Policy priorities for mobilizing investment in Swedish green industrial transitions
A new report by Stockholm Sustainable Finance Centre at SEI, IVL and RISE investigates the key challenges for investments in technological and production changes that bring deep emissions cuts in heavy industry in Sweden. According to the study, what the industry demands is policy focus on issues related to creating market demand and ensuring that the necessary infrastructure is in place.
The report concentrates on the heavy industries that account for the largest share of greenhouse gas emissions: iron and steel, cement, refining and chemicals. The authors also include the pulp and paper industry given that it is a large industrial point source of biogenic carbon dioxide emissions and has the potential to contribute to meeting the national net-zero target with so-called “negative emissions”.
“We found that access to financing is not a significant obstacle to the green transformation of Swedish heavy industry. What the industry demands are a long-term time perspective and policy focus on issues related to creating market demand and ensuring that the necessary infrastructure is in place“, says author Kersti Karltorp at IVL.
The study focused on technological alternatives that can lead to radical reductions of direct emissions. This means that incremental energy efficiency measures and reduced demand, although important, are not considered. The results are based on interviews with representatives from key industrial firms and financial firms and institutions.
Results and recommendations
Some of the authors´ recommendations are:
- Policymakers should focus on market formation efforts. Particularly important are efforts at the European Union level to ensure that carbon price signals are high enough to create business cases for green industrial products and that efforts to prevent carbon leakage maintain fair competition.
- Both investors and policymakers should continue to push for companies to deliver transparency and target setting with respect to their scope 3 emissions. Working with value chains to create demand for green industrial products is crucial for accelerating the pace of transitions.
- The Swedish government should pay attention to how public support for industrial transitions may impact fair competition. As many countries strive to stimulate deep green industrial transitions, several industry respondents stressed that national direct support should be formed so that it does not undermine fair competition.
- As industrial transitions can evolve over decades, it is crucial that policymakers can deliver a stable and predictable framework that is credible over mandate periods.
The research project that has led to this report has been financed by Skandia.
For more information, please contact:
Kersti Karltorp, email@example.com, tel. +46 (0)10-788 67 78