6. Sweden

Economic instruments used to correct for negative environmental externalities have been widely used in Sweden since the early 1990s. Among the different types of economic instruments available, taxes, subsidies and grants appear to be the most widely used. Since the early 1990s there has been a dominance of economic instruments in the areas of energy, greenhouse gases and air pollution. Examples are the tax on energy consumption, energy and carbon dioxide tax on fossil fuels, the sulphur tax, regulation for nitrous oxides and the subsidies and grants for energy efficiency, renewable energy, and climate investments. In the period of 2018–2021, some changes to existing instruments have been made, and a few new instruments have been implemented.

January 1, 2018, a new climate policy framework entered into force in Sweden, which consists of a climate act, climate targets and a climate policy council. The Climate Act establishes that the Government's climate policy must be based on climate targets and specifies how the implementation will be carried out. The long-term target is to have zero net greenhouse gas emissions by 2045 at the latest, which means that emissions of greenhouse gases from activities in Sweden shall be at least 85% lower in 2045 compared to 1990. Supplementary measure may be utilized to achieve the remaining reduction down to zero. The supplementary measures include increased uptake of carbon dioxide by forests, verified reductions carried out outside of Sweden, and carbon capture and storage based on the combustion of biomass (bio-CCS) (Swedish Environmental Protection Agency, 2022c). In July 2018, the Swedish government introduced an emission reduction obligation scheme, accompanied by several changes in the tax rules for petrol and diesel. Low-blended biofuels that are covered by the scheme are subject to carbon and energy tax rates that correspond to the rates of their fossil equivalents. The carbon tax rates for petrol and diesel were adjusted downwards to take account of the share of low-blended biofuel per litre full blend, and the energy tax was lowered.

In 2019, changes to the tax on fuels used for heat production in combined heat and power plants and in other heating plants (CHPs) were made. CHPs are subject to lower tax rates. However, these tax cuts were lowered. Since then, CHPs within the EU ETS are subject to 91% of the carbon tax and 100% of the energy tax (The Swedish Environmental Protection Agency, 2021).

In July 2018 the Swedish government implemented a bonus-malus system targeted at new cars. Vehicles that run on diesel or petrol are subject to a higher annual tax during the first three years, and the previously used tax exemption associated with low CO₂-emissions was removed. Zero or low emission vehicles receive a bonus. The maximum bonus of SEK 70000 (EUR 6 803), or 25% of the sales price, will in practice only be given to zero emission vehicles. For other, such as plug-in hybrids, the bonus decreases for every gram of carbon dioxide per kilometre the car emits.

In the area of energy efficiency, renewable energy, and climate investments, several changes were implemented. The government has decided that the electricity certificate system, a subsidy scheme for renewable energy that have been in place in Sweden since 2003, will be terminated by the end of 2035, and new electricity generation facilities will not be eligible for the system after the end of 2021. The subsidies for installation costs and production of renewable energy that were introduced in 2009 ended in 2020 and was replaced for private individuals by a tax reduction for green investments. Municipalities and companies were, however, still eligible for continued support in 2021.

The subsidy schemes for climate investments aimed at the industry sector was extended in 2020 to include the finance of research, feasibility studies and investments relating to other greenhouse gas emissions, such as certain combustion emissions and diffuse emissions linked to process-related emissions and strategically important initiatives in industries that contribute to greenhouse gas emissions reductions. The budget for the program increased from SEK 300 (EUR 29) million to SEK 750 (EUR 73) million between 2018 and 2021.

In 2020, the Swedish government also introduced a tax on waste incineration. The tax level has since been gradually increased. In the following chapters the economic instruments described in this section, as well as several other economic instruments used in Sweden, are described in more detail.

The excise tax on electricity consumption was increased each year between 2018 and 2021. The revenue from this excise tax, and the other nine highest revenue generating environmental taxes, fees, and charges can be seen in table 27.

Together with the neighbouring countries Finland and Norway, Sweden was one of the first countries to implement a tax on carbon dioxide in fossil fuel in the early 1990s. The tax aims to reduce emissions of carbon dioxide in sectors outside the EU ETS. The tax has been raised in several steps since it was first implemented. In total, the tax has increased from SEK 0.25/kg CO₂ in 1991 to SEK 1.20/kg CO₂ in 2021. In addition to specific tax increases stipulated in Government bills, a yearly indexation of the tax level is applied (The Swedish Environmental Protection Agency, 2021). To compensate for increased prices due to the reduction obligation scheme, the GDP-adjustments of the carbon tax was put on hold between 2020–2022. In 2021, the revenues collected from the tax amounted to almost SEK 22 (EUR 2.1) billion (Statistics Sweden, 2022).

The tax level is proportionate to the calculated amount of carbon dioxide emissions, based on the fuel’s fossil carbon content. This means that biofuels are currently not subject to carbon taxation. A reduced carbon tax is applied for diesel used in agriculture, forestry, and aquaculture (The Swedish Environmental Protection Agency, 2021).

In addition to the CO₂ tax, fossil fuels are also subject to energy taxes. Tax rates for different fuels over the period 2018–2021 are listed in table 28. Energy tax on fuel is differentiated based on environmental impact, where a more stringent tax is levied on fuels associated with a larger environmental impact (Nordic Council of Ministers, 2019). The energy tax on fuels varies depending on whether it is used for heating purposes or as motor fuel. The tax level on heating fuels varies between industries, households, and the energy conversion sector (The Swedish Environmental Protection Agency, 2021).

Yearly adjustments in both energy and carbon dioxide tax on motor fuels used in road vehicles and off-road machinery have been made since 1994 to adjust for inflation in the country (consumer price index). In July 2019 tax rates were lowered by the equivalent of the GDP-adjustment for that year. In 2020 the GDP-adjustment was put on hold until 2022 to compensate for increased prices due to the reduction obligation scheme. (The Swedish Environmental Protection Agency, 2021).

In 2020, the European Commission approved a 10-year prolongation of the tax exemption for non-food-based biogas and bio-propane used for heating or as motor fuel in Sweden. The tax exemption aims to increase the use of biogas and bio-propane, as well as reduce the use of fossil fuels (The Swedish Environmental Protection Agency, 2021).

The industry sector, as well as agriculture, forestry, and aquaculture sectors, are subject to some exemptions and reductions in energy taxes on fuels used in the industrial manufacturing processes. One of the main reasons is for cost-efficiency reasons, and to avoid carbon leakage. The carbon tax reduction was rescinded from January 1, 2018. A special reimbursement for carbon tax on diesel for machinery in agricultural, forestry and aquaculture activities were raised from SEK 1.43 (EUR 0.14) per litre to SEK 2.24 (EUR 0.22) per litre in 2019 and was also subject to a tax reduction on the energy tax. From January 1, 2020, the reimbursement was SEK 1.93 (EUR 0.19) per litre (The Swedish Environmental Protection Agency, 2021).

In addition to the energy tax on fuels, there is also an excise tax levied on electricity consumption. Municipalities in the northern parts of Sweden pay a lower tax on their consumption. Manufacturing industries receive a significantly lower tax compared to households. Since 2004, the energy tax for manufacturing industries has been SEK öre 0.5 (EUR cent 0.05) per kWh.

In 2021 commercial activities in e.g., agriculture, forestry and aquaculture are also entitled to a tax reduction to the level of SEK öre 0.6 (EUR cent 0.06) per kWh.

Sweden is part of the EU Emissions Trading Scheme (ETS), governed by the Emissions Trading Directive (2003/87/EC). Having a common market for reduction of greenhouse gas emissions in EU member states together with Norway and Lichtenstein, ensures that reductions are made cost-effective i.e., emission reductions are done where the costs are lowest (Nordic Council of Ministers, 2019). The Swedish Environmental Protection Agency (2021) reported that about 760 Swedish installations are included in the system. At the EU level in total, approximately 11 000 installations are covered.

In 2018, the EU ETS was reformed (EU Commission, 2018). The quantity of emissions allowed within the system is decreased every year. From 2021 onwards, the annual reduction of the cap will be increased from 1.74% to 2.2%. A market stability reserve was introduced to reduce the surplus of emission allowances on the market. From 2023 onwards, the market stability reserve cannot hold more allowances than auctioned the year before. The remaining allowances are invalidated. Almost half of the allowances are allocated for free to installations covered by the system. This is used to avoid risks of carbon leakage in specific industrial sectors such as steel and cement. The remaining allowances, currently 57%, are auctioned (The Swedish Environmental Protection Agency, 2021).

In December 2022, the EU Commission, EU Parliament and EU Council agreed to reform the EU ETS and on 18 April 2023, the EU Parliament voted to adopt this law (EU Parliament, 2023). The reform includes a faster reduction of the cap (4.3% instead of 2.3%), a gradual phase-out of free allocation from 2026 to 2033 and linked to this, the gradual introduction of a carbon border adjustment mechanism over the same time period. In addition, a new ETS for road transport and heating will start in 2027. Also, a social climate fund will be established to abate the negative effects on poverty from the ETS-2.

The nitrogen oxide charge was introduced in 1992 with the aim of reducing nitrogen emissions from large combustion plants. The economic instrument builds on the principle that collected revenues from the charge per unit of emitted NOx are returned to the participating plants in proportion to production of energy. In this way participants with low emission per unit of produced energy is promoted (The Swedish Environmental Protection Agency, 2021). Since 2008 the charge has been SEK 50 (EUR 4.9) (Nordic Council of Ministers, 2019).

With the purpose of reducing emissions of sulphur dioxide from combustion processes, a tax on sulphur on certain fuels was introduced 1991. The tax is levied on fuels with high sulphur content, such as coal, peat and certain oils. The tax has been constant since the introduction in 1991 at a level of SEK 30 (EUR 2.92) per kg sulphur for solid and gaseous fuels and SEK 27 (EUR 2.62) per cubic litre for every tenth of a weight percent of sulphur in liquid fuels (Nordic Council of Ministers, 2019; The Swedish Tax Agency, 2022d). 

A subsidy scheme for renewable energy have been in place in Sweden since 2003. In 2012, Norway became a part of the scheme and today the countries have a common market for certificates. It is a subsidy scheme with market features where producers of renewable energy receive a certificate for every produced unit of energy (MWh). The certificate can be sold on a market where the price is decided by market mechanisms. Buyers of the certificates are operators who are enforced to have a certain share of certificates in proportion to electricity consumed or sold. These are mainly suppliers of electricity and energy intense industries (The Swedish Environmental Protection Agency, 2021). The goal was to increase the production by 46.4 TWh between 2012 and 2030. This goal was achieved in March 2021 (Energimyndigheten, 2022). 

The rapid expansion of renewable electricity production means that the electricity certificate system now has a limited function. Therefore, the government has decided that new electricity generation facilities are not eligible for the system after the end of 2021 and that the electricity certificate system will be terminated by the end of 2035 (The Swedish Environmental Protection Agency, 2021).

With the main purpose to reduce greenhouse gas emissions, a subsidy scheme was introduced in 2015 targeted at local and regional investments. Based on the estimated greenhouse gas reduction of each investment, applicants can compete for the grants. Examples of investments that can be granted support are infrastructure for charging electrical vehicles, biogas plants, infrastructure for biofuel and transitions from fossil fuel to biofuel or district heating. The combined budget for the program together with the Charge at home-grant amounted to SEK 1.5 (EUR 0.15) billion in 2019 and was increased to SEK 1.96 (EUR 0.19) billion in 2020. Individuals are exempted from the Climate leap, but individuals have the possibility to apply for financial support to install charging facilities on private properties through the Charge at home-grant (The Swedish Environmental Protection Agency, 2021).

The “Industrial Leap Programme”, which is operated by the Swedish Energy Agency (SEA), provides funding for innovation projects to reduce process related industrial greenhouse gas emissions, including Carbon Capture and Storage (CCS). Eligible projects may include research, feasibility studies, and investments for pilot and demonstration projects. Part of the budget (“Industrial Leap Programme – Negative emissions”) is earmarked for projects that target the capture, transport and geological or other permanent storage of biogenic CO₂ or CO₂ that has been separated from the air (Swedish Energy Agency, 2022b).  In 2018, the government budgeted SEK 300 (EUR 29) million for the programme, and in 2021, the budget had increased to SEK 750 (EUR 73) million (The Swedish Environmental Protection Agency, 2021).

