Reduce the tax on biofuels!

For those of us who work with transport, it’s very difficult to keep up with the skyrocketing fuel prices. Especially if you, like NTEX, aim to reduce the company’s carbon footprint by for example refuelling with HVO (hydrotrerated vegetable oil).
When this biofuel, which reduces CO2 emissions by up to 90%, costs several crowns more per litre than regular diesel, it sends out a strange signal.
Why not allow traders, who carry out activities that depend on fuel, to receive a substantial tax reduction for all sustainable biofuels?

I’m not the only one who thinks this would be a good idea. Recently, EU Commissioner for Competition, Margrethe Vestager was approached by representatives from the Swedish Public Transport Association, the Swedish Bus & Coach Federation and some 30 other players who work in transport, fuel, vehicle manufacturing, agriculture, and environmental organisations.

 Together, they demand a long-term tax exemption for all sustainable biofuels. They argue that this is a prerequisite for the Swedish transport sector to achieve its ambitious climate targets. I must say, I agree.

In their op-ed, they point out that increased electrification is an important part of the solution, but that there is much more that needs to be done. “[Electricity] currently solely accounts for 0.01 percent of the energy used for road transport in the EU. By contrast, sustainable biofuels represent 5.6 percent of the energy used, while fossil fuels fill the remaining 94.4 percent.” (Source: https://www.svenskkollektivtrafik.se/globalassets/svenskkollektivtrafik/dokument/aktuellt-och-debatt/nyheter/tax-exemption-for-crop-based-biofuels-under-the-ceeag.pdf). 

The higher prices of HVO do not exactly encourage the use of sustainable biofuels. It doesn't take a genius to figure out that in their quest to survive, more and more companies are likely to go back to refuelling their trucks and buses with diesel.

But it is not just players in the transport sector who depend on tax exemptions on biofuels. I think other traders who depend on fuel should also be be included.

Take, for example, the farmer I recently saw in a Youtube clip, who has done everything she possibly can to run a sustainable business. She had switched to HVO, but because prices have skyrocketed, she is now forced to switch back to diesel in order to keep her business running.

And honestly, who can blame her?

Thomas