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How Sweden lays the foundation for sustainable manufacturing

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Sweden is at the forefront of Europe’s green transformation of industry. With a no.1 ranking in sustainability, it offers unbeatable opportunities for reducing waste and CO2 emissions – enabling your business to build a strong environmental profile and accelerate the smart industry shift.

8 reasons why Sweden leads the charge toward sustainable production:

  • Sweden has abundant renewable energy sources, ranging from hydropower and geothermal to biomass and wind turbines
  • Significant incentives in place to support the industry's transition to sustainable operations
  • Ranks among Europe’s top five countries for circular economy legislation
  • Tops the list of the most eco-innovative OECD countries
  • Sweden is on target to run entirely on renewable energy by 2040
  • Rich in industrial symbiosis networks, feeding heat into residential homes, turning gas into biofuel, wastewater into fertiliser etc
  • Extensive expertise in remanufacturing and metals recycling
  • Global leader in waste management: on track to fulfil 2020 zero waste vision

Sweden offers excellent opportunities for manufacturing companies that want to build a world class reputation in environmental performance. Growing your business here might just be the greenest investment you can make – while benefiting from the lowest electricity prices in the EU*. 

The key here is abundant renewable energy. Wherever you choose to locate in Sweden, the electricity mix is up to 97 per cent free from CO2 emissions. As much as 66 per cent of the total energy output comes from renewable sources such as hydropower, geothermal energy and biomass. This enables energy-intensive manufacturers to achieve a low carbon footprint. 

But that’s just the starting point.  

Sweden ranks among the world’s top eight most sustainable countries – with a no.1 placement on analyst firm RobeccoSAM’s list of sustainable countries for 2017. It is a pioneer in clean technologies and, more importantly, has advanced mechanisms for industrial symbiosis which will be instrumental for implementing circular economy models.

For example, Sweden’s extensive district heating network and state of the art electrical grid provide ample opportunities for closing the loop in operations and minimising waste, while getting paid for recycled energy and heat.

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Decoupling of carbon

Sweden has proved that growth is not a trade-off for pursuing sustainability programmes. The country is committed to being a leader in implementing the 2030 Agenda which is the action plan for the 17 Sustainable Development Goals (SDG) set out by the UN. And progress is speeding ahead.  

In 2015, Sweden became the world’s first country to achieve a decoupling of economic growth from carbon emissions. Indeed, between the years 2008 and 2014 alone, CO2 emissions were cut by 14 per cent while total GDP increased by 16 per cent in the same period. The Swedish government is now making its largest investment ever in environment efforts andm in 2018, Sweden achieved a No. 1 world ranking in the SDG Index and Dashboards Report.

What does this mean for manufacturers? As the EU sets binding targets for reducing emissions, businesses need to plan ahead for regulatory compliance. By locating operations in Sweden, energy-intensive companies can go the extra mile to boost their green competitive advantage and save costs. 

Crucially, Sweden’s green investments are already decades in the making. In other markets that lag behind in terms of efficient infrastructure, companies often need to calculate for taxes that support national infrastructure upgrades.

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Circular manufacturing: Sweden’s system-wide solutions  

It is widely agreed that the traditional linear approach to production – take, make and dispose – is incompatible with the future. But Sweden is hard at work to change things around.

The manufacturing industry is responsible for approximately 17 per cent of the EU’s total output of greenhouse gases. Material waste is at least 30 per cent and considerably higher in some areas of manufacturing. To move on from this scenario, Sweden employs system-wide solutions to minimise waste – making energy, heat and raw materials recycling an easy path to follow.

In addition to renewable energy, Sweden’s know-how in environmental fields lays a strong foundation for accelerating the shift to a circular economy, which the European Commission has projected will save EU businesses €600bn. This is equivalent to 8 per cent of their annual turnover.

Companies like Volvo, Atlas Copco and Electrolux are pushing boundaries in remanufacturing. Service-based business models, which extend the use of products, are on the rise and new ecosystem partnerships are emerging. 

Providing manufacturers with easy options for recycling waste – and rewarding them for their efforts – is a key component of Sweden’s ambitious strategy to preserve the environment and protect the balance of ecosystems, and to make sustainability the basis for economic growth and social inclusion.

By 2020, Sweden aims to increase metal recycling to 85 per cent and several innovation programmes, such as Produktion 2030, are helping to further Sweden’s mission of becoming one of the most sustainable manufacturing locations in the world.

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*Eurostat 2017, Energy price incl. network fees and non-recoverable taxes for a consumption range of 20-70 GWh.

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Klas Ericson

Investment Advisor Sweden Investment Advisor, Sweden
+46 70 222 78 02
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Martin Heumann Bauer

Investment Advisor Sweden Investment Advisor, Sweden
+46 72 239 45 44
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Andreas Scheibenpflug

Investment Advisor Sweden Investment Advisor , Sweden
+46 70 277 83 94