9. OIL AND BIOFUELS

Supply and demand

Oil consumption is declining

As nuclear power was introduced in the 1970s and 1980s, many households switched from fuel oil to electric heating or district heating, which had a large impact on the overall oil consumption. In recent decades, oil consumption decreased across all sectors, in volume terms most deeply in industry (Figure 9.2). The transport sector declined the least and has become the dominant oil consumer in Sweden. In 2017, transport consumed 58% of the oil supply, of which 97% in road transport.

Industry is the second-largest oil consumer, at 26% of the total in 2017. Over 70% of industrial oil consumption was for non-energy purposes: liquefied petroleum gas (LPG), ethane and naphtha in chemical industries and bitumen in construction. From 2007 to 2017, industrial oil consumption declined by 25%. Most of this decline was in energyrelated oil consumption, which indicates that oil used as an industrial feedstock is harder to replace.

Figure 9.2 Oil consumption by sector, 1973-2017

Oil demand has declined across all sectors over recent decades, but only slowly in the transport sector, which accounts for nearly 60% of the total oil consumption.

*Industry includes non-energy consumption.

**Other energy includes consumption in refineries.

***Commercial includes commercial and public services, agriculture, forestry and fishing. Notes: TPES by consuming sector. Mtoe = million tonnes of oil equivalent.

Source: IEA (2019 forthcoming), World Energy Balances 2019 preliminary edition, www.iea.org/statistics/.

Sweden imports all its crude oil; oil products are net export

Sweden does not produce any crude oil, and imports around 20 million tonnes (Mt) annually to feed its refineries. In 2017, the country imported 19.8 Mt, of which 37% was from the Russian Federation (Russia) and 35% from the North Sea oil production in Norway and Denmark. The rest came from various countries, which include Nigeria and Venezuela (Figure 9.3). Sweden also exports some of its imported crude oil, mostly to the United Kingdom and the Netherlands.

The output of Swedish refineries exceeds domestic demand, and the country is a net exporter of oil products. In 2017, domestic production amounted to 20.1 Mt and net

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9. OIL AND BIOFUELS

exports to 7.4 Mt. The largest export markets were the UK (22% of exports) and the Netherlands (18%) (Figure 9.4).

Related to diesel imports, Sweden, together with Finland, maintains a more stringent environmental fuel quality for diesel, known as Mk1, than the rest of the European Union. Given the heavily dieselised character of these countries, this makes Sweden and Finland a somewhat harder diesel market to access for other European and former Soviet Union actors. The main refiners in the Baltic and north German markets have, however, built capacity to produce and supply Mk1 to Sweden and Finland to compete with domestic refiners.

Figure 9.3 Crude oil imports by country, 1973-2017

Sweden imports all its crude oil, mostly from Russia and the North Sea.

Source: IEA (2019b forthcoming), Oil Information 2019 preliminary edition, www.iea.org/statistics/.

Figure 9.4 Oil product imports and exports by country, 1973-2017

With its large refining capacity, Sweden is a net exporter of oil products (since 1989) and sells to various European markets.

Source: IEA (2019b forthcoming), Oil Information 2019 preliminary edition, www.iea.org/statistics/.

Biofuels have rapidly increased, mostly through imports

Sweden is the leading IEA country for biofuels as a transport fuel. In 2017, liquid biofuels accounted for 17% of the total energy supply in the transport sector. Initially, bioethanol was the most common biofuel, used for low blends in gasoline or as an E85 fuel in special vehicles. In recent years, biodiesel has become the dominant biofuel (Figure 9.5).

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