The Determinants of Sulfur Emissions from Oil Consumption in Swedish Manufacturing Industry, 1976-1995

Using a structural decomposition analysis, we analyze the causes of reduction in emitted sulfur originating from the manufacturing industry in Sweden during 1976-1995. We also analyze how policy instruments work with respect to sulfur emissions. We conclude that the sulfur tax has been important for reducing sulfur emissions. It affects energy prices, and hence substitution from heavy fuel oil (HFO) to light fuel oil (LFO), as well as substitution from oil to other energy sources. The sulfur tax also addresses sulfur emissions through a reduction of sulfur content of oil directly