In 2009 a subsidy to cover parts of the installation costs of solar panels was initiated. All types of actors could obtain financial support for installing grid-connected solar electricity and solar hybrid systems. However, the support for private individuals ended December 31, 2020, and was replaced by a tax deduction for green investments. The tax deduction applies to installations of green technology including solar cells, systems for storage of self-produced electricity and at home charging stations. Municipalities and companies were still eligible for continued support in 2021. The subsidy is, however, lowered to 10% of the installation cost with the aim to end after 2021, as the Government' argue that there is no longer a long-term need for support (The Swedish Environmental Protection Agency, 2021).

Companies in agriculture, gardening and reindeer husbandry can apply for subsidies to produce renewable energy from biogas, wind power, solar power, hydro power, and geothermal energy. Energy produced can either be used in the industry or sold on the market (Swedish Board of Agriculture, 2022a). Subsidies are also available for building facilities for the production and use of manure-based biogas, as well as upgrading or building a plant to manage digestates

Digestate is the material remaining after decomposition under low oxygen conditions of a biodegradable feedstock. Feedstock materials for digestion typically include farm livestock manures and crop material or other non-farm organic materials such as food waste. These are biologically decomposed in a controlled process in the absence of oxygen. (Woodhead Publishing, 2023).

(Swedish Board of Agriculture, 2022b). Support for the production in a biogas plant is also given (Swedish Board of Agriculture, 2022c).

An income tax reduction for households’ and businesses’ micro-production of renewable energy was introduced in 2015. The reduction is SEK 0.60 (EUR 0.06) per kWh of renewable electricity fed into the grid in a connection point with a fuse size of up to 100 Amps. The reduction is limited to the amount of electricity received from the grid in the same connection point and capped at SEK 18000 (EUR 1749) per year (The Swedish Environmental Protection Agency, 2021).

In order to take on and stimulate creative and cost-effective initiatives on local level aimed at reducing eutrophication in the sea, a subsidy scheme, called LOVA, was introduced in 2009. The scheme includes measures not only thought to reduce eutrophication, but also to reduce environmentally hazardous substances from recreational boating and to collect lost fishing gears, so called ghost gears. Municipalities and associations are allowed to apply for financial support within the scheme and the grant can be applied for at the county administrative board. For 2021, the total budget was approximately SEK 219 (EUR 21) million (Swedish Agency for Marine and Water Management, 2021).

Municipalities in Sweden takes out a fee on the usage of fresh water. The fee consists of one fixed part and one part that depends on the amount of water that is being used. Different fees are levied for different types of housing (The Swedish Water and Wastewater Association, 2021). In 2021, the yearly cost for a detached single-family house without a basement comprising of 5 bedrooms, bathroom with WC, laundry room, an extra toilet room and garage varied between SEK 3 247 (EUR 315.5) and SEK 15 633 (EUR 1 519) depending on municipality (The Swedish Water and Wastewater Association, 2022).

A tax on landfill waste was introduced in 2001. The tax is applied when more than 50 tonnes of waste is deposited in a year and is based on weight. It does not differ with regard to material or content. The tax has doubled since its implementation in 2001. During the period 2018–2021 the tax on waste was raised with 11 percent to SEK 555 (EUR 54) per ton (Swedish Tax Agency, 2022b).

In 2020 the Swedish government introduced a tax on waste incineration. The tax level was gradually increased, from SEK 75 (7.3 EUR) per ton of waste in 2020, to SEK 100 (9.7 EUR) per ton of waste in 2021 and to SEK 125 (12.1 EUR) per ton of waste in 2022 (Swedish Tax Agency, 2022c).

