The connection between policies and biofuel production and consumtion in Europe and how it affects Sweden

The reduction mandate is a well-functioning model for reduced greenhouse gas emissions

The reduction mandate in Sweden works well. It has led to expansive use of biofuels with high greenhouse gas performance and by far the largest emission reductions in the transport sector within the EU.

The project has compared policy instruments, production and consumption of biofuels in the 27 EU countries and analyzed the connections and how Sweden is affected.

The results show that the Swedish reduction mandate works well, as it specifically steers towards reduced greenhouse gas emissions.

Increasing levels of reduction will mean an increased need for biofuels with high greenhouse gas performance, while demand for this type of biofuel is also likely to increase in the rest of the EU and the rest of the world.

Sweden currently imports more than half of the biofuels. In order to have access to the biofuels needed to meet the reduction mandate at a sustainable price, it will be crucial that there is sufficient supply of sustainable raw materials and that production capacity is expanded as demand within the EU increases.

Project conclusions in summary:

• The reduction mandate, which steers towards using biofuels with high greenhouse gas performance, works better than mixing mandates based on volume or energy.
• Blend-in mandates spur national consumption, but not necessarily production.
• Competition for biofuels and the raw materials from which they are produced, may increase with increased climate ambitions within the EU.
• Fuel producers in Sweden and other EU countries are actively developing new technologies and working to ensure the supply of raw materials.
• New production facilities, in Sweden as well as other EU countries, are being designed to be able to switch other bio-products as the electrification of the road transport sector reduces the need for biofuels.
• New production facilities based on established technology are located mainly in the vicinity of existing infrastructure, but for new technologies, facilities can be established where a knowledge base has been built up through R&D activities.

Results from the project were presented (in Swedish) in a webinar on 12 May 2022: