Sunpine comments on the government's new proposal for increased reduction obligation

On August 27, the government presented a proposal for an increased reduction obligation. Since then, many people have contacted us at Sunpine to ask what we think about the proposal. We are happy to be asked, especially since we have worked for the past 15 years to develop one of the world's best biofuels.

– We at Sunpine view all measures to reduce fossil emissions positively. The reduction obligation can be an important policy instrument and therefore we warmly welcome a discussion about a new system. Now we have the chance to change and do the right thing – and to create a reduction obligation that makes a real difference for the climate, says David Öquist, CEO of Sunpine.

The new proposal increases the reduction obligation from six to ten percent. But for the best effect, the reduction obligation also needs to be increased in the right way. Here, there are three things in particular that we want to highlight:

1. Include electricity – the right way

Part of the new proposal is about possibly including electricity charged at gas stations in the reduction obligation. Electrification is a central part of the transition and including electricity in the reduction obligation is therefore absolutely not wrong. But in such cases it needs to be included in the right way.

– The challenge is that in Sweden we already charge electricity at the gas station – and increasingly so. Raising the reduction obligation to ten percent and at the same time including the electricity that is already charged therefore risks becoming a zero-sum game for the climate. We also see a possible problem in that increased use of electric cars – which in itself is positive – would in the long term open up the possibility of reducing the admixture of biofuel in conventional diesel and gasoline.

Not all details of the proposal are clear or presented yet, and therefore it is difficult to overview the full consequences of a reduction obligation that includes electric vehicle charging.

– But no one wants a situation where different fossil-free alternatives risk competing with each other – and where increasing the reduction obligation becomes a burden on the climate. Here we need to find a long-term solution that promotes a sustainable energy mix, and accelerates both electrification and the development of other fossil-free fuels.

2. Differentiate between biofuel and biodiesel

The term biofuel encompasses a range of different products – from used Chinese cooking oil to Sunpines crude tall oil diesel which has a CO reduction value.₂ of 90 percent, and which is produced from crude tall oil, a waste product from the paper and pulp industry.

– In the current system, you can mix in any biofuel. This means, for example, that in Sweden over the years – often without knowing it – we have filled our cars with both soy residues and palm oil residues. We need to design a reduction obligation that rewards really good biofuels over other less sustainable alternatives, says David Öquist.

3. Construct a long-term sustainable reduction obligation

In a few short years, the Swedish reduction obligation has been introduced, increased to 30 percent, cut to 6 percent and is now to be increased again – and possibly include electricity. We at Sunpine have full respect for the market changing and developing, but to create security for everyone working to develop fossil-free alternatives, we need to build a long-term sustainable system.

– To succeed in the transition, industry players need long-term and stable business conditions. As CEO of an innovation company that has invested over SEK 800 million in a state-of-the-art facility to produce high-quality fossil-free fuel, I wish to see conditions moving forward that do not change every year.

We therefore ask that this time, time and resources be invested, and that we collaborate with industry players, to develop a reduction strategy that is sustainable over time.

– Let's change and do it right this time, so that we can break the trend and together achieve the goals that scientists have set for the climate. I'm happy to help with that, concludes David Öquist.