Sweden has the goal of becoming one of the first countries in the world to reach zero greenhouse gas emissions. One of the biggest challenges in this transition is switching to materials in buildings and infrastructure which are carbon-neutral in their production. Historically, reduced greenhouse gas emissions from construction materials have not been prioritised in Sweden; the focus has instead been on introducing different types of functional and safety-related requirements.

The purpose of this study is to discuss how the central government handles and is able to handle the transition to carbon-neutral construction materials in buildings from a business perspective. What types of technical, market and institutional risks exist and which of those can motivate different types of policy measures? What are the pros and cons between technology-specific and technology-neutral strategies? There is a special focus on the transition to an increase in the building of houses with solid wood and carbon-neutral cement/concrete.

Sweden is one of few countries in the world where there is a physical potential for extensive wooden house construction. But almost all countries are and will be dependent on cement as a construction material.

Lack of consensus on the transition

In order for the transition to take place, consensus is needed in terms of the existing obstacles, bottlenecks and risks. Consensus entails that the central government, industry and academia make an assessment of risks that overlap to such an extent that a change to carbon-neutral construction materials can be realised. Without consensus, there is a major risk that the transition cannot be realised.

A first observation is that there is no consensus on the way Sweden should go. With regard to climate-neutral construction materials, several municipalities have developed specific wood construction strategies, and the importance of wooden houses as a climate measure has also come up in parliamentary motions and interpellations. The construction industry does not share this perception, instead preferring a transition to carbon-neutral construction materials which ensure functional and safety-related requirements. Within the academy there are results that show great uncertainties about the climate benefits of a transition to multi-family houses in solid wood. Given certain assumptions, emissions are comparable to a multi-storey house in modern cement. The government has not taken a stand on the issue of what material to focus on.

The construction industry thus sees a need to use cement in the future. Today, the annual volume of concrete used in the world is about ten times larger than the global forest harvesting. A global transition to climate-neutral buildings will therefore require cement produced with carbon capture and storage (CCS), which is also advocated by the construction industry. However, the Swedish state currently does not have a clear opinion or national strategy for the development of CCS for cement production in Sweden.

Conversion to durable construction materials poses a high risk for companies...

For investments in sustainability, which are capital-intensive, the risk levels are often too high for private actors to be willing to make long-term investments of the scope desirable from a socioeconomic perspective. The transition to new construction materials belongs to this category. This applies not least to whether carbon-neutral cement can be produced in Sweden, as this requires the capture, transportation and storage of carbon dioxide. CCS is still a relatively inefficient technology but is under development. A wider use of climate-neutral cement requires that a CCS market can be developed either in Sweden or in Europe, but the regulatory barriers are still significant. A new EU directive is vigilant on many issues, including third party access to storage sites as well as cross-border CCS operations. For example, storing “Swedish” carbon dioxide in Norway is not allowed.

Lack of knowledge speaks for technologically neutral policy measures

Our main conclusion is that the lack of knowledge about how the choice of construction materials affects greenhouse gas emissions and the functionality of buildings in a life-cycle perspective speaks that the restructuring framework should be technologically neutral. This means that the state should not prescribe any specific material, but it will be the material’s climate emissions in a life-cycle perspective that should be at the center of any public efforts. With a technologically neutral approach, the starting point is greenhouse gas emissions and not the material, technology or industry that will be used to solve this challenge. This is a design that best fits situations where there are no strong arguments for promoting a specific solution.

However, the investments that need to be made are capital intensive and have a long life time. Companies and authorities need to make decisive strategic choices in the coming years to achieve the net release goal. It is therefore important for long term conditions and stable rules for central players to dare to invest in the development of climate-neutral materials.

Two examples of efforts are as follows: Increased wood construction is complicated by the fact that existing regulations are adapted to other construction materials and there is no knowledge of the climate effects of going from the use of existing building materials to wood. Consequently, regulations need to be reviewed and the state may need to support development and testing of wood materials and combinations of different materials in buildings that allow for reduced greenhouse gas emissions without compromising function and safety.

There are major institutional challenges for Swedish-produced climate-neutral cement. Again, the regulations are not adapted to CCS. Given that the goal is for buildings to be produced climate neutral in Sweden in the future, this means that non-climate-neutral cement may need to be imported. However, it is uncertain if any country will be able and willing to export climate-neutral cement to Sweden.