A case study on the significance of policy instruments for the food processing and retailing industries’ climate work

The challenge of national climate policy today is to create sufficiently strong pressure on industry to transform, while at the same time keeping in mind the global context, where sustainable rules are largely absent. Sweden’s current climate policy instruments do not exert enough pressure on the food processing and retailing industries to ensure green transformation1. Consistent policy could help ensure both green transformation and economic growth – “Green growth”. The greatest challenges are the absence of supranational regulations, fragmented global value chains and low price competition internationally.

In order for the government’s environmental and climate policy objectives to be attained, parallel with positive economic development, green transformation of enterprise and industry is needed. Growth Analysis has conducted two case studies on the basis of this perspective. In the first case study the forest industry was analysed. In this report the results from the second case study – about the food processing and food retailing industries – are presented.

The overall aim of the case study is to gain knowledge about what has incentivised and enabled the food processing and retailing industries’ green transformation to date. Which policy instruments and other factors have been important? How did industry react to these factors? What role have innovations and green entrepreneurs played? And are there any general lessons to be learnt?

The questions have been answered through interviews with food industry actors as well as through two literature reviews and statistical analysis.

Current climate policy instruments exert a low pressure to transform on the food processing and retailing industries

The pressure to transform, from existing climate and energy policy instruments, is low. For the food processing and retailing industries the carbon tax constitutes approximately 0.1 per cent of the companies’ total operating costs. The average for Swedish enterprise and industry is 0.3 per cent.

The driving forces behind the food industries’ climate work are risk minimisation and a strong sustainability norm

The food processing and retailing industries indirect energy consumption and carbon dioxide emissions are high. An important driver behind the industries’ climate work is to reduce the vulnerability to price increases for energy and fossil fuels. Another important driver is that sustainability, including green transformation, has become the norm and something that companies wish to be associated with.

Important measures have been more efficient refrigerants and better energy efficiency

Measures which have contributed towards reduced climate change impact is the development of district heating, the change to more environmentally friendly and efficient

refrigerants, the installation of doors or lids on freezers and, to some extent, more efficient transportation.

Few climate innovations and green entrepreneurs

Reduced climate impact from these industries is not, primarily, the result of innovations or of green entrepreneurs but instead the result of existing more climate-efficient technology being utilised. The Internet has, however, made new business models possible.

Green transformation in competitive markets

Sweden’s high ambitions in regards to environmental protection, and in particular Swedish livestock regulations, are regarded by the respondents in this study as a competitive disadvantage. Furthermore, these regulations do not constitute a driving force for green transformation of the industries in question, but rather have led to increased imports. Many of the respondents, however, believe it is possible that the Swedish food processing and retailing industries will have (continued) green growth, but that this requires consistent policy. The respondents also feel that Sweden is not in a position to compete internationally with low prices.


Current climate policy instruments do not constitute a sufficient driving force for a green transformation of the food processing and retailing industries. Currently, these industries find themselves in a situation where strong forces are pulling in two different directions. Sustainability is the norm and demand for sustainable products is increasing. But an even stronger force is low price competition from international actors. This constitutes a challenge for formulating policy for the green transformation of these industries. The fragmentation of global value chains constitutes a further challenge for national policy.

Proposals and recommendations

Growth Analysis proposes a systematic examination  of current regulations and policy instruments in order to determine which ones need to be revised to ensure that the institutional framework helps in achieving the government’s environmental goals for the food processing and retailing industries.

A case study on the significance of policy instruments for the food processing and retailing industries’ climate work

Serial number: Report 2014:09

Reference number: 2012/011

Download the report in Swedish Pdf, 1.8 MB.


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