The costs for waste management are charged partly as a cleaning fee, partly as a fee for the products covered by producer responsibility (explained further in section 6.3.5). Most municipalities in Sweden take out a fee for collection of household waste. A few municipalities use a tax instead. The fee often consists of a fixed part and a part that varies with e.g. frequency of collection of waste and the size of the trash bin (Swedish Environmental Protection Agency, 2022a). Lower costs for less frequent collecting and smaller trash bins should incentivize household to produce less waste. Some municipalities incentivize separation of biodegradable waste, used to e.g. produce biogas, by offering a lower cost for households that collect biodegradable waste in separate bins (Sveriges avfallsportal, 2020).

A tax on chemicals in certain electronic products are divided into two groups: appliances and other electronics. The tax rate levied on appliances such as washing machines, dishwashers, freezers, and refrigerators is SEK 11 (EUR 1.1) per kilo of the product. Other electronic products face a tax rate of SEK 166 (EUR 16.1) per kilo of the product (Swedish Tax Agency, 2022g).

With the main purpose to reduce material use and the environmental effects linked to that, tax reductions for the reparation of certain goods are applied. The tax reduction builds on the principle that making reparation and maintenance of certain goods cheaper, should incentivise consumers to repair broken goods instead of replacing them (Nordic Council of Ministers, 2019). Tax reductions are applied to the reparation of appliances, such as dishwashers, washing machines and refrigerators (Swedish Tax Agency, 2022h). A tax reduction is also applied to the reparation of goods such as bicycles, leather products, clothes and shoes (Swedish Tax Agency, 2022i).

In Sweden, there is producer responsibility for the following product groups: batteries, vehicles, tyres, electrical and electronic equipment, packaging, wastepaper, pharmaceuticals, and radioactive products (Swedish Environmental Protection Agency, 2021). This means that producers have the responsibility to collect and dispose of product, as well as to inform consumers on how and where to dispose the products. To cover the costs associated with collection and disposal, consumers are faced with an additional charge on the consumer price (NCM, 2019).

The collection of cans and bottles for beverages differs a little from the remaining product groups included in the producer responsibility. An economic incentive to recycle aluminium cans, plastic and some glass bottles in the form of a refund when recycling is given. The refund system has been in place since 1984. Producers of beverages for commercial use (dairy products and juice exempted) are required to provide a possibility to recycle cans and bottles for refund (Förordning [2005:220]; NCM, 2019).

Vehicles such as cars, trucks, buses, tractors, and motorcycles are subject to annual taxation and in some cases subsidies or extra charge linked to levels of emissions of greenhouse gases. The annual base tax is 360 SEK (EUR 35) plus 13.53 SEK (EUR 1.32) per gram of CO₂/km emission as declared in the vehicle documentation. For diesel cars an extra 250 SEK (EUR 24.3) is charged as an environmental charge (Swedish Tax Agency 2022j).

In 2018, a significant change in the tax and subsidy scheme for vehicles was made through the implementation of a bonus-malus system. The idea of the system is to reward vehicles that emit relatively small amounts of carbon dioxide (bonus), while burdening vehicles that emit relatively large amounts (malus). The system only applies to new cars that are registered after July 1, 2018.

The bonus is calculated on the basis of a number of parameters, with a maximum of 25% of the sales price at the time of purchase. For pure electric cars and hydrogen cars with zero emissions, the highest possible bonus was SEK 70 000 (EUR 6 803). For other cars, such as plug-in hybrids, the bonus decreased for every gram of carbon dioxide that the car emit according to the Swedish vehicle register. For a car registered the first time between April 1, 2021 and July 11, 2022, the bonus was calculated starting at 45 000 SEK (EUR 4 373) and deducting 583 SEK (EUR 57) for every gram CO₂ per kilometre that the car emits. (Swedish Transport Agency, 2022a). The bonus scheme was abolished with the new Swedish government during November 2022 (Regeringen, 2022).

The malus part implies that cars with higher CO₂ emissions (more than 60 g/kilometre according to tests in the WLTP cycle) pay an increased tax for the first three years after registration. This e.g., implies that vehicles registered between July 1, 2018, and March 31, 2021, are, for the first three years, subject to a yearly carbon dioxide charge of 82 SEK (EUR 8) per gram of CO₂ per kilometre if the vehicle emits more than 95 grams, but less than 140 grams of CO₂ per kilometre. If the vehicle emits more than 140 grams of CO₂ per kilometre, the charge is 107 SEK (EUR 10.4) per gram (Swedish Transport Agency, 2022a).

