A fossil fuel free Sweden is within reach

Different business sectors in Sweden are drawing up their own roadmaps to become fossil fuel free to increase their competitiveness. But if the world is to stand a chance of averting runaway climate change, more businesses must start to see the transition as an opportunity instead of an obstacle and policy must pave the way, argues Svante Axelsson, national coordinator of Fossil Free Sweden. By Svante Axelsson, national coordinator of Fossil Free Sweden | July 12, 2021

When companies wake up to dangers of being the last to leave the fossil fuel economy and instead see the competitive advantages of a quick transition, they will become accelerators for change.

This ambition loop is beginning to unfold in Sweden, where 22 business sectors are following roadmaps that will see them forge and influence pathways to a fossil fuel free and competitive near-term future.

Together these sectors account for over 70% of Sweden’s territorial emissions and among them are those usually said to have hard-to-abate emissions, for example steel, cement and aviation.

The process was initiated by Fossil Free Sweden, an initiative that was set up in 2015 by the Swedish Government as way to bring together – and listen to – non state actors that wanted to help the climate crisis.

The roadmaps have brought companies in these industries together around their common challenges and given them the opportunity to independently come up with a way of determining how they will contribute to reaching the national climate target of net zero by 2045.

Hard to abate

For the steel industry, this is primarily a matter of replacing the more than 1000 years old blast furnace process in which carbon and coke are used to remove oxygen from iron ore.

To overcome this, a joint company called HYBRIT, steel manufacturer, SSAB, mining company, LKAB, and energy company Vattenfall, are developing a technology that uses green hydrogen for direct reduction, with a residue of water and not CO2. Their target is to have fossil fuel free steel on the market by 2026 and in full production by 2030.

For the cement industry, whose work naturally affects the concrete industry, as well as construction and civil engineering, the solution is to use technology for carbon capture and storage (CCS). Cementa, which is part of the HeidelbergCement Group, plans to use CCS across its entire plant in Slite, which might just make it the first carbon neutral cement plant in the world.

The aviation industry, meanwhile, has set itself a target for all domestic air services to be fossil fuel free by 2030 and has stipulated that all flights starting from Sweden will achieve the same by 2045. The automotive industry is aiming for 80% of new sales of private cars and 50% of all heavy trucks to be electric by 2030.

Challenges

But the roadmaps also identify what challenges each industry is facing and what is required politically to overcome these. The solution for many industries is, as in the case of transport, to electrify, and politicians must therefore ensure that fossil fuel free electricity is readily available.

This will involve the rapid expansion of electricity grids. But it also involves unleashing major short-term investment to ensure fossil fuel free competitiveness in the long term. Government has an important role here in risk reduction so that green investments are able to attract private capital.

Moreover, central government and other public actors are instrumental in helping create green value chains through the requirements they specify in public procurements. Several industries in both transport and construction point out that technology to radically reduce emissions is available, but for industry to be able to make the necessary investments in it, in a competitive market, buyers must specify clear climate requirements.

Even though major investments are required and production costs can rise, research shows that this does not need to mean particularly large price differences for the end consumer. The cost of producing steel in a fossil fuel free process, for example, is estimated to increase by 25%, but for the end consumer – of, for instance, a private car – the price increase is less than half of 1%.

Similarly, the production of cement using CCS technology can increase costs by up to 70%, but here, too, the cost increase for someone buying an apartment in a building constructed using carbon neutral cement turns out to be less than 1%.

Ambition loop

The roadmaps have contributed to a new type of dialogue between politics and business in which companies are increasingly asking for more ambitious and clearer climate policy in order to enable them to transition more competitively.

One clear example is how Håkan Samuelsson, CEO of Volvo Cars, last year stated that he wanted to see a ban on petrol and diesel cars in order to speed up the company’s transition to electric vehicles only. This is a step that the Swedish Government is yet to take.

Taken together, the roadmaps join up to show a jigsaw puzzle of how to transition to a fossil-fuel free Sweden. They show the challenges to be faced in piecing together the puzzle and they show what the synergies are and what areas could be developed both to accelerate progress and to create new industry and export branches.

The specific vision of creating a fossil fuel free welfare nation is at the centre of Sweden’s climate strategy. A transition that does not secure people’s quality of life and ability to support themselves will both meet great resistance and serve as a bad example for other countries looking on.

Sweden accounts for only 0.1% of total greenhouse gas emissions, but by leading the way the country can both develop technological solutions that other countries can benefit from to reduce their emissions and, at the same time, show how climate action, wellbeing and competitiveness are interconnected.

The Swedish goal of being the first fossil-free welfare nation in the world should, of course, not be interpreted as a signal of competition amongst nations. Instead, it should be seen as a clarion call for other countries to join the race. And the more that get involved, with same aim, the faster the Race to Zero will be.