powered by biogas that is often produced locally. That is good. We Social Democrats want to see more Swedish in the tank, more opportunities for returns in Swedish agriculture, and more climate-smart circular economy.
Mr. Speaker! Own production of biogas also strengthens our supply capacity and preparedness.
Now we have a government that prioritizes increasing Sweden's emissions. We have a government that has not yet ensured that the tax exemption for biogas that Sweden has had is restored. This means increased fuel costs, which affects those who drive biogas cars but also public transport and trucking companies. It leads to higher ticket prices or fewer departures in bus traffic as well as to higher prices towards the trade.
The sales of biogas trucks have gone from almost 10 percent of the total sales to practically zero. It is a direct consequence of the tax. And several industries have unfortunately switched back to fossil fuels for the same reasons.
Marcus Dahlsten, who is CEO of Transportföretagen, says: "This is a hard blow for the transport sector and the companies that choose to lead the way in the green transition by using biogas. We see that it could mean cost increases of up to 30 million kronor for a trucking company with 150 biogas trucks. The transport sector is a low-margin industry and it takes the legs out from under the companies fighting at the forefront of the green transition."
In newspapers, one can see headlines that a tax on biogas is like a sugar tax on broccoli. On P4 Östergötland, one can hear that a tax on biogas is like having an alcohol tax on milk. It is, therefore, not very smart.
Mr. Speaker! The Minister for Finance is welcome to elaborate on what the active dialogue that the Minister for Finance refers to has looked like and when a decision will be made regarding the reintroduced tax exemption for biogas.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I would like to thank the interpellants for this question, even though one of the interpellants is not here but is replaced appropriately by Anna-Caren Sätherberg.
I think one should step back a bit and go to what is the basis for this. The Riksdag is very much in agreement on the biogas and on the tax exemption. It is important to emphasize that. It almost sounds like it is not so.
This is an important and serious issue, not least for all those who have been affected. When this was invalidated, farmers in particular were hit hard. It also concerns public transport, the transport sector, trucking companies and many others. It is often small companies that have small margins. This has been and is a major blow for them. Therefore, it is important that we push forward now. The Commission has finally taken up the matter and will hopefully both redo and do it right.
What is the reason for this? For those who may be listening to the debate, I shall briefly explain what has actually happened. The Commission had approved Sweden's tax exemption for biogas. I believe everyone in this chamber thought it was good. It was good for Swedish companies, it was good for Sweden, and it was good for the climate. But in December 2022, the European Court of Justice, as I said initially, ruled that the processing had been insufficient. The Commission had, therefore, not done a sufficiently solid job during its review. That is the major problem.
Another major problem until just a few months ago has been that the Commission has waited an incredibly long time to pick up the review again. We have, of course, pointed this out on many occasions at different levels. I last had a conversation with Margrethe Vestager in January. Immediately after that conversation, they finally took up the review. This means that the Commission and Sweden, i.e., the Ministry of Finance, will now cooperate closely to ensure that it is corrected. But fundamentally, it is the Commission that has made a mistake from the beginning.
Questions are being asked about the re-demands. We have a goal. I cannot promise anything and cannot know what the commission will land on. But we are working closely and, of course, actively so that it becomes what the government and what I know the Riksdag also wants: that we should get a new approval for tax exemption for biogas. The commission was not against it from the beginning, but the problem concerned the review and the processing. We also want that, in such cases, there should be no re-demands on those tax amounts. It is, of course, the government's goal.
But it is the commission that must give the approval. Before we have that, we cannot promise anything.
We are in agreement. What I can promise the members in the chamber is that we are working on the issue. Officials have been active in the matter. And in the latest conversation I had with Margrethe Vestager, I was very clear. Now the commission has picked up the issue, far too late, but nonetheless. And we have a dialogue with the industry. I know that many here in the chamber have that, but of course we at the Ministry of Finance do as well.
Actually, everyone is in complete agreement. This must be resolved as quickly as possible, and it should have been resolved a long time ago.
Peder Björk (S)
Mr. Speaker! I would like to thank the Minister for Finance for being so clear that there is a consensus in the chamber and that the government is working on the issues and seems to be prepared to stand up for the consensus that exists regarding tax exemption for biogas.
I note that the Minister for Finance says he sees and understands the economic consequences that the judgment from the tribunal has led to for many actors across our country. It has led to major consequences, not least for small companies.
