The green transition is essential for strengthening Sweden’s competitiveness, and hydrogen is poised to play a critical role in this transformation. However, several obstacles are slowing its development, highlighting the need for targeted action, says Swedish Energy Agency.
Hydrogen’s Potential in the Green Transition
Hydrogen has the potential to become a vital tool in Sweden’s energy transition, especially in sectors where electrification is challenging or impractical. These include steel and iron production, the chemical industry, refineries, and certain areas of the transport sector—industries that are also among the largest emitters of CO₂.
The Swedish Energy Agency has been leading the coordination of hydrogen-related efforts in Sweden, engaging with stakeholders, conducting industry dialogues, and performing market analysis. Their final report identifies significant barriers to hydrogen’s advancement, such as:
- A lack of tailored regulations.
- The need for efficient permitting processes.
- Challenges related to the availability of electricity and grid capacity.
The report proposes several measures to address these issues, emphasizing the importance of a national hydrogen strategy to clarify the government’s role in shaping the hydrogen market.
“To capitalize on Sweden’s strong potential for producing fossil-free hydrogen, we need a cohesive approach. The government must take a central role in developing the hydrogen market. This requires a clear national direction for hydrogen, which is why we recommend continued hydrogen coordination under the Swedish Energy Agency,” said Gustav Ebenå, Head of System Analysis and Statistics at the agency.
The Importance of National Coordination
Hydrogen projects are often large and complex, requiring significant time and resources for completion. To accelerate progress, the Energy Agency highlights the need to:
- Strengthen support programs such as Klimatklivet and Industriklivet.
- Expedite legislative processes for hydrogen.
“Hydrogen projects require tailored support to account for their unique characteristics. To encourage investment, stakeholders need financial security throughout the project lifecycle, along with options for extensions,” added Angelina Björklund, Project Manager at the agency.
Hydrogen’s Current Landscape
The hydrogen market is in a development phase, with many promising projects announced but also facing delays or cancellations. While some new projects emerged in 2024, others were discontinued. The reasons for these setbacks vary, including project-specific challenges, external factors such as economic conditions, and in some cases, insufficient demand driven by the broader market climate.
Milestones and Future Outlook
In fall 2023, Ovako inaugurated a pioneering hydrogen facility in Hofors, becoming the first in the world to use fossil-free hydrogen to heat steel before rolling. This breakthrough reduces emissions to near zero, with water as the only byproduct. The project was supported by the Industriklivet program, which aims to drive green transformation in Swedish industry.
Additionally, Sweden recently celebrated the opening of its largest fossil-free hydrogen plant, marking a significant step in the country’s decarbonization efforts.
The Versatile Role of Hydrogen
Fossil-free hydrogen can help reduce emissions that are otherwise hard to eliminate and provide flexibility to the energy system. For instance, excess electricity can be used to produce hydrogen, which can then be stored—such as in mines—and utilized when energy demand peaks.
Hydrogen is uniquely versatile:
- As a product, it can be used in industrial processes.
- As energy storage, it ensures renewable energy can be efficiently managed.
- As a distribution channel, it supports clean energy integration across sectors.
With continued investment, coordination, and policy support, hydrogen is set to become a cornerstone of Sweden’s path toward a sustainable and competitive future.
