Short- and long-term impacts of the energy crisis in Sweden

The briefing finds that low to middle income groups in Sweden were most affected by the 2022 energy price crisis, with an average welfare impact of -3.8%. It highlights that sparsely populated areas suffered greater impacts than densely populated ones. The analysis suggests that direct compensation targeting income deciles 1 to 5, specifically deciles 3 to 5, would be more effective than fuel tax reductions, which primarily benefited high-income groups and risked undermining long-term climate goals.

• Low to middle income groups in Sweden experienced the most significant negative welfare impacts from energy price increases, with an average impact of -3.8% across all groups; specifically, income deciles 3, 4, 5, and 7 saw impacts exceeding -4%.
• Geographic location significantly influenced welfare impacts, with sparsely populated areas experiencing an average impact of -4.3% compared to -2.6% in densely populated areas.
• Electricity costs represent a higher share of total expenditure for low to middle income groups (deciles 1 to 5), particularly in sparsely populated regions where there is a 2.2% spending difference compared to urban areas.
• Fuel tax reductions in 2022 were largely ineffective at supporting the most vulnerable, as they primarily benefited the wealthiest 20% of households and only 62% of the tax reduction was passed to consumers.
• Direct compensation targeting households below the poverty line (Scenario 2) almost eliminates negative welfare impacts for the first income decile, but fails to provide significant support to the most affected middle-income groups (deciles 3 to 5).
• Short-term energy price alleviation measures, such as pausing the greenhouse gas reduction mandate for transport fuels, conflict with Sweden's goals to achieve net-zero emissions by 2045 and its 2030 climate targets.

APA

Xylia, M., & Suljada, T. (2023). Short- and long-term impacts of the energy crisis in Sweden. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf

Chicago

Xylia, Maria, and Timothy Suljada. Short- and long-term impacts of the energy crisis in Sweden. Stockholm Environment Institute, 2023. https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf.

Wikipedia

{{cite report |last1=Xylia |first1=Maria |last2=Suljada |first2=Timothy |title=Short- and long-term impacts of the energy crisis in Sweden |publisher=Stockholm Environment Institute |date=April 2023 |url=https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{xylia2023short, author = {Xylia, Maria and Suljada, Timothy}, title = {{Short- and long-term impacts of the energy crisis in Sweden}}, institution = {Stockholm Environment Institute}, year = {2023}, month = apr, url = {https://www.sei.org/wp-content/uploads/2023/04/energy-crisis-sweden-sei2023.026-corrected.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }