Sweden’s “Green Transition”: Opportunities and Challenges
In northern Sweden, the rapid expansion of green industries is transforming the region—but at what cost? As billions are invested in new mines, battery factories, and wind farms—investments are expected to reach 1,400 billion SEK (€120 billion) by 2040—local communities are caught between promises of economic prosperity and the pressures of environmental and social change. Driving this boom is the global race for minerals essential to the energy transition—rare earth metals, lithium, and other critical resources that power everything from electric vehicles to wind turbines. Northern Sweden has become a crucial supplier, but its role in this transition is deeply contested.
While the Swedish government and major industries present these projects as essential for a sustainable future, many local residents, environmental groups, and Indigenous Sámi communities see them as a continuation of colonial extraction. The contradictions are stark: wind power developments meant to combat climate change threaten reindeer herding, while new mines promise jobs but risk polluting waterways. The situation in Skellefteå, where the now-failed Northvolt battery factory triggered both economic optimism and a severe housing crisis, exemplifies these tensions.
These dilemmas are not unique to Sweden. Across the world, green industrialisation is creating new conflicts over land use, environmental protection, and economic justice. Who benefits from the green transition, and who bears the costs? Northern Sweden’s experience is a case study in these global struggles.
A History of Resource Extraction
The exploitation of northern Sweden’s natural wealth is nothing new—for over a century, northern Sweden’s economy has revolved around extracting and processing natural resources, particularly forests, minerals, and hydropower. From the second half of the 19th century, coastal towns grew around sawmills, pulp and paper mills, while central areas thrived on logging and timber. The construction of the railway to Gällivare and Kiruna enabled large-scale iron ore mining.
Hydropower soon followed, spurred by the growing demand for electricity to power these industries and advances in long-distance transmission. This industrial boom fuelled rapid population growth, earning northern Sweden the title of “The Land of the Future.” However, this development came at a cost—many of the new jobs created were gruelling and dangerous, and the construction of hydroelectric dams disrupted the livelihoods of Sámi reindeer herders.
Shifting Industrial Dynamics
From the latter half of the 20th century, northern Sweden’s industrial landscape began to change. While resource-based industries grew, automation reduced the need for workers. By 2020, a worker in a Swedish iron ore mine produced about six times more than a worker 60 years earlier. This shift led to population decline and economic crisis, with only a few urban centres maintaining growth. Periods of crisis hitting both mining and forestry deepened the downturn.
The first turning point came about 20 years ago, when rising metal prices rekindled interest in mineral exploration. Some new mines were opened, with mixed results. Several bankruptcies revealed companies’ environmental neglect, while existing mines ramped up production, with the total output in ore production rising from 48 million tonnes in 2000 to 84 million tonnes in 2023.
The Emergence of Wind Power
Over the past 15 years, wind power has expanded rapidly in northern Sweden, home to most of the country’s wind farms. The region’s vast, open spaces enable large-scale development, including the Markbygden wind farm, which spans 450 square kilometres and currently has 501 turbines.
Only recently, however, have industrial activities based on natural resources made a dramatic return, driven by the push for a “green transition.” New technologies are now replacing older, more polluting methods with cleaner, low-carbon alternatives.
Industrial Projects for a Green Transition
The green transition in northern Sweden really took off with the arrival of Northvolt in 2017. The battery manufacturing company announced plans for a factory in Skellefteå to produce enough batteries for one million medium-sized electric cars annually, using renewable electricity and a recycling facility to minimise its climate footprint.
Simultaneously, the Hybrit project—a collaboration between LKAB, SSAB, and Vattenfall—began working to cut emissions from steel production by replacing fossil fuels with hydrogen. By 2020, LKAB committed to switching production from iron ore pellets to pure iron, or sponge iron. The steel mills that use LKAB’s products are expected to reduce their carbon emissions by 40 to 50 million tonnes annually—about as much as Sweden’s entire current carbon footprint.
