The Industrial Leap programme – planning, implementation and follow-up

The Industrial Leap programme differs in some ways from the Swedish Energy Agency’s work on research and innovation in the energy area since the principal purpose of the Industry Leap relates to climate policy, and besides research, it can also finance investments in commercial holdings. The Industry Leap has also been expanded twice and is now considerably broader than it was at the start. Nevertheless, the Government has continued to assign the Swedish Energy Agency sole responsibility for the Industry Leap programme. The Government did not analyse in advance the consequences of the expansions, for example in terms of what target group and types of measures would be covered by the updated design. The nature of the target group remains largely unclear after the latest expansion.

The implemented expansions also lead to greater overlap with the Climate Leap, a programme to support climate investments for which the Swedish Environmental Protection Agency is responsible. For example, some actors can apply for support for equivalent investments in facilities that reduce greenhouse gas emissions from both the Industrial Leap and the Climate Leap programmes. However, requirements for estimates of emission reductions for investments are lower under the Industrial Leap, which is not reasonable, according to the Swedish National Audit Office.

It is the assessment of the Swedish National Audit Office that there is a risk that the central government finances substantial investments through the Industrial Leap programme, despite the lack of conditions for several of the funded projects to be implemented. Several projects are dependent on actions in other policy areas for their implementation, for example expansion of electricity or infrastructure. However, the Government has placed a lot of trust in the Industrial Leap’s contribution to Sweden’s climate goals. To accomplish this, it is essential that the Government to a large degree coordinates the management between climate policy and other policy areas, and at the same time ensures that there is a plan to achieve Sweden’s climate goals even if the high expectations of the Industrial Leap would not be met.

In the application process, the Swedish Energy Agency does not clearly enough request the information needed to assess applications for the Industrial Leap programme. The Agency therefore frequently needs to ask applicants to supplement their application, which is an inefficient approach. It is also unclear how the Swedish Energy Agency determines whether supplementary information should be requested. The Swedish Energy Agency has aspired to facilitate the process for applicants, but the Swedish National Audit Office considers that their approach to collecting information from applicants is inefficient and furthermore, involves a risk that applicants are treated differently without any objective basis.

Even though information on the potential to decrease emissions is central to assessing applications, the Swedish Energy Agency has not ensured that the estimates concerning this potential, supplied by the applicants, are comparable. Since the Swedish Energy Agency has not provided sufficient guidance on how to estimate the potential, applicants have used different methods and with different boundaries, which means that the estimates are not comparable in addition to being difficult to comprehend. According to the Swedish National Audit Office, this makes it difficult for the Swedish Energy Agency to clearly and transparently rank which projects should primarily be granted funding. Therefore, it is the assessment of the Swedish National Audit Office that there is a risk that projects are granted funding even if they do not contribute to a large extent to the aim of the Industrial Leap.

The Swedish Energy Agency uses several criteria for assessing applications to the Industrial Leap, but has not provided sufficient guidance to internal and external assessors on how to interpret and apply the criteria. According to the Swedish National Audit Office, this further contributes to the Agency’s difficulties in comparing and ranking different projects.

The Swedish National Audit Office considers that the Swedish Energy Agency’s decisions to reject or approve an application are not always sufficiently justified, as it is not always clear how the Agency reached its decision. In addition, documentation on the information that formed the basis for the Agency’s decision in the case is often lacking.

During most of the period under audit, the Swedish Energy Agency has not collected the information needed to follow up and evaluate the results and effects of the individual projects. Examples of such information include updated assessments of the projects’ potential to reduce emissions and estimates of the extent to which the projects have brought a particular technology closer to market introduction. In its follow-up reporting to the Government, the Swedish Energy Agency has instead used estimates of potential that the applicant stated in their application. These estimates are uncertain and not comparable between projects. A contributing factor to the fact that the Swedish Energy Agency has not sufficiently prioritised follow-up and evaluation is that the design of the Industrial Leap programme has changed several times since its introduction. The Swedish Energy Agency has therefore had to spend time and resources adapting to new conditions and expanding expertise in several areas.