In 2017, a new act (Lag (2017:1200) om skatt på flygresor) was implemented which implies a new tax on aviation from Swedish airports. The new tax applies from April 1, 2018. The tax is paid per passenger and varies according to destination. The size of the tax was raised by January 1, 2021 to SEK 64 (EUR 6.22) for domestic flights and trips inside Europe, SEK 265 (EUR 25.75) for trips outside Europe at shorter distances than 6 000 km and SEK 424 (EUR 41.2) for trips with other destinations (Swedish Tax Agency, 2022k).

Road charges was introduced in Sweden together with several other European countries in 1998 following the EU Directive (99/62/EC). From 2017, the charges concern trucks with a total weight of 12 tons, that are driving on certain roads in Sweden, Denmark, Luxembourg and The Netherlands (Swedish Tax Agency, 2022l). The road charge for trucks registered in Sweden with a total weight of 12 or 7 tons, and equipped with a traction device, varies between SEK 7 747 (EUR 753) and SEK 24 368 (EUR 2 368) per year depending on Euro class and the number of axles of the truck. The charges had not been adjusted since 2001, but by July 1, 2019, the charges were increased. At the same time the charges were differentiated to a larger extent with regard to Euro exhaust class (Swedish Transport Agency, 2019). The charge for Euro class V and EEV was further increased by 6% in January 2021. For the current road charges, see Table 30 below. Worth mentioning when discussing road charges, is the ongoing political debate about a possible change in the road charge. The existing road charge could be replaced with a road wear tax that varies depending on distance. One reason for the change is to correct for the competitive advantages for international trucks driving on Swedish roads (Nordic Council of Ministers, 2019). However, transportation of goods through foreign heavy trucks is still subject to a road tax when driving on certain roads. This tax is at the same level as for trucks registered in Sweden (Swedish Transport Agency, 2022b).

In Stockholm, a congestion tax was introduced in 2007. The tax is levied on vehicles passing the toll stations around the city centre, going either in our out, during peak hours of heavy traffic. The tax varies during the day with a higher tax during peak hours and a lower tax or no tax on hours when there is normally less traffic. The main purpose of the tax is to reduce congestion, improve accessibility and reduce emissions of CO₂ and air pollutants. Gothenburg followed the example in Stockholm and introduced a congestion charge in 2013. In Stockholm, the congestion charge is, at present, SEK 45 (EUR 4.4) at rush hour during high season. In Gothenburg, the tax concerns passages between 6 am and 6.59 pm during weekdays and is set to SEK 9 – 22 (EUR 0.87 – 2.14) per passage, depending on the time of the day. The revenue from the road charges is intended to finance new infrastructure projects in the regions.

An infrastructure charge for passing certain bridges has also been introduced in the cities of Motala and Sundsvall to finance the construction of bridges (Swedish Transport Agency, 2022c).

A decision from 2017 makes it possible for private individuals to apply for financial support when purchasing electric bicycles, mopeds, and motorbikes. This subsidy was active from February to October 2018, when the budget of SEK 350 million (EUR 34 million) was used (Swedish Environmental Protection Agency, 2019).

Subsidies up to 15 000 SEK (EUR 1 460) per charging point can be applied for charging of electric vehicles through “Ladda elbilen” for organisations that installs charging at tenant houses or workplaces, or through the “Climate leap” (Klimatklivet) for public charging stations (Swedish Environmental Protection Agency, 2022b).

To reduce extraction of naturally occurring accumulations of gravel, a tax was introduced in Sweden in 1995. Gravel extraction for domestic use is exempt of this tax. Gravel can be used as a component in the preparation and production of concrete. Gravel suited for extraction is a finite natural resource which play an important role in for example producing drinking water through providing a natural cleaning process (Nordic Council of Ministers, 2019). Since January 1, 2021, the tax is SEK 17 (EUR 1.65) per extracted tonne (Swedish Tax Agency, 2022e).

