Published 2021-11-02This post is also available in Swedish
How to accelerate Sweden’s climate transition
Sweden’s climate transition has started speeding up, but financial incentives and stronger policies are needed to accelerate investment in technology. On 29 October, Mistra and the Mistra Carbon Exit research programme held a webinar called Klimatet i fokus – hur accelererar vi den svenska omställningen? [Climate in focus – how can we accelerate the Swedish transition?]. A recording of it is available here.
The climate transition is a central issue in Mistra Carbon Exit, which is investigating the technical, economic and political challenges on the road to Sweden’s goal of zero greenhouse gas emissions by 2045. Programme Director Lars Zetterberg says that many positive things are happening, including dramatically decreasing costs for solar and wind power and how the proportion of electric vehicles is increasing faster than was predicted. Post-fossil companies are advancing, and he sees the partnerships being built within supply chains as a success factor. However, more must be done to speed up the transition. Lars Zetterberg is looking to the EU, where the cost of emitting carbon in the emissions trading system has increased significantly in the last four years, from staying level at five euros for six years to the increase significantly to more than 60 euros in October 2021.
“This is very positive, because it contributes to squeezing out coal power from Europe, but unfortunately it’s not enough. If we are to achieve transformative changes, such as in how we produce steel and cement, the price must be even higher – which means this instrument needs improving, as do others. In Sweden, emissions must decline by several percentage points every year if we are to achieve our goal for 2030,” says Lars Zetterberg.
He also states that we can no longer be satisfied with just harvesting the low hanging fruit – we must pick them all. If new technologies are to be in place by 2045, decisions must be taken now.
Marginal price increases for carbon-free end products
Filip Johnsson is Deputy Programme Director for Mistra Carbon Exit and Programme Director for Mistra Electrification. He highlights the importance of looking at supply chains when examining the cost effects of carbon-free base materials, not least to see how much more expensive the final products are. Calculations for a building that uses carbon-free cement and a car manufactured in carbon-free steel show that the final product is just 0.5 per cent more expensive, without even including other measures, such as a lighter construction. The value chain perspective is emphasised by Filip Johnsson as key to moving towards industry that is free of carbon emissions.
“The instruments mentioned by Lars, particularly the EU ETS, as well as a carbon tax, are really important. We must ensure they are improved, but we also need to understand the level of the price increase for the final product. This makes the value chain perspective incredibly important, finding new constellations and cooperation so we can reset. If there is increased pressure from the consumers at the end of the value chain, this will spread up the chain,” says Filip Johnsson.
The transition also involves achieving effective electrification, one of the biggest measures in reducing emissions. There is great potential for new technologies here, and for linking sectors together, known as sector coupling.
Northern Sweden is the model for the transition
H2 Green Steel is one of the new companies putting carbon-free technology in production in Boden, Norrbotten. Chief Sustainability Officer Lars Lundström says that the Hybrit initiative for fossil-free steel production, as well the Northvolt battery plant, are sources of inspiration for producing carbon-neutral steel using a hydrogen-based process. Large-scale production is planned for 2024 and collaboration with other companies, politicians and customers is vital.
“We need to work with politicians, locally and regionally, and we do so extensively. In Norrbotten, and in Boden, the issues are largely housing and permit assessments. At the EU level we like tough climate targets, we like a high price on carbon emissions and preferably no free emission allowances. At a global level we see that it’s incredibly important to set tough climate goals based on research,” says Lars Lundström.
He also sees the importance of everyone helping to drive green demand. In the end, consumers must be prepared to pay a little more, at least during a bridging period.
One of the municipalities that is a model for the transition now occurring in northern Sweden is Skellefteå. Northvolt – which aims to produce batteries for a million cars – has established here, bringing 3,000–4,000 direct jobs and about three times as many indirect jobs, in a town that currently has about 70,000 inhabitants, according to Municipal Director Kristina Sundin Jonsson.
“This is an extraordinary societal transformation. Transformation of this speed hasn’t happened before in Sweden, and means that 100,000 new people will come to Västerbotten and Norrbotten. This requires cooperation at every level, national, regional and local.”
Kristina Sundin Jonsson says this is a huge challenge, and a change that is affecting the entire community.
“The number of residents will increase by about 20 per cent – what effect will this have on the construction of homes, on infrastructure, public transport and social sustainability?
“The state can and must be a type of facilitator”
Ola Alterå, Chief Executive of the Swedish Climate Policy Council, sees acceleration as the word of the autumn, with economic acceleration out of the pandemic and acceleration in the climate transition. From a political perspective, the EU has rolled out its biggest ever reform and in the US, across the Atlantic, climate investments are taking shape. He believes that circumstances ahead of COP26 in Glasgow are better than they have been for previous climate meetings. The technology exists, renewable power is cheaper than fossil power and there is strong public support, support which Ola Alterå believes that politicians sometimes underestimate.
“Business also sees climate neutrality as a long-term competitive advantage and, globally, increasing numbers of countries are introducing climate legislation and forming climate policy councils like we have in Sweden. There is an entirely different power in the transition now compared to a decade ago,” he states.
“It seems paradoxical that Swedish emissions have levelled off, when we know that we need to accelerate – and we have set higher targets. The reduction has not been anything like as great as it needs to be,” says Ola Alterå.
He believes that the simple explanation is that we have come a long way in some areas, such as power and heat production, perhaps the low hanging fruit, as Lars Zetterberg put it. Now there are other areas in which things ned to start happening, and we are at that tipping point. Ola Alterå highlights Mistra Carbon Exit’s perspective on value chains and the Mistra REES research programme’s work on the circular economy; not only thinking about inflows, but also the smarter use of energy and resources, more efficiently and in a circular manner.
Ola Alterå also believes we must see the entire value chain in politics – better coordination and collaboration between state agencies and local, regional and national contexts.
“The state can and must be a type of facilitator, linking together all these collaborations you are talking about. And I believe this is an increasingly important role for the state and for governments in our complex global economy, which we must reset.
“Carbon-free travel plans are perhaps the clearest example of this in Sweden. The state has to be active here and lead the way, and there is no guarantee that governments and agencies and other public bodies are set up for this,” says Ola Alterå. “In general, there is expertise in writing laws and ordinances, but now they need to take a greater role in facilitating the transition. Now they are out of the starting blocks, politicians must keep up, be fast and provide the right conditions for driving the climate transition.”