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‘It’s a part of our identity’: How Sweden became a green industry pioneer

When Sweden took over the EU Presidency at the start of this year, the first thing the government did was take the Brussels press corp to the Arctic to show off Sweden's world-leading plans for fossil-free industry. But how did Sweden take a lead in the green transition and what are the lessons for others?

'It's a part of our identity': How Sweden became a green industry pioneer
The Hybrit pilot plant in Luleå. Photo: Adam Sundman/SvD/TT

The scale of the projects planned or under construction in the far north of Sweden puts the region at the absolute forefront of the world’s green industrial transition. 

In 2025, the Hybrit demonstration plant built in Gällivare will start to produce the world’s first hydrogen-reduced sponge iron in industrial quantities. The steel company SSAB will then close its blast furnace in Oxelösund and switch to an electric arc furnace using this iron, making Sweden the first country in the world to produce industrial quantities of coal-free steel. 

By 2050, when mining giant LKAB aims to have converted all its production to hydrogen-reduced sponge iron, the 24.4 million tonnes a year it hopes to deliver will cut the combined emissions of its steel industry customers by between 40 million and 50 million tonnes of carbon emissions a year, equivalent to Sweden’s entire current greenhouse gas emissions. 

It’s not just Hybrit. The startup H2 Green Steel plans to produce five million tonnes of green steel at its new plant in Boden by 2030. Sweden’s cement manufacturer Cementa plans to capture the carbon dioxide released in all of its production by 2030, the Preem refinery in Lysekil is investing heavily in converting to biofuels, and Northvolt is building one of Europe’s first battery gigafactories in Skellefteå. 

So how has Sweden managed to attract so much investment in the green industrial transition? Why are businesses here willing to take such big risks when many of their counterparts elsewhere in the world are still hesitating?  

Steelmaker SSAB site manager Monica Quinteiro holds up a piece of HBI (hot-briquetted iron) outside the HYBRIT pilot facility. Photo: Jonathan Nackstrand/AFP

As so often in Sweden, a lot comes down to the system of government inquiries, which means detailed policy proposals are developed semi-independently of the ruling government, drawing on experts and stakeholders from across society. 

The tradition of cross-party agreements, particularly over energy, has also been important, as have the close relations between unions and business, and then in turn between both of these and the government. 

Finally, Sweden’s system of collective wage bargaining, in which unions automatically capture any productivity gains in higher wages, means that Sweden’s companies are always under pressure to move their products higher up the value chain. 

Arguably, SSAB’s push to lead the world in coal-free steel follows a pattern that in the past has seen it become the global leader in high-strength specialty steels. 

Sweden’s Centre Party then-climate minister, Lena Ek, launched the development of Sweden’s roadmap to net zero at a press conference in 2011, alongside Joe Delbake, head of the EU’s climate directorate. Photo: Leif R Jansson/Scanpix

In Sweden, we have a system’

Mikael Karlsson, associate professor of environmental science at Uppsala University, believes the government inquiry launched by the centre-right Alliance government in April 2014 on how Sweden could reach net zero by 2050 played a decisive early role in the development of Hybrit and Sweden’s other fossil-free industrial investments.  

This in turn followed the Alliance government’s 2010 decision to establish the All Party Committee on Environmental Objectives, a parliamentary committee which brought together representatives of all parties except the far-right Sweden Democrats.  

When the Social Democrats and the Green Party took over the government in 2014, they passed the inquiry over to the committee, which then launched an intensive investigation in the run-up to the Paris climate conference 2015 to decide how ambitious Sweden could reasonably be. 

Karlsson, who was then chair of the Swedish Society of Nature Conservation, was one of many independent experts brought in to brief the committee.  

“This was important, because then the political parties were more resilient towards lobbyists, and all of them had listened to the same expert information and evidence-based proposals,” he remembers. 

SSAB, Sweden’s largest industrial emitter, was initially reluctant to commit to significant early cuts in emissions, Karlsson remembers, with Claes Lundberg, SSAB’s representative to the committee, arguing the hydrogen solution used in Hybrit was not practical. 

“He was critical to the new objectives that were negotiated, to the climate law, even to the climate policy council,” Karlsson says. “We raised the technical opportunities, a few of us, and said, ‘well, you could work on hydrogen and electrification and so on, and they said  ‘no, no, no, it’s impossible’.”

But as soon as the proposals of the committee were voted through the parliament, SSAB’s position changed.  

“It didn’t take long until the steel industry announced Hybrit, and then they said ‘we can do it by 2035’, when the target for net zero emissions was 2045, so it was ten years ahead of the politicians.” 

The Fossil Free Sweden initiative was launched in the run-up to the Paris climate conference in 2015 to coordinate Swedish industry’s push towards zero emissions. Hybrit was announced in April 2016. 

