Swedish government investigator proposes higher fuel taxes and lower electricity costs to meet climate targets

A government-appointed investigator has proposed raising fuel taxes by 1.80 SEK per litre and increasing the biofuel blending mandate for both petrol and diesel while cutting electricity taxes, Swedish public broadcaster SVT reports.

Investigator Svante Mandell, who submitted his findings to acting Climate and Environment Minister Johan Britz (L) on Wednesday, estimates the changes would push pump prices up by about 3 SEK per litre. “This isn’t drastic—it brings us in line with comparable countries,” he told SVT. “These aren’t high prices.”

The measures aim to phase out fossil fuels and meet Sweden’s 2045 national climate goals and EU commitments. Mandell warned that without higher fuel costs or purchasing emissions allowances from other countries, Sweden will fail to meet its 2030 targets.

To offset the impact on households, the proposal includes lower electricity taxes, intended to benefit rural residents and encourage electric vehicle adoption. “This should boost electric car imports and, crucially, keep them in Sweden,” Mandell said, noting the current international market for used EVs.

The biofuel blending mandate—currently at 10%—would rise to 21% in 2028, 23% in 2029, and 25% by 2030. Mandell argued that fuel prices must align with those in Denmark, Finland, and the Netherlands, where taxes are higher. By 2028, he projects prices will return to 2021 levels (around 21–22 SEK per litre), restoring the historical ratio between disposable income and fuel costs.

The investigation follows a 2022 election pledge by the governing coalition to lower fuel prices, which critics argue has slowed electric vehicle sales. The proposal will now undergo a consultation process.