- Court ruling threatens Sweden’s largest cement factory
- Any closures could result in imports with higher carbon costs
- ‘Carbon leakage’ a problem for COP26 leaders in Glasgow
- Local green goals may conflict with global goals
STOCKHOLM, Oct. 18 (Reuters) – When a Swedish court ordered the country’s largest cement manufacturer to stop limestone mining at its massive factory on the windswept island of Gotland to avoid pollution, environmentalists applauded.
In addition to protecting wildlife and water supplies, the move could force the plant, which makes 75% of Sweden’s cement and is the country’s second-largest carbon emitter, to cut production while it finds raw materials elsewhere. or even to close completely.
This could be good for Sweden’s emissions targets, but not so good news for the rest of the planet.
A report commissioned by the government and viewed by Reuters said it could force Sweden to import cement from countries that throw more emissions into the overall manufacturing process – or risk massive job losses in the industry of construction in his country.
“Imports from countries outside the EU would likely lead to greater environmental impacts due to lower CO2 emissions standards and lower land use standards,” the report, obtained via an access to information request.
Sweden’s dilemma sums up one of the challenges faced by countries gathered in Glasgow for the UN COP26 climate talks: how to show that they are not reducing their emissions by simply exporting the problem elsewhere – a phenomenon known as “carbon leakage”.
A wealthy and stable Nordic democracy, Sweden has long led international environmental rankings and has been successful in reducing greenhouse gases for years while keeping economic growth on track to its goal of net zero emissions here. 2045.
It has the world’s highest carbon tax at $ 137 per tonne and is a leader in the use of renewable energy. In 2018, its per capita carbon emissions stood at 3.5 tonnes, well below the European Union average of 6.4 tonnes, according to World Bank data.
But the stalemate at the Slite cement plant embodies the growing tension between local environmental goals and the 2015 Paris Agreement signed by nearly 200 countries in an attempt to limit global warming to 1.5 Celsius.
“We need to weigh global attention – do our best for the climate – but also keep our ambitions high when it comes to our local environmental issues,” Swedish Environment and Climate Minister Per Bolund told Reuters. “These two things can be balanced.”
Much of the cement imported into Europe comes from Turkey, Russia, Belarus and countries in North Africa.
They are nothing like the EU’s Emissions Trading System (ETS), the world’s largest carbon market and which sets the price of carbon permits for energy-intensive sectors, including including cement, within the bloc of 27 countries.
The World Bank says only 22% of global emissions were covered by pricing mechanisms last year and the International Monetary Fund has set the average global carbon price at $ 3 per tonne – a tiny fraction of the carbon tax of Sweden. Read more
While the Swedish court ruling was not related to Slite’s carbon footprint, but rather the risks his career poses to local groundwater, the impact from an emissions perspective depends on efficiency and energy mix of producers likely to supply Sweden with cement for butchering. any shortfall.
Slite’s owner, Germany’s HeidelbergCement (HEIG.DE), also plans to make it the world’s first carbon-neutral cement plant by 2030, but uncertainty over its future following the court ruling could delay or even cause the project to fail.
“We need a decision quickly on the long-term basis of these operations if this is not to be delayed,” said Magnus Ohlsson, managing director of HeidelbergCement’s Swedish subsidiary, Cementa last month.
Koen Coppenholle, head of the European cement lobby group Cembureau, said he was convinced that European factories were “cleaner” overall because the EU’s high carbon burdens on producers had encouraged them to invest in the reduction of their emissions.
“In Europe, at the moment, we are replacing 50% of our primary fuel needs with alternative fuels,” he said.
According to Cembureau data, however, cement imports from outside the EU have jumped by around 160% over the past five years, although total volumes remain relatively low.
But carbon leakage, where emissions are transferred from countries with strict environmental rules to countries with more lax and cheaper regimes, is a problem for dozens of industries and policymakers are trying to tackle it.
In July, the EU unveiled plans for the world’s first carbon border tax to protect European industries, including cement, from foreign competitors whose manufacturers produce cheaply because they are not charged for their production. carbon.
The European cement industry supports this initiative, but warns that it is fraught with pitfalls, such as how to measure emissions in different countries given the diversity of processes and fuels.
“If you impose strict CO2 and emissions requirements, you have to make sure you do it in a way that doesn’t push companies out of the EU,” Coppenholle said. “This is the whole discussion of carbon leaks.”
For a country like Sweden, which has cut emissions by 29% over the past three decades, the question of national action versus global impact goes beyond the glue.
The country’s already low and declining emissions from domestic production fell to just under 60 million tonnes of carbon equivalent in 2018.
But if you measure what Swedes consume, including goods and services produced abroad, the figure is about a third higher, according to Statistics Sweden, which puts so-called consumption-based emissions at 82 million tonnes this. that year.
THE CLIMATE IS GLOBAL
The local versus global perspective also raises questions about what kind of industrial policy is ultimately greener.
Sweden’s leading steel company SSAB (SSABa.ST), state-owned mining company LKAB and utility Vattenfall, for example, have invested heavily in developing a process for producing steel without using fossil fuels. Read more
They say the switch to so-called green hydrogen energy would reduce Sweden’s emissions by around 10%, a big step towards the country’s goal of net zero emissions by 2045.
But for researchers Magnus Henrekson of the Research Institute for Industrial Economics, Christian Sandstrom of Jonkoping International Business School and Carl Alm of the Ratio Institute, it is an example of “environmental nationalism” that benefits a country, but not the nation. world.
They estimate that if Sweden exported the renewable energy it would use to make hydrogen to Poland and Germany – so that they could reduce their use of coal-fired electricity – overall CO2 emissions would drop by 10 to 12 times more than making “green” steel.
The carbon tax at the EU border, meanwhile, is not expected to be phased in until 2026, potentially too late to have an impact on the fate of Cementa’s Slite limestone quarry.
The Swedish parliament has accepted a government proposal to change the country’s environmental laws to suspend Cementa’s execution, but no long-term solution is in sight.
Environmentalists such as David Kihlberg, climate manager at the Swedish Society for Conservation of Nature, say the easing of regulations gives industries an excuse to delay the changes that are due to happen now.
“It would be incredibly destructive for climate diplomacy if Sweden came to the highest climate meeting in Glasgow and declared that our climate policy is to increase emissions and local environmental impact in order to pull the rug from the cement producers. Chinese, “he said, referring to a hypothetical scenario that is not Swedish policy.
“The climate issue is global and must be resolved through cooperation between countries.”
Editing by Mark John and David Clarke
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