Far more likely is that you need a new mass air flow (MAF) sensor. Basically, that code means that the engine management computer is having to overcompensate for a rich or lean condition at idle or part throttle. The computer gets its signal from one of the oxygen sensors, but I've seen a tendency among Volvo owners on this board and on Swedespeed that this code requires a new MAF sensor. That's what mine needed, even after the dealer replaced an O2 sensor under warranty.

You can throw money at an O2 sensor if you want, but I think you're ultimately looking at an expensive new MAF sensor.

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Jim Rothe, '99 S70 T5M,
http://www.jimrothe.com/volvo/index.html