Nordic Leadership in Low-Carbon Materials
Photo: Adam Gavlák / Unsplash
Industrial acceleration without decarbonisation would be a European own goal.
The EU is getting ready for action to protect its industrial base. Competitiveness, resilience and security are key guiding principles. However, unless industrial acceleration is coupled with consistent and strengthened climate policy, it risks backfiring on all three fronts. Several industries, including in the Nordics, have realised this and are proving that decarbonisation is key both to Europe’s industrial future and to mitigating climate change.
The European Commission is working hard to finally launch the Industrial Accelerator Act (IAA), following multiple delays due to clashing views amongst Member States and stakeholders, and even internally in the Commission. Meanwhile, a revised Public Procurement Directive (PPD) is under development, to be published later this year. Together, these two instruments hold the potential to fill an important gap in EU industrial strategy: demand side policies. The question is, for what kind of products should demand increase, and what will it mean for climate policy?
The Nordics are leading the way on industrial decarbonisation
Looking north, the answer is clear. Many Nordic heavy industries have come a long way in developing fossil-free value chains, largely driven by key EU climate policies like the ETS.
In Sweden, the mining sector has set a fossil-free target for 2035. Near-zero emissions – or green – steel will be produced within the next few years. The last remaining blast furnace is set to be retired by 2030, reducing national GHG emissions by 7%. Downstream, construction companies such as Skanska and Peab are procuring low-carbon materials, deploying zero-emission construction machinery, and exploring ways to improve resource efficiency and circularity.are procuring low-carbon materials, deploying zero-emission construction machinery, and exploring ways to improve resource efficiency and circularity.
EU competitiveness depends on decarbonisation and a move away from fossil dependence.
In late 2025, Bellona convened a policy roundtable with representatives from the Swedish construction value chain, public procurers, researchers and civil society to explore how to develop lead markets for low-carbon construction. Participants agreed that EU competitiveness depends on decarbonisation and a move away from fossil dependence, especially in a context of increasing global competition and growing geopolitical tensions.
Policy uncertainties threaten industrial frontrunners and green investors
Some policy decisions in 2025 were unfortunate, such as the adoption of a weakened climate target for 2040 and a removal of the word “decarbonisation” from the Industrial Accelerator Act. The ETS2 was postponed, and there is uncertainty around the timeline for phasing out ETS1 free allowances. Such rollbacks in EU decarbonisation policy only create market uncertainty and undermine the prospect of a competitive, green European industrial base.
So, with the revision of the PPD and the adoption of the IAA on the horizon, how do we ensure that EU construction industry can effectively decarbonise and deliver on EU climate goals, while staying competitive and resilient to market and climate shocks?
Policy milestones for a more resilient and green industry
The roundtable stressed that the European construction industry needs clear market signals. Negotiations on the PPD and IAA, and the upcoming ETS review and Circular Economy Act, will together determine the prospects for a truly green and competitive industrial base, that lowers emissions and counters rampant climate change.
As co-signatories, we believe that:
- Staying the course on climate policy is a crucial enabler of the industrial transition. Focus must remain on implementing and strengthening the impact of existing policy, including the EU Climate Law, ETS1, ETS2 and CBAM.
- The EU’s industrial competitiveness, resilience, and security depend on resource efficiency and a move towards a circular economy. Although policymakers acknowledge this, action is lagging. The Circular Economy Act offers an opportunity to change course.
- The EU Public Procurement Directive can help decarbonise the construction value chain and promote climate innovation. To achieve this, Green Public Procurement needs to become mandatory across the EU. This is an essential step to collectively raise the bar and provide predictability for industry, while using public money to deliver on the climate, environmental and social goals we have set as a society.
- In the context of the IAA, environmental labels should promote deep decarbonisation and avoid encouraging technological lock-ins in polluting and outdated production routes. This will mean the exclusion of fossil-based steel from top performance tiers, inclusion of upstream emissions, and setting of phase-out timelines for worst-performing production classes. Similarly, a European preference criterion only
makes sense if it promotes deep industrial decarbonisation and helps deliver on the EU’s climate goals.
In a world where competition for critical resources is on the rise, it makes little economic sense for the EU, a union with very limited fossil resources, to cling on to fossil dependency. Moreover, science tells us that climate inaction in itself could cost the EU €5.6 trillion by 2050. Between 1980 and 2024, extreme weather events caused more than €820 billion in asset losses in Europe, with a quarter of these losses concentrated between 2021-2024.
In a world where competition for critical resources is on the rise, it makes little economic sense for the EU, a union with very limited fossil resources, to cling to fossil dependency.
Yet the numbers that matter most are not financial. Over 180,000 deaths in Europe were caused by extreme heat waves from 2022 to 2024. We are approaching irreversible climate tipping points at an unprecedented pace, and rapidly closing the window of opportunity to stay within 1.5°C of global warming.
Further delays will not make the transition easier or cheaper, but rather more expensive and chaotic. Delivering on agreed-upon EU climate policy and using the union’s spending power to transition towards a European low-carbon industry is the right choice not only for competitiveness and resilience, but for the wellbeing of EU citizens and the global community.
The views expressed in this article are the author’s own and do not (necessarily) reflect REVOLVE's editorial stance.