The Swedish government agreed today on a new long-term energy policy, which includes cutting greenhouse gas (GHG) emissions by 40pc by 2020.

The target involves a 20mn t/yr CO2e reduction compared with 1990 levels and applies to the non-trade sector. A third of the reductions will take place through investment in other EU countries or be achieved through flexible mechanisms such as the clean development mechanism (CDM). The remaining reductions will take place in Sweden.

The government will propose a number of initiatives to ensure that the targets are met, including a higher carbon tax, and increased fuel and other energy taxes.