LKAB is also expanding into rare earth element and phosphorus extraction—materials critical for electric car engines and wind turbines—at a new facility in Luleå. Nearby, Spanish company Fertiberia is planning a hydrogen-based fertiliser plant to reduce carbon emissions.
Radical Industrial Shifts in the North
These new industrial projects are transforming northern Sweden. In Boden, a steel mill set to open in 2026 could more than double Sweden’s steel production, using hydrogen to cut emissions to a fraction of the levels seen in traditional steelworks. Other projects aim to produce liquid fuels from biomass heating plants.
The investment required for these projects is immense – new wind farms and power lines are already needed, and plans for new mines will drive up demand even further. The Norrbotten Chamber of Commerce projects that regional investments will reach 1,400 billion SEK (€120 billion) by 2040. Peter Larsson, former government coordinator for industrial projects in the north, estimates that 100,000 new residents will be needed to fill the new jobs, a major demographic shift in a sparsely populated region of just 500,000.
Yet, this boom is largely driven by the promise of substantial corporate profits, with companies racing to dominate green technology while capitalising on cheap electricity. While this makes economic sense for businesses, it raises pressing concerns—when profit is the priority, climate outcomes, social cohesion, and long-term development are far from guaranteed.
The Case of Skellefteå: Boom, Bust, and Uncertainty
Skellefteå is a striking example of the social and economic pressures facing municipalities in northern Sweden. When Northvolt announced plans to build a battery factory there in 2017, it fundamentally altered the municipality’s development plans. For decades, population growth had stagnated, and housing construction was minimal. With the arrival of Northvolt, thousands of new homes were needed, along with expanded municipal services such as healthcare and education, to accommodate the factory’s anticipated 4,000–5,000 workers and an influx of construction labourers. Despite municipal housing company Skebo’s best efforts, a severe housing shortage emerged. Construction workers were initially housed in temporary barracks as small as ten square metres, and many Northvolt employees were forced to rely on similar accommodations. At the same time, the municipality is facing an acute labour shortage, particularly in aged care and health services, struggling to meet the demands of a rapidly growing community.
Now, after facing severe financial difficulties for several months, Northvolt has filed for bankruptcy in Sweden on March 12 (having already filed for bankruptcy protection in the US in November)—the largest bankruptcy of a company in Sweden in recent history. Factory construction had long-since stalled, with only a third of the plant completed, and some 1,600 workers had already been laid off. Reports from Goldman Sachs (which holds a 19 percent share in the company) and the Fraunhofer Institute suggested the company was struggling to overcome production challenges typical of new battery manufacturers in a highly competitive market—compounded by a downturn in the automotive industry and a weakening global demand for EVs. In the end, Northvolt was unable to solve the financial crisis, and the future for the company’s 5000 employees—3000 of them at the factory in Skellefteå—is highly uncertain.
The Strain on Local Infrastructure
For municipalities like Skellefteå, the situation is unsustainable without further investment. Local government leaders have been forced to increase infrastructure spending, with nearly SEK 30 billion (€2.6 billion) planned over the next decade. However, without sustained population growth and increased tax revenue—further complicated by the economic woes of Northvolt—this risks becoming a heavy financial burden.
Across the region, it is clear that the state has left municipalities to shoulder enormous responsibilities. Two years ago, government coordinator for urban transformation in northern Sweden, Peter Larsson, warned that local authorities could not handle the strain alone. He proposed streamlining housing construction, offering incentives to attract new residents, sharing investment risks, and increasing infrastructure funding. So far, however, the government has provided only limited support, as reflected in the last budget.
Environmental and Labour Concerns
Industrial expansion in northern Sweden has not been without criticism, particularly regarding labour issues. After regional television exposed workers sneaking under perimeter fences at Northvolt’s construction sites to avoid ID checks, authorities carried out a raid, uncovering permit violations and widespread beaches of work hour and safety regulations. Trade unions reported cases of workers clocking 90-hour weeks, while others had worked as many as 22 days straight. Safety concerns extend beyond standard labour conditions. Since production began, there have been 47 accidents involving dangerous chemicals, and Swedish radio has reported on workers being pressured to continue working despite ammonia levels far exceeding official safety limits.
