New horizon

Driving along the forest-lined roads that wind through the northern Swedish county of Norrbotten you get accustomed to seeing the signs of heavy-duty industry: the lorries laden with timber, the rust-brown cargo trains transporting iron ore. This is what has traditionally defined Norrbotten, blessed as it is with vast tracts of land and many of the natural resources that have built Sweden and made it rich.

Yet in recent years there has been a shift here – one that’s now picking up momentum. Norrbotten, which is a similar size to Austria and makes up more than 20 per cent of Sweden’s land mass, is positioning itself as a leader in the booming renewable energy and hi-tech industries. Instead of simply sending raw materials and energy down to Stockholm, innovation is happening here. Norrbotten’s leaders are also looking decades down the road, envisioning the economy of the future and how they can be an integral part of it.

“Nowadays the jobs are here,” says Björn Nilsson, governor of Norrbotten. With a background in both science and business – and a stint in Silicon Valley under his belt – Nilsson has long been a champion for the region. Thirty years ago, the area suffered from high unemployment and a brain drain. Now Norrbotten has the second-highest gross regional domestic product in Sweden and an unemployment rate that, pre-pandemic, hovered under 5 per cent (these days it has grown but less so than in other parts of the country). Though there is still a north-south divide in Sweden, Norrbotten has an increasingly effective pitch to entice southerners to head north: there’s space, affordable property and a growing need for skilled workers.“Many sectors are looking for people,” adds Nilsson, sitting in his residence in Luleå, the region’s capital. The hall is filled with works of art on loan from the national collection and a handful of stuffed Nordic animals such as the Eurasian lynx and Arctic fox are perched nearby. “We should aim even higher. We haven’t developed all our opportunities.”

Signs of these opportunities are everywhere. Take the vehicles on the highways flashing Varning signs in the oncoming lane. They are all followed closely by a lorry carrying an 80-metre-long wind-turbine blade and headed to Markbygden, an area 20 minutes outside of the town of Piteå, home to the largest wind farm in Europe and one of the world’s five biggest. Rising up out of the forest are 300 turbines; eventually Markbygden is slated to comprise 1,101 turbines.

Markbygden will supply the country with potentially gigawatts of additional clean energy, a necessary precondition for the next big thing in Norrbotten that stands to revolutionise the way various industries, if not the entire world, function. Hydrogen – its production, its use as a transport fuel, as a critical element in industrial processes and as a store for electricity – could go a long way in the fight to reduce carbon emissions. And Norrbotten is years ahead of most of the competition in exploring its possibilities.

Nowhere is hydrogen’s potential more evident than at the ssab steel plant at the edge of Luleå. Here tonnes of iron ore are brought in on trains every day from northern mines. That ore is placed into a blast furnace where hot air is used to extract the iron, which emerges as molten metal, flowing like lava from a volcano into train cars waiting below as sparks fly across the floor and smoke billows to the high ceilings.

This process requires coal, and it is a very dirty industry. Steel-making alone is responsible for 10 per cent of Sweden’s total carbon emissions. After the Paris Agreement was signed, it became clear to ssab’s leadership that even attempting to capture its carbon output wouldn’t bring numbers anywhere near the targets. So they took a bold step and initiated the Hybrit project: a pilot plant demonstrating that it’s possible to produce “fossil-fuel free” steel and bring carbon emissions to zero using hydrogen.

“We believe that the potential of hydrogen technology is huge worldwide,” says Martin Pei, executive vice president of ssab. “If we can show here in Sweden that the technology is developed and the process can run economically at industrial scale, then we believe many other steel companies in the world will follow. This is the start of a revolution of the whole steel industry.”

In order to produce hydrogen you need water and Norrbotten’s rivers boast some of the highest volumes in Europe. You also need energy and Norrbotten is supplied with 100 per cent renewable energy from hydroelectric, wind and solar farms. That means a carbon-neutral society is within reach here in ways that other places can only dream of. While the environmental implications are obviously huge, it’s the potential profits that have brought many on board. Investors are swayed by the notion that Europe could compete with industrial juggernauts such as China.

“One of the visions we have is to become the Saudi Arabia of Europe, with a little more freedom,” says Mox Murugan, investment manager at Invest in Norrbotten, with a chuckle. “In other words, a major energy supplier to Europe. People will say that it’s ambitious – but is it? Norrbotten was hugely important last century in powering Europe’s growth: most of Europe’s iron came from here. This century it could well be energy instead of iron. The electricity here is emissions-free, at the lowest prices in Europe and ultra-reliable – there hasn’t been a major grid outage since 1979. All these ingredients are why power-intensive industries are looking to locate here.”

Murugan’s claims are borne out by commercial interest in the region. Facebook chose the area as the site of its first data centres outside the US not only because of its stable grid and its consistently cool temperatures but also because they could be run mainly on renewable energy. That has spawned new offices of local suppliers around its perimeter and the growth of companies aimed at serving the highly secured new centres. In Skellefteå to the south – not part of Norrbotten, technically, but the municipality works closely with Luleå – a new Northvolt battery factory promises to create up to 15,000 new jobs in coming years, in a city that has just 30,000 people in the workforce. Then there’s the Esrange Space Centre, whose large satellite dishes emerge out of the forest here and there in the far north. It’s an important piece of the European Space Agency’s activities, quietly working away above the Arctic circle.

The German ambassador to Sweden, Anna Prinz, recently took a delegation to Norrbotten to meet Governor Nilsson and tour some of the projects underway. Germany is investing €9bn in research and construction of its own factories to use hydrogen. “Sweden is in an important geostrategic position for Europe,” says Prinz. “China is very fast and everywhere it is trying to co-operate in new energy resources, methods and technologies. We want to have our own European development.”

Prinz calls Norrbotten “a hidden jewel” when it comes to the hydrogen industry. “What they are doing right now will have a global impact,” she says.

The development of Norrbotten relies not just on major industrial projects but also on small business, technology start-ups and more. The Luleå University of Technology acts as hub for all of this. It not only attracts talent and conducts important research, it also collaborates with other universities, local start-ups and the government to help drive innovation.

Neil Costigan is a long-time technology entrepreneur based in Luleå as ceo of security software start-up Behaviosec. Costigan’s office is in the Luleå Science Park, where an incubator called Arctic Business is thriving by taking smart ideas and nurturing them into successful businesses. Costigan says that one reason it works so well is that the engineering talent here is exceptional. “I’ve looked at some of the kids here and I’m always blown away by the depth of knowledge,” he says.

Costigan, originally from Ireland, is also quick to extoll the benefits of living in Norrbotten, though he admits that the winters are long. “But from March until May it’s just beautiful bright skies and snow everywhere, with the whole city out walking on the ice,” he says. “Then the summers are just amazing. And there’s an airport with 16 flights a day to Stockholm.”

Both Luleå and Piteå are in a position to benefit significantly from an uptick in regional investment – as are other local towns and the larger mining city of Kiruna, which is about four hours further north. “What we lack to continue to drive that growth is people,” says Nilsson.

Convincing people to move north isn’t the only challenge, however. It can be difficult to navigate the bureaucracy to get a Swedish personnummer, which affords the right to work, even for EU citizens with an offer of employment due to a slow and backlogged system. For a real influx of the human capital needed to make the most of opportunities here, there will need to be a more concerted effort to cut red tape.

It seems, though, that the people driving change here are acutely aware of these challenges and are more than determined to face them. “We need to save the planet and it’ll be good business too. So we take the lead,” says Nilsson. “We need to join forces to propel and accelerate, achieve what was previously thought to be impossible. That’s a thrilling thought and it’s something that attracts people.”