Sweden as a role model for the EU’s future industrial green pact

White smoke in Brussels! Thierry Breton, the pope of a strong European industry and a strategic vision of European power in the world, launched the “industrial green pact” on February 1st. In French in the text, this means that Brussels has converted to industrial policy, an expression which would have earned the person who pronounced it, a few years ago, to be called “French” or “irresponsible”… He It took the triple shock of Covid, which revealed the fragility of our industrial value chains, the war in Ukraine and the American mega-politics of subsidies to its low-carbon industry for Europe to get out of its comfort zone and its ideological gangue… But here we are!

Are we witnessing the emergence of a kind of industrial “whatever the cost” that would succeed the financial one of Mario Draghi during the financial crisis of 2008, and the other, health of first, now structural, which is the trademark of Emmanuel Macron’s second term? The temptations will indeed be great to see States and companies queuing at the Brussels counter to support, here and there, at best such a national champion, at worst such a lame duck that the market economy would have spontaneously knocked down. The “frugal” camp, these liberal European states, is not mistaken: joined by a certain number of “small countries”, it is already worried about a Franco-German stranglehold on the billions which are going to be dumped and a fragmentation of the internal market.

These debates are relevant, as is the update represented by the irruption of industrial policy on the European scene. Let’s not forget the essential, however: the one and only long-term industrial policy, generating growth and collective gains, is to have access to abundant and cheap energy. And the one and only credible policy for the transition to carbon neutrality is to control the industrial value chain of the technologies necessary for this transition.

Sweden, a strategic state

The most advanced state in the world in the energy transition has understood this perfectly and, oh surprise, it happens to be holding the presidency of the European Union at the moment. We like to cite Sweden – since that is what we are talking about – for its social model, but the real Swedish exception lies in its ability to reconcile growth, a protective social model, strong industry and the continuous reduction of its CO2 emissions beyond the electricity sector alone. We will now also have to get used to considering it also as a strategic state in the new geopolitics that is taking shape. In addition to the assumed end of its posture of neutrality which led it to join NATO, Sweden will be a center of gravity for low-carbon industry in Europe. The Swedish decision to become a major producer of critical metals and minerals following the recent discovery of gigantic deposits in the north of the country, the establishment by the Swedish company Northvolt of a giga-factory of batteries, the development of hydrogen production are in the process of massively transforming the Swedish Far North, which is already home to the mining industry around the large iron deposits .

In the next twenty years, nearly 90 billion euros will be invested in this region, which will become one of the major European centers of low-carbon industry. Additional consequence: Sweden plans to massively increase its electricity production to meet the demand of these electro-intensive industries. The figures are impressive: half of Sweden’s electricity production will be used by industry in 2040! Scandinavia will therefore have to increase its electricity production by more than 60%, and the recent Swedish decision to massively relaunch nuclear power owes nothing to chance.

What lesson can we learn from this pioneering country? That the transition to a low-carbon world requires production: to produce to decarbonize our economy and make it resilient in a hostile world, to produce electricity, to extract raw materials, to transform them, etc. “Produce, produce and produce again […]it is the highest form of […] your duty as a Frenchman”, said Maurice Thorez to the miners of Waziers in 1945. At a time of passionate debate on the meaning of work, when foreign trade posted a record deficit, rehabilitating production could be a useful project for our economy, structuring for our climate policy and unifying for a divided nation.