Norway may need over $6 bln in funding by 2025 for its green energy boost

Banking on renewable energy, Norway outlines roadmap to turn into ‘green industrial giant’

The Norwegian government has presented a roadmap for a green industrial boost, setting out measures to bring the country into a low-carbon emissions era through the help of seven industries, which are seen as crucial to curbing emissions and achieving net-zero goals. Within this framework, renewable energy takes centre stage as the key enabler of the transition to a green industry.

Hywind Tampen (for illustration purposes); Source: Equinor

Norway’s Prime Minister and Minister of Trade and Industry presented the roadmap in Stavanger on Thursday to show how Norway can deploy new, green industrial establishments and strengthen the existing industry in a bid to more than halve its greenhouse gas emissions

As the industry is perceived as the driving force to bring Norway into a low-emission society, Prime Minister, Jonas Gahr Støre (Labor Party), explained: “We are going through the biggest change the Norwegian economy has seen in recent times. The government will accelerate the opportunities for Norwegian business and industry in the green shift. The roadmap points out the course for the ever-growing green industrial boom. Together, we will create more profitable jobs, increase investment on the mainland, increase exports and contribute to emissions cuts.”

In this roadmap, the government points to seven focus areas with great growth opportunities – offshore wind; hydrogen; batteries; maritime industry; CO2 management; forestry, wood, and bioeconomy; and the process industry – explaining that it will facilitate faster development of projects within these areas, including through stronger capital instruments.

Jan Christian Vestre (Labor Party), Minister of Trade and Industry, commented: “We are now presenting 100 measures to strengthen green industry throughout the country. The goal is to accelerate large green industrial projects in both existing and new industries, so that we ensure value creation and welfare for the future. This is to create and share in practice.”

Seven pillars of green industry

The government envisions seven focus areas, which it intends to pursue and develop further in order to achieve its decarbonization goals and bring its green industry plans to life. To this end, Norway intends to become “a leading nation in offshore wind with an industry that develops and builds “top-class” wind power solutions. The country is putting the wheels into motion to streamline the licensing process towards the completion of the first wind power projects in the Norwegian Sea areas, as the goal is to put them into operation before 2030.

In pursuit of its offshore wind ambitions, the government recently disclosed its plan to allocate areas with the potential for 30 GW of offshore wind production on the Norwegian shelf by 2040.

Related Article

Moreover, the country wants to develop “a coherent and profitable battery value chain,” which ranges from sustainable mineral extraction to battery recycling to attract large battery investments and gig factories.

Another of these seven pillars is hydrogen and Norway intends to develop a value chain for the production, distribution and use of hydrogen produced with low or zero emissions, and contribute to the development of the hydrogen market in Europe. The country has already taken steps to achieve these goals and an investment of $22.41 million in a new centre for energy research dedicated to hydrogen and ammonia was revealed in March 2022.

“ We must continue the close cooperation between business and government and we must have good partnerships with other countries and the EU to ensure market access for our Norwegian, green companies. A strategic industrial partnership with the EU will, for example, help ensure access to raw materials for Norway and the EU,” says Vestre.

Related Article

Furthermore, Norway plans to commercialise industrial solutions for the capture, storage and use of CO₂, creating profitable jobs in Norway and cutting global climate emissions in a cost-effective way. The country also aims to have “the world’s cleanest and most modern and energy-efficient process industry, based on high-tech solutions, with great value creation and net-zero greenhouse gas emissions.” The new roadmap outlines that Norway will remain “a maritime superpower internationally,” showing the way into the green shift by developing, building and using zero-emission solutions and autonomous vessels.

In addition, the country has set out plans to have “the world’s most sustainable forestry” and use the biological resources from sea and land for climate-friendly and profitable products, elaborating that bio-raw materials will contribute to the development of industrial jobs and value chains.

“Private capital will lead, and the government will contribute with state risk mitigation to green industrial projects. The need for such government risk mitigation is estimated at around NOK 60 billion until 2025. The business community can be confident that we will stand up and that we will equip the various support schemes to meet the need for government loans, guarantees and equity. The prerequisite is, of course, that there are good projects and private willingness to invest,” added Vestre.

Government may need over $6 bln by 2025 for green projects

The Norwegian government will undertake several measures to implement its new roadmap, including increasing case processing capacity to contribute to faster licensing of grids and power generation; and reviewing its entire policy apparatus to sharpen efforts further towards green change in the business sector.

To comply with this roadmap, the country will also provide “targeted risk relief for good, economically profitable projects within the seven focus areas,” such as different variants of loans, guarantees and equity for green industrial projects. The policy instruments estimate that the need for such government risk mitigation for Norway’s green industrial boost may be in the order of NOK 60 billion (over $6 billion) by 2025.

Additionally, the government plans to establish a Green Industry Council led by the Minister of Trade and Industry, where the social partners, industrial actors, the environmental movement and research and development environments can discuss challenges and develop a common understanding of the role and responsibilities of different actors in green industrial development.

“We need many more heads and hands for the green industrial promise. Therefore, we will include more people in working life, expand faster and more relevant educational courses where people live, and implement a broad competence reform in the business community that will ensure industry professionals,” said Støre.

In a bid to accelerate the energy transition, the Norwegian government will continue its efforts to promote CO2 management, hydrogen and electrification as important contributions to cutting emissions from the Norwegian industry and achieving the temperature target specified in the Paris Agreement.

As the access to clean and affordable power will be of great importance for investment decisions in the industry in the future, Vestre states that “there will be no green industrial adventure without renewable energy. Therefore, we want to increase power production, reduce the license processing time and strengthen the capacity of the power grid. It must happen quickly.”

The country’s government further emphasises that the speed and efficiency of adopting an emission-free future depend to a large extent on access to renewable power, industrial areas, infrastructure, raw materials, capital, technology and expertise.

“We will enter into a dialogue with the business community and the main organizations about climate partnerships, to find out how we can equip ourselves to realize the potential for rapid emissions cuts. Climate partnerships will contribute to a common understanding of what is needed to achieve the climate goals and anchor necessary emission reductions in the industry,” adds Vestre.

View on Twitter.