Mr. Speaker! I still wonder if the Minister for Finance fully understands the gravity when she cannot give a clear statement on how the government chooses to handle clawbacks, regardless of what the Commission's decision will be and what the way forward looks like. It is, after all, an incredibly large number of people who have invested large amounts in the production of biogas and also in vehicles.
The tax exemption on biogas has been the starting point for making the economic calculations work. Those who produce and sell biogas also experience reduced revenues in a first instance because no one is buying the biogas. That means they incur costs for it.
There is also a risk that they will face clawbacks on the tax exemption they have already received. This applies, among other things, to agricultural activities all over the country, which risk receiving a tax hit of several million kronor if clawbacks occur. In that case, those operations will not know if they survive at all. This obviously creates an incredible uncertainty in those companies when they do not receive a clear notice. It could mean that they have to shut down their operations. But even if it is not so bad that they have to shut down their operations, the willingness to develop the business otherwise, or to invest in the business being conducted today, is limited due to the uncertainty.
Mr. Speaker! I simply wonder why the Minister for Finance is not here and now to provide an announcement on how the government intends to handle the clawback, regardless of what the commission comes to. It would be an important announcement to all companies, not least the small ones, who have dared and wanted to be part of driving the development towards a more sustainable future in Sweden. They have invested incredibly much in sustainable transport but now receive no announcement from the government regarding the clawback.
Mr. Speaker! I would very much like to hear the Minister for Finance give a clearer statement to those who have invested in biogas that the government sees them and, above all, can imagine contributing to a solution where they are not affected by clawbacks.
Anna-Caren Sätherberg (S)
Mr. Speaker! It has really taken far too long. It may seem completely absurd, especially as we know that the EU is investing heavily in biogas and wants to see a tenfold increase in production by 2030. But now, both energy and carbon taxes are being levied on climate-smart biogas and biogas oil at the same level as fossil fuels. I truly hope that the Minister for Finance and the government become a bit more successful in the dialogue with the EU Commission. From January 1, 2024, the tax will mean an additional 20 percent price increase in a biogas industry that is struggling, in a public transport system where costs are rising, for trucking companies that have invested in being climate-smart, and at biogas truck factories where sales are falling.
The government has prioritized increasing emissions and not, for example, sending out the biofuel investigation for consultation that arrived almost a year ago. The government prioritizes fossil fuels from rogue states instead. That also means that the electrification of the vehicle fleet, which is needed and which we want to see, is now stalling.
Mr. Speaker! I must say that I do not quite understand what the government wants. The Swedish industry is not - as the then Prime Minister, Moderate, said when the Finance Minister sat in his government - basically gone. Our Swedish industry has taken climate responsibility and is developing new business ideas and new processes. They are at the forefront. But they also need to know that the policy holds together and is with them. They need to know that the policy is doing its part so that the investments do not end up in other countries.
Biogas is circular and climate-smart - and needed. It creates utility throughout the entire chain and increases Sweden's competitiveness and preparedness. We Social Democrats will, of course, press the government on this tax exemption, Mr. Speaker, because it has gone on for far too long.
I appreciate what the Minister for Finance says about the work being done, but now that the commission took such a long time, I still wonder if the Minister for Finance has any kind of perception of how quickly the tax exemption can be put in place. We heard a date before, but then we thought the commission would start faster. It took much longer than anyone in this chamber, including the Minister for Finance, wanted.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I must say that I am somewhat astonished by Anna-Caren Sätherberg's description of Swedish industry and the government's work with it. Something that is important to me in the short and long term is that Sweden should grow. We are to have a growth that is strong. Sweden shall be richer in ten, fifteen, and twenty years than Sweden is today. At the same time, we shall reduce emissions.
How do we do all this together? Yes, by electrifying and transitioning. Swedish companies are leading the way, which I am enormously proud of. They do it together with the state. The state and capital also have a cooperation regarding the green transition.
I am very pleased that many in the industry are turning to us and are grateful that we take the issue of nuclear power seriously. They know that it will be needed - together with wind, solar, and water - so that they can grow and become even greener in the future. It is this government that is doing it and that has a majority in the Riksdag for nuclear power. It is also this government that in the budget has allocated large resources to, for example, charging infrastructure and carbon capture. This is Swedish industry - small as well as large companies - happy about.
It is also this government that is making Sweden safer, if I am to add something important for companies and industry since we are on that topic. The government ensures that the development that has been ongoing for far too long, which concerns brutal crime and a brutal criminal economy, is reversed.
