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How green champion Sweden could end up exporting its carbon sins By Reuters

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© Reuters. This undated handout photo taken by Reuters October 13th, 2021 shows a general view of Slite’s Cementa plant in Sweden. REUTERS/Cementa/Handout

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By Simon Johnson

STOCKHOLM /Reuters – Ecologists cheered the Swedish court’s order to the largest cement producer to cease mining limestone at its large factory in Gotland. The move was made to protect the environment.

The ruling will not only protect wildlife and water sources, but it could also force the plant, which makes 75% Swedish cement, and is second in carbon emissions, to reduce its output, find raw materials elsewhere or shut down entirely.

This is good news for Sweden’s emission targets but it doesn’t bode well for the rest.

A government-commissioned report seen by Reuters said it could force Sweden to import cement from countries that pump out more emissions in the overall manufacturing process – or risk massive job losses in the construction industry at home.

According to a Freedom of Information request, the report stated that imports from non-EU countries would likely have greater environmental impact due to lower standards regarding CO2 emissions, and higher standards for land use.

Sweden’s problem is a reflection of one of the major challenges nations face when meeting at Glasgow U.N. Climate Conference COP26. It involves how they can show the world that their emissions are being cut by not simply exporting them elsewhere. This phenomenon is called “carbon leakage”.

Sweden is a stable, wealthy Nordic democracy that has topped the international environmental ranking. It has been able to reduce greenhouse gas emissions for many years and maintain economic growth, all while moving towards net zero emission by 2045.

At $137/tonne, it has the most high carbon tax in the world. The nation is also an innovator in using renewable energy. According to World Bank data, its 2018 carbon emissions per head were 3.5 tonnes. This is well below the 6.4-tonne average for Europe.

The standoff regarding the Slite cement plant exemplifies the tension growing between the local environment goals of the Paris Agreement 2015 signed by almost 200 countries in an effort to limit global warming at 1.5 Celsius.

Per Bolund, the Swedish Minster for Environment and Climate said that “We must balance the global focus – doing the best for the climate – but we also have to maintain our high ambitions in relation to local environmental issues.” Both of these things can be balanced.

ALTERNATIVE FUELS

A large proportion of Europe’s imported cement is from Turkey and North Africa.

They don’t have anything like the EU’s Emissions Trading System (ETS), the world’s largest carbon market and one that sets the price https://reut.rs/2Xa600G of carbon permits for energy-intensive sectors, including cement, within the 27-nation bloc.

The World Bank says only 22% of global emissions were covered by pricing mechanisms last year and the International Monetary Fund put the average global price of carbon https://reut.rs/3av8ObY at $3 a tonne – a tiny fraction of Sweden’s carbon tax.

Although the Swedish court did not decide on Slite’s carbon footprint but the dangers its quarry presents to groundwater, it was affected by the emissions from the perspective of Slite. The impact of Slite’s supply of cement for Sweden will depend on how efficient and what energy they use.

The owner of Slite, Germany’s HeidelbergCement, (DE:), plans to make it the first carbon-neutral cement plant in the world by 2030. However, the uncertain future after the court decision could delay or even stop the project.

Magnus Ohlsson (chief executive of HeidelbergCement’s Swedish subsidiary Cementa) stated last month that “we need to make a decision quickly on the long-term base for these operations”

Cembureau European Cement Lobby Group head Koen Coppenholle stated that European cement plants were cleaner overall due to the fact that producers pay high EU carbon fees. He said they had been encouraged by these charges to reduce their emissions.

He stated that Europe is replacing half of its primary fuel requirements with alternative fuels.

Cembureau data shows that cement imports from the EU rose by 160% over the past five years. However, total cement volumes are still relatively low.

However, carbon leakage (where emissions are transferred from countries with strict environmental laws to those with looser and more affordable regimes) is a concern for many industries. This issue has been addressed by policymakers.

The EU announced plans to create the first global carbon border tax. This will protect European industries like cement from foreign competitors who produce less carbon because they don’t pay for it.

The European cement industry is supportive of the initiative, however, it warns that there are many challenges, including how to measure emission in different countries due to different fuels and processes.

Coppenholle stated, “If you impose severe requirements on CO2 emissions and carbon dioxide, then you must make sure that it doesn’t force companies out of the EU.” That’s all there is to it about carbon leakage.

Sweden has reduced its carbon emissions by 29% in the past three decades. The question of whether it is domestic or global action goes far beyond cement.

The nation’s low and decreasing emissions from its domestic production have fallen to less than 60 million tonnes carbon equivalent in 2018, a drop of just under 60%.

According to Statistics Sweden however, the number is almost three times greater if you take into consideration what Swedes consume. This includes goods and services made in Sweden.

CLIMATE IS GLOBAL

Questions about the effectiveness of different industrial policies are also raised by local and global perspectives.

Sweden’s leading steel firm SSAB, state-owned miner LKAB and utility Vattenfall, for example, have invested heavily in developing a process to produce steel without using fossil fuels https://reut.rs/3j11CsJ.

The switch to “green hydrogen power” would decrease Sweden’s emission by 10%. It is an important step in the right direction towards reaching Sweden’s 2045 net zero emissions goal.

For Magnus Henrekson, Christian Sandstrom, and Carl Alm, researchers at Ratio Institute, it is an example of environmental nationalism that does not only benefit one country, but the entire world.

According to them, if Sweden exports the renewable energy used to produce hydrogen to Germany and Poland instead of coal-fired power to cut down on their carbon emissions, overall CO2 emissions will fall 10-12 times as fast as if they make “green” steel.

The EU’s carbon-border levy is due to start in 2026. This could be too late for the fate of Cementa’s Slite limestone quarry.

Although the Swedish Parliament has accepted an offer from the Government to modify its environment laws, it is not clear if this will lead to Cementa being granted a temporary halt to execution.

David Kihlberg from the Swedish Society for Nature Conservation is the climate chief. He believes that by easing regulations, industries can be excused for not making changes now.

“It would have a devastating effect on climate diplomacy if Sweden showed up at the Glasgow climate summit and stated that our climate policy was to raise emissions and reduce local environmental impact to help Chinese cement producers,” he added.

“The global climate issue must be addressed by countries working together.”

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