State aid: Commission approves prolongation of tax exemption for non food-based biogas and bio propane used for heating or as motor fuel in Sweden

The European Commission has approved, under EU State aid rule, the prolongation of tax exemption measures for non food-based biogas and bio propane used for heating or as motor fuel in Sweden. Under two separate schemes, Sweden exempts from energy and CO₂ taxation (i) biogas that is used in heat generation (former scheme last prolonged in 2018) and (ii) biogas that is used as motor fuel (former scheme last prolonged in 2015). With today’s decisions, the Commission approves for both schemes a 10-year prolongation of the tax exemption (2021-2030), with two modifications: i) limiting the tax exemption to only non-food based biogas and ii) extending the tax exemption to non-food based bio-propane. The objective of the tax exemption is to increase the use of biogas and bio-propane and to reduce the use of fossil fuels and their greenhouse gas emissions, while facilitating the transition towards advanced biofuels. The Commission assessed the measures under EU State aid rules, in particular the Guidelines on State Aid for environmental protection and energy 2014-2020. The Commission found that the tax exemptions were necessary and appropriate for stimulating the production and consumption of domestic and imported biogas and bio propane, without unduly distorting competition in the Single Market. In addition, the schemes will contribute to the efforts of both Sweden and the EU as a whole to deliver on the Paris agreement and move towards the 2030 renewables and CO₂ targets. On this basis, the Commission concluded that the measures are in line with EU State aid rules. More information will be available on the Commission’s competition website, in the State Aid Register under the case numbers SA.56125 (heat generation) and SA.56908 (motor fuel).