Policy to promote the production and use of bio-fuels to meet the energy challenge in the transport sector of developed countries : a case study of Sweden

Abstract: Increasing evidence of anthropogenic induced global warming calls for more effective policies to regulate levels of greenhouse gases emitted to the atmosphere. The transport sector is one of the sectors contributing the most to annual carbon emissions due to large dependency on fossil fuels. Since fossil fuels are non-renewable and becoming increasingly scarce, significant uncertainties regarding supply and prices are prevailing and affecting the global economy. As a response to climate change and the oil dependent transport sector, policies are developed to facilitate the introduction of renewable biofuels as a substitute to fossil fuels. Despite the potential to substitute fossil fuels and reduce climate impacts, biofuels have not yet been widely adopted on the fuel market. The aim of this study is to recommend effective policies to promote the production and use of biofuels in order to aid the development towards a less carbon dependent transport sector in Sweden. A case study has been utilised where multiple methods have been employed to elicit data from multiple sources. The analysis showed that the main drivers in Sweden to biofuel policy development are energy autonomy, climate changes, scarce fossil reserves and a strong technological development and excess amounts of biomass and waste products suitable for biofuel production. Obstacles to successful, sustainable biofuel expansion are complex, inconsistent policies which reduce opportunities for economically and environmentally efficient implementation of biofuels and also present new possibilities for future biofuel dependency situations. Recommendations drawn from the study are the implementation of general and flexible policy measures, so the market forces can direct the biofuel development towards a flexible, but still robust, future. The main finding derived from this study is that fuel substitution is vital, but not as important as improved energy efficiency and therefore, the main objectives of all energy and transport policies should be to create incentives for fuel saving rather than fuel substitution.