The Swedish National Audit Office (Riksrevisionen) has begun a review of the tax exemption for biofuels, with the results to be published in 2011.
Sweden has striven to increase the share of biofuels in transport, and liquid biofuels such as ethanol and biodiesel are currently exempt from energy and carbon tax. The main purpose of the exemption for biofuels was to encourage the continued introduction of these fuels.
Sweden now consumes the most ethanol per capita in the EU, the audit office said, and is behind only Germany and France in total consumption. Sweden’s tax subsidy for biofuels today comes 2 billion kroner (€206 million, US$253 million) per year. The review intends to assess the effectiveness of the exemption, and answer the following questions:
- Is the tax exemption for biofuels appropriate based on the parliamentary climate change?
- Has the government’s design and control of the exemption been appropriate?
- Does the tax exemption have significant side effects?
- Has the government followed up and assessed the tax exemption in an appropriate manner?
Germany scrapped its tax break on biofuels in Germany in 2006, and at the end of 2009 Norway announced plans to scrap a tax exemption for biodiesel.