Sweden’s government to slash tax on petrol and diesel

Sweden's government has announced plans to slash tax on petrol and diesel next year, cutting revenues by an expected 5.6 billion kronor (€500m).

Sweden's government to slash tax on petrol and diesel
Energy Minister Ebba Busch announces plans to cut tax on petrol and diesel at a press conference on Thursday. Photo: Claudio Bresciani / TT

Energy Minister Ebba Busch called the measure “important, necessary, and long-awaited” at a press conference held alongside Oscar Sjöstedt, finance spokesperson for the far-right Sweden Democrats. 

“We know that many families are having a tough time right now,” she said. 

The government is proposing to cut the tax on petrol by 1.64 kronor per litre, and the price of diesel by 43 öre per litre in 2024, which, if an extra measure to cut tax on agricultural diesel is included, will cost a total of 6.5 billion kronor. 

Sjöstedt said the amount that the price would actually change at the pump would depend on global fuel markets as well as government taxation. 

“Of course, something can happen that can neutralise the impact of a tax reduction, but it could just as well have a boosting effect,” he said. “The difference is that that, all things being equal, the tax will be lower.” 

In the run-up to last September’s election, the Moderate, Christian Democrat and Sweden Democrat parties all promised to cut the price of fuel at the pump quickly, with parties promising cuts of as much as 10 kronor per litre for diesel and 5 to 6 kronor per litre for petrol. 

Sjöstedt defended the government’s failure to drive through cuts in the price of this magnitude. 

“None of our parties got their own majority and that means that you can’t get 100 percent of your policies through, but have to compromise,” he said. 

Fuel taxes are a key part of the arsenal governments have to reduce carbon dioxide emissions from the transport sector and the current government’s decision to sharply reduce the biofuels obligation — the share of biofuels mixed in with petrol and diesel — is the main reason why Sweden is now on track to miss key emissions goals. 

At the press conference, Busch said that she could not give any assessment on what impact the tax cuts she was announcing would have on emissions. “That’s a calculation we have not yet made,” she said.

However, in an analysis document released alongside the announcement, the government estimated that the change would increase emissions by about 350,000 tons in 2024 and 490,000 tons in 2025. 

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Sweden’s SSAB to build €4.5bn green steel plant in Luleå 

The Swedish steel giant SSAB has announced plans to build a new steel plant in Luleå for 52 billion kronor (€4.5 billion), with the new plant expected to produce 2.5 million tons of steel a year from 2028.

Sweden's SSAB to build €4.5bn green steel plant in Luleå 

“The transformation of Luleå is a major step on our journey to fossil-free steel production,” the company’s chief executive, Martin Lindqvist, said in a press release. “We will remove seven percent of Sweden’s carbon dioxide emissions, strengthen our competitiveness and secure jobs with the most cost-effective and sustainable sheet metal production in Europe.”

The new mini-mill, which is expected to start production at the end of 2028 and to hit full capacity in 2029, will include two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill to produce SSABs specialty products, and a cold rolling complex to develop premium products for the transport industry.

It will be fed partly from hydrogen reduced iron ore produced at the HYBRIT joint venture in Gälliväre and partly with scrap steel. The company hopes to receive its environemntal permits by the end of 2024.


The announcement comes just one week after SSAB revealed that it was seeking $500m in funding from the US government to develop a second HYBRIT manufacturing facility, using green hydrogen instead of fossil fuels to produce direct reduced iron and steel.

The company said it also hoped to expand capacity at SSAB’s steel mill in Montpelier, Iowa. 

The two new investment announcements strengthen the company’s claim to be the global pioneer in fossil-free steel.

It produced the world’s first sponge iron made with hydrogen instead of coke at its Hybrit pilot plant in Luleå in 2021. Gälliväre was chosen that same year as the site for the world’s first industrial scale plant using the technology. 

In 2023, SSAB announced it would transform its steel mill in Oxelösund to fossil-free production.

The company’s Raahe mill in Finland, which currently has new most advanced equipment, will be the last of the company’s big plants to shift away from blast furnaces. 

The steel industry currently produces 7 percent of the world’s carbon dioxide emissions, and shifting to hydrogen reduced steel and closing blast furnaces will reduce Sweden’s carbon emissions by 10 per cent and Finland’s by 7 per cent.