This is the third in our series exploring national hydrogen best practices from other jurisdictions. My colleague David had previously covered Japan and Australia.
Today, we take a look at a country that has been leading the charge on hydrogen in Europe: Sweden.
Sweden’s success at decarbonization
Since the 1970s, Sweden has been implementing energy policies that have reduced its carbon emissions by a factor of three.
The country introduced the world’s first carbon tax in 1991 at a rate of about $110 per tonne of carbon. This tax, along with other energy reform policies, provided the necessary incentives to shift to low-carbon energy sources. As a nation, Sweden was among the first to draw definite connections between fossil fuels and global warming and its emissions have been declining ever since.
More recently, Sweden has announced its intention to be the first fossil fuel-free nation in the world by 2045. To reach this ambitious goal, the country introduced a Climate Act in 2018 and established a Climate Policy Council, which ensure that the government’s policies are in line with the climate goals. As a result, Sweden forged 22 different action plans, several of which contained the use of hydrogen to reach the country's objectives.
Despite a recent spark of sudden interest, hydrogen is not a novelty to Sweden. The country has conducted research programs for hydrogen and fuel cells since the 1960s, with advanced research already well underway in this area.
Strong partnerships between academia and industry have led to the development of new hydrogen products and product concepts.
With a head start in the hydrogen game, Sweden is well positioned to lead globally in this space.
Although its hydrogen strategy will not be released until July 2021, Sweden has already made significant progress with regards to the development and integration of this clean energy technology.
Cleaning up the industrial sector
Worldwide, the steel industry is identified as one of the three biggest producers of carbon emissions.
According to a McKinsey report, the average ton of steel produced globally emits 1.85 tons of carbon dioxide (eight percent of global emissions), which makes it a good candidate for decarbonization. While technologies that would decrease the industry’s carbon footprint currently do exist, the challenge has been finding a solution that is both effective and economically feasible.
In Sweden, companies like HYBRIT are using hydrogen and spearheading the drive to become the first fossil fuel-free producer of steel in the world. Alongside them, Swedish steel producer H2 Green Steel (H2GS) has big plans to open the world’s largest hydrogen green steel plant by 2024.
In a typical production, blast or electric arc furnaces combine iron ore and limestone with purified coal (coke) to create steel. In this pilot project, the coking coal is replaced by hydrogen, thereby eliminating carbon emissions and producing only water as the byproduct. The hydrogen can also be used to power the arc furnaces, delivering a production pathway that is completely carbon free.
Every steel producer in the world, especially in Europe, is considering something similar to bring its emissions down, since the industry is facing three key developments that go beyond the Paris Agreement:
Changing customer requirements and growing demand for carbon-friendly steel products
Tightening of carbon emission regulations
Growing investor and public interest in sustainability.
As Sweden strives towards meeting its own climate goals, the country's ability to succeed in decarbonizing its steel industry is due to unique conditions that make projects like these viable.
Most notably, it has access to cheap and clean electricity (from nuclear and hydro) coupled with a highly specialized and innovative steel industry.
For reasons such as these, it is not surprising that the country is currently on track to develop the world’s first fossil fuel-free steel technology—and trailblazing the way for how the rest of the world might follow suit to decarbonize the rest of the industry.
Sweden’s transportation sector
The EU has taken a firm stance on developing the alternative fuel infrastructure for road vehicles where a pan European network of hydrogen refueling stations (HRS) is expected to be implemented by its member states.
Pursuant to this, the Swedish government has played a key role in ensuring the adoption of hydrogen in its transportation sector. Even without a national strategy, it has funded infrastructure projects, ramped up plans to build more HRSs (130 by 2030), and incentivized consumers by introducing policies that support the purchase of low-emission vehicles.
Some of its climate action policies include the introduction of a bonus-penalty system whereby low emission vehicles get a bonus at the time of purchase and high emitting vehicles get a penalty. This policy also provides hydrogen buses a rebate of up to 20% off the purchase price.
As a result of strategic government actions such as these, Sweden has been successful in the creation of a hydrogen hub within their transportation sector. The municipality of Sandviken not only boasts the largest number of hydrogen cars per capita in the world, but also built the world’s first green (100% fossil fuel-free) hydrogen refuelling station.
Balancing the grid
In the last two years, Sweden has decommissioned half (6 of 12) of its nuclear fleet while increasing the number of large renewable energy projects like wind and solar.
Due to the intermittent nature of wind and solar, Sweden is investigating the role hydrogen can play in balancing the grid when there are fluctuations in demand and supply.
In addition, as the trend for renewables continues to grow in Sweden’s electricity market, hydrogen shows great promise in being the solution for smoothing out volatility in prices and providing energy storage during off-peak hours.
With Europe’s Hydrogen Roadmap targeting an overall energy mix of 14% green hydrogen by 2050, it is clear that Sweden will be leading the way to be a key contributor to that goal.
Written by Susie Ho, former Senior Advisor at the Nuclear Innovation Institute.