Sweden
With a cumulative score of 2.37, Sweden ranks number 12 among developed markets and number 13 in the global ranking.
- Developed markets
- Europe
2.28 / 5
Power score
2.72 / 5
Transport score
2.28 / 5
Buildings score
Low-carbon strategy
Net-zero goal and strategy
Sweden has a net-zero goal of 2040 for its power sector, and 2045 for its economy. The net-zero strategy is target- and market-driven. The central aim is to penalize carbon-emitting processes, thereby promoting market competition as a way to develop methods of emissions abatement. This relies upon market mechanisms set at the EU level, such as the EU Emissions Trading Scheme, or ETS.
Nationally Determined Contributions (NDC)
Sweden is part of the EU's joint nationally determined contributions (NDC) to the Paris Agreement. The updated NDC, submitted to the UNFCCC in 2021, pledges to reduce emissions by 55% before the end of 2030, compared to 1990 levels. In the power sector, Sweden aims to reach net zero by 2040, while the remaining economic sectors will reach carbon neutrality by 2045.
Fossil fuel phase-out policy
Sweden’s low-carbon strategy is primarily based on economics driving specific results. It therefore does not directly promote specific technologies and sectors, but instead focuses on the tools needed to de-incentivize carbon-emitting processes, while boosting the uptake of low- or zero-carbon technologies. This contrasts with some other EU member states, which directly support specific sectors, such as onshore wind or electric vehicles.
Power
Power policy
Sweden’s power policy is centered upon decarbonization, aiming to achieve net zero in the power sector by 2040. Since 2020, the country has been coal-free in power generation. Policymakers avoid setting technology targets, out of a preference for market mechanisms that allow the cheapest technologies to prevail. A key challenge for reducing emissions in Sweden are the large district heating facilities that currently burn a mixture of waste, biomass, and occasionally oil and gas. That said, Sweden’s power sector is one of the cleanest in the European Union.
Power policies
Power prices and costs
Sweden has some of the lowest wholesale power prices in the EU. Yet, once taxes and surcharges are added, Swedish retail electricity prices rise, bringing the country to the middle of the EU pack. About one-third of Swedish electricity retail prices are accounted for by energy cost, with the remainder made up of taxes, such as VAT and an energy tax, as well as grid-use charges. There are no bans on differentiated tariffs, such as time-of-use rates.
Power market
Sweden’s power system is fully liberalized and in line with EU standards. The country has a competitive power market, as well as an open retail market. Any licensed company is allowed to own generation assets or to sell electricity to consumers. Companies are also permitted to sign power purchase agreements directly with power producers or utilities. The power system is dominated by hydro and nuclear capacity. Combined, these two technologies account for half of the country’s 2020 installed capacity, contributing to about 75% of generation. The country also has a large onshore wind fleet. Sweden’s electricity generation from burning fuels like waste also supplies the country’s district heating facilities. On very cold days, these combined heat and power plants usually supplement their fuel supply with oil to achieve a higher thermal output.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Utility privatisation
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Similar to many other EU countries, Sweden is struggling with the permitting process for renewables, particularly onshore wind. The country has tried to address the issue by creating designated areas of national interest for wind power. Fossil fuel generators must pay for their emissions under the EU Emissions Trading Scheme, which covers all large combustion facilities in the EU.
Currency of PPAs
Are PPAs signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?
Transport
EV market
Battery-electric vehicles and plug-in hybrid electric passenger vehicles made up 4% of Sweden’s total passenger vehicle fleet in 2020. Sales of these cars accounted for as much as 33% of the total. Some incentives promote the ownership of low-emission vehicles, such as an income tax reduction for company cars that meet the criteria, as well as a refund of up to 60,000 Swedish krone ($7,000) for zero-emission vehicles and up to 10,000 Swedish krone for vehicles with emissions below 60 grams of CO2 per kilometer. Sweden also penalizes the purchase of high-emission vehicles, by way of a tax on the first three years of ownership.
EV policy
Sweden’s decarbonization philosophy is centered around achieving CO2 targets, rather than favoring specific technologies. Consequently, there is no policy explicitly in favor of electric vehicles. Instead, the country’s 70% emissions reduction target in transport by 2030, combined with a series of other mechanisms, work in favor of decarbonizing the vehicle fleet in the cheapest way possible. Incentives are open to all vehicles that meet the low- or zero-emission criteria, which in some cases includes cars that run on biofuels. The only outright support for EVs that Sweden has in place is a scheme to support charging infrastructure, which ended in 2020. Under that program, installers of residential chargers could get a rebate of 50%, or 10,000 Swedish krone (whichever was lower), toward the cost of the charger.
Transport policies
Fuel economy standards
Does the country have a fuel economy standard in place?
Buildings
Buildings market
More than half of buildings are centrally heated in Sweden. Waste- and biomass-fired combined heat and power plants are the primary supply to district heating and industrial heating networks. The second-largest technology for heating is direct electric heating, which makes up around one-third of the total. Finally, about 12% of heating in the country is fueled by geothermal sources, mainly through heat pumps.
Energy performance standards
Are there minimum energy performance standards for buildings?
Energy efficiency plan
Does the country have a national energy efficiency plan?
Buildings policy
Sweden aims to achieve net-zero heating by 2044. By 2030, the target is for renewables to account for a 69% share of the heating sector, with that proportion rising to 71% in 2040. The country’s largest heating source, district heating, is covered by the EU ETS. Sweden has also set limits on the energy use, average thermal transmittance and a building envelope’s average air leakages for new and refurbishing buildings. The specific energy use is capped at 80-90 kilowatt-hours per square meter, depending on the size and location of the building.
