Knowledge gaps delay environmental permits

Many people feel that environmental permitting processes in the industrial and energy sectors are time-consuming, inefficient, and not particularly effective. This has increased calls for reforms to the legal frameworks. However, new research shows that a significant reason why environmental permits are denied or take too long is a knowledge gap between the industry applying for the permit and the authority granting it.

– In my research, I show that the permitting processes for Facebook’s data center in Luleå and Northvolt’s facility in Skellefteå were expedited despite being conducted within the current legal framework. In both cases, there was continuous dialogue and an ongoing exchange of knowledge between the companies and the reviewing authorities throughout the process. What is needed to increase the efficiency of environmental permitting processes is not extensive regulatory changes, but better collaboration between industry and authorities, says Kristoffer Sundström, a researcher in economics at Luleå University of Technology.

Investigated the efficiency of environmental review processes

In his dissertation, he has investigated the efficiency of Swedish environmental review processes by, among other things, analyzing over 1,600 permit cases handled by the environmental review delegations between 2018 and 2022. The aim was to investigate why certain review processes take longer than others. His analysis shows that 80 percent of the applications submitted to the environmental review delegations were deemed incomplete. Incomplete applications have, on average, processing times twice as long as applications that are complete from the start.

Facebook and Northvolt had efficient processes

A common criticism of environmental review processes is that regulations make them slow. Two major modern industrial projects studied in the dissertation, however, demonstrate well-functioning permitting processes. These are Facebook’s data center in Luleå and Northvolt’s facility in Skellefteå. There, the permitting processes proceeded quickly within the current legal framework. The processes were characterized by flexibility, predictability, and expertise. In both cases, there was a continuous dialogue and an ongoing exchange of knowledge between the companies and the reviewing authorities, where conditions and requirements were clarified as the process unfolded. The companies realized early on that this was something they needed to prioritize. Since Facebook is an American company, its understanding of Swedish legislation and how it is applied was lacking. For this reason, joint meetings were arranged with all parties involved to make the process more efficient. In the case of Northvolt, the county administrative board was involved throughout the entire process and served as a point of reference to ensure that the correct materials were prepared and submitted. This suggests that it is not the framework itself that is at fault when processes take a long time. What is needed instead are clearer guidelines and a continuous dialogue between the applicant and the authority granting the application.

“Companies need more support to understand what a complete application should look like. Within the reviewing authorities, expertise and staffing levels must be strengthened so that companies can receive better guidance and professional support regarding requirements. This saves time and money for both companies and authorities,” says Kristoffer Sundström.

Two case studies on emission standards

His dissertation also includes two case studies on the impact of emission standards on the amount of organic substances in discharges to waterways from pulp mills, measured as chemical oxygen demand, during the years 1981–2020. In the economic literature, economic instruments are often recommended over other environmental policy tools to reduce emissions. A well-known example is the EU’s emissions trading scheme to reduce carbon dioxide emissions. However, Kristoffer Sundström’s case study shows that emission limits, combined with trial periods, have contributed to significant reductions in water pollution. A trial period means that industry is granted an extended deadline to test and evaluate various methods for meeting emission limits.

“When properly designed and implemented, forms of environmental regulation other than economic instruments may be preferable in certain cases. This is particularly true when the effects of emissions on the environment are geographically localized, as is often the case with emissions into waterways,” says Kristoffer Sundström.

The research was funded by the Kamprad Family Foundation within the framework of Norrlandsnavet.

Thesis:

• The Effectiveness of Environmental Regulations: Design, Implementation, and Institutional Context