Sweden Democrats threaten government crisis over biofuels obligation

The far-right Sweden Democrats are threatening to push Sweden's three-party ruling coalition into a political crisis as they fail to reach agreement over how drastically to cut the country's biofuels obligation, a key part in its plan to reduce emissions.

Sweden Democrats threaten government crisis over biofuels obligation
Sweden Democrat finance spokesperson Oscar Sjöstedt has said that if an agreement is not made it will trigger a government crisis. Photo: Caisa Rasmussen/TT

The party is claiming that a pledge in the Tidö Agreement calling for the biofuels obligation, or reduktionsplikt, to be cut to the “lowest EU level”, should mean that the amount of biofuels that must be blended into petrol and diesel and Sweden should be cut to close to zero, rather than to about half the current share, as suggested by ongoing EU negotiations. 

“We are being tough in the negotiations because of the power we have as the biggest party in this bloc,” Oscar Sjöstedt, the party’s finance spokesperson told TV4. “There is going to be a change at the end of the year that is going to be pretty significant and substantial, that I’m 99.9 percent certain about, otherwise we will have a government crisis.” 

The Liberal Party is pushing for a much less severe reduction, perhaps to a little more than half the current level, where 30.5 percent of all petrol and diesel must be biofuel. 

“We have signed up to a temporary reduction in the biofuels obligation, and it’s clear that that is what we are going to do, but zero is not an alternative for us,” the Liberal Party’s leader Johan Pehrson told TV4.

The decision to reduce the amount of biofuel in the mix at Swedish pumps has made it much more difficult for Sweden to meet its targets for emissions reductions, putting pressure on Pehrson’s colleague, Environment Minister Romina Pourmokhtari. 

Next Wednesday, Pourmokhtari will have to defend the extent to which her government’s policies have pushed Sweden away from being able to meet its 2045 target of net zero emissions when the The Swedish Climate Policy Council reports on the country’s progress towards its target. 

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Sweden’s government launches inquiry into benefits cap

Sweden's government has launched an inquiry into capping benefits so that no one in the country can earn more from social welfare than they could from working.

Sweden's government launches inquiry into benefits cap

The country’s prime minister, Ulf Kristersson, announced the inquiry at a press conference held on Thursday alongside Finance Minister Elisabeth Svantesson, Social Minister Anna Tenje, and Linda Lindberg, the Sweden Democrats’ spokesperson on social affairs.

“It’s a fundamental principle that it should always be more financially rewarding to go to work than to go on benefits, but today it isn’t always the case,” Kristersson said in a press statement. “That’s why we are taking the initiative to bring in a benefits cap with the idea of increasing the motivation to work. It’s an important structural reform to get more people into work.” 

The promise to put in place a benefits cap was an important part of the Tidö Agreement between Sweden’s three government parties and the far-right Sweden Democrats, on whom they depend for their support. 

Svantesson said that there were currently around 20,000 households in Sweden who get more money by being on benefits than they would if they worked. 

“The subsistence allowance, just to make clear, is not in itself a large payment. But if you have income support and a family, many allowances are added,” she said.

“If you get stuck in what was supposed to be a temporary thing, then it’s a great challenge to move on. It was never intended that subsistence allowance would be a long-term source of income. It is about incentives but also about morals.” 

Maria Hemström Hemmingsson, the Director General of the Institute for Evaluation of Labour Market and Education Policy (IFAU), a state-owned research institute, has been appointed to run the investigation and to make her proposals in December 2024. 

Hemmingsson is already leading an inquiry on subsistence allowance, after being appointed by the former Social Democrat-led government to look at what requirements the government could impose on those receiving the benefit. 

In the inquiry she can either set a cap for the total amount of benefits any single household or individual can receive, or she can suggest reforms which would prevent people from receiving too many different types of benefits simultaneously.