The target of zero emissions sets a new standard for industry and industrial policy. Industrial policy in the twenty-first century must aim to achieve zero emissions in the energy and emissions intensive industries. Sectors such as steel, cement, and chemicals have so far largely been sheltered from the effects of climate policy. A major shift is needed, from contemporary industrial policy that mainly protects industry to policy strategies that transform the industry. For this purpose, we draw on a wide range of literatures including engineering, economics, policy, governance, and innovation studies to propose a comprehensive industrial policy framework. The policy framework relies on six pillars: directionality, knowledge creation and innovation, creating and reshaping markets, building capacity for governance and change, international coherence, and sensitivity to socio-economic implications of phase-outs. Complementary solutions relying on technological, organizational, and behavioural change must be pursued in parallel and throughout whole value chains. Current policy is limited to supporting mainly some options, e.g. energy efficiency and recycling, with some regions also adopting carbon pricing, although most often exempting the energy and emissions intensive industries. An extended range of options, such as demand management, materials efficiency, and electrification, must also be pursued to reach zero emissions. New policy research and evaluation approaches are needed to support and assess progress as these industries have hitherto largely been overlooked in domestic climate policy as well as international negotiations. Key policy insights

District heating satisfies about 60% of the heat demand in Swedish buildings. Today, more than two thirds of the heat supply to the district heating systems is based on biomass and waste, and biomass alone accounts for about half of the heat supply. The purpose of this paper is to present the Swedish experiences of introducing and expanding the use of biomass in the district heating systems and to identify the main drivers behind this development. Our five research questions and the corresponding conclusions consider the driving forces from energy policy tools and local initiatives, the biomass prices, the established infrastructures in forestry and district heating, the technology paths for biomass conversion, and finally the future challenge of competing uses of biomass