The environmental claims of these projects have also faced scrutiny. While Northvolt (whose slogan was “make oil history”) used renewable electricity – and planned to generate half of its own raw materials from a recycling plant on the battery factory site – like many of the companies involved in the green transition, it supplied products to major automakers such as Audi, Porsche, and BMW. Critics argue that producing large vehicles with massive batteries contradicts the broader climate goals these industries claim to support.
Industrial Expansion and the Pressure on Indigenous Communities
A key factor driving northern Sweden’s industrial boom is access to cheap electricity. However, as industrial expansion accelerates, meeting energy demand is becoming a challenge. The combined electricity consumption in Norrbotten and Västerbotten is currently around 12 TWh per year, but the region’s largest industrial projects could push this demand to 110 TWh—nearly equivalent to Sweden’s total national consumption today.
While companies are largely indifferent to the energy source, most point to onshore wind power as the most viable option—not only is it cheap, but the permit process for new constructions is relatively fast. However, scaling up to meet demand would require 4,000 to 5,000 new wind turbines, raising serious land-use conflicts. Indigenous Sámi reindeer herders, who are already under pressure from forestry, hydropower, power lines, mines, and tourism, face yet another threat to their traditional lands.
Sámi Rights in Danger
The Gällivare Sámi community exemplifies the growing pressure industrial expansion places on reindeer herding and Sámi society. Already, the community is struggling with the effects of LKAB’s mine in Malmberget and the expansion of Boliden’s Aitik mine to the south. The heavily trafficked E10 road cuts right through vital grazing land, disrupting traditional herding routes, alongside a railroad used to transport ore and a newer rail link to the Finnish border.
Beyond heavy industry, other sectors are also fragmenting Sámi lands. Industrial forestry, the growing tourism sector, as well as increasing snow mobile traffic add further disruptions. Now, to meet surging industrial energy demand, plans for at least three large wind farms in the area threaten to encroach even further on Sámi land and traditions—with potentially devastating consequences. One reindeer herder summed up the situation bluntly: “The green transition will kill us.”
Growing Resource Demand and Its Consequences
These developments pushed by the “green transition” in northern Sweden also highlight the global demand for metals and minerals essential to green technologies. Lithium, cobalt, graphite, and nickel are critical for batteries, while rare earth metals are key components of electric motors and wind turbines. As demand for these resources rises, concerns are mounting over the environmental toll and the social conflicts mining projects—particularly in Sámi territories—are likely to intensify.
The European Union’s new mineral strategy, the Critical Raw Materials Act (CRMA), aims to reduce its dependence on China by increasing “domestic” production of these key resources. However, this push seems destined to intensify conflicts over land use. LKAB has already applied to have its new iron ore and rare earth deposit north of Kiruna classified as a strategic project under the CRMA, which would speed up the permitting process. If approved, the mine would erase the Gabna Sámi community’s last remaining herding passage around Kiruna, dealing yet another blow to Sámi land rights and traditional livelihoods.
Mining Disputes and Land Struggle
Already, tensions are rising over some of these large-mining projects, particularly those encroaching on Sámi lands. The planned nickel-cobalt mine in Rönnbäcken, developed by Bluelake Minerals, would cover an area the size of Stockholm, with hundreds of millions of tonnes of industrial waste slated for disposal near the Ume River system. Meanwhile, British company Beowulf Mining’s proposed Kallak mine (“Gallok” in Sámi) would see iron ore transported along the Lesser Lule River—a key migration route for the Jåkhågasska Sámi community’s reindeer. Concern have also been raised about the environmental effects of a large mine close to both the river and the Laponian Area, a UNESCO World Heritage Site.
Local opposition, protests and blockades by environmentalists and Sámi against have repeatedly delayed the Kallak mine project, and legal appeals have delayed the permitting process. As recently as 2022, the Swedish government granted a mining permit for the project, but the company has yet to submit its environmental application. Additionally, the UN Committee on Elimination of Racial Discrimination has criticised the decisions of Sweden’s handling of both the Kallak and Rönnbäcken cases, adding further pressure on the government.
