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Title [SEI] Financing green industrial transitions: a Swedish case study
SEI
Category

The article examines whether financing is a significant obstacle for achieving radical emission reductions in energy-intensive industrial sectors, using Sweden as a case study.



Published on 13 June 2024



 



Key messages





  • Industry and financial actors in Sweden do not consider capital investments or financing availability as major barriers to industrial decarbonization.




  • Non-financial barriers, such as market demand for green industrial products, infrastructure for low-carbon processes, and permitting processes, are seen as more critical.




  • Early implementation of public financing for piloting and demonstrating low-emission processes and national net-zero climate target help explain Sweden’s leadership in industrial decarbonization.




  • Policymakers should focus on supporting innovation and creating the enabling conditions for green industrial products through market demand measures and infrastructure investments.





 



Achieving global climate targets requires massive reductions in greenhouse gas emissions from energy-intensive industrial sectors. The authors investigate whether financing is an important obstacle for radical emission reduction in industry. They study Sweden as a case of a country that is comparatively advanced in its planning for transitions to low-carbon industrial production. They find that the size of capital investments or the availability of financing for these investments is not perceived as a significant obstacle. There are a number of factors explaining this, such as the fact that the companies involved in this study are well-established, large corporates, and hence well placed to finance their transition plans through conventional corporate finance channels, that conditions for market demand are good in the EU, and that many of the firms are in early stages of developing new technologies, when capital need is smaller compared to later stages. The authors also find that many financial actors express a strong appetite for sustainable investments. Finally, they observe that despite financing not being perceived as an obstacle, there is still a large and important role to play for public actors for reducing the risk of investments and accelerating the pace of change going forward.



 



Topics and subtopics



Climate : Finance / Governance : Finance



Tags



just transition , industry



Related centres



SEI Headquarters



Regions



Sweden
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Sources SEI
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