European Commission grants Sweden another year for biofuels tax exemption

In Belgium, European Commission has approved, under EU State aid rules, the prolongation of the tax exemption measure for biofuels in Sweden. Sweden has exempted liquid biofuels from energy and CO₂ taxation since 2002. The scheme was prolonged following the Commission decision in case SA. 48069 in 2017 until 31 December 2020.

By this decision, the Commission approves a one-year prolongation of the tax exemption (from 01 January 2021 to 31 December 2021). The objective of the tax exemption measure is to increase the use of biofuels and to reduce the use of fossil fuels in transport.

The Commission assessed the measures under EU State aid rules, in particular the Guidelines on State Aid for environmental protection and energy 2014-2020. The Commission found that the tax exemptions are necessary and appropriate for stimulating the production and consumption of domestic and imported biofuels, without unduly distorting competition in the Single Market. In addition, the scheme will contribute to the efforts of both Sweden and the EU as a whole to deliver on the Paris agreement and move towards the 2030 renewables and CO₂ targets.