Presentation of Vattenfall's full year 2015 results
150612 Paris OECD Final version
1. Ministry of Finance Sweden
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Decoupling Growth From Emissions
Lessons Learned From + 20 years of Swedish CO2 Taxation
Parallel Session IV B. Competitiveness Impacts
6th International Tax Dialogue Global Conference
Tax and the Environment
1-3 July 2015
OECD Conference Centre - Paris, France
Susanne Åkerfeldt
Senior Advisor
Ministry of Finance, Sweden
susanne.akerfeldt@gov.se
+46 8 405 1382
2. Ministry of Finance Sweden
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CO2 emission cuts are urgent ….
How can we do it?
Pricing carbon
through CO2-taxation?
3. Ministry of Finance Sweden
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Swedish Energy and CO2 Taxation
1924 – 2015
Basic Design and Development
Raising revenues, driving fossil fuel
consumption down while enabling growth
and avoiding carbon leakage ….
4. Ministry of Finance Sweden
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Swedish Energy and CO2 taxation
1924 – 2015, Basic Design and Development (I)
• Excise duties on energy – two components:
– Energy tax on fuels and electricity.
– CO2 tax on fossil fuels.
• Energy tax:
– Introduced in: 1924 petrol ; 1951 electricity ; 1957 oils and coal ; 1964 LPG ;
1985 natural gas ; 2013 low blended bio in motor fuels.
• CO2 tax:
– Based on fossil carbon content of fuels.
– Introduced in 1991, along with existing energy tax. Part of major general tax
reform.
– CO2 tax achieves cost effective emission reductions.
5. Ministry of Finance Sweden
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Swedish Energy and CO2 Taxation
1924 – 2015, Basic Design and Development (II)
• CO2 tax: Same level of for fossil motor and heating fuels, per ton fossil CO2.
• Two levels of CO2 tax for heating fuels, per ton CO2
– high for households and service (27 €1 in 1991; 123 € in 2015)
– low for sectors at risk of carbon leakage = industry, agriculture and heat
production in combined heat and power plants.
• In 1991: 7 €; in 2015 outside EU ETS 74 €, within EU ETS industry and CHP 0 €.
• The alternative would have been an overall much lower tax level for all operators, resulting in
significantly lower environmental results.
• Border Tax Adjustments have never been an alternative considered in Sweden.
• Energy tax: Two tax levels for heating fuels and electricity
– high for households and service.
– low for industry (within and outside EU ETS) and agriculture.
1 Exchange rate 1 € = 9,0932 SEK is used throughout this presentation (Official rate per 1 October 2014, 2014/C344/03)
6. Ministry of Finance Sweden
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Development of the Swedish CO2 Tax
General Level and Industry Level
CO2 tax levels
Euro per tonne
Considered proposal for 2016
Note: From 2008 industry outside EU Emissions Trading Scheme (EU ETS)
7. Ministry of Finance Sweden
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Real GDP and CO2e Emissions1 in Sweden,
1990–2013
Sources: Swedish Environmental Protection Agency, Statistics Sweden
1 CO2 = approx. 80 % of
total CO2e emissions.
70
80
90
100
110
120
130
140
150
160
170
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
GDP CO2e
Real GDP and CO2e Emissions
Index, 1990=100
+58%
-23%
8. Ministry of Finance Sweden
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Business Sectors in
Sweden
Facts and Effects
• Industry within EU Emission Trading Scheme (EU ETS): Generally energy intensive.
– No CO2 tax from 2011, lower energy tax. Replaced earlier tax reduction schemes.
• Industry outside EU ETS: Generally less energy intensive.
– Increased tax levels: 30 % CO2 tax 2013, 60 % CO2 tax 2015.
– In general low costs for energy and high costs for labour and capital.
• Large shares of the SE industry’s use of energy consist of bio energy (36 %, mainly
paper and pulp) and electricity (35 %).
– Low energy tax on electricity for industry.
– Steady decline in specific energy use (amount of energy used per monetary unit of value added).
• District heating is a major provider of space heating in Sweden
– 80 % of space heating in the service sector (offices, shops etc.) in 2011.
– 69 % of in-put in district heating is bio-fuels and waste.
10. Ministry of Finance Sweden
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True and False about the Swedish Way (II)
• “A CO2 tax reduces emissions in a cost-effective way” TRUE
Since the introduction of the Swedish CO2 tax in 1991 …..
– Total CO2 e emissions has dropped with significantly.
– The use of fossil fuels for household heating has dropped by 70 %.
– No signs of strong negative effects on employment and growth. Not led to a “bigger state”
(Taxes as a percentage of GDP has declined by 15 %.)
