To reach climate goals in the transport sector the pace of electrification needs to speed up. Sweden has one of the highest shares of electric vehicles (EV) in the world, and 45% of the EV fleet operates under leasing agreements. In 2018, the Swedish government introduced a bonus for low emission cars and a taxation on fossil-fuelled vehicles. The bonus was however eliminated in November 2022, effective immediately. We show that this led to a significant decline in private leasing of EVs while other market segments remained stable. Private leasing played a key role in expanding the stock of lightweight EVs and dominated new EV registrations among low-income households, which declined following the bonus withdrawal. We also show that the subsidy removal led to a significant increase in EV-leasing prices, making EVs the most expensive option across price segments

Biogas and fatty acids produced from agricultural biomasses for industrial use.

The Swedish Industrial Biogas Commission is calling for 10 TWh of biogas/year (via digestion and gasification; by 2030). Current production is about 2 TWh/year, mainly from waste and sludge. The supply of organic waste is not sufficient to produce the required biogas.Agriculture has significant amounts of residual biomass that can be digested (mainly manure and straw). With this fact taken into account, this project report also assumesthat smaller parts of the arable land can be used for growing nitrogen-fixing grass/clover ley for biogas production, perhaps in combination with the production of protein feed for agriculture and fatty acids for industry in a biorefinery concept.It is possible to use manure, straw and ley with smaller amounts of waste in the western part of Sweden (Västra Götaland, Skåne and Halland) to produce 3.5 to 5 TWh of biogas/year in large biogas plants (approx. 100 GWh/plant and year) for use in industry. Co-production of fatty acids and biogas is also possible, e.g. at least 16 plants are needed to cover identified industrial needs.There are good opportunities for Bio-CCS, partly at the biogas plant, when biogas becomes biomethane, and partly in the industry where biomethane is used. Negative emissions possible, corresponding reduction of climate gases when biomethane replaces natural gas (5 TWh biomethane with CCS can reduce CO₂ emissions by about ¾ for the chemical and refinery industry segment). CO2 can also be used for production of emethane (Bio-CCU), but electricity shortages are a likely bottleneck.The price of natural gas (including tax) compared to biogas with existing subsidies is estimated to be relatively similar. The current subsidy system is directed towards manure digestion, which only produces about 1/5 of the potential biogas from agricultural biomass, which is why subsidies need to be modified to produce the biogas in demand. Fatty acids can also be produced using primarily pasture and waste via a biological process at a similar price level as today's fossil-based production method.A future investment in building biorefineries, which generate renewable commodities can be one solution for the industrial green transition, with agricultural biomasses, but this can also contribute to the green transition of the agriculture. Difficulties with the studied system is that it is large with many actors, significant investment is needed to be realized, and clear incentives are needed to become an actor in the system also includingthe farmers, and there are technical and biological uncertainties in function. A clear question is who is prepared to take the lead in realizing this?

Frameworks for setting so-called science-based corporate net-zero targets require companies to counterbalance residual emissions across scopes 1−3 with durable carbon dioxide removal (CDR) in the net-zero target year, no later than 2050, and beyond. We find that if all companies worldwide were to adopt and achieve such targets, the level of CDR by 2050 would be several times higher than the remaining global emissions - which would be unrealistic and unsustainable. This outcome is due to significant double counting in corporate greenhouse gas (GHG) inventories and is not aligned with the frameworks’ foundational science-based net emission pathways. We also present a case study of 303 EU companies with Science-Based Target Initiative net-zero committments, combined with an analysis of the EU Parliament’s Green Claims Directive proposal. The case study shows that these companies alone could create a demand for about 365 MtCO<inf>2</inf> of EU-sourced durable CDR by 2050 - an amount comparable to the total CDR (durable and non-durable) required for the EU to achieve net-zero. This has policy implications for perceived fairness, since current frameworks impose a disproportionate burden to generate CDR on net-zero-committed companies. We recommend revising net-zero frameworks to account for the implications of double counting in corporate GHG inventories

This study investigates the impact of feed-in tariffs (FITs) on the capital expenditures (CAPEX) of solar photovoltaics (PV) projects in Japan. In 2012, Japan introduced a FIT scheme with the highest tariff levels in the world. Tariffs for a project were set at the time when the project obtained a qualification, but early projects had no deadline for starting operations, and many where not built until many years later. The installed capacity of solar PV in Japan surged under the scheme. However, Japan has suffered from high costs of solar PV compared to the global level. Using survey data from Japanese solar PV projects, and econometric modelling we leverage the fact that projects qualified at different points in time, with different FIT levels, have subsequently been built simultaneously. We find that higher FIT levels are correlated with increased CAPEX, where a 1 JPY/kWh increase in the FIT level is linked to a 3.31 JPY/W rise in CAPEX. This may be due to that developers with guaranteed high tariffs have weaker incentives to reduce costs and/or to strategic pricing by suppliers. Our findings indicate that poorly designed support schemes can counteract the policy goal of reducing renewable energy costs. 

Bioenergy with carbon capture and storage (BECCS) is considered as a future key technology to provide baseload electricity, heat, pulp, paper, and biofuels, while also enabling atmospheric carbon dioxide removal (CDR). Sweden seeks to lead the way in bringing this technology up to scale, introducing a EUR 3.6 billion reverse auction scheme to facilitate market entry of companies producing BECCS. We explore instrument design preferences among politicians, regulators, and prospective BECCS operators to identify trade-offs and explore feasible policy design. Based on 35 interviews with experts in the latent BECCS sector in Sweden, we identify under which circumstances prospective operators would be willing to place bids and discuss how actor preferences both align with and challenge auction theory. The analysis concludes that at least four dilemmas need attention. These concerns how to: (1) balance the state’s demand for BECCS to be implemented already in 2030 against the prospective BECCS operators’ fear of the winner’s curse, i.e., a fear of bidding for a contract that turns out to be too costly to implement; (2) allocate contracts at the margin of the auctioneer’s demand for BECCS without driving up costs; (3) design compliance mechanism to achieve effectiveness without undermining efficiency, and; 4) integrate the auction with the voluntary carbon market—if at all—in a manner that safeguards the environmental integrity of the auctions. 

