Sweden to up biofuel mandates again after slashing them
Sweden's government announced that the country will raise its greenhouse gas (GHG) reduction obligations to 10pc for gasoline and diesel from 6pc, with changes due to come into effect on 1 July next year according to Swedish bioenergy association Svebio.
The country announced in May last year that it was planning to lower GHG reduction mandates for 2024-2026 to 6pc for both diesel and gasoline, from 30.5pc for diesel and 7.8pc for gasoline in 2023. The government at the time said this was because higher GHG reduction targets in Sweden, compared with the rest of the EU, were pushing diesel prices up at the pump.
The biofuels industry in Sweden welcomed the new 10pc mandate, as it will support domestic demand for its fuels. The drop in Sweden's mandates to 6pc had a significant effect on domestic biofuels usage and wider biofuel prices in Europe, particularly hydrotreated vegetable oil (HVO). Because fatty acid methyl ester (Fame) biodiesel has a 7pc physical blend wall into diesel under the EU Fuel Quality Directive, Sweden relied on drop-in HVO to meet its high diesel mandates.
As a result of the 2024 mandate cuts, HVO deliveries were down by 95pc on the year in June and total biofuels deliveries were down by 79pc in the same period, according to data from government data provider Statistics Sweden. Lower mandates in Sweden cut domestic HVO demand, redirecting supplies to the wider European market, pushing values down as a result. Prices for HVO Class II fob ARA range, made from used cooking oil, were down by $715.42/t year on year, or 31.5pc, on 27 August.
Tomas Ekbom, programme director at Svebio, told Argus that Sweden's government understood it could not rely mainly on the electrification of the transport sector to meet targets and that biofuels had a larger role to play. He added that the government likely also considered that it would be too costly to pay for credits if, in the end, EU targets were missed.
Sweden's government estimates that the country will meet its Effort Sharing Regulation commitments for 2030 — a binding emissions reduction target for domestic transport (excluding aviation), buildings, agriculture, small industry and waste of 50pc compared with 2005 levels — by implementing this new 10pc reduction obligation, as well as a new climate action plan.
But the parliament previously abolished GHG reduction levels for 2027-2030, taking a wait and see approach. And ministers did not include any plans to scale up the mandated levels from 10pc. The re-cast Renewable Energy Directive requires a 14.5pc GHG reduction target, or 29pc share of renewables by energy content, for transport fuels by 2030.
Sweden's new obligation will allow fuel suppliers to credit electricity from public charging stations towards meeting their emissions reduction obligations, but how this will work in practice remains unclear. Last year, battery electric vehicles were 5.75pc of Sweden's total passenger car fleet and plug-in hybrid electric vehicles were 5.37pc of the fleet, based on data from the EU's alternative fuels observatory.
Sweden will also include a proposal in its 2025 budget to reduce fuel taxes to reduce impact on fuel prices at the pump. The gasoline tax will be reduced by 0.75 krona/litre ($0.07) next year while the diesel tax will be increased by 0.11 krona/litre ($0.01) — the EU minimum.
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Singapore, 30 August (Argus) — Australian airline Qantas Airways recorded a higher fuel bill in the 2023-24 fiscal year to 30 June, as more flights, sustainable aviation fuel (SAF) expenses and carbon offset programmes weighed on costs. Qantas saw its fuel costs rise by 17pc from a year earlier to A$5.32bn ($3.62bn) in 2023-24, according to the company's full-year financial results released on 29 August. The airline group's passenger carrying capacity was up by 21pc on the previous year, with growth in domestic and international capaicty. This saw the group's overall fuel consumption grow to 29mn bl (79,000 b/d), or 18pc up on the previous year. Qantas expects fuel costs in the first half of 2024-25 to remain stable from a year earlier at about A$2.7bn, including hedging and gross carbon costs, with the group forecasting to consume 15.6mn bl of fuel, including SAF. Qantas forecasts domestic group capacity to rise to 104pc of pre-Covid 19 pandemic capacity in the first half of 2024-25. Its international capacity guidance, excluding Jetstar Asia, is expected to rise by about 16pc from the previous year to achieve 102pc of pre-Covid levels in the first half. The group's passenger carrying capacity, measured by available seat kilometres (ASKs), was up on a year earlier by 21pc to 141mn ASK by 2023-24, although this was still about 93pc of pre-Covid levels. Qantas has agreements to offtake SAF, renewing its agreement to buy SAF for flights out of London Heathrow and doubling the size of its corporate customer SAF programme in 2023-24. But the group saw its 2023-24 profit fall, with underlying profit before tax down by 16pc on the previous year to A$2.08bn. By Cara Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India lifts curbs on use of sugarcane juice for ethanol
India lifts curbs on use of sugarcane juice for ethanol
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US, Italy, Germany miss goal to cut fossil fuel finance
US, Italy, Germany miss goal to cut fossil fuel finance
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Tight Singapore VLSFO supplies lift bunker prices
Tight Singapore VLSFO supplies lift bunker prices
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