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Sweden - GHG mandate expected for July 2018

Local sources familiar with discussions about the renewal of the Swedish biofuels policy revealed new details about the new tool meant to replace aggressive tax breaks before the end of 2018, when they will lapse according to EU decisions (SA 43301) on State Aid released in December 2015.

The current plan retained by the government includes the introduction of the GHG mandate from July 1, 2018. Sources explained that policy makers would set the level of GHG reduction based on current consumption levels; they want to avoid any dip in biofuels blending. They will introduce two separate GHG mandates for gasoline and diesel. Biogas and pure biofuels will not be subject to these two mandates, which will concern only blended liquid biofuels. In this regard, it will significantly differ from the German mandate.

            Although the plan has yet to be made public, sources said that the level of the GHG mandate for diesel would likely be set above 5%, to maintain the current blending level of HVO and Fame. The GHG mandate for gasoline should be lower than 5%, in line with the current level of GHG reduction implied by the ethanol consumption.

            The government is also committed to continue its support of the pure use of biofuels, which are not subject to state aid requirements. It is therefore likely that the aggressive tax breaks granted to B100 and pure HVO will remain in place from 2018, after the introduction of the GHG mandates in the blending sector.