Positive energy district (PED) is a novel idea aimed to have an annual surplus of renewable energy and net zero greenhouse gas emissions within an area. However, it is still an ambiguous concept, which might be due to the complexity of city district projects with interconnected infrastructures and numerous stakeholders involved. This study discusses various aspects of PED implementation and presents practitioners’ experiences with the PED concept, challenges, and facilitators they have faced with real projects. The study is based on interviews with ten Swedish professionals. The major challenges reported for PED implementation were local energy production and energy flexibility, sub-optimization, legislation, suitable system boundaries, and involvement of stakeholders. Most of the interviewees mentioned improved collaboration, integrated innovative technology, political support, and climate change mitigation goals as important facilitators. The interviewees highlighted the importance of a local perspective and considered each city’s preconditions when developing a PED project. The study emphasizes that to facilitate PED implementation and replication in cities, more knowledge and clarity is required about PED such as on the definition and system boundaries. © 2023 by the authors.

Given the escalating climate crisis, the task of integrating novel carbon dioxide removals into the European Union’s climate policy is urgent and long overdue. Here, we argue that there is a window of opportunity for responding now, and put forward a solution.

The transport sector accounts for about 20% of EU’s GHG-emissions. Progress in emission reductions has been slow and primarily driven by biofuels promoted through national blending mandates. The mandates differ in whether they are measured in volume, energy, or emission reduction and in how gasoline and diesel are targeted. Due to this, national mandates and their effects have not previously been quantitatively compared on an EU level. In this article we convert the mandates for all EU member states between 2009 and 2020 to a common unit and study their impact on biofuel consumption, production, emission reductions and fuel prices. We find that mandates are driving biofuel consumption in the EU and correlates with emission reductions. Increased mandates have however often been fulfilled by blending biofuels eligible for double counting. We also find that reduction mandates have been effective in encouraging high-performance biofuels. For historical fuel prices, we do not see a clear correlation between countries’ shares of biofuel and consumer fuel prices while the global oil price has a considerable impact. For biofuel production, increased demand drive investments in the EU, but when it comes to localisation of new plants factors such as local infrastructure are more important than national mandates. 

The expectation that carbon dioxide removal (CDR) will play a crucial role in the climate transition is starting to gain traction in policy. An increasing number of countries are expanding their CDR policies, from specification of objectives (via elimination of regulatory obstacles) to market development. Among the many CDR options, sustainably sourced bioenergy with carbon capture and storage (BECCS) is often cited as having the greatest theoretical potential. Unlocking this potential will necessitate new and robust economic incentives. However, at present, there is a serious gap between actual policy and the required incentive structures, and developing these policies in a responsible way will likely take many years. To get BECCS started sooner than it otherwise might, we argue that an interim policy for allowing BECCS to mature would help identify potential trade-offs or pitfalls, and would help test how firms react to incentives for CDR before rolling our large scale international incentive structures. In this Perspectives article, we provide an insight into the current status of BECCS and CDR policy based on interviews with key policy makers and experts. We also provide a special insight into Sweden’s development of interim policy that takes the form of a reverse auction.

Avskiljning och geologisk lagring av biogen koldioxid, bio-CCS, har succesivt fått en mer framskriven funktion i svensk klimatpolitik. Möjligheten att skapa kolsänkor genom bio-CCS gör att tekniken kan bidra till det svenska målet om noll nettoutsläpp av växthusgaser till 2045. Regeringen har gett Energimyndigheten i uppdrag att sjösätta ett stödsystem för bio-CCS med start 2022. Kunskapen om hur nyckelaktörer vill utforma stödsystemet är dock bristfällig. Sådan kunskap är central för att möjliggöra en proaktiv systemdesign som lockar till deltagande. Denna studie undersöker därför preferenser för systemdesign bland aktörer inom näringslivet, den nationella förvaltningen och politiken. Syftet är att identifiera dilemman och potentiella målkonflikter. Energimyndighetens uppdrag är begränsat till att utreda ett stödsystem baserat på omvända auktioner eller fasta ersättningsnivåer, vilket också utgör huvudfokus i denna rapport. Baserat på intervjuer med 40 respondenter syns konvergens kring att statligt stöd bör kanaliseras genom omvända auktioner. I jämförelse med fasta ersättningsnivåer skapar ett auktionssystem bättre förutsättningar för att vara samhällsekonomiskt effektivt och för att harmonisera med EU:s statsstödsregler. Denna studie pekar dock på flera auktionsdilemman och potentiella målkonflikter. Exempelvis måste auktionsvolymerna matchas med den tekniska potentialen bland intresserade företag, vilket är lättare sagt än gjort. Denna studie presenterar också argument för att begränsa auktionerna genom budget- snarare än volymtak och pekar på att företagens egna kostnadsuppskattningar i många fall är betydligt högre än vad som påvisats i tidigare studier. Flera potentiella målkonflikter har också identifierats vilka är beroende av hur målsättningen med det statliga stödet preciseras. En trolig politisk målsättning är att stödet ska skapa minusutsläpp för att bidra till att uppfylla svenska klimatmål. En sådan målsättning skulle kunna stå i konflikt mot stödmottagande företags ambition att engagera sig i marknader för minusutsläppskrediter. Hur stödsystemets målsättning preciseras är avgörande för möjligheterna att hitta kompletterande finansieringskällor.