Sweden's Green Boom Collapses - Northvolt, Hybrit and Stegra Hit the Wall
Northern Sweden was supposed to lead a green industrial revolution. Instead Northvolt is bankrupt, the state-backed Hybrit steel project is frozen and Stegra is still billions short.
STOCKHOLM - For years, northern Sweden was sold to the world as the heart of a green industrial revolution: battery gigafactories, fossil-free steel and hydrogen. Now the tone has changed.
One flagship project after another has been stopped or put on hold. Even the movement's own cheerleaders admit the shift has been set back by several years.
Svante Axelsson, who heads the government-backed initiative Fossil Free Sweden, blames the pandemic, the war in Ukraine and Donald Trump. He is now calling on the next government to come up with a clearer industrial policy.
Economist John Hassler, a former climate investigator for the government, also wants a clearer policy - but warns against handing direct subsidies to individual companies, Swedish Radio reports.
Northvolt went bust, Hybrit stalled
The best-known collapse is battery maker Northvolt in SkellefteÄ. It filed for bankruptcy in March 2025 after burning through billions, including money from Swedish pension funds.
American company Lyten completed its purchase of Northvolt's Swedish operations in February this year.
State-owned mining giant LKAB's push for fossil-free sponge iron within the Hybrit project has also ground to a halt. Last year the company postponed its decision on a demonstration plant in GĂ€llivare, citing uncertain profitability and the unpredictable price of EU emission allowances.
By then, the state had already paid out 1.4 billion kronor - around 125 million euros - of the 3.6 billion set aside through the Swedish Energy Agency. The remaining payments were frozen.
READ MORE: Despite the Northvolt Fiasco, Billions in Taxpayer Funds Proposed for New Green Fund
Stegra still needs more money
Green steel company Stegra in Boden has new owners but still has not secured its financing. After a review during its first hundred days, the company said in late September that the cost of finishing the project is significantly higher than it assumed as recently as June.
Stegra blames the heavy cost of restarting work after a long slowdown, as well as inflation. Chief executive Henrik Henriksson is stepping down and was replaced by HĂ„kan Buskhe on 1 November. The company says work in Boden continues while it seeks new capital from its largest owners.
Back in 2024, Danish energy company Ărsted had already scrapped plans for FlagshipONE in Ărnsköldsvik, a plant that was supposed to produce fossil-free shipping fuel.
Warning against handouts
Axelsson and Hassler both want a clearer policy, but they disagree on what the state should do. Hassler explicitly warns against propping up individual companies with direct support.
The question is pressing after Northvolt's collapse, when Swedish pension funds among others lost billions as the company went under.
Mats Dagerlind · Senior Political Columnist
Mats Dagerlind is Senior Political Columnist at Samnytt and Samnytt News. A veteran Swedish political commentator and essayist, he covers Swedish domestic politics, free speech, cultural identity, and media accountability.
Follow @SamnyttNews on đ â