Sweden: European Commission opens State aid investigation into non-food biogas and bio-propane tax exemption schemes
Investigation follows the General Court's annulment of two previous EC decisions approving the tax exemptions
The European Commission (EC) today announced that it has opened an in-depth investigation to assess whether two Swedish tax exemption schemes for non-food-based biogas and bio-propane used for heating or as motor fuel are in line with EU State aid rules.
According to the related EC release, the investigation follows the General Court's annulment of two previous EC decisions approving the tax exemptions.
Background
In June 2020, the EC approved the prolongation until 31 December 2030 of two Swedish schemes that exempt from energy and CO₂ taxation: (1) biogas and bio-propane that is used in heat generation and (2) biogas and bio-propane that is used as motor fuel. The original schemes were first approved by the EC under EU State aid rules in 2003 for the motor fuel scheme and in 2007 for the heating fuel scheme. The motor fuel scheme was further prolonged in December 2015 and the heating fuel scheme in July 2018.
In December 2022, the General Court annulled the two 2020 EC decisions on procedural grounds. The General Court concluded that the EC was required to open a formal investigation procedure to assess whether the tax exemptions combined with support from other member states, notably Denmark, led to the overcompensation of biogas producers.