This means that by the time Svante Axelsson, a former General Director for the Swedish Society of Nature Conservation, was appointed Fossil Free Sweden’s National Coordinator in the summer of 2016, SSAB was at the forefront. 

Svante Axelsson, the national coordinator for Fossil Free Sweden, says that by the time he got involved, SSAB was the big emitter pushing hardest for the green transition. Photo: Anders Wiklund/TT

“Steel was the first mover and they set the narrative,” he tells The Local. “Everyone used to say that steel was the most difficult industry [to move to zero emissions], so when steel wanted to be fossil-free first, I was very surprised, and when I talk to the other sectors, I always say, ‘if steel can do it, you can do it’.”

Once SSAB understood it could not delay the move to fossil-free steel by decades, he believes, the company realised it had to invest sooner rather than later.

“They had to decide whether they wanted to invest in the old technology and then wait 20 years for the next opportunity, or whether they were going to try something new,” Axelsson says. “With that perspective, they realised it was impossible to invest in the old technology when they knew that the industry had to become fossil free.”

Other sectors, such as the Preem refinery near Gothenburg, had a similar “window of opportunity” for green investment.

The former Green Party leader Isabella Lövin won went viral when she posted a photograph of herself signing Sweden’s new climate law. The photo of her all-woman team mocked a male-only photo posted by the then US President Donald Trump. Photo: Isabella Lövin/Twitter

Can the Green Party take credit? 

In her book Oceankänslan (The Ocean Feeling), Isabella Lövin, the Green Party’s leader and Deputy Prime Minister between 2016 and 2021, says her party’s policies made an enormous difference. 

She writes that Mårten Görnerup, Hybrit’s first chief executive, told her that three of her party’s reforms had been crucial to getting the ambitious steel project off the ground.

They were: 

  • Sweden’s Climate Law, which seeks to commit all future governments to the country’s environmental targets
  • The Industrial Leap (Industriklivet), which subsidises green industrial projects
  • The 2016 Energy Agreement between the Social Democrat and Green government, the Moderate Party, the Centre Party and the Christian Democrats, which committed Sweden to 100 percent renewable electricity by 2040. 

Görnerup confirms this to The Local, although he says it was more the 2015 Paris Agreement than Sweden’s Climate Law that had provided the necessary certainty. He remembers Lövin literally rushing out onto the street in Luleå when she saw him passing by and dragging him into a café to repeat what he had told her in private to green party activists. 

Others, however, question this timetable, pointing out that by the time The Industrial Leap was brought in in 2018, Hybrit was already well on the way. 

“If we let the Swedish Green Party write the history, then we could say, ‘well we launched this new policy called the Industrial Leap, and then we got steel without coal’,” says Roger Hildingsson, a political scientist at Lund University. “But when the Industrial Leap was launched, this initiative was already on its way.” 

Fossil Free Sweden 

When Fossil Free Sweden was first announced in 2015 in the run-up to the Paris climate conference, it was criticised as being too reliant on voluntary targets from Swedish industrial sectors. 

But after Svante Axelsson was recruited in the Summer of 2016, as each industrial sector agreed on more and more ambitious roadmaps for reducing emissions, these criticisms began to fall away.

“It was really a great success because everyone wanted to produce their roadmaps,” Axelsson remembers. “And I think it was because they could change the discussion and their communication, they could get new, intelligent people into the companies, and they got help to pressure the government to reduce obstacles.” 

In the roadmaps, companies presented wishlists of the laws to be changed and government incentives to be brought in, which would make their projects easier to realise, and the government then began to meet some of their requests.  

“They said ‘we want to do it and we can do it, but only if parliament clears the obstacles”, Axelsson says. “And this flipped the perception. The industry sector was not the problem, it was the parliament. It changed focus over who is the bad guy and who was the good guy.” 

What underpinned all this activity was the Paris Agreement, which was firm enough to convince business leaders that the world economy was going to go fossil free. 

“When we talk with these business leaders and ask them why they are investing in fossil-free technology, they say it’s because of the Paris Agreement,” Axelsson says. “That’s the starting point. Without the agreement, the investments in fossil-free technology would be very risky.”

Industries in Sweden more and more began to see green investments as key to their future profitability and survival.

“In many negotiations, you talk about burden sharing, but we talk about benefit,” Axelsson adds. “The mindset was to show that to go fossil free is a natural way for Sweden to increase the value of our natural resources like mines, steel, and forests.”

Former Swedish Prime Minister Stefan Löfven early on promoted the idea of a “fossil free welfare state”. Here he is digging the first symbolic scoop on the Hybrit pilot project back in 2018. Photo: Gustav Sjöholm/TT

Swedish unions and the ‘fossil-free welfare state’

The backing the green transition has received from the unions and, by extension, the Social Democrat party, sets Sweden apart from many other countries, Axelsson says, arguing that Sweden’s history of relative harmony and cooperation between unions and businesses had made it easier to push ahead with ambitious projects.

