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Sweden Leads European Bioethanol Market


Detroit, Mich. -- Sweden is leading Europe in encouraging the growth of bioethanol as an eco-friendly renewable fuel. It is part of the Swedish government's strategy to free the country of dependency on oil by 2020.

At the same time, Saab is struggling to keep pace with customer demand for its new 9-5 BioPower model in Sweden as thousands of drivers switch from gasoline to enjoy the environmental and performance benefits of bioethanol, a renewable and sustainable fuel.

More than 5,500 cars have been ordered since sales began in Sweden in July last year and the Saab 9-5 BioPower is now established as the country's top selling environmentally-friendly vehicle (ELV), outselling all its competitors put together.

Ethanol history

There is nothing new about using bioethanol as a fuel. The first Model T Fords were designed to run on it and it has been used as an emergency back-up during times of war. However, once the world's reserves of cheap oil began to flow freely, alcohol-based fuels - whether bioethanol or methanol - quickly became a curiosity, confined almost exclusively for use in high-powered, competition engines.

Now, as the world begins to come to terms with the environmental fall-out of industrialisation and the prospect of diminishing oil supplies, bioethanol - a renewable and potentially carbon-neutral fuel - is back on the agenda. And in Sweden that means it is available at filling station pumps.

The Swedish government has already taken the decision to begin the process of switching road transport away from oil and Prime Minister Goran Persson has targeted 2020 as the year when the country can contemplate ending its dependency on fossil fuels altogether. The wide-scale production and use of bioethanol as a substitute will be one of its main weapons in helping the country to 'kick the oil habit'.


There are two driving forces behind the adoption of a renewable and sustainable fuel such as bioethanol: the environmental need to combat climate change from the so-called 'greenhouse' effect and the strategic need to overcome dependency on oil, a finite resource for which global demand will exceed supply. As a nation, Sweden has a long tradition of environmental care and it is hardly surprising that it is one of the first countries in the industrialized world to begin to seriously address such issues.

Emissions of fossil carbon dioxide (CO2) from road transportation are widely recognized as a one reason for the 'greenhouse' effect and all its associated problems. In Sweden, for example, it is estimated that close to 40 per cent of all CO2 emissions are due to transport.

The first filling station with an E85 (85% bioethanol/15% gasoline) pump was established in 1995 but development was slow in view of the very small number of 'flex-fuel' cars on the road at that time. Steady expansion began in 2002 and last year (2005) the number of filling stations with E85 pumps doubled to more than 300, or about 10% of the national network.

This sudden growth has been further stimulated by the sales success of the Saab 9-5 BioPower. The government has also announced that by 2008, 25 per cent of the country's filling stations will be offering renewable fuels.


There is currently only small scale, commercial production of bioethanol from wheat and barley in one region of Sweden, so most of the bioethanol required is imported from Brazil, the world's biggest bioethanol supplier. Nearly all Brazil's domestic road transport needs are met by bioethanol, which is produced locally from sugar cane, without any subsidy, at a lower cost than the world market price of gasoline.

The other main commercial producer of bioethanol is the United States, where it is produced in the mid-west region from corn and blended with gasoline to produce E10 (10 per cent bioethanol) fuel. As world oil prices continue to rise, US output has more than doubled in the last four years.

In Europe, Spain is currently the largest producer of bioethanol, supplying relatively small quantities from grain for use as an additive to gasoline. There are also small production facilities in France, using by-products from wine making, with plants also planned in Holland, Italy, Ireland, Germany and Portugal.

However, the most efficient feedstock for producing bioethanol is neither corn nor sugar, but 'bio-mass', in the form of straw, organic waste or wood clippings and forestry residue. Here bioethanol is produced from cellulose, instead of starch, and yields are higher as well as less energy intensive.

Sweden has a vast forestry resource and an industrial process for producing bioethanol from wood and forestry waste is being developed for large-scale commercial ETEK's (Etanolteknik AB) R&D pilot plant at Ornskoldsvik. Seven more plants are planned in Sweden for the coming years.

To remove fossil CO2 completely from the environmental loop, emissions during the commercial production of bioethanol must also be minimized and modern processes are already moving towards a zero emission status. Success in achieving this will depend on the type of bio-mass raw material and production processes that are used. The ETEK plant is targeting, from a life cycle perspective, zero fossil emissions by utilising hydro-electric power.

In a comprehensive 2004 study, the International Energy Agency, an OECD organization, estimates there is enough global resource of bio-mass for biofuels such as bioethanol to meet two thirds of the world's current transport energy needs. And in the United States, research by General Motors indicates that 66-107 billion gallons of bioethanol could be produced annually from bio-mass, including dedicated energy crops such as switch grass, willows, poplars and sorghum. This would be sufficient to support a national E60/70 gasoline blend or directly replace about half the current 140 billion gallons of gasoline consumed annually in the United States.

Sweden leads Europe

The EU's latest directive on energy taxation, effective from 1 January 2004, calls on member states to apply reduced taxation or a complete exemption for bio-fuels in pure or low blends. It follows a parallel directive requiring member states to introduce measures that will ensure bio-fuels account for an increasing proportion of total energy consumption in the transport sector, reaching 5.75 per cent by the end of 2010.

In Sweden, E85 already accounts for 2.5 per cent of fuel for road transport, by far the highest proportion in any European market. Supportive government measures include favorable taxation for E85, tax incentives and free parking for users of flex-fuel cars, a requirement for government agencies to source at least 50 per cent of car fleets as eco-friendly vehicles and the introduction of city buses running on pure bioethanol.

"The Swedish government and its agencies are to be congratulated in rising to the challenge of meeting our future energy needs," says Saab Automobile's Managing Director, Jannke Jonsson. "Much work has already been done and Sweden is in a strong position to lead and inspire the European development of bioethanol as a near to mid-term energy solution."

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