Sweden

Sweden is a knowledge-based economy and integrated in global value chains, which contribute to the high standards of living, well-being, income and gender equality.

A green industrial transition is currently gaining momentum in northern Sweden, and with it high and growing demand for fossil-free electricity. Several recent government initiatives aim to ensure a strong expansion of fossil-free electricity production. Sweden’s recovery plan within the EU Recovery and Resilience Facility has the green transition as one of its focus areas, with specific reforms and investments primarily targeting carbon-intensive sectors.

Research and innovation are important in the field of energy. Over the past 10 years, Sweden has been a leading nation in eco-innovation, according to the Eco-Innovation Index. In the subarea that deals with the consumption of materials, resource efficiency and circular economy, Sweden’s performance has been below the EU average.

The green transition depends on having the skilled workforce needed to run industry and complementary public services. This is a challenge for some northern regions and municipalities already facing labour shortages. The green transition can reinforce both conflicts and synergies between environmental and rural policies. Investments in new technologies and industries create jobs, including in sparsely populated rural areas. At the same time, however, these investments can affect competition for land, forests and other natural resources.

Energy efficiency plays an important role in the electrification of society. In the past five years, roles related to energy efficiency have accounted for 50 % of employment in the environmental goods and services sector.

The level of energy poverty in Sweden is lower than that of the EU as a whole. One reason for this is that, since the 1970s, Sweden has invested heavily in fuel-switching and energy efficiency measures. Greenhouse gas emissions from heating homes and buildings have fallen by 91 % since 1990. The measures that have contributed the most to this development are the expansion of district heating networks and the subsequent switch from oil-fired boilers to electricity- and bioenergy-based district heating, as well as the installation of heat pumps in buildings. A major challenge for Sweden’s future lies in its transport sector. A fairly large proportion of the population may be in ‘transport poverty’, living in areas far from public transport and therefore needing a car to get to work.

The food system

The Swedish food strategy was adopted by parliament in 2017. Long-term profitable businesses are a prerequisite for sustainable production within the food system, as they can invest in new, more sustainable technologies and methods and are better equipped to handle unforeseen events. In the last few years, such unforeseen events have occurred, affecting businesses and the food system in terms of their potential to provide increased, profitable and sustainable food production in Sweden.

According to the evaluation of the strategy, no statistically significant trends for profitability, competitiveness or production could be identified for the food chain as a whole over 2016–2022. At a more detailed level, the trend for profitability in the restaurant sector has decreased. The downward trend can largely be explained by the reduction in households’ disposable income as a result of the increased inflation rate, as well as effects related to the pandemic. The number of companies in the food industry has steadily increased since 2016. The downward trend in the number of companies in primary production can likely be connected to the rapid structural transformation taking place in Swedish agriculture, where the proportion of small and medium-sized enterprises is decreasing, while the proportion of large enterprises is increasing.

Unhealthy eating habits remain one of the main risk factors for poor health and premature death in Sweden. About 40 % of Swedes consume a diet that is considered unhealthy. Food consumption accounts for one third of households’ consumption-based greenhouse gas emissions. Proposals for national goals and indicators for sustainable food consumption were presented in 2023. The Nordic nutrition recommendations are a comprehensive compilation of research on food and health. With the 2023 edition, the recommendations include environmental impact for the first time. Dietary advice and guidelines for public meals in Sweden are based on health and they have included environmental aspects since 2015. They are now under revision.

None of the seven Swedish environmental objectives identified as most relevant to the food strategy are considered achievable by 2030, although there is some progress. Two milestone targets for food waste have been established and a national action plan for reducing food waste has been in place in Sweden since 2018. Food waste occurs throughout the food chain, with the largest amount of food waste coming from households; however, there is evidence that household food waste is decreasing.

The transition towards a sustainable food system needs to be seen from a wider perspective. Therefore, 10 government agencies have developed 10 common strategic objectives for a sustainable food system that will guide the direction of future efforts. These are based on the three dimensions of sustainability as well as current political policies. The ambition is that the strategic objectives will contribute to a more transversal perspective being used by different government agencies when it comes to the food system.

The energy system

Electricity production in Sweden is mainly fossil free, and largely based on water, wind and nuclear power. The housing sector uses a high share of renewable energy due to district heating. The prices have been relatively low for a long period of time, except during the recent energy crisis.

