What Sweden’s carbon dilemma tells us about the next phase of net-zero

Despite Sweden’s reputation as a sustainability leader, emissions are on the rise again and skepticism about offsets is still strong. At the same time, the carbon market has transformed dramatically over the last few years. After nearly three years working in the industry, I’ve seen how different the reality can be from the misconceptions I grew up with.

Emissions and environmental policies in recent years 

Sweden has long been one of the most progressive countries when it comes to sustainability – in innovation, infrastructure, investment, and policy. Yet, with more relaxed environmental policies from the conservative government, emissions have started to increase again, and the country is now further away from its 2030 NDC target.

Sweden’s history as a climate leader & the public perception of carbon offsetting and removal

In a country where people have six different bins and are willing to drive to a recycling centre to make sure their recycling gets done properly, it’s perhaps not surprising that the idea of offsetting emissions rather than reducing them does not sit well with many people.

In my experience, many people in Sweden believe carbon offsetting projects are inherently bad, as companies should focus on reducing their emissions, rather than paying someone else to make the problem go away.

When I was in school, I remember talking about the concept of offsetting, and my teachers telling me it was simply a way for companies to “buy their way out” and continue to emit as much as they wanted. It was only when I started working for AlliedOffsets that I realised how wrong they were.

Does carbon offsetting allow companies to continue to emit without any consequences? 

Still to this day, when I speak to friends and family back home about my work, the consensus largely remains that companies offset emissions primarily to avoid investing in internal decarbonisation efforts. Negative media attention regarding some projects has led many people to dismiss all projects as the same.

I have always said that since I spend most of my week working, I want it to be somewhere where I can make a difference. I want my work and the company I work for, to have a positive impact on the world. Yet, I often hear, ‘If you want to work with sustainability and make a difference, should you not focus on helping companies reduce their emissions rather than help them get away with continuing to emit carbon?’ Whilst I will be the first to admit that the market has had a poor reputation due to the actions of certain buyers and developers and a lack of oversight, and official standards governing the quality of credits over the years. I have, in my (almost) three years in the industry, seen that a lot of change has happened since then, and there are a wide variety of projects available in the market today as quality has taken more of a centre stage.

Wide variety of projects available 

After I started working for AlliedOffsets, I realised just how many different offsetting and removal project types there are, and how many projects are focusing on different co-benefits in addition to the carbon removal or avoidance happening. For example, according to our database at AlliedOffsets, there are currently over 11,000 projects globally with added co-benefits, including alignment with the UN Sustainable Development Goals (SDGs) and Verra CCB validation or verification.

Similarly, whilst I’ve been attending conferences in London, Manchester, and even Colombia, I’ve met people in all parts of the carbon market value chain and realised that everyone I’ve come across in this industry is working in this space because they have a genuine passion and interest in sustainability.

An overview of Sweden’s carbon market and recent activity 

In Sweden, there are 53 projects in the voluntary carbon market, and over 92% of those projects are removal projects (the majority of which are technical removal projects). As of September 2025, there are over 230 buyers of Swedish credits, most of which are national companies such as Vattenfall, Stockholm Exergi, Max Burgers, and Arvid Nordquist.

Top 10 buyers by sector

In general, we’ve seen an upward trend in the number of buyers entering the market in recent years, although the number is still relatively small compared to other countries.

Why carbon removal and offsetting are needed to meet global decarbonisation and NDC targets

In recent years, several publications and research reports have highlighted that reducing emissions alone will not be enough to reach global net-zero goals or achieve countries’ NDC targets. Many studies now show that carbon offsetting and removal are essential tools to bridge the gap between what can realistically be reduced and the targets that have been set. This is particularly true for hard-to-abate sectors such as aviation, shipping, cement, and agriculture.

Even for companies in other sectors, there are always residual emissions that are almost impossible to remove entirely (at a reasonable cost). That’s where the use of high-quality carbon removal and offsetting credits can come in, as they allow companies and countries to account for emissions they cannot eliminate, while also generating additional benefits, such as biodiversity protection, job creation, and investment in local communities.

For example, using AlliedOffsets Forecasting model, we can see that in a high growth scenario, thousands of jobs can be generated locally in Sweden if demand for locally produced credits increases.

Projected VCM employment by project type

The growing carbon removal market 

While carbon offsetting in general often meets skepticism in Sweden, carbon removal is increasingly seen as a credible and necessary solution. Unlike traditional avoidance projects, carbon removal tackles emissions at their source and can produce tangible, long-term climate benefits, which makes it easier for both policymakers and the public to accept.

The market for carbon removal is expanding rapidly, driven by growing corporate net-zero commitments and the recognition that hard-to-abate emissions cannot be eliminated entirely. In Sweden, this trend is creating significant investment opportunities across different project types. For example, data from AlliedOffsets forecast model highlights the potential excess profit margins by project type:

• BECCS (Bioenergy with Carbon Capture and Storage) – Hydrogen production: 34%
• Agricultural soil carbon projects: 22%
• BECCS from Energy-from-Waste facilities: 15%

Excess profit potential by project type

This illustrates that carbon removal is not only a climate necessity but can also offer an economic opportunity, attracting both domestic and international investment.

Conclusion

In Sweden, as in other countries, skepticism will remain, but what I’ve learned is that offsets and removals, when done right, are not an excuse; they’re an essential tool alongside reductions. I believe (as many others in this industry) that the real challenge is not whether offsets should exist, but how we ensure their quality and integration into companies' net-zero pathways.

This article is also published on AlliedOffsets. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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