“It’s a part of our identity. We have been at the forefront of many different industrial developments, so it was a very natural step to start a green industrial revolution.”

Sweden’s then Prime Minister Stefan Löfven also took a prominent role in the launch of Fossil Free Sweden, which Axelsson believes helped convince business leaders that the idea had strong government backing. 

Workers walk at the site of the Northvolt Ett factory in Skellefteå, north Sweden on February 23, 2022. Photo: Jonathan Nackstrand/AFP
The Northvolt effect 

SSAB may have got the ball rolling with Hybrit, but when the battery startup Northvolt secured a 3.5 billion kronor loan from the European Investment Bank in 2017 to build a battery gigafactory in northern Sweden, it upped the level of ambition. That June, the European car giants Volkswagen and BMW agreed to invest in the project. 

“I don’t think we should underestimate the importance of Northvolt as an inspiration,” Lund University’s Hildingsson argues. 

In 2020, Vargas, the investment company behind Northvolt, announced an, if anything, even more ambitious, plan to build Europe’s first greenfield steel plant in 50 years, the fossil-free H2 Green Steel. 

Other business leaders learned from what Northvolt had done, and in particular from its strategy of financing its project by securing financing in exchange for future production. 

Axelsson is quick to point out that there is such a strong market for green steel, batteries, climate-neutral cement and biofuels, that the government has not needed to provide subsidies. 

“There’s no support needed for fully scaled-up production, because this project was bankable from the beginning,” he said of Hybrit. “The market is there. Companies want to buy 25 percent more expensive steel. We have lots of consumers, be it Audi, Volkswagen, BMW. It’s the same situation for climate-neutral cement or biofuels. The market is there.” 

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Large chunk of Swedish motorway collapses after landslide

A landslide tore apart a stretch of motorway in Sweden on Saturday, injuring three people, police and emergency services said.

Large chunk of Swedish motorway collapses after landslide

Whole sections of a motorway collapsed overnight between Gothenburg in Sweden and Norway’s capital Oslo, police confirmed on Saturday.

The landslide has caused major damage in both north and southbound directions on the E6, near the small Swedish town of Stenungsund.

It ripped up a petrol station car park, overturned lorries and caved in the roof of a Burger King restaurant.

The road is now completely closed in both directions, confirmed Lidia Bradaric, alarm and management operator at the emergency services in Greater Gothenburg on Saturday morning.

An aerial shot of the landslide’s devastation of the E6. Photo: Adam Ihse / TT

Police are investigating whether blasting works at an ongoing construction project nearby may have caused the landslide.

At the time of writing, it is unclear whether there is any connection between construction works and the landslide.

Police have opened a probe into “aggravated public destruction” and will question staff at the building site, but said there was not a definitive link “between the blasting, the work on the site and the collapse”.

A Burger King restaurant is located in the same area and images from the site show that the roof of the restaurant has partially collapsed. Photo: Adam Ihse / TT

A drone image from the site shows that the road has suffered extensive damage in several places in both directions.

The greatest impact appears to have occurred at a petrol station, where a large crack runs across the landscape from one side of the road to the other. Several lorries in the area have been damaged and overturned.

Photo: Adam Ihse / TT

“It is a very large area, approximately 500 metres in diameter, that has been affected,” stated police spokesperson August Brandt.

The worst-hit area covers around 100 metres by 150 metres (330 by 500 feet), but the landslide affected an area of around 700 metres by 200 metres in total, the emergency services said.

 Uladzislau Miklash, a lorry driver, was asleep in his parked vehicle when he felt it start to slide.

“I had no idea what was happening,” he told P4 Vast radio.

The landslide “affected around ten vehicles, a forest area and a commercial area including a petrol station and a fast-food restaurant”, said regional emergency services chief Daniel Lyckelid.

Images on local media showed damaged lorries and a bus that had fallen into a trench.

“Several people were helped out of their vehicles in the area of the landslide with the help of the fire brigade and helicopters,” the emergency services added.

Specially trained search and rescue services and dogs continue to scour the collapsed road.

Swedish emergency services were alerted overnight. Photo: Adam Ihse / TT

Lorries have been damaged and tipped over when crossing the damaged motorway. Photo: Adam Ihse / TT

In total, around ten vehicles have driven into one of the road holes, sources confirmed.

As emergency services said they could not rule out the risk of further landslides, the public are advised to avoid the area.

Police have cordoned off a large part of the motorway due to the potential risk of collapse. Authorities plan to close the section of the E6 motorway for several weeks, while traffic is being diverted via road 650.

Authorities have estimated that the impact on traffic will be “enormous” for a long time to come.