Heating & Cooling support

In Sweden, tax exemptions are the main incentives to support renewable heating. The instruments are, in general, technology neutral. 

Sweden does not have a national 2030 target for renewable energy (NECP, 2018). According to the 2016 trajectory, the share of RES-H&C will increase slightly from the current level to 69% of final consumption by 2030 (ibid.).

• Tax exemption for biogas. For biogas or biodiesel that is consumed as fuel for heating, exemption from energy tax is granted at 100 percent and from carbon dioxide tax at 100 percent (Act (1994:1776) on tax on energy, Ch. 6a). Biogas for heating has long been tax-exempt in Sweden. In June 2020, the EU Commission approved continued tax exemption for biogas and biogasol in Sweden for the period 2021–2030. However, this tax exemption was annulled in a judgment of the General Court on 21 December 2022. In October 2024, the European Commission has decided to approve Sweden's tax exemptions for biogas and biodiesel (Press release from the Ministry of Finance the 23rd of October 2024).
• Ordinance (2022:225) on government support for the production of certain biogas. Companies who produce biogas from stable manure and/or produce biogas that is upgraded to biomethane in gas or liquid form can apply for support for biogas production. Responsible authority: Swedish Energy Agency.
• Ordinance (1997:634) on government contribution to investment for reconstruction and connection of electrically heated buildings to district heating. According to this regulation, grants may be available for the conversion and connection of residential apartments and certain residential premises in electrically heated buildings to district heating. Such grants may not cover measures carried out in premises used for commercial or industrial purposes.
• Ordinance (2015:517) on support for local climate investments sets out the rules for support for the production of biofuels and biofuels and support for the use of biofuels for the production of electricity, heating and cooling may only be given if the fuel is covered by a sustainability notice according to the Act (2010:598) on sustainability criteria for biofuels and biofuels. If it is a question of the use of solid or gaseous biofuels for the production of electricity, heating or cooling in a facility other than such a facility referred to in Chapter 1 § 3a of the Act on Sustainability Criteria for Biofuels and Biofuels, support is given even if the fuel is not covered by a sustainability statement according to the same law.
• Tax reductions for households:
  • Ordinance (2023:402) on subsidies for energy efficiency in single-family houses sets rules for subsidies for measures that promote efficient energy use and a reduced power requirement for room heating and domestic hot water heating in electrically or gas-heated single-family houses. The grant is applicable for material costs for the energy efficiency measures on the house’s heating support. In addition, households can also receive a grant for measures on the outer shell of the house.
  • Act 2009:194 sets rules for the tax-deduction for installation of different types of heating systems such as heat pumps, solar heat systems, boilers. The installation of renewable energy devices and the replacement of conventional heating sources with renewable ones may be deducted from tax.
• Energy and carbon dioxide taxes. In Sweden, energy and carbon dioxide taxes are levied on the supply, import and production of fossil fuels for heating purposes. Energy tax must be paid for fuels specified in Ch. 2. §§ 1, 1 a, 3 and 4. Renewable energy sources are exempt from these taxes.
• Nitrous oxide tax. The producers of heat are obliged to pay a tax according to their nitrous oxide emissions. Heat producers using renewable energy sources are exempt from this obligation.

• Energy Authority
• Swedish National Board of Housing, Building and Planning
• Swedish Environmental Protection Agency
• Swedish Tax Authority