20 December 2018    

Fredrick Federley – Member of the EU parliament proponent of sustainable energy and lowering CO2 emissions

In the latest episode of the podcast “The energy forecast” Cecilia Edling Östman interviewed Fredrick Federley, member of the European Parliament.

Federley has had several roles in the Swedish Parliament and since 2014 he is a member of the European Parliament representing the Swedish Center Party. One of his main focuses is energy related issues and going from brown to green.

Fredrick is dedicated to the transition to the low CO2 society and has been working on environment, climate, animal welfare and fighting global resistance for the last four and a half years in the European Parliament. Prior to his work in the EU Federley was mainly working on social security pensions and migration policies in Sweden.

Emissions Trade System

One of Federley’s focus areas for the last couple of years has been the Emissions Trade System (ETS). He describes it as a market for carbon dioxide.

“It’s covering the energy sector- most of the industries but it does not cover agriculture and transport for example. if I have an industry and my processes lead to CO2 emissions I need to buy allowances that are comparable to the amount of carbon dioxide I release into the atmosphere. So, if I release a 100 tons of carbon dioxide I will have to buy 100 allowances to pay my due for it.”

However, the price has been too low so far, so it didn’t really have the effect that Federley hoped for. The effect he is out to get is that it will be expensive enough to emit carbon dioxide so that they push innovation forward. This will be more beneficial in the ideal situation according to Federley, since it will be more beneficial to improve the processes in order to decrease carbon dioxide than to actually pay the allowances.

Federley states that this works very well for the energy sector since all energy producing companies are very much in favor of a really high price on carbon dioxide, because they also have an easier way then of immediately putting it on the electrical bill to the consumer.

Innovation fund

In order to boost the leap to new technology an innovation fund has been established.

“In the innovation fund we set aside a lot of allowances that are sold on the market and the revenues we get from that is used for these spearhead projects to try to reduce CO2.”

One project that has been funded this way in Sweden is the hybrid project between LKAB, Vattenfall and SSAB. They are now trying to move away from using coal in the steel process and towards using hydrogen gas instead and the project is starting a test plant now. Federley furthermore explains how these kinds of spearhead technology projects are just a cost for companies since there is no revenue in it. It is a big risk and high price for companies, and in order to take away the toughest consequences of putting all that money into new projects is lifting the innovation found money. Any industry moving towards new technology which isn’t already on the market can apply for funding.

Energy sector development within the EU

Since Federley started working in the European Parliament in 2014 there has been big changes in the energy sector development, such as the set-up of the main regulation for the new ETS period 2021-2030 as well as the formation of the energy union.

“If you look EU wide, we do not have a deficit on energy, but we do have a deficit now in different parts of the European Union and we have a big surplus on energy in other parts of the union. If we are able to create a common market where we are able to trade electricity you would actually be able to solve those problems through the energy union.”

Another big change has been to form a legislative proposal on energy efficiency. The European Union is trying to work much more on efficiency issues than they have been doing before, such as decrease the consumption of energy in already up and running processes. Moreover, the EU has been working on the renewable files which means finding from which sources there are renewable energy and how much renewable energy should there be up on the market until 2030.

In order for the EU to be climate neutral by 2050 there are certain matters that need to be addressed, such as:

  • The legislative framework which is in place now, but it needs to be upgraded.
  • In the next mandate the renewable energy package needs to be reviewed and a review of the ETS in order to tweak it in a more ambitious way.
  • Regulation needs to be updated in the next mandate.
  • Transportation, both public and private.

Fredrick Federley’s energy forecast

Federley states that he is convinced that we will move much more towards renewable resources since there is a growing market for that. For example, in the last 2 years solar energy has become more financially viable than coal, moving money and investments into renewable energy instead of coal. Federley additionally explains that he believes that we will work much more in hydrogen gas in the future and that the energy usage will be much more diverse.

“Aviation will probably be hydrogen at some point but the start off will be to get an immediate cut of CO2 emissions from aviation. I think the start off will be renewable sources, electricity and in the long run hydrogen gas”.

Federley concludes the interview by expressing his belief that we are underestimating the power of the chains of events that are happening at the moment. The target that the EU has set up on increasing energy efficiency of at least 32% by 2030 he thinks will be overreached, because the profit now in investing in renewable energy is so much higher than what was anticipated so likely the EU will be able to overachieve that goal.

Want to listen to more of “The energy forecast”?


Alexander Helling, CIO of Baseload Capital on How financing plays a big role in going from brown to green.

Mark Howells, professor in energy system analysis.

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