During the last few years, there has been a significant increase in renewable energy production, mainly driven by the significant increase in wind power from 2.3 TWh in 2013 to 33.1 TWh in 2023. Solar panels are currently undergoing a technological leap: production almost doubled from 1.1 TWh in 2021 to 2 TWh in 2022. During that period, four nuclear power reactors were decommissioned without replacements. Scenario predictions show a large future increase in electricity consumption due to the trend of electrifying existing and new industries (mainly fossil-free steel), including the transport and processing industries. How the predicted electricity demand will be met is a current question and challenge, which, among other things, has led to an increased interest in new nuclear power production in Sweden.

Since the 1990s, energy and carbon dioxide taxes have been key instruments in driving down emissions and shifting to renewable energy. During the last decade, taxes have been complemented by national and international climate targets as drivers of the energy system transformation. Technological development is also an important driver of increased energy efficiency and the energy system transformation, with developments including a rapid increase in the use of heat pumps in the housing sector and the increased use of electric vehicles. Digitalisation is an enabling factor for consumers by making it more approachable to have a flexible energy consumer/producer pattern.

Electricity prices increased significantly in 2022, which affected the patterns of energy consumption in Sweden. Increased prices led to many households adopting a more flexible approach than they had previously, with an increase in flexible electricity price contracts where the consumer may adapt their electricity use depending on the current price. Installations of heat pumps and solar panels also increased during this period.

The transformation of the energy system is also supported by the EU emissions trading system. In 2018, a greenhouse gas reduction mandate was introduced in the transport sector. It requires all suppliers of gasoline and diesel to blend in a percentage of biofuel. In 2024, the mandate was decreased significantly, which had a negative impact on the amount of biofuel consumed in Sweden. In August 2024, the government proposed increasing the mandate, but by only a fraction of the prior decrease.

The mobility system

Sweden has an overall transport policy objective that aims to ensure a socioeconomically efficient transport solution for citizens and the business community of Sweden that is sustainable in the long term. Over the years, the development of the transport system has been contributing to Sweden’s journey towards achieving some important sustainability development goals. Greenhouse gas (GHG) emissions have decreased, and the number of traffic fatalities has decreased over time. However, there are also challenges, as the affordability of transport is decreasing for individuals with low incomes, and the trends for transport reliability and standards are not moving in the desired direction. Overall, society has not moved nearer to a transport supply that is sustainable in the long term.

Digitalisation continues to advance, improving accessibility and reducing the need for transport. A decrease in public transport was seen during the pandemic. The transport sector is showing several positive signs, particularly regarding road traffic in terms of increased energy efficiency although the results are still modest in terms of the energy efficiency of other modes of transport and the transition to more energy-efficient transport methods. Regional authorities are responsible for public transport and local authorities are responsible for community planning. The public transport branch has a joint environmental programme and, nationally, alternative fuels made up 28 % of bus fuel in 2023. Examples of environmental car zones can be found in eight cities.

The share of electric vehicles in total traffic increased from 9 % in 2022 to 11.3 % in 2023. According to recent short-term forecasts, the number of light electric trucks will increase dramatically over the next two years. The geographical distribution of infrastructure and the number of recharging stations are continuously improving. Innovative solutions are seen among companies developing their own recharging companies or heavy vehicle producers monitoring vehicle travel patterns and using the data, in cooperation with government agencies, to optimise the roll-out of high-capacity charging.

In 2017, Sweden introduced a GHG milestone target for domestic transport. Emissions have decreased since 2009, but the current rate of progress makes it unlikely that the target set for 2030 will be achieved on time. Decision have been made to lower the GHG reduction mandate over the coming years and decrease taxes on gasoline and diesel.

There is an urgent need to accelerate the pace of electrification. Incentives to buy electric vehicles are strengthened by climate bonuses for vans and heavy vehicles, and there is a scrapping bonus for cars. The climate bonus for cars was removed in 2022.

Recent political and legislative changes, particularly the Fit for 55 package, will have an influence on the mobility systems in Sweden. The Fit for 55 package includes stringent carbon dioxide emission performance standards for heavy vehicles and cars and a proposed phase-out of internal combustion engine vehicles.