the inexperienced lure of Sweden’s industrial far north By Reuters

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© Reuters. FILE PHOTO: A view of the Swedish Baltic port of Lulea November 14, 2012. REUTERS / Alister Doyle /

By Simon Johnson

STOCKHOLM (Reuters) – Hydro and wind power in the far north of Sweden has long been home to polluting industries and will reduce the country’s carbon footprint as it attracts low-carbon manufacturers and creates thousands of jobs for those ready for the dark and brave the cold.

Known internationally for reindeer and spectacular views of the Northern Lights, the region also has a surplus of cheap, renewable electricity that is needed by energy-intensive industries under pressure from shareholders and regulators to curb global warming.

The planned investments, including the production of fossil-free steel and electric vehicle (EV) batteries, will exceed 1,000 billion crowns (US $ 120 billion) over the next decade, estimates Treasury Secretary Magdalena Andersson.

“The job creation through the green transformation will not happen in the future, but now in Sweden,” she said in a presentation in May.

Electric vehicles are an important part of the European Union’s roadmap to achieve net zero emissions by 2050.

The bloc aims to have at least 30 million zero-emission vehicles on its roads by 2030 as it addresses a quarter of the EU’s greenhouse gas emissions from the transport sector.

The need for industry to meet legally binding EU environmental standards made Sweden’s far north and its green energy an obvious choice for battery maker Northvolt, which is partially owned by auto giant Volkswagen (DE :).

It is initially investing around 4 billion euros (4.88 billion US dollars) in a gigafactory in Skelleftea, around 800 kilometers north of the capital Stockholm, in order to produce batteries with 40 gigawatt hours of energy storage by 2024 – enough to supply 700,000-800,000 in between Electric vehicles.

“Access to the hydropower infrastructure … in Skelleftea was really important,” said Northvolt boss Peter Carlsson, quoting the local electricity costs as around a third of those in Germany and a fifth of those in China.

The jobs created are an opportunity for the relatively small local population and also attract newcomers.

“Of course I wish it was a little warmer,” said Christopher Gorelczenko, Senior Director of Commissioning at Northvolt, a US citizen who arrived late last year to set up the Gigafactory.

CHEAP AND CLEAN

Sweden invested heavily in hydropower in the 1950s, 60s and 70s to contain the costs of its industry and to be globally competitive. Many of the power plants are in the far north.

Over the past decade the focus has been on wind power, which provides around 20% of Sweden’s electricity.

Carlsson, a former senior executive at Elon Musks Tesla (NASDAQ 🙂 Inc., estimated that the total carbon footprint of Northvolt batteries would be about a quarter that of a comparable power supply made in China.

For Hybrit, a joint venture of the ore mine LKAB, the state energy company Vattenfall and the steel manufacturer SSAB, which wants to produce fossil-free steel in Gallivare above the Arctic Circle, cheap renewable energies were a big draw.

Rival H2 Green Steel plans to produce five million tons of fossil-free steel by 2030 in Boden, south of the Arctic and not far from Lulea, where Hybrit owns a small pilot plant for fossil-free steel.

Facebook’s first data center to run entirely on renewable energy (NASDAQ 🙂 is located in Lulea, where it has invested more than 8.7 billion crowns.

SHAPE OF THINGS THAT ARE TO COME

“I think it is a small window into the future of what industrial development will look like in other countries as well,” said Mikael Nordlander, head of the R&D portfolio of the state energy company Vattenfall, Industry Decarbonisation.

The district of Norrbotten – which also includes Lulea – and where the giant mines Kiruna and Aitik of LKAB and Boliden are located – accounted for around 11% of Sweden’s total greenhouse gas emissions in 2016, the local authority said.

“It used to be industry that affected our climate work,” said Carina Sammeli, Mayor of Lulea, a city with around 80,000 inhabitants. “But now it’s industry that is driving change.”

Sweden emitted 4.26 tons of carbon dioxide per capita in 2017, compared to a global average of 4.8 tons per person, according to the website Our World In Data. Fossil-free steel production alone could cut Sweden’s emissions by around 10%, says Hybrit.

The boom has created thousands of jobs, both directly and indirectly.

“If you are looking for a job, it may be time to move north,” said Minister of Labor Eva Nordmark in April.

Unemployment in Norbotten and Vasterbotten – the geographically upper third of Sweden – was the lowest in the country in 2020 at 6.7% and 6.4% respectively, compared to a national average of 8.5%, said the Swedish Public Employment Service, in part due to the transition to green industry.

H2 Green Steel expects its plant in Boden – around 40 kilometers from Lulea – to create 10,000 new direct and indirect jobs.

Sammeli says Lulea – where daylight can only be 3 1/2 hours in winter but not really dark in summer – will need an additional 25,000 new residents over the next 20 years to meet the labor demand.

“We haven’t grown much in years and didn’t really have to build a lot until recently,” she said. “Now we have major challenges in terms of planning, water and sewage capacity to build new residential areas.”

($ 1 = 0.8198 euros)

($ 1 = 8.2999 Swedish crowns)

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