Increased reduction obligation can be thousands of Swedish kroner more expensive for households

The Green Party wants to significantly increase the reduction obligation.

Despite the party’s attempts to compensate people in a “fair transition”, the bill risks being high for rural areas.

– It is incredibly difficult to look at what the future will bring us for fossil fuel prices, says MP top Janine Alm Ericson.

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The Green Party’s major political project is a “fair and rapid climate transition”.

In short, this means that citizens with lower incomes must pay less for the transition and people with higher incomes must pay more.

– We have to make sure to show how we can do this in a smart way so that everyone feels that they can be involved, regardless of whether you live in the city, in the country or what socio-economic conditions you have, spokesperson Daniel Helldén told Aftonbladet in the end of February.

A large part of the climate debate concerns domestic transport, which accounts for almost a third of the emissions in Sweden.

The Green Party is the only party in the Riksdag that stands by the obligation to reduce infoclosethe obligation to reduce The reduction obligation was introduced in 2018 by the red-green government. The system forces fuel suppliers to gradually increase the mixing of biofuels in petrol and diesel. The idea is that the reduction obligation should reduce emissions of greenhouse gases and thus climate impact. must be raised according to the previous plan.

– We have never accepted to back down on the reduction obligation. We want to reintroduce and develop the reduction obligation and ensure that it becomes much cheaper for people to transport sustainably, says Elin Söderberg, the Green Party’s spokesperson for climate and rural areas.

Instead of the six percent biofuel in petrol and diesel that currently applies, want MP return to the previous levels: 40 percent for diesel and 12.5 percent for gasoline.

High bill for those who need the car

So, what is the MP’s transport policy costing households?

When the government lowered the reduction obligation at the turn of the year, it was expected that the price of diesel would fall by five kroner and 50 öre.

In February this year, i.e. two months after the reduction obligation was lowered, a liter of diesel cost SEK 19.2, according to a compilation by the industry organization Drivkraft Sweden.

If the reduction obligation had not been introduced, it is therefore possible that the diesel would have instead cost SEK 24.7 per litre.

For a passenger car that is driven an average of 1,126 miles per year, this means a price difference of just over SEK 3,700 per year, assuming that the diesel car consumes an average of 0.6 liters per mile.

How can such a price increase be considered fair, based on MP’s goals for climate change?

Janine Alm Ericson is economic policy spokesperson and responsible for MP’s shadow budget for 2024.

– We try to make the transition as fair as possible. It is incredibly difficult to look at what the future will give us for fossil fuel prices and then we simply have to come back, she says.

Tax cuts are not enough

In its budget, the MP has a series of measures to equalize the price of climate change. Among other things, there is a tax reduction for sparsely populated areas of SEK 2,325 per year.

But the reduction only applies to a number of selected municipalities, mainly in northern Sweden, and does not cover the cost of the diesel price increase.

In addition, the municipalities of Skåne, for example, would be completely without the tax cut but affected by the higher fuel prices – if the MP’s budget had been passed in the Riksdag.

Electric cars will become cheaper

In order to get more people to replace the fossil-powered car, and thereby avoid the higher fuel prices that the party’s policy leads to, the MP wants to reintroduce the government bonus for electric car purchases.

The price ceiling for the car is SEK 550,000. The proposal provides SEK 50,000 for a car that costs up to SEK 399,999. For cars between SEK 400,000 and SEK 550,000, you should receive SEK 30,000.

But few low-income earners can afford a new electric car and are thus probably forced to keep the diesel car. Thus, they are left with increased fuel prices.

Recently, the mouthpiece Daniel Helldén made a statement that the increased costs of the reduction obligation must be paid by people in big cities in the form of a new road tax. But it is unclear how it will be designed and the party has not presented any figures.

Janine Alm Ericson presents the electric car check that the party wants to introduce. It means that the state takes the cost of reducing the leasing cost for an electric car to SEK 1,500 a month.

The check applies to people who earn up to SEK 23,500 a month.

The MP peak: There are always households that are not compensated

The MP also wants to change the travel deduction so that trips by public transport are also covered and that more people are covered. The proposal means an increased compensation than the current system for those with lower incomes.

– Everything is really a big package where we want to make it easier for people who have the worst economy to still be part of the transition, says Janine Alm Ericson.

But with the reduction obligation maintained, your view is that those who have an older diesel car are not losers?

– In general, it is the case that we have calculated based on the available figures we had at the time. But in the overall budget, we don’t see that. Then there are always households that are not compensated when changes are made to the various systems and there will always be such effects. We try to reduce them so that fewer are affected.