How regulatory sandboxes for innovative net-zero technology can be organized in Sweden

Technological development in a number of areas is taking great strides right now, not least due to advances in AI. But sometimes laws and regulations become an obstacle to rapid development and implementation. I EU's Net Zero Regulation sets eligibility requirements for member states to introduce regulatory sandboxes as a tool to ensure that innovative technologies that contribute to reduced greenhouse gas emissions come to fruition more quickly. A regulatory sandbox in this regard would give a company an exemption from current regulations to, for example, test new technologies in a controlled, real-world environment.

Vinnova sees a need for collaboration between authorities to handle applications

On behalf of the government, Vinnova has analyzed and developed a proposal for how a national contact point for regulatory sandboxes can be organized in Sweden.

- One insight from the analysis is that several different authorities are responsible for legislation, permit review and supervision that may be affected in each individual proposal. We therefore propose that a joint contact point for authorities receives a proposal and then transfers the decision to establish a sandbox to competent expert authorities, says Johana Axelsson, Vinnova, project manager for the government assignment.

During the work on the assignment, Vinnova has, among other things, conducted interviews with companies and analyzed how other countries work with regulatory sandboxes and how they organize the work.

What do companies say about the benefits of regulatory sandboxes?

As part of the analysis, a number of companies operating in sectors that could potentially be relevant for regulatory sandboxes in net zero technology were interviewed. The companies are requesting access to test and demonstration environments for validating new technology. They see a need for more support from the authorities to navigate complex regulations and want more efficient permit processes. The companies are positive about the possibilities of regulatory sandboxes but express concerns that proposal involve significant investments in both time and resources. This can be a barrier for smaller companies and startups that have limited resources. The companies also express hesitation about sharing sensitive information and trade secrets in a sandbox. This can hinder effective collaboration and information exchange.

How do other countries do it?

The international analysis of the global environment shows that several countries use regulatory sandboxes. These sandboxes enable experimental activities that, for a limited period of time, can include flexible rule interpretation or deviations from existing regulations. This is to promote testing and development of innovative products and services in order to shorten the time to market introduction. The countries collaborate with industry players and other stakeholders to increase efficiency and promote cross-border innovation. The challenges are mainly that significant investments in time and resources are required and to be able to offer solutions for secure information sharing.

A well-organized point of contact - a prerequisite

Vinnova concludes that a well-organized national contact point is crucial for it to be possible to achieve the ambitions in the net zero regulation. Vinnova emphasizes the need for clear definitions and division of responsibilities between the contact point and the authorities responsible for the legislation in the area. This requires clear rules of the game and places high eligibility requirements on collaboration between authorities.