Biofuel from forest biomass is a weapon in the climate battle

There are several ways in which the Swedish forest can be a source of important raw materials to help us meet our environmental goals. Making biofuel from forest biomass is one alternative. But policy-makers need to put in place a long-term regulatory framework to ensure that the necessary investments are made.
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At an IVA seminar in Almedalen on ways to increase production and use of biofuel based on forest raw materials, most of the experts agreed that a reduction requirement would be a good option.

Jan Wintzell, Senior VP Business Development and Innovation at Sveaskog, pointed out that Sweden has a great opportunity to make biofuel from forest residuals.

“We already have the technology but investment of tens of millions of kronor is needed to scale it up. So a risk premium for the industry that is the first to take the risk and invest would be a good option.”

Long-term and clear control mechanisms are needed under all circumstances if biofuel from the forest is to be a large-scale alternative. In addition to a risk premium, Jan Wintzel also thinks that a reduction requirement rule would have a positive impact on development.

But he and several other speakers pointed out that EU directives could disrupt this Swedish opportunity.

Per Kågeson is an economist and author focusing on the environment.

“Sweden is the EU country that uses the most biofuel. Most of it is imported,” he said.

Per Kågeson has a positive view of a reduction requirement, but wonders whether a risk premium could be introduced without being regarded as a government subsidy.

“This sort of price premium would also be a commercial obstacle that could distort competition, so it’s not a viable option.”

Preem is one of the companies that are investing in developing and producing biofuel. Helene Samuelsson is Head of Corporate Communications at Preem.

“The decision to invest in this was good, but perhaps it came a bit late,” she said.

The control mechanisms that policy-makers could introduce must be competition-neutral if the necessary investment is to become a reality.

She is convinced that liquid biofuel will be needed for a long time. It is also cheaper to produce than producing gas for vehicles through gasification.

The politicians who participated in the seminar, Jonas Jacobsson Gjörtler (M), Isak From (S) and Håkan Svenneling (V), were more or less in agreement that a reduction requirement is a feasible option to stimulate increased production and use of biofuel.