13. Brief economic analysis
Emissions trading
As part of my work at the Energy Agency, I looked at the cost difference between the two scenarios 1) continuing to use the natural gas mix in the West Sweden gas network from Denmark, and 2) gradually replacing it and future needs with locally produced biogas in line with what is proposed by the the vast majority of our important players in the sector.
Since I was interrupted in my analysis, and all my documentation was suddenly taken from me, I can only reason here on an overview level. The price picture is regulated in the Emissions Trading Directive,[1] where it is clear that all operators will need emission rights for greenhouse gas emissions (e.g. linked to fossil gas). The price per ton is expected to increase quite sharply. The goal is to reduce emissions by 42% by 2030 compared to 2005 levels [2].
The issuance of emission rights is limited, and when these have been used up, emissions are prohibited according to current law. Should emissions occur in addition to this, tough fines await. In emissions trading, operators therefore risk having to pay large sums for the use of fossil gas. Biogas use, on the other hand, will generate a bonus (in the later emissions report). The total price difference between using fossil gas and biogas can thus be very large.
Other financial parts
In addition to emissions trading, there are of course many other pieces that affect the economy. For example, many of us are happy now that the EU has finally approved the Swedish tax exemption on biogas, which will help Sweden’s biogas sector. But it is not enough to solve the problems.
I also want to mention the social benefits that biogas contributes that you don’t get from fossil gas, and that can be valued quite well, for example green jobs and rural development can be directly translated into increased tax revenue and increased added value. Fossil natural gas naturally also provides some tax revenue, but since pretty much everything will be used in trading sectorsin a short time frame, it is actually quite small tax revenues overall.
Foot notes
[1] Prisbilden regleras indirekt genom att direktivet sätter ramarna för marknaden och därmed det pris som sätts där.
[3] https://www.energigas.se/om-oss/nyheter-och-press/nyheter/eu-godkanner-svensk-skattebefrielse-pa-biogas/