Swedish tax cuts increase biodiesel use, ethanol fails to keep up

The Swedish Bioenergy Association (Svebio) estimates that the August tax cuts given to biofuels in Sweden had a large effect on commercial transport, but the impact on E85 in private transport was more meagre.

“Private motorists seem to not be aware that after 1 August it’s become cheaper for them to fuel their cars with E85 ethanol than petrol if they have flex fuel engines,” said Svebio CEO Gustav Melin in a statement.

The sales of 100% biodiesel increased in August, with both rapeseed and hydrogenated vegetable oil (HVO) reaching year-high sales figures.

Rapeseed diesel sales increased by 33% and HVO diesel sales by 23% from the situation in July 2015.

Total sales of HVO diesel decreased at the same time, however, which may indicate diminishing blending with regular diesel.

Sales of E85 ethanol remained static, despite the tax reductions for both rapeseed diesel and ethanol.

“If we can inform motorists that fuelling their vehicles with E85 pays off, they would not only save money but also help cut back on carbon emissions from transport. Commercial transport has already begun a large-scale transition to 100% biodiesel. Many trucking companies and transport service users want to reduce their climate impact, that is obvious from the statistics,” Melin said.

However, on the reasons of why the percentage of biodiesel in the fuel supply is falling in Sweden, he said we could only “speculate”.

This article was written by Ilari Kauppila, deputy editor at Biofuels International