Swedish Prime Minister G鰎an Persson is to head a working group studying a proposed phase-out of fossil fuels in the country by 2020, Dagens Nyheter newspaper reports. 2020 is already Sweden's target date for achieving full environmental sustainability (ED 22/09/97).

The project will involve forging a consensus among regional authorities, agriculture and industry, Mr Persson told a press conference on Tuesday. "The commission will take the initiative... and perhaps carry out pilot projects", he added.

Mr Persson's announcement follows a recent proposal by Social Democratic MPs to the Nordic Council of Ministers calling for the creation of a regional common market in alternatives to fossil fuels, possibly modelled on the existing Nord Pool electricity exchange.

Swedish MP Sinikka Bohlin, a member of the Nordic Council environment committee, said in a statement: "We have to try and convert our whole production apparatus and... remove barriers to cross-border freedom of movement when building and extending power plants and distributing alternative fuels."

Fossil fuels currently account for about 35% of Sweden's energy supply, making Sweden, with Iceland, one of only two OECD countries deriving less than 50% of their total energy from this source. In 1970, oil accounted for 98% of the energy used in the Swedish district heating systems; today, it accounts for only 8% in district heating and 30% of the total energy supply.