Norwegian government presents its 2021-2030 climate action plan
Norway is committed to achieving its emission reduction target under the Paris Agreement. On January 8, 2021, the government presented a white paper describing its climate action plan for the transformation of Norwegian society as a whole by 2030. The plan shows how Norway will achieve its climate target and at the same time create green growth.
Norway has entered into an agreement with the EU to take part in EU climate legislation in the period 2012–2030. This consists of three pieces of legislation: the EU Emissions Trading System (EU ETS), the Effort Sharing Regulation for non-ETS emissions, and the land-use, land-use change, and forestry (LULUCF) regulation.
Under this Government, Norway has reduced its greenhouse gas emissions, and this progress will continue. This climate action plan will give new momentum to Norwegian climate policy. For the first time, the government is putting forward a compelling, comprehensive plan for cutting emissions in every sector. We must make sure that it pays to cut greenhouse gas emissions, said Minister of Climate and Environment Sveinung Rotevatn.
As the EU ETS applies to the bulk of emissions from industrial production and the oil and gas industry, the main emphasis of the Norwegian climate action plan to 2030, presented by the government on January 8, 2021, is on emissions that are not included in the EU Emissions Trading System (ETS), the non-ETS emissions.
These include emissions from transport, waste, agriculture, and buildings, and some emissions from industrial production and the oil and gas industry.
40% GHG reduction in non-ETS
Under the current regulation, overall emissions in the non-ETS sector in the EU are to be reduced by 30 percent by 2030. Norway’s national target is an emission cut of 40 percent, either in Norway or in other European countries. In addition, the action plan discusses carbon dioxide (CO2) removals and emissions in the land-use, land-use change, and forestry (LULUCF) sector.
The main policy instruments in the climate action plan are taxation of greenhouse gas (GHG) emissions, regulatory measures, climate-related requirements in public procurement processes, information on climate-friendly options, financial support for the development of new technology, and initiatives to promote research and innovation.
The government intends to make greater use of climate-related requirements in public procurement processes.
Maintain biofuels for transport
Requirements for zero-emission solutions will be introduced for passenger cars and small vans in 2022, and for local buses from 2025. Criteria relating to low- or zero-emission solutions will also be introduced for ferry services and high-speed passenger vessel services.
However, the sales volume of biofuels for road traffic will be maintained to ensure cuts in emissions from fossil vehicles that are still in use. The government will introduce biofuel quota obligations for offroad diesel and fuel for shipping from 2022.
Vehicle taxes and other policy instruments will be designed so that they continue to provide incentives to choose zero-emission vehicles.
Ramp up carbon tax rates
Enova SF, a funding agency owned by the Norwegian Ministry of Petroleum and Energy and charged with supporting the development of energy and climate technology, has been given a clearer climate profile so that it will contribute towards Norway’s emission reduction commitment for non-ETS emissions and Norway’s transition to a low-emission society.
The government will use the Letter of Intent (LoI) it has signed with the agricultural organizations as a basis for climate-related work in this sector in the years ahead.
The white paper also announces a gradual increase in the carbon tax rate from its current level of about NOK 590 (≈ EUR 57) to NOK 2 000 (≈ EUR 193.2) per tonne CO2 equivalents in 2030. This will progressively increase the cost of emitting CO2 and give stronger incentives to reduce emissions.
The government’s policy is not to increase the overall level of taxation. Any tax increase will therefore be offset by reducing other taxes correspondingly.