Global Complexities
The rapid industrialisation seen in northern Sweden reflects both the urgency of the green transition and the broader global challenges it entails. While advancements in electric vehicles, battery production, and green steel are crucial for reducing emissions, they must be weighed against responsible resource management and rights of local communities, particularly the Sámi.
Indeed, scaling up these technologies globally presents significant hurdles. A recent UN Resource Panel report showed that natural resources extraction had tripled in recent years, with metals seeing ab even steeper rise. The report issued sharp warnings that further increases would have severe and detrimental effects on biodiversity, water resources and carbon emissions, highlighting the pressing need for a more sustainable approach to the green transition.
Hitting Resource Limits
For some key metals, signs of scarcity are already emerging—even in the short term. The clearest example is copper. In the early days of industrialisation, the average grade in global copper mines was about 10 percent, and by 1900 it was still at 4 percent. Recent research shows that the global average has dropped to just 0.6 percent, reflecting the increasing difficulty of extracting high-quality deposits.
Simon Michaux, a researcher at the Geological Survey of Finland, has investigated how much metals would be needed for a fully fossil-free energy system. His findings suggest that current reserves of critical battery materials are insufficient to meet realistic assumptions about energy storage demands. While Michaux’ conclusion is disputed, a large meta-study of scientific literature on different aspects of a 100 percent fossil free energy systems also warns of potential shortages in other key metals and minerals. There are also limitations to the technical possibilities to scale up production of certain essential elements. These findings underscore the need to combine technological innovations that reduce carbon emissions with vastly improved resource efficiency across all sectors of society.
Lighter, Fewer, Cars
The road transport sector is a case in point. Many EV models today are large and heavy vehicles, requiring powerful engines and oversized batteries. The Volvo EX90, for example, weighs 2.8 tons, has a 500-horsepower engine, and a battery twice the size of that in a typical medium-sized car. To reduce resource use, many researchers advocate for a shift toward smaller, lighter vehicles. French engineer and author Phillipe Bihoux suggests the industry take inspiration from the Citroen CV2 and other models from the mid-20th century, which weighed under one ton.
Likewise, researchers in California investigating the lithium requirements for a fully electric car fleet in the United States calculated that a ”business as usual” scenario would require three times the current global lithium production. However, by downsizing batteries (and, by implication, cars), while also improving public transport, expanding bike lanes, and rethinking urban planning, researchers identified a best-case scenario that could cut lithium demand by 92 percent.
Rethinking Urban Mobility
A growing number of cities worldwide are taking steps to reduce car dependence. Over the past decade, Paris has pursued its vision of becoming a ”15-minute city,” improving access to essential services to reduce the need for travel, while expanding space for bicycles and pedestrians at the expense of car space. As a result, Paris has seen a 40 percent reduction in the car travel, and today, bike journeys outnumber car travel in central Paris.
A climate transition that involves reducing metal and energy demand is possible in other sectors as well, but any large-scale change faces an economic and political paradox. While some industries embrace technological shifts as part of the ”green transition,” few companies support measures that would reduce demand for their products. In northern Sweden, as well on a global level, this fundamental contradiction remains unresolved.
As northern Sweden faces a transformation driven by green technologies, a key question emerges: Can the region’s industrial development align climate goals with social equity? The answer will depend on how well the competing interests if environmental sustainability, corporate profits, and local communities are balanced.
Arne Müller is a freelance journalist and author living in Umeå, northern Sweden. Müller has written extensively on Sweden’s mining industry and green transition, and in 2016 he received the prestigious Guldspaden prize for investigative journalism in his book Norrlandparadoxen (‘The Norrland Paradox’). His most recent book, ‘Northern Lights – The Dream of Green Industry’, looks at the large industrial projects planned and under construction in northern Sweden as part of the climate transition.