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Norway plans to more than triple its national tax on carbon dioxide (CO2) emissions by 2030

by Mohamed EL DEIB 8 months ago in legislation

Norway plans to increase its CO2 price to just under 200 euros per ton by 2030

Oil platform in fjord landscape: 39 percent of the oil resources on the Norwegian continental shelf have not yet been developed

Norway plans to increase its CO 2 price to just under 200 euros per ton by 2030, roughly tripling it today. In addition, emissions budgets are to be introduced for each year.

The sale of cars with internal combustion engines will be banned in Norway from 2025 and the country only has one coal-fired power station. Additional CO2 reductions must therefore come from other sectors. In return, the Norwegian government has now decided to significantly increase the CO2 price.

In Germany, there has been a national CO2 trade since the beginning of the year with a price of 25 euros per ton. This should increase to 55 euros by 2025. Federal Environment Minister Svenja Schulze praised herself for this approach: "The CO2 price sends a very clear signal. It influences investment decisions."

The latter is of course correct, and it was the same thirty years ago. Such a price was introduced in Norway as early as 1991 and has influenced "investment decisions" ever since. The Norwegian price level is now just under 60 euros per ton of CO2.

That should change now. According to Norway's Prime Minister Erna Solberg, the price is expected to more than triple by 2030: to just under 200 euros. This would make Norwegian emissions the most expensive in the world.

Sweden currently leads the international ranking with just under 120 euros per ton of climate poison. For comparison: In Germany, the Federal Environment Agency has just calculated a CO2 price of 195 euros as covering costs.

The planned tripling is based on the Norwegian government's climate plan for the years 2021 to 2030, which Solberg presented on Friday. The plan must now be discussed in the Norwegian Parliament in Oslo.

The special thing about Norway's CO2 price is that the oil and gas industry also has to pay it. These large emitters are asked to pay twice at the same time. First, they have to buy certificates within the framework of the EU emissions trading system. These have just risen to a new all-time high of just under 35 euros per ton. And then they pay the national, Norwegian CO2 price.

Anniken Hauglie, head of the Norog Oil and Gas Industry Association, warned: "It will be expensive and affect the competitiveness of the Norwegian continental shelf." All Norwegian oil and gas are stored under the continental shelf or continental shelf.

Hauglie also made it clear, however, that the industry is not fundamentally against raising the CO2 price, and demanded support: "The increased income from the CO2 tax must be reserved for measures to reduce emissions."

Step by step instead of the last minute

Another innovation in the conservative government's climate plan is the creation of CO2 budgets. By 2030, emissions should not simply be halved compared to 1990, but there is a national CO2 budget for each individual year.

Germany could also use this approach as a model. It is of little use to the climate if emissions remain high for years and then only drop sharply shortly before a deadline.

But that is exactly what Germany is planning when it comes to phasing out coal. The emissions from coal-fired power generation should not decrease linearly to zero by 2038, but a large number of coal blocks should remain on the grid until shortly before this cut-off date.

Back to Norway. There, the sales ban for cars with internal combustion engines will be supplemented by the new climate plan from 2025: in the future, the ban on combustion engines will also apply to buses. In addition, from 2023 only ferries with "low emissions" are to be purchased, which probably means gas-powered ferries.

Environmental associations praised the significant increase in the CO2 price. "The price increase will influence all decisions in the Norwegian economy," said Marius Holm from the environmental foundation Zero. "In combination with other measures, this will accelerate Norway's climate policy."

However, criticism came from the opposition parties. The head of the Left Party, Audun Lysbakken, finds the plan "too tame". With this climate plan, the country is "only halfway to our destination".

Whether this is true has not yet been verified by an independent body. The scientists from the Climate Action Tracker have not yet updated the country profile for Norway.


Mohamed EL DEIB

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Mohamed EL DEIB
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