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POLITICS

Sweden Democrats threaten government crisis over biofuels obligation

The far-right Sweden Democrats are threatening to push Sweden's three-party ruling coalition into a political crisis as they fail to reach agreement over how drastically to cut the country's biofuels obligation, a key part in its plan to reduce emissions.

Sweden Democrats threaten government crisis over biofuels obligation
Sweden Democrat finance spokesperson Oscar Sjöstedt has said that if an agreement is not made it will trigger a government crisis. Photo: Caisa Rasmussen/TT

The party is claiming that a pledge in the Tidö Agreement calling for the biofuels obligation, or reduktionsplikt, to be cut to the “lowest EU level”, should mean that the amount of biofuels that must be blended into petrol and diesel and Sweden should be cut to close to zero, rather than to about half the current share, as suggested by ongoing EU negotiations. 

“We are being tough in the negotiations because of the power we have as the biggest party in this bloc,” Oscar Sjöstedt, the party’s finance spokesperson told TV4. “There is going to be a change at the end of the year that is going to be pretty significant and substantial, that I’m 99.9 percent certain about, otherwise we will have a government crisis.” 

The Liberal Party is pushing for a much less severe reduction, perhaps to a little more than half the current level, where 30.5 percent of all petrol and diesel must be biofuel. 

“We have signed up to a temporary reduction in the biofuels obligation, and it’s clear that that is what we are going to do, but zero is not an alternative for us,” the Liberal Party’s leader Johan Pehrson told TV4.

The decision to reduce the amount of biofuel in the mix at Swedish pumps has made it much more difficult for Sweden to meet its targets for emissions reductions, putting pressure on Pehrson’s colleague, Environment Minister Romina Pourmokhtari. 

Next Wednesday, Pourmokhtari will have to defend the extent to which her government’s policies have pushed Sweden away from being able to meet its 2045 target of net zero emissions when the The Swedish Climate Policy Council reports on the country’s progress towards its target. 

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BUSINESS

Norwegian battery start-up Freyr demands subsidies to complete factory

The Freyr battery start-up has halted construction of its Giga Arctic factory and demanded additional government subsidies, Norway's state broadcaster NRK has reported.

Norwegian battery start-up Freyr demands subsidies to complete factory

Jan Arve Haugan, the company’s operations director, told the broadcaster that the company would not order any more equipment until Norway’s government committed to further subsidies. 

“We are holding back further orders for prefabricated steel and concrete pending clarification on further progress,” he said. “We are keen to move forward, but we have to respect that there is a political process going on, and we have expectations that words will be put into action.” 

Freyr in April 2019 announced its plans to build the 17 billion kroner Giga Arctic in Mo i Rana, and has so far received 4 billion kroner in loans and loan guarantees from the Norwegian government. It has already started construction and hopes to complete the build by 2024-2025. 

Haugan said that the enormous subsidies for green industry in the Inflation Reduction Act voted through in the US in 2022 had changed the playing field for companies like Freyr, meaning Norway would need to increase the level of subsidies if the project was to be viable. 

Freyr in December announced plans for Giga America, a $1.3bn facility which it plans to build in Coweta, Georgia.   

“What the Americans have done, which is completely exceptional, is to provide very solid support for the renewable industry,” Haugen said. “This changes the framework conditions for a company like Freyr, and we have to take that into account.” 

Jan Christian Vestre, Norway’s industry minister, said that the government was looking at what actions to take to counter the impact of the Inflation Reduction Act, but said he was unwilling to get drawn into a subsidy battle with the US. 

“The government is working on how to upgrade our instruments and I hope that we will have further clarifications towards the summer,” he said.

“We are not going to imitate the Americans’ subsidy race. We have never competed in Norway to be the cheapest or most heavily subsidised. We have competed on competence, Norwegian labour, clean and affordable energy and being world champions in high productivity.” 

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