In line with the Swedish implementation of the European Common Agricultural Policy (CAP), subsidies were available for farmers through the Swedish Rural Development Program. The program includes investment grants for young entrepreneurs, capacity building, cooperation and innovation, support to areas with natural constraints, animal welfare subsidies, ecological farming, and environmental and climate actions. Measures specifically contributing to climate change mitigation include those aimed at: increasing energy efficiency, production and use of renewable energy, conversion from fossil to renewable energy sources, improved manure handling, more efficient use of nitrogen and climate and energy advice, among others (The Swedish Environmental Protection Agency, 2021). An additional economic instrument targeted at farmers is the reduced energy tax for machines used in agriculture as well as tax on electricity consumption mentioned in section 6.1.2 and 6.1.3.

Since 1984, there has been a tax on pesticides with the purpose to reduce the consumption of pesticides in agriculture and thereby to reduce environmental and health effects accordingly (Nordic Council of Ministers, 2019). The tax is targeted at production and is paid per kilogram of active substance in the pesticide. In 2021, the tax was SEK 34 (EUR 3.3) per kilogram (Swedish Tax Agency, 2022f).

Under the Forest Policy, there are no production subsidies, and forest owners have considerable freedom and responsibility to independently conduct long-term sustainable forest management. The Swedish Forest Policy (as of 1993) states that forests and forest lands should be used effectively and responsibly in order to produce sustainable yields, the natural productive capacity of forest land should be preserved, biodiversity and genetic variation in forests should be secured, forests should be managed in a manner that enables naturally occurring plant and animal species to survive in natural conditions and in viable populations, threatened species and habitats should be protected and cultural heritage assets in forests and their aesthetic and social values should be safeguarded (The Swedish Environmental Protection Agency, 2021).

The regulations concerning nature conservation and cultural heritage in the Forestry Act include not disturbing important biotopes, buffer zones and arable land, and leaving older trees, high stumps, and dead wood in situ. Sustainable forest management influences carbon dioxide removals and emissions in various ways, through the production of renewable raw materials that can replace fossil fuels and materials that generate emissions of greenhouse gases while maintaining or increasing carbon stocks in biomass, soils, and harvested wood products (The Swedish Environmental Protection Agency, 2021).

With the purpose of protecting valuable biotopes, land can be purchased by the state for permanent protection of the land, or the state can provide monetary compensation to landowners for managing the land with the purpose of preserving and developing biodiversity and related values (NCM, 2019).

With the purpose to reduce problems related to overfishing and low profitability in the fisheries sector, individual tradable fishing quotas was introduced in Sweden in 2009. Swedish marine fishery is overall regulated through EU’s Common Fisheries Policy (CFP). Through negotiations between countries in the EU, a yearly limit or cap of each commercial fish species is decided, a so called total allowable catch (TAC). The TAC is then transferred and divided into quotas that are distributed and allocated to Swedish fishermen based on historical levels of fishing (allocation principle is called grandfathering). (NCM, 2019).

Companies, government authorities, regions, municipalities, universities, scientific institutes, trade associations and recognized producer organizations can receive grants given in support of marine environment and conservation measures, e.g., for conservation projects to restore aquatic diversity (Swedish Board of Agriculture, 2022d). There are also subsidies given in support for aquaculture e.g., to reduce negative environmental effects or water use (Swedish Board of Agriculture, 2022e). Subsidies in support for fishing include, e.g., investments in selective gear and equipment that reduces the environmental impact of fishing (Swedish Board of Agriculture, 2022f). The support is granted by the Swedish Board of Agriculture.

In December 2020, the Swedish government decided on a new support scheme for re-wetting drained wetlands. This aims at providing climate benefits while strengthening biodiversity, balance water flows, increase the addition to ground water and reduce eutrophication. The rewetting of wetlands on peat soils are expected to reduce the CO₂ emissions caused by the drainage. The initiative is based on voluntary participation by landowners and SEK 350 (EUR 34) million was allocated for the support in 2021.