Photo: Norwegian Government building; Source: Regjeringen.no

Oil industry scolds Norway’s plan to increase carbon tax

The Government of Norway has revealed plans to increase its national tax on carbon dioxide (CO2) emissions more than threefold by 2030 to help it reach its climate goals.

During the presentation of the Government’s “Climate plan 2021-30” last Friday that the cost of emissions would be raised to 2,000 Norwegian crowns ($237) per tonne by 2030 from 590 crowns for most industries at present.

Environment Minister Sveinung Rotevatn said: “Emissions are going down with this government, and they will continue to do so. The climate plan is a historic shift in Norwegian climate policy.

Norwegian Minister of Climate and Environment Sveinung Rotevatn; Source: Government of Norway
Norwegian Minister of Climate and Environment Sveinung Rotevatn; Source: Government of Norway

For the first time, a government presents a credible, holistic plan to reduce emissions in all sectors. We must make sure that it pays to cut greenhouse gas emissions”.

Norway, western Europe’s largest oil and gas producer, aims to cut its greenhouse gas emissions by 50-55 per cent by 2030 compared with 1990 levels, as well as the long-term target of 90–95 per cent cuts by 2050.

Norway's Prime Minister Erna Solberg; Source: Government of Norway
Norway’s Prime Minister Erna Solberg; Source: Government of Norway

By mid-2021 the government will also present a white paper on the long-term development of its energy industries, including oil and gas, Prime Minister Erna Solberg said.

Climate policy is the sum of everything we do – how we readjust and equip Norway for the future. We want to cut emissions and increase CO 2 uptake in a way that restructures Norway and facilitates green growth.

For that, we need a business community that is greener, smarter and more innovative. The government will show how the oil and gas industry will cut, by 2030, its emissions by 50 per cent”.

According to Reuters, big emitters, such as oil producers and aviation, already pay around 800 crowns annually in pollution costs.

That includes the charge they face because of non-EU Norway’s adherence to the European Union’s Emissions Trading System (ETS), which uses trade to establish the cost of carbon emissions.

The combined cost of the national tax and ETS payments will be capped at 2,000 crowns, under the latest plans.

Espen Barth Eide, energy spokesman for Norway’s main opposition Labour Party told broadcaster NRK the government should have set a higher target for emission cuts, but it would be constructive in its talks with the minority government.

There is the other side of the coin. Namely, Anniken Hauglie, the head of the Norwegian Oil and Gas Association (NOGA), representing companies such as Equinora said that “such a tax would be expensive, increase the cost of the Norwegian continental shelf and could weaken Norwegian competitiveness”.

It is worth reminding that recently Norway announced its funding decision for the Northern Lights CO2 transport and storage project in Norway as well as its readiness to launch the $2.7 billion Longship carbon capture and storage project.