Court backs refinery expansion in challenge to Sweden's emissions aims

STOCKHOLM (Reuters) - A 15 billion crown ($1.6 billion) expansion of Sweden's biggest oil refinery, can go ahead, a court ruled on Monday, potentially creating the country's biggest polluter and running counter to the government's promise to cut emissions.

The expansion of Preem's Lysekil refinery would see its carbon dioxide emissions increase by 1 million tonnes to 2.7 million tonnes per year, making it Sweden's biggest emitter of greenhouse gases.

The court said it had no means to stop the expansion of the plant, planned for a decade, as it adhered to European Union rules.

"The so-called stop rule in the Environmental Code cannot be applied to operations that are part of the EU greenhouse gas emissions trading system," the court said.

The ruling kicks the issue into the hands of the government, a minority coalition of the Social Democrats and Greens, which has promised both more jobs and to lower greenhouse gas emission.

Deputy Prime Minister Isabella Lovin of the Green Party said in a statement the government would now look at whether to permit the expansion, but gave no date for a decision.

Preem has said the extra capacity at the plant, on Sweden's west coast, would be used to make biodiesel and would not mean more crude oil being processed at the plant.

(Reporting by Johan Ahlander; editing by Simon Johnson and Jason Neely)

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