“Our alternatives to new aviation tax”

In Dagens Industri today Christian Clemens, BRA, Rickard Gustafson, SAS and Bjørn Kjos, Norwegian, address the government’s plans for an aviation tax stating there are more effective ways of tackling emissions than through the “symbolic” tax and present “joint targets for how Sweden can lead the way for more sustainable aviation by 2030”.

The Swedish aviation industry has a joint ambition to halve fossil carbon dioxide emissions from domestic flights by 2030, from 2005 through more effective aircraft and a higher proportion of bio-fuels.

The entire aviation industry, they write, is working to create a market for large-scale bio-fuel production. Investing in more fuel-efficient planes is significantly more effective than bringing in an aviation tax. They believe the proposed tax would reduce accessibility and potential for growth. Under the first year alone it is estimated the aviation tax would mean 7,000 fewer jobs and GDP loss of almost SKr 4 billion. In the best case scenario the tax would bring emissions down by 0.2%. Sweden needs aviation not least to achieve the government’s goal for regional growth.

M: companies being driven out the country

After Nordea’s threat to move its head office out of Sweden the Moderates have attacked the government. Ulf Kristersson, the party’s economic spokesperson, says, “We are driving companies out of the country with the policy the government is threatening to bring in.” He says Sweden needs more head offices, not fewer.

Nevertheless Finance Minister Magdalena Andersson is not fazed by Nordea’s threat. “If they place their head office in another country then it lowers the risk for Swedish taxpayers in the case of a crash,” she says. She points out that the banking sector is healthy, has high profits and the fees have not created any problems. She also emphasises that Nordea made billions of kronor in profits last year.

The proposal is now out for consultation.

EU should not control Swedish forestry

“It is unacceptable that Sweden is entering these negotiations without a clear stance,” write Helena Jonsson, chair of the Federation of Swedish Farmers, LRF, and Sven Erik Hammar, chair of the Federation of Swedish Family Forest Owners in Dagens Industri today of the EU’s negotiations on climate and land use, LULUCF.

Swedish forests absorb 50 million tones of carbon dioxide equivalents, which can be compared to Sweden’s total emissions of 60 million tonnes. Forestry means we can benefit from timber products where if fossil-based products were used instead current CO2 emissions would double.

If the EU Commission has the last word on forest reference levels (annual net absorption of carbon dioxide in the forest) then if felling crosses this reference level the forest will be considered to have net emissions, despite that there is in actual fact net absorption of CO2. They ask the government whether it wants the EU to control Swedish forestry and demand politicians show leadership. The EU directive is a threat to the climate benefits of Swedish forestry.

State giant raises alarm

The state owned airport company Swedavia has warned against the proposal to introduce an aviation tax, stressing the negative impact it will have. The company, which owns and runs ten airports including Arlanda and Landvetter, believes the proposal should not be implemented.

CEO Jonas Abrahamsson says, “The tax is being motivated by climate reasons however the state investigation shows that it leads to very limited climate benefits and that the total carbon dioxide emissions could in fact increase.” At the same time the tax would have very serious consequences for Sweden’s competitiveness.

Abrahamsson says the airlines have been clear that they may be forced to close existing routes and it would be harder to attract international airlines to establish new routes.

At the same time Swedavia’s airports broke passenger volume records last year after an increase of 5% to 39.5 million.

Trade Federation critical

Speaking at a conference for online retailers on Thursday, Swedish Trade Federation (Svensk Handel) CEO Karin Johansson criticised both the Riksbank and the National Institute of Economic Research for bemoaning the fact that the retail trade is not helping push up inflation.

Johansson said that retailers are unable to raise prices, and have seen margins squeezed by online price comparison sites and frequent campaigns. She warned that the Riksbank’s negative interest rates were costing companies dearly, as import prices rise, and that many retailers will be forced to close their shops.

“Price pressure is here to stay and forecasters haven’t understood this,” she said

Olofsson refused request

In October 2008 the Swedish National Audit Office (Riksrevisionen) asked that it be allowed to examine the merger of the Danish and Swedish postal services but Maud Olofsson, the then enterprise minister, turned down the request saying that neither the Danish nor Swedish governments had a controlling interest in the new company, PostNord.

PostNord has been in the red since 2012 and Mikael Damberg, the current enterprise minister, has repeatedly expressed his concerns about the state of the company (ed.), saying that he has inherited “a marriage” from Maud Olofsson. According to Dagens Nyheter, he would like to see the Danish business – which is the part that is responsible for the multi-billion kronor losses – hived off.

A group of financial and legal experts is currently considering whether it is possible to separate the two businesses. Their report will be presented at the end of March, but in the meantime PostNord has triggered a political storm in Denmark with the opposition accusing the government of trying to cover up just how deep the crisis is.

Record investment in battery plant

Peter Carlsson, who managed Tesla’s supply chain before returning to Sweden, officially launched the Northvolt project on Tuesday to raise SKr 40 billion to build Europe’s biggest battery plant in Sweden. The target is cell production equivalent to 32 gigawatt hours.

In an initial phase state-owned Vattenfall, Stena, the EU, the Swedish Energy Agency and Vinnova are investing a minimum of SKr 120 million in the project.

Carlsson expects a surge in demand for batteries as automakers switch to electric vehicles. “If 10% of the European car fleet is electric by 2025, Europe will need at least three similar large-scale factories just for this,” he says.

Northvolt has yet to identify a site for the project, but the plant could eventually employ up to 3,000.

Granryd irritated

European mobile operators are used to weak sales growth and European Commission opposition to consolidation but Mats Granryd, the former CEO of Tele2, and currently head of GSMA, a trade body that represents the interests of mobile operators, is irritated. With upwards of 80 operators in Europe, consolidation should be permitted, he says.

“It is not right that there has to be four operators on every small sub-market in Europe when there are four operators in the United States, which is a gigantic market. Generally speaking, the EU has adopted a consumer-friendly stance and the US a corporate-friendly stance,” he tells Dagens Industri.

Trade ministers concerned over US trade policy

EU trade ministers gathered in Malta on Friday to discuss the protectionist trend the United States seems to be adopting. The latest news is that the US administration has vowed to prioritize its trade rules over World Trade Organization rules and threatened to withdraw from the WTO dispute settlement system.

Talking to the newspaper Dagens Nyheter, Swedish minister Ann Linde says the EU must take action, if the US chooses to ignore the rules. Despite the risks, countermeasures may be necessary, she says.

Ann Linde expects a reaction from other countries as well, including China. This could result in a trade war, but the minister’s hope is that it will be possible to have a discussion with Washington.

Constructive meeting with Malta

Sweden and Malta are to work together on the criminal investigation into Falcon Funds, the pension company suspected of having defrauded billions from Swedish pension savers.

On Wednesday, prosecutor Arne Fors was in The Hague to discuss the criminal investigation with representatives from Malta. Over a billion kronor of pension savings is still missing since the Swedish Pensions Agency reported the fund company Falcon Funds in October.

Arne Fors called it a “constructive meeting” and investigators in Sweden and Malta have a fairly similar view of events in the Malta-registered pension company and which individuals are suspected, according to the prosecutor.

However the Swedish Economic Crime Authority is still waiting for important account statements from Malta that are needed to be able to trace the missing funds.