Mr. Speaker! This question and this debate are actually about companies that have previously had a tax exemption. As has been said, there is no disagreement about this. The interpellator and Anna-Caren Sätherberg can feel reassured by what I have said about this being an important issue. The Commission has made a mistake. Furthermore, the Commission has been far too slow. We have conveyed that.
Now the issue has been raised, and we will work actively with the commission so that it becomes as we all in here want, that is to say that the tax exemption shall be able to continue. The goal is, of course, that there shall be no clawbacks.
Mr. Speaker! I know that this is an important issue for many companies - especially a number of smaller companies that have invested heavily in this. I share the description that both members have made in the debate of how tough it is for many. They went all out to do the right thing, and so it became a punishment because the commission did not handle this matter as they should have done from the beginning.
We will continue to work on this issue as well as with the issue of facilitating for agriculture, the transport sector, and small businesses in general. This involves, for example, the changed reduction obligation, which is important for many smaller companies, and reduced tax on agricultural diesel. It has been important for surviving in a tough time. We want to do a number of things to facilitate. The tax exemption on biogas is good for both the climate and the companies. That is why it is so important that this is put in place.
Finally, I can only point out again that I am glad that the commission has finally taken the ball. It took far too long. We will do everything we can in cooperation with the commission to ensure that this becomes as good as possible and proceeds as quickly as possible.
Peder Björk (S)
Mr. Speaker! I believe that many of us are very concerned that the issue of tax exemption on biogas will drag on. I note, Mr. Speaker, that the Minister for Finance does not comment on the timeline moving forward but only states that it has taken a very long time so far. In light of that, the missing answer from the Minister for Finance on the issue of clawbacks becomes even more difficult for the companies that are currently facing an incredibly tough economic situation. Those companies would need a decision here and now on how the government intends to handle clawbacks for the tax exemption that has already occurred, so that they can look forward and feel secure that this will not affect them.
Mr. Speaker! Unfortunately, the Minister for Finance is missing the chance today to give a clear statement. I would gladly see the Minister for Finance take the chance to now go back to the Ministry of Finance, draft a proposal on how the requirements can be handled, and return to the Riksdag with this proposal. There is a great risk that this process will drag on and will take not just 6, 12, or 14 months but perhaps 18 months or even longer than that. During that time, these companies, which have chosen to go ahead and invest in biogas to achieve sustainable transport, are bleeding. These companies deserve a statement. Do not miss this chance, Minister for Finance, but ensure that a statement is delivered to these companies on how the government views the requirements! In that way, we also ensure that there is biogas in Sweden in the future.
Anna-Caren Sätherberg (S)
Mr. Speaker! I do not think the Minister for Finance should be so upset that I question the government's climate policy when emissions are being increased. Yes, there is a majority in the Swedish Riksdag for the Minister for Finance's policy, but that in turn certainly does not guarantee a climate policy. That majority in the Swedish Riksdag does not favor what is climate-smart. The Minister for Finance will, in that case, have to look to other colleagues who care about Swedish industry and Swedish production and about increasing Sweden's preparedness and ensuring that we get a more circular and climate-smart economy.
Mr. Speaker! I nevertheless appreciate that the Minister for Finance clearly states that the work to get back the tax exemption on biogas that we need is underway. But I would like to get an answer to the question that I asked in my previous contribution. The timeframe seems to be shifting. First, we were informed of a duration, but the commission has not taken up the issue until now. What is the Minister for Finance doing to assess how long this might take? The biogas industry is truly on its knees right now. I believe that everyone in this chamber, including the Minister for Finance, wants to ensure that it does not.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I want to turn to those who have been affected by this slow and incorrect handling from the Commission's side. You should know that we work every day to ensure that this receives a solution. Finally, the Commission has picked up the ball. The Commission knows very well that the government, but also the Swedish Riksdag, feels a great frustration over how much time it took before they did so. The government and we at the Ministry of Finance will work as closely and as tightly as possible with the Commission on the substantive issue – also, of course, to push on the timing.
However, I can never promise when the commission will be finished. No one in the Riksdag can do that either. I wish I could decide it, but the question lies with the commission. We will do everything we can to make this go as quickly as possible, because we know that many people right now feel great uncertainty and worry that this is dragging on and that no news is received. What I can promise is that we will do everything we can to have the issue come out as well as possible as quickly as possible.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.