Background According to the United Nations, climate change is one of the most challenging and urgent problems. To reduce emissions, various regulations have been introduced. Emissions trading (EU-ETS) and carbon dioxide tax are two economic instruments aimed at reducing greenhouse gas emissions. The industrial sector in Sweden today accounts for 31% of carbon dioxide emissions, and a common fossil energy carrier used is liquified petroleum gas (LPG). When LPG is burned, carbon dioxide is produced, contributing to climate change. By replacing LPG with a sustainable energy carrier, industries can reduce costs associated with emissions and thus increase competitiveness while lowering environmental impact. Therefore, there is a need for a framework that deals with both the economic and environmental impact that arises if alternative sustainable energy carriers replace LPG. Objectives The study’s objective is to evaluate alternative energy carriers that can phase out the use of LPG. The contribution of this study is a framework that analyzes and visualizes the economic and sustainable benefits of changing energy carriers. Methods A techno-economic model was developed by evaluating economic and sustainable indicators. A case study was conducted on a company that uses LPG in its manufacturing process. Eight different scenarios were set up where various energy carriers are used. Data concerning the different scenarios were collected. The scenarios were compared and analyzed based on the model to see which alternative energy carriers generate economic and sustainable improvements. Results The results from the case study show that all scenarios had an increased environmental performance compared to LPG. Either by reduced CO2 emissions or by being carbon dioxide neutral. From an economic perspective, only one scenario is more favorable than LPG, Bio- LPG. Bio-LPG reduces the total cost by 28.5%. Conclusions The study presents a model that can evaluate alternative energy carriers from an economic and environmental perspective. In many cases, a trade-off was discovered either being sustainable at a high cost or paying fees for emissions at a lower price. Alternative energy carriers exist with less environmental impact. Still, the technology for many of them is not sufficiently developed for large-scale production and use, which means that the cost is too high. Depending on the company's business strategy, the model can visualize the effects of a possible change of energy carrier. / Bakgrund Klimatförändringarna är ett av de mest utmanande och brådskande problemen enligt Förenta nationerna, för att minska utsläppen har olika regleringar införts. Handel med utsläppsrättigheter (EU-ETS) och koldioxidskatt är två ekonomiska styrmedel med syfte att minska växthusgasutsläppen. Industrisektorn i Sverige står idag för 31% av koldioxidutsläppen och en vanlig fossil energibärare som används är gasol. När gasol förbrännas produceras koldioxid som bidrar till klimatförändringar. Genom att byta ut gasol mot en hållbar energibärare kan industrier minska kostnader som är förknippade med utsläpp och på sådant vis öka konkurrenskraft, samtidigt som man minskar miljöpåverkan. Det finns därav ett behov av ett ramverk som behandlar både den ekonomisk och miljömässig påverkan som uppkommer om gasol byts ut mot alternativa hållbara energibärare. Syfte Syftet med studien är att utvärdera alternativa energibärare som kan fasa ut användandet utav gasol. Bidraget från denna studie är ett ramverk som analyserar och visualiserar de ekonomiska och hållbara fördelarna med att byta energibärare. Metod En tekno-ekonomisk modell utvecklades genom att utvärdera ekonomiska och hållbara indikatorer. En fallstudie utfördes på ett företag som använder gasol i sin tillverkningsprocess. Åtta olika scenarier sattes upp där olika energibärare används. Data rörande de olika scenarierna samlades in. Scenarierna jämfördes och analyserades utifrån modellen för att se vilka alternativa energibärare som genererar ekonomiska och hållbara förbättringar. Resultat Resultaten från fallstudien visar att alla scenarier hade en ökad miljöprestanda jämfört med gasol. Antingen genom minskade CO2-utsläpp eller genom att vara koldioxidneutrala. Ur ett ekonomiskt perspektiv är endast ett scenario mer gynnsamt än gasol, biogasol. Biogasol minskar den totala kostnaden med 28.5 %. Slutsatser Studien presenterar en modell som kan användas för att utvärdera alternativa energibärare utifrån ett ekonomiskt och hållbart perspektiv. En avvägning upptäcktes i många fall, antingen vara hållbar till hög kostnad eller betala avgifter för utsläpp till en lägre kostnad. Alternativa energibärare existerar som har mindre miljöpåverkan, men teknologin för många utav dem är ej tillräckligt utvecklad för storskalig produktion och användning vilket medför att kostanden är för hög. Beroende på vilken affärsstrategi företag har kan modellen visualisera effekterna vid ett eventuellt byte av energibärare.

