Heidelberg cement plant cancels carbon capture plans despite billion-krona profits

One of Sweden’s largest carbon emitters, Heidelberg Materials’ cement plant in Slite on Gotland, has abandoned plans to capture and store its CO₂ emissions, despite the company reporting multi-billion-krona profits, Swedish public broadcaster SVT reports.

The company cites insufficient demand for low-carbon cement and the need for substantial state subsidies as reasons for scrapping the project. Its Slite facility, Sweden’s fourth-largest CO₂ emitter, releases 1.8 million tons annually—about 4% of the country’s total emissions.

Heidelberg paused the advanced project in November 2025 after being denied 8 billion kronor ($750 million) in state funding through Industriklivet, a government program that had exhausted its budget. The capture facility would have cost 15–20 billion kronor ($1.4–1.9 billion), according to the company.

Despite record profits—2.7 billion kronor ($250 million) in Sweden over the past five years and around 20 billion kronor ($1.9 billion) annually for the parent company—Heidelberg calls the investment unprofitable. Vice CEO Karin Comstedt Webb stated that public sector risk-sharing is essential: “We must see action from the government so we share the risk.”

The company also faces rising costs for EU emissions allowances, projected to reach “a couple of billion kronor annually” within a decade. Yet Comstedt Webb emphasized weak market demand for carbon-neutral cement, noting that higher prices for green products, state subsidies, and revenue from negative emissions would need to offset operational costs, including electricity.

Climate researcher Mathias Fridahl of Linköping University warned that delays risk undermining long-term climate goals: “You can pause for a few years, but not indefinitely. These projects must be realized.” Heidelberg insists it remains committed to transitioning but requires viable economic conditions to proceed.

The EU Emissions Trading System (EU ETS) caps greenhouse gas output from industry, energy, and aviation. Companies exceeding their allocated allowances must purchase additional credits, while those emitting less can sell surplus permits. The system aims to cut industrial emissions by 62% by 2030 compared to 2005 levels.