Famous for Volvo, Ikea and Absolut Vodka, Sweden is now on a new pursuit to become the first completely oil-free economy in the world by 2020.
The oil crisis in the early 1970s forced Sweden to embark on a quest for alternative energy sources. Its phasing out of oil has proceeded smoothly; in 1970, oil accounted for 77% of Sweden’s energy, but by 2003 that figure fell to 32%.
According to the energy committee of the Royal Swedish Academy of Sciences, there is growing concern among nations that global oil supplies are peaking and will soon become scarce, causing the price of oil to skyrocket. Committee members predict that a global economic recession could ensue, and Sweden is taking action to make its economy less vulnerable.
“Our dependency on oil should be broken by 2020,” said Mona Sahlin, former minister of Sustainable Development, in an interview with The Guardian newspaper. “There shall always be better alternatives to oil, which means no house should need oil for heating, and no driver should need to turn solely to gasoline.”
The Renewable Energy Directive (RED) requires 10% of Europe’s fossil fuel in transport to be replaced with liquid biofuels by 2020. The majority of biofuel produced is sold as a low-admixture (ethanol and biodiesel) to fuel companies for blending with fossil fuel. The blending ratio is 5% biofuel to 95% fossil fuel. About 80% of low-admixture ethanol is imported from Brazil.
In 2006, the government passed a “pump law” to require larger Swedish fuel stations (selling more than 3,000 cubic meters of gas or diesel per year) to provide a replacement fuel option. Also, starting in 2009, all small stations that sell more than 1,000m3 per year were required to meet the same standard.
Of the European member states, Sweden has one of the highest shares of renewable energy in transport with 5.4% in 2009. One-fifth of the cars in Stockholm can run on alternative fuels, primarily ethanol. It is not uncommon to see gas stations that sell ethanol because ethanol stations have lower construction costs than petroleum stations. Most of the ethanol sold in Sweden is derived from grain. From a lifecycle viewpoint — where climate impact is measured along the whole chain from production to use — ethanol extracted from sugarcane is favored. Swedish researchers focus on the production of ethanol from cellulose, referred to as second-generation biofuels, which uses a more effective production method than grain-based ethanol. Moreover, this type of ethanol does not affect food crops. Among other biofuel sources is biogas that can be extracted from manure and waste.
Stockholm placed an order for 2,000 flex-fuel vehicles (FFVs) for any car manufacturer willing to produce them. Ford Motor Company took the offer and delivered its first set of the flex-fuel version of the Ford Focus in 2001, selling more than 15,000 by 2005.
Sweden’s swift adoption of flex-fuel vehicles, rising from 717 in 2001 to over 200,000 by 2011, can be attributed to the National Climate Policy in Global Cooperation Bill passed in 2005, which exceeded the Kyoto Protocol expectations and sought to eliminate oil imports by 2020.
To meet these high standards, several government incentives were implemented, including a tax exemption for ethanol and other biofuels, which resulted in a 30% price reduction at the pump for E85 fuel over gasoline. Other “demand side” incentives included a US$1,800 bonus to buyers of FFVs, a 20% discount on auto insurance, free parking spaces and a tax reduction for flex-fuel company cars. By 2008, this incentive package resulted in sales of FFVs representing 25% of new car sales.
International oil dependency is one of the world’s biggest problems and as Sahlin notes, a Sweden free of fossil fuels would give the country enormous advantages, “not least by reducing the impact from fluctuations in oil prices. The price of oil has tripled since 1996.” Sweden’s investments, actions and laws are no accident, and although Sweden’s goal of eliminating oil consumption is seen as ambitious by the rest of the world, their attention to the detrimental effects of this dependence is worth noting. As Nelson Mandela reminds us “it seems impossible until it is done.”