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Sweden axes ethanol tax during Lula visit

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09:01 CEST+02:00
Sweden agreed on Tuesday to abolish a tax on ethanol, which it currently purchases from Brazil, under a biofuels accord signed during a visit of Brazilian President Luiz Inacio Lula da Silva to Stockholm, officials said.

"We have signed an agreement regarding science and cooperation concerning bioenergy," Swedish Prime Minister Fredrik Reinfeldt told a press conference.

"We intend to abolish this special tax that was introduced on January 1, 2006 in Sweden.

"We want to take away this tax as fast as possible," he added, with the move expected to take effect on January 1, 2009.

Ethanol, made from sugar cane, is one of the most efficient sources of biofuel, and is also a market where Brazil hopes to expand its reach.

Lula, who arrived here Tuesday on a two-day state visit, said: "I'm very happy to be backed by Sweden. The relations between Sweden and Brazil are extraordinarily good.

"There are 200 Swedish companies in Brazil, but it's not only because of the number of jobs that are generated by Swedish companies but also because of the political thinking, the way we (have worked) together for so many years."

Lula said that in the face of climate change, "we can no longer keep blaming someone else for being responsible" for threats to the planet.

"If each party takes ... responsibililty to do things right, then we have a chance to save our planet."

Lula was to take part in a seminar on biofuels on Wednesday before leaving for Denmark. He will then visit Oslo on Friday and will arrive in Madrid on September 17.

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