Switzerland energy: Exemplary in essence
Switzerland's aim of ensuring that all petrol consumed contains at least 5%
bio-ethanol by 2010 would seem to be overly optimistic given the undeveloped
nature of the Swiss ethanol market. Even with the construction of the country's
first bio-ethanol plant in 2008 and various tax incentives, achieving this aim
can only be achieved with considerable ongoing government support.
Recent indications from Switzerland are that essEnce5, a bio-fuel mixture of
bio-ethanol (5%) and petrol (95%) should be on the market by the beginning of
next year with the eventual aim of its replacing all petrol by 2010. While this
renewed focus on bio-fuels is a positive step for Switzerland, which has
traditionally lagged far behind other countries in bio-fuels production, it is
questionable whether such an ambitious target can be achieved in such a short
time frame.
Various practical efforts towards the goal are currently
being made. Alcosuisse, a division of the Swiss Alcohol Board, is currently
developing Switzerland's first bio-ethanol production plant, which is scheduled
to become operational by 2008. When fully operational, the plant will produce
around 45 million liters of output annually.
Further to this, the Swiss
government, which is heavily advocating the wider use of cleaner fuels, has
decided not to tax the bio-ethanol produced in the Alcosuisse project in an
attempt to drive the wider use of bio-fuels.
The price of the new
gasoline is expected to be similar to current petrol prices, or at most slightly
higher, and is unlikely to have a negative impact on
performance.
According to the Swedish Petroleum Institute Swedish
consumers were able to buy bio-fuel for the first time in 1986 and today it
stands for 88% of the total Swedish gasoline sales. The Swedish example
illustrates how tax exemptions can encourage the spread of more environmentally
friendly fuels. However, given that it has taken since 1986 for a similar
product to reach an 88% penetration in Sweden, the Swiss hopes of 100%
penetration in a five year period seem excessively optimistic.
The
likelihood of Switzerland achieving its 100% goal is dependent on continued
government support, particularly through tax incentives. The taxation of mineral
oils is currently under revision by the Swiss government, and favorable tax
treatment in the revised law will be a key element, though by no means a
guarantee, in ensuring the successful deployment of
essEnce5.
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