Sweden fighting for cheaper ethanol

Sweden has applied for EU approval to import Brazilian ethanol at a lower tariff rate than the present tariff.
"The Swedish market for biofuel and environmentally friendly cars is growing rapidly. But we know from experience that price is important. The price of biofuel must be sufficiently attractive compared to that of petrol," says Gunnar Wieslander, State Secretary for Trade.

This afternoon, Mr Wieslander met representatives of almost all EU embassies, as well as journalists, to talk about Sweden's application for EU approval to import ethanol at a low tariff and to demonstrate the advantages of ethanol.

Sugar cane ethanol has advantages

Brazilian ethanol produced from sugar cane is cheaper and considered to be more CO2-efficient than ethanol made from cereals. But the import to the EU of agricultural ethanol from a country outside the EU is burdened by high tariffs. This is because ethanol is classed as an agricultural product. The fuel known as E85/E95 - which is the ethanol that is sold on the Swedish market - is, however, a chemical blend of agricultural ethanol and chemicals. For this reason, ethanol can be classified as a chemical product and thus qualify for a lower tariff. Sweden has applied for permission to blend the ethanol with the chemicals here in Sweden and still apply the lower tariff that a chemical product carries.

"This would keep prices at such a level as to make the use of biofuel preferable to that of petrol on the Swedish market - for the benefit of the climate," Mr Wieslander said at the meeting.

Biofuel cars sell

Biofuel company Sekab and vehicle manufacturers Saab and Scania also took part in the meeting and talked about their experiences of biofuel. Twenty-two per cent of all the cars that Saab sold in Europe last year were cars that can run on both petrol and biofuel.

"Biofuel must be cheaper, or cost the same as petrol, otherwise consumers will go back to petrol," Anders Fredriksson from Saab said.

Sweden wants support for ethanol proposals

There is ethanol that is produced in the EU, but it is currently too expensive to be able to compete with petrol. If the EU decides that Sweden is not allowed to import E85/E95 at a lower tariff or that only EU ethanol can be used, the price of ethanol is expected to rise. The consequence could be that consumers stop using biofuel, or at least reduce their consumption of biofuel.
"If we are serious about fighting climate change, we must take decisions, on tariff issues too, that support, and do not undermine, the development and use of biofuel," Mr Wieslander said.

For Sweden's application to be accepted, approval is required from a majority of member countries on the EU Customs Code Committee. The vote will take place at the beginning of February.