<p>The aim of the thesis is to analyze the design of the present climate and energy policies. The main focus is on how the policy instruments affect the Swedish stakeholders who are included in the European Union’s Emission Trading Scheme (EU-ETS). In-depth interviews have been carried out with representatives from the basic industry, energy utilities as well as industrial and green organizations. The purpose is to illustrate have how these stakeholders view the current policy framework and what amendments that they view as necessary.</p><p>Suggestions to the Government are given regarding the design of national policies and policy instruments to provide for an improved policy framework. The information and synthesis have furthermore been collected through extensive literature studies as well as participating at conferences and seminars.</p><p>The thesis is written as a monograph in order to address a larger group of readers interested in the transition of energy systems towards sustainability as well as policy makers and Swedish stakeholders. The common understanding that the global energy systems have to undergo a transition to renewables and higher energy efficiency due to the earth’s finite sources of fossil fuels and uranium presents large challenges for policy makers and business sectors as well as the society in general.</p><p>Global greenhouse gas (GHG) emissions have to be drastically reduced and the work to achieve this has started through international negotiations such as the Kyoto Protocol. As the present commitment levels are low, an important issue in a short-term perspective is to develop a more comprehensive and efficient system with a much wider participation and more stringent emission targets.</p><p>In order to achieve current national policy goals and international GHG emission commitments the Swedish Government utilizes a number of policy instruments that are either nationally self-assumed or called for by international agreements or the European Union. The Swedish stakeholders that are included in the EU-ETS face a broad policy framework that has a large impact on their daily operations and future investment strategies. It is imperative for the policymakers, i.e. the Government, to act in accordance with the long-term perspective that the climate change issue and the transition of the energy system require. It is likewise important that any actions are in accordance with the operational and investment climate that the business sector faces. It is argued that these aspects are not fully considered as the success of the next national budget or term of public office seems to overshadow these issues. A long-term perspective is required to provide the business sector with stable and reliable incentives. This is needed to provide the economic conditions under which the businesses can realize investments that will result in emission reductions. Short-term policies reinforce the view of environmental investments as a form of risk investments. This negatively affects the possibility of the policy instruments to effectively achieve established policy goals.</p><p>Paying attention to these requirements is however not a simple task for policy makers as it will require agreements between the political parties. This demonstrates the main political difficulty with climate change – the requirement of a long-term and full commitment by all state authorities. It should be noted that the thesis does not attempt to describe the Swedish policy makers as neglecting the urgency of acting to mitigate climate change. The national agenda is far to advanced from an international perspective for such statements. The thesis however pinpoints some important issues highlighted by stakeholders, within the business sector and other organizations, who are concerned with the present climate and energy policy framework.</p><p>Some of the findings are as follows:</p><p>• Reducing GHG emissions in order to combat climate change must include a long-term perspective</p><p>• The design of policy instruments should consequently be long-term to increase the support for investments in GHG emission reducing technologies</p><p>• The design of policies that promote low GHG production alternatives within the energy utilities should be improved</p><p>• The large potential for reduced GHG emission available through fuel switching and energy efficiency improvements in the Swedish basic industry should be promoted by amended policies</p><p>• Reformulate or abandon the national GHG emissions target goal with the current formulation</p><p>• Strive for an emission rights allocation system that is as transparent, fair and predictable as possible</p><p>• The policy framework should aim for a high level of stability through interaction with the affected stakeholders</p><p>• These factors are inherently important for the overall efficiency of the policy framework</p>

The aim of the thesis is to analyze the design of the present climate and energy policies. The main focus is on how the policy instruments affect the Swedish stakeholders who are included in the European Union’s Emission Trading Scheme (EU-ETS). In-depth interviews have been carried out with representatives from the basic industry, energy utilities as well as industrial and green organizations. The purpose is to illustrate have how these stakeholders view the current policy framework and what amendments that they view as necessary. Suggestions to the Government are given regarding the design of national policies and policy instruments to provide for an improved policy framework. The information and synthesis have furthermore been collected through extensive literature studies as well as participating at conferences and seminars. The thesis is written as a monograph in order to address a larger group of readers interested in the transition of energy systems towards sustainability as well as policy makers and Swedish stakeholders. The common understanding that the global energy systems have to undergo a transition to renewables and higher energy efficiency due to the earth’s finite sources of fossil fuels and uranium presents large challenges for policy makers and business sectors as well as the society in general. Global greenhouse gas (GHG) emissions have to be drastically reduced and the work to achieve this has started through international negotiations such as the Kyoto Protocol. As the present commitment levels are low, an important issue in a short-term perspective is to develop a more comprehensive and efficient system with a much wider participation and more stringent emission targets. In order to achieve current national policy goals and international GHG emission commitments the Swedish Government utilizes a number of policy instruments that are either nationally self-assumed or called for by international agreements or the European Union. The Swedish stakeholders that are included in the EU-ETS face a broad policy framework that has a large impact on their daily operations and future investment strategies. It is imperative for the policymakers, i.e. the Government, to act in accordance with the long-term perspective that the climate change issue and the transition of the energy system require. It is likewise important that any actions are in accordance with the operational and investment climate that the business sector faces. It is argued that these aspects are not fully considered as the success of the next national budget or term of public office seems to overshadow these issues. A long-term perspective is required to provide the business sector with stable and reliable incentives. This is needed to provide the economic conditions under which the businesses can realize investments that will result in emission reductions. Short-term policies reinforce the view of environmental investments as a form of risk investments. This negatively affects the possibility of the policy instruments to effectively achieve established policy goals. Paying attention to these requirements is however not a simple task for policy makers as it will require agreements between the political parties. This demonstrates the main political difficulty with climate change – the requirement of a long-term and full commitment by all state authorities. It should be noted that the thesis does not attempt to describe the Swedish policy makers as neglecting the urgency of acting to mitigate climate change. The national agenda is far to advanced from an international perspective for such statements. The thesis however pinpoints some important issues highlighted by stakeholders, within the business sector and other organizations, who are concerned with the present climate and energy policy framework. Some of the findings are as follows: • Reducing GHG emissions in order to combat climate change must include a long-term perspective • The design of policy instruments should consequently be long-term to increase the support for investments in GHG emission reducing technologies • The design of policies that promote low GHG production alternatives within the energy utilities should be improved • The large potential for reduced GHG emission available through fuel switching and energy efficiency improvements in the Swedish basic industry should be promoted by amended policies • Reformulate or abandon the national GHG emissions target goal with the current formulation • Strive for an emission rights allocation system that is as transparent, fair and predictable as possible • The policy framework should aim for a high level of stability through interaction with the affected stakeholders • These factors are inherently important for the overall efficiency of the policy framework