A greater victory for the deputy than for the climate

Preem’s announcement that the application to expand the Lysekil refinery is being withdrawn appears to have put top environmentalists to bed. In any case, the representatives failed to coordinate their speeches on Monday.

Karolina Skog, economic-political spokesperson, I saw the decision as a result of the government tightening the requirements to mix biofuels in gasoline and diesel. Lorentz Tovatt, Climate Policy Spokesperson, tweeted on the other hand, triumphantly that the U-turn would never have occurred if the government had not taken over the environmental evaluation of the project.

The truth is likely that a number of interacting factors caused Preem to back down. First, the corona pandemic has caused a drop in demand and a sharp decline in gasoline and diesel prices. DN review Preem’s finances show a company in deep crisis.

During the project, the price of emission rights has also skyrocketed. When Preem started outlining the expansion, it cost around five euros to emit a ton of carbon dioxide. Now the price is around 25 euros. Following the recent European Commission proposal for stricter emissions targets for 2030, several analytics companies are tracking a price of at least 50 euros in ten years. Of course, this greatly affects Preem’s calculations, even if it had received certain allowances for free.

Of course, purely Swedish factors, such as the stricter reduction obligation that this time is not offset by a reduction in fuel tax and the fact that the Preem brand has been defeated by the debate, may also have had a certain impact. . But most of all, the company’s decision should probably be seen as part of a broader international trend. In August, for example, the British oil company BP announced plans to completely abandon fossil fuels in the long term.

If climate policy is renationalized, there are only losers

Politically, it matters less what ultimately toppled Preem’s plans. After a series of losses in high-profile environmental problems – Stockholm Bypass, Vattenfall lignite – the Green Party finally won. At the same time, Stefan Löfven does not have to deal with a problem that had the potential to tear apart the red-green government.

For the climate and the environment, the benefits are more uncertain. The ceiling for the amount of carbon dioxide emissions that can occur within the EU trading system is not affected by the stalled plans. The question is also what happens to the sulfur-rich heavy oil that the company can no longer sell to shipping and that in the now-scrapped expansion was destined to become cleaner fuel. If, instead, it is exported from Sweden to be burned in a foreign plant without treatment, it does not earn much.

There are several lessons to be learned from the Preem case. The government must be more careful with its legal tools. You certainly have the right to take over the environmental assessments, but in that case it must be done “immediately”. The fact that the government has waited almost a year after the ruling of the Land and Environment Court before intervening gives a disgust for the banana state.

But above all, it is obviously a bad arrangement to have national climate targets for the sectors that are part of the EU’s emissions trading. If different countries start arguing over who to take a plant from, it undermines the whole idea that emission reductions should take place where it is most effective.

If climate policy is renationalized, there are only losers.