Is Green the New Gold?

Cleantech

Cleantech and Greentech: Is Green the New Gold?

By Jakob Lagercrantz

 

The Swedish government is proposing a legislation that all fuel pumps must have a climate label, defining the climate impact of the fuel. A heated struggle is brewing in Sweden whether origins of fuels should be marked on the fuel pumps to allow the customer to choose alternatives to undemocratic regimes.

 

Sweden, like most countries, is depending on foreign fuels. 40% percent comes from Russia, the same amount from Norway, 10% from Nigeria. Nigeria is one of the most criticized oil producing countries, with the largest need of restoration after decades of ruthless oil exploration.

Eco-labelling can trace its origins to North America, where mandatory requirements for “green stickers” focusing on energy- and fuel consumption were introduced in the 1970’s. Today we are used to different eco labels, we take it for granted that ecolabelled milk, wine or batteries are available.

In the electricity sector it is slightly more difficult. Electricity is produced in several places, and is mixed and distributed through the grid to the end user. At the appliance in our home we do not know exactly where “my” electrons come from, we have to accept a different model. By paying for eco labelled electricity the customer allocates more financial resources to new production of for instance wind and solar electricity, thus improving the financial situation for the electricity we would like to see produced. It is the same with fuels, different origins being mixed in the refineries.

Sweden and North America are markets where ecolabelling is playing an increasingly important role. It is an important means of supporting a greener production thorough market mechanisms. Eco labelled electricity was introduced in Sweden in 1996, and has worked well since then. Labelling fuel pumps has been proposed in cities in California and Ottawa, but is still debated in court.

The Swedish Government has recently proposed a legislation that will force fuel providers to put a label on the fuel pump with climate impact on the fuel. This is a far-reaching proposal, unique in the world, and will be a welcome support to customers wanting to choose the best alternative for their cars. The proposal emanates from an idea put forward by the  Swedish Green Motorist organization Gröna Bilister, and has received widespread support from transport companies and retailers. It will allow customers to select a fuel company that can provide low carbon fuels.

But the Government has, in its current proposal, backed down from specifying origin. They have listened to parts of the fuel industry, who claim that the European Commission in the Fuel Quality Directive (FQD) allows origins to be confidential. The Swedish 2030-secretariat challenged this view, and asked the European Commission directly. The answer came a few weeks later and stated unequivocally that the FQD doesn’t impact consumer information.

“The requirement on the confidentiality of the information reported by suppliers to the Member States concerning the origin of fuels applies for the specific purposes of the Directive, which are different from providing consumer information on the origin of fuels. It has no implications for potential national legislation to provide consumer information on the origin of fuels”, clarifies Andreas Gumpert from Directorate C of DG Climate in Brussels.

In 2019 we will have a label on all pumps outlining climate impact, and hopefully origin. This will open for more countries to follow, and will be an integral part of increasing the customer’s power over business as usual. The 2030-secretariat will continue to push for more transparency to allow customers to play an even more important role.

 

Fores is a Swedish think tank devoted to questions related to climate and environment, migration and integration, entrepreneurship and economic reforms, as well as the digital society.