The experts' alarm: Fuel prices are predicted to rise sharply - reduction obligations may be reintroduced

The Tidö parties have put a lot of focus on bringing down fuel prices during the mandate period, with increased emissions as a consequence. Last year, domestic transport emitted around 16 percent more than when the government took office, according to the Swedish Environmental Protection Agency's statistics.

Now, therefore, rapid measures are required by the next government to overcome the emissions, three independent experts state for DN.

All of them have previously, on behalf of the government, given suggestions on how Sweden's climate policy should develop going forward; national economist John Hassler, environmental economist Svante Mandell and Åsa Persson, outgoing chairman of the government's expert council Climate Policy Council.

But even if the next government does not take any active measures in the area, fuel prices are expected to rise by several kroner - probably already from the turn of the year. The reason is that Sweden currently has a special exception from the EU Commission that allows a fuel tax below the EU's minimum level. However, the exception only applies for the rest of the year.

From 2028, the price will then be pushed up further, when the EU introduces a new emissions trading system, ETS2. The system was created precisely to reduce emissions from transport throughout the Union. How large a price increase this leads to is unclear, but estimates point to at least SEK 1-2 a litre.

- Much of this will happen regardless of what the next government wants, says Svante Mandell, who is active at the Economic Institute.

However, those measures will not be enough for Sweden to meet the climate requirements by 2030. If Sweden misses the climate requirements, it could mean EU fines of around SEK 8-40 billion, the Climate Policy Council assessed in its report last spring.

- Things need to happen in many sectors and on a broad front quickly now, says council chairman Åsa Persson - and points out that there are many fully investigated proposals to implement.

Several of them can be found in the Styrmedelestredningen that Svante Mandell handed over to the government last summer. The investigation was tasked with proposing specific measures to meet the EU's climate requirements.

In theory, there are three ways to reduce emissions from traffic, according to the investigation. One is electrification, which Mandell singles out as the best long-term strategy.

- But by 2030 it will not have time to produce enough effect, he says.

The reason is that Sweden still has around 4.5 million cars with combustion engines on the roads.

Then the two other options remain. Either to drastically reduce traffic – which Mandell sees as unfeasible – or to increase the mix of renewable fuels in petrol and diesel.

In other words: to reintroduce a higher reduction obligation, which the Kristersson government has lowered significantly during the term of office. Mandell proposes that it gradually increase to 25 percent from today's 10 percent.

The inquiry's proposal was rejected by M, L and SD when it was presented in May.

- It's not strange, it's an election campaign. But I don't see any other way forward, says Svante Mandell.

The government's other climate researcher, national economist John Hassler, also sees a higher reduction obligation as the only solution to meet the 2030 goal.

- It's getting very urgent. There are still opportunities to reach the target, but then fuel prices need to quickly become higher, he says.

Both Hassler and Mandell believe that Sweden's fuel prices need to be on par with neighboring countries'. In Germany, Denmark and Finland, the petrol price is currently around SEK 10 higher than in Sweden, and diesel prices around SEK 6 higher, according to EU statistics.

To compensate for the increased costs of fossil-fuelled transport, and to strengthen the incentives to buy electric cars, both John Hassler and Svante Mandell advocate a reduced electricity tax. The government lowered the electricity tax by 3 öre per KWh from 1 January this year, but more is required according to the economists.

- It shouldn't be insanely expensive to drive, but we can't have petrol prices on par with Malta. And it must become cheaper to charge electric cars, says Svante Mandell.

The fact that petrol and diesel will rise sharply in price has not been sufficiently communicated to the Swedish population, believes Åsa Persson - which may have led to people buying cars with internal combustion engines unaware of the increase in price that awaits.

- It is important to bring this long-term trend to the voters. The entire EU has agreed that fossil fuels will gradually become more expensive and be phased out.