GAIN Report - SW6013
Page 6 of 8
The above import duties do not apply to imports from countries that are part of the GSP program or from countries that have concluded Association Agreements with the EU. (GAIN Report E36056)
In January 2006, the Swedish government closed a loophole that allowed imports of ethanol at a reduced duty rate. Under the old loophole, ethanol imported to reach the required 5% bio-fuel blend could be classified under the “other chemicals” tariff line (38249099) by mixing the ethanol with 20% gasoline. “Other chemicals” are subject to a lower tariff (about
€0.25/hl) than plain ethanol intended for the 5% imported under the “other chemicals” tariff code for bio-fuels. Reportedly, many Swedish ethanol
blend (€19.2/hl per liter).
Effective January 1, 2006, tax relief is only available for ethanol imported under the higher €19.2/hl duty. The import price is eventually expected to rise by about €0.16 per liter as a result of the closed loophole.
SECTION III. TRADE
A. Ethanol Trade
Sweden’s rising ethanol consumption is based on imports, of which a large share is sourced in Brazil. In 2005, total imports are estimated at about 290,000 MT. This figure represents both imports under HS codes 220710 and 220720 as well as imports under HS code 38249099.
As mentioned above, a big part of Swedish ethanol imports have been classified under tariff line 38249099. Imports of ethanol under tariff line 38249099 from Brazil have, indeed, increased substantially over the past years as a result of Sweden’s increased ethanol consumption. After closing the loophole in January 2006, imports under tariff line 38249099 have declined. During the first two months of 2005, Sweden imported almost 6,000 MT under tariff line 38249099 from Brazil. In 2006, there are no reported imports from Brazil under that tariff line. Swedish imports of un-denatured (220710) ethanol originate in Italy, Brazil, Belgium, the UK and Norway. Imports of denatured ethanol (220720) originate in the Netherlands, the UK and Italy.
Prior to closure of the loophole, import prices were about SEK 3.61 (€0.38) per liter – approximately a 20% advantage compared to domestically produced ethanol. At the higher tariff rate following closure of the loophole, import prices are expected to settle around SEK 4.48 (€048) per liter – slightly higher than the cost of domestic production. Despite the loss of a price advantage, dependence on imported ethanol is expected to continue for another ten years due to the lag in technology and infrastructure development.
Before 2005, Swedish exports of ethanol were very small. In 2005, however, exports increased more than five times to about 37,000 MT due to increased exports of un-denatured ethanol mainly to Finland but also to Portugal and Belgium.
B. Bio-Diesel Trade
Swedish imports of bio-diesel are small, about 4,000 MT, due to the limited utilization of bio- diesel in Sweden. With the 5% blend of bio-diesel in conventional diesel, however, imports
USDA Foreign Agricultural Service