Swedish government plans to increase reduction obligation in autumn budget

The Swedish government is set to propose an increase in the reduction obligation in the autumn budget, with plans for the change to take effect from July 1, 2025. This decision is driven by various domestic political reasons. The government, particularly the Moderate and Liberal parties, has faced criticism over rising emissions. By implementing this measure, they aim to demonstrate their commitment to reducing emissions.

The proposed increase in the reduction obligation represents a significant departure from one of the key campaign promises made by the Tidö parties, especially concerning the voters of the Sweden Democrats and Christian Democrats. Observers note that this shift will pose a challenging task for the government in terms of explaining the abrupt change to voters. The government had previously made a substantial reduction to the obligation at the turn of the year, only to propose a slight increase a few months later.

Despite this, the government hopes to maintain fuel prices by further lowering fuel taxes. However, it is anticipated that the price of diesel may still rise slightly, even with these adjustments.