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Sweden's legislation on oil security

Part of Oil Security Toolkit

Sweden’s response to oil supply shortages is governed primarily by the provisions of the 2012 Act on Oil Stockpiling (2012:806) (AOS), as well as the accompanying 2012 Ordinance on Oil Stockpiling (2012:873) (OOS). The 1975 Oil Crisis Act (1975:197) (OCA) facilitates Sweden’s compliance with the International Energy Programme (IEP) and the 1978 Rationing Act (1978:268) (RA) provides general powers for the rationing of supplies at times of emergency. The specific terms governing the storage of emergency stocks by the addressees of the Swedish stockholding obligation are spelled out by secondary legislation including inter alia the 2012 Regulation of the Swedish Energy Agency (STEM) concerning Emergency Oil Stocks (2012:7) (RESEA).  


According to article 1(2) of AOS, a severe supply outage exists when there is a sharp and sudden reduction of supply with crude oil or petroleum products with respect to the European Union (EU) or to a European Union Member State irrespective of whether or not such a supply drop is accompanied by an IEA decision to release stocks or to take other measures. Article 7(1) AOS further provides that Sweden’s oil emergency regime can be triggered by a decision of the IEA to release emergency stocks (article 7(1)(1) AOS) or by a determination of the European Commission that there is a serious supply disruption. The provisions of the AOS can also be utilised as a first step in an urgent situation or in response to a local supply crisis (articles 7(1)(3-4) AOS).


According to article 7(1) AOS it is the Swedish Government that determines whether or not the country’s oil supply emergency regime shall be activated.


General

According to article 2(2) AOS, there are in principle two addressees of the Swedish stockholding obligation: first, government authorities who have opted to stock emergency stocks (article 2(2)(2) AOS) and, second, other stakeholders who are obliged by law to stock emergency reserves (article 2(2)(1) AOS, see also article 3 OCA). Such other stakeholders are defined by article 3(1) AOS as importers of crude oil or of oil products (article 3(1)(1) AOS) and as actors who purchased fuels from someone who imported crude oil or oil products and who subsequently sold at least 50 000 cubic meters of fuels in Sweden.

Supervisory Authority

In accordance with OOS (1) STEM is the Supervisory Authority in relation to the provisions of AOS.

Storage Agency

Sweden does not have a central stockholding agency. Instead, the Supervisory Authority supervises the Swedish energy emergency system in accordance with article 8(1) AOS and is inter alia tasked with preparing contingency plans for releasing emergency stocks and for taking demand restraint measures (article 7(2) AOS).

Storage Quantity

According to article 2(1) AOS, Swedish emergency stock levels must correspond at least to the higher amount of either 90 days of average daily net imports or to 61 days of average daily consumption in the previous year. Emergency stocks may consist of crude oil and of petroleum products provided that the amount of crude oil never represents more than two thirds of the emergency stocks (article 2(1) AOS).

Availability of stocks

According to article 5(1) AOS, emergency stocks should always be stored in such a manner so as to ensure that emergency stocks can be distributed to end users and markets within such a time that ensures that the effects of serious supply disruptions can be alleviated.

Storage Locations

AOS does not specify particular storage locations (but note article 15 of RESEA which excludes certain storage locations). However, AOS does specify that addressees of Sweden’s stockholding obligation may, subject to express authorization, be allowed to store up to 30% of their respective emergency stocks abroad (Swedish ordinance on emergency stockholding, 19 §).

Sale of excess stocks

N/A


General

AOS entitles the Swedish Government to implement emergency measures in accordance with decisions of the IEA, the EU Commission or when major or local supply crises exist (article 7 AOS).

Stockdraw

Sale/Tender

According to article 7(1) AOS, the Swedish Government is entitled to authorise the release of emergency stocks in whole or in part to address an ongoing oil supply emergency. Article 5 OCA in turn obliges holders of oil stocks to comply with orders to release such stocks.

Production Surge

N/A

Demand restraint

While Swedish primary legislation does not specify any particular demand restraint measures, article 7(2) AOS stipulates that the Supervisory Authority shall prepare contingency plans that allow for the restriction of oil consumption at times of emergency (see also articles 6-11 RA). Further, article 3 OCA provides for the possibility of ordering holders of oil stocks to abstain from releasing them or to restrict their distribution.  

Fuel Switching

N/A

Relaxations of Road Traffic and Transport Laws

N/A 


The Swedish emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.

Domestic

Reporting duties

According to article 3(5) AOS, addressees of the stockholding obligation must, at the request of the Supervisory Authority, provide all the information that may be required in association with a given addressee’s stockholding obligation (see also article 16 OCA and articles 3-9 RESEA). Additionally, article 6(1) AOS obliges the Supervisory Authority to maintain a register of the country’s emergency stocks and to prepare statistical summaries on a monthly basis (article 6(2) AOS). Article 8(2) AOS oblige addressees of the Swedish stockholding obligation to provide all required information to the Supervisory Authority and to grant the Authority access to all facilities, premises and areas to which the Authority may require access. Article 8(3) AOS also entitles the European Commission to request information and access to relevant sites.

Enforcement

The Swedish police authorities are to assist with the enforcement of the Supervisory Authority’s tasks (article 8(2)(1-2) AOS, see also article 21 OCA). Additionally, entities not complying with their stockholding obligation may have to pay a storage fee (article 8(7) AOS) and/or may have to pay fines for delayed submission of information to the Supervisory Authority that may range from 10 000 SEK to 25 000 SEK.

Alongside these financial penalties, the OCA further specifies that intentional or negligent failure to comply with stockholding obligations, expropriation orders, or notification obligations can lead to imprisonment of up to six months as well as additional fines (article 19 OCA).

Regional

European Union

As a Member State of the European Union, Council Directive 2009/119/EC obliges Sweden to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.

Sweden’s compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).

International

The IEA

As a Member of the International Energy Agency (IEA), Sweden is obliged, pursuant to article 2 IEP, to maintain oil reserves equal to 90 days of net imports of the previous year. Article 1 OCA incorporates these obligations based on the IEP into Swedish law. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP.