Norway oil sector braced for huge carbon tax hike as new climate plan hatched

Authored by upstreamonline.com and submitted by ILikeNeurons
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Norway plans to hit oil and gas companies with an increase in carbon taxes to the end of the decade as the major producer nation unveiled a new climate plan aimed at tackling its carbon dioxide emissions.

In the plan unveiled on Friday outlining the Oslo administration's climate ambitions for the rest of the decade, the government is set to increase the total cost of CO 2 emissions to a ceiling of 2000Nkr per tonne in 2030 ($235), leading the lobby group for the country's oil and gas industry to warn of a potentially negative impact on activity.

Oil and gas companies currently pay 800Nkr ($94) per tonne of CO 2 emitted from production on the Norwegian continental shelf — made up of payments for EU Allowances under the bloc’s Emissions Trading System, and Norway’s own carbon taxes. This total will increase to 2,000Nkr per tonne by 2030 (according to 2020 values), regardless of the EU carbon price at the time.

At a press conference on Friday, Norway’s Prime Minister Erna Solberg presented the government’s climate ambitions to 2030, arguing that the CO 2 tax is the most important means to reduce greenhouse gas emissions from oil and gas production, which represents about a quarter of the country’s total CO 2 emissions.

“We are raising CO 2 tax (combined with EU ETS allowances) to Nkr2000 to incentivise development of low-carbon technologies for oil and gas production,” she said.

According to Solberg, Norway is not responsible for emissions resulting from the use of oil and gas exported from Norway — so-called Scope 3 emissions.

“A fundamental principle in the Paris Agreement is that responsibility for emissions lies where they occur. Norway is responsible for emissions from production,” she said.

Potential blow to competitiveness of NCS

Industry lobby group Norwegian Oil & Gas Association (Norog) leader Anniken Hauglie told Upstream that the government's proposal of a significant cost increase could have a negative impact on domestic production.

“It will be expensive, increase costs and weaken competitiveness of the Norwegian continental shelf,” she said.

Although Hauglie said the industry supports the Norwegian CO 2 tax, she stressed that the totality of regulations, taxes and framework conditions must not be weakened.

“We have to avoid a situation where Norway becomes outcompeted and that companies move their investments to other countries,” she said.

Norog wants financial support schemes for low-carbon technologies and emissions reduction.

“The increased revenues from CO 2 tax must be earmarked for measures to reduce carbon emissions,” Hauglie said.

Norway’s new plan to reduce climate-harming emissions towards 2030 will be followed by updates every few years.

The plan also highlighted Norway’s ambitions for offshore floating wind power, carbon capture and storage and hydrogen but lacked much by way of detail about these technologies.

Solberg said that detailed plans for these technologies will be presented in a white paper on Norway’s energy resources, which will be presented during the spring.

enigmapenguin on January 11st, 2021 at 11:30 UTC »

Meanwhile in Australia, we pay companies to pollute our planet.

autotldr on January 11st, 2021 at 11:02 UTC »

This is the best tl;dr I could make, original reduced by 78%. (I'm a bot)

Norway plans to hit oil and gas companies with an increase in carbon taxes to the end of the decade as the major producer nation unveiled a new climate plan aimed at tackling its carbon dioxide emissions.

At a press conference on Friday, Norway's Prime Minister Erna Solberg presented the government's climate ambitions to 2030, arguing that the CO2 tax is the most important means to reduce greenhouse gas emissions from oil and gas production, which represents about a quarter of the country's total CO2 emissions.

According to Solberg, Norway is not responsible for emissions resulting from the use of oil and gas exported from Norway - so-called Scope 3 emissions.

Extended Summary | FAQ | Feedback | Top keywords: emissions#1 Norway#2 gas#3 oil#4 CO2#5

wiffleplop on January 11st, 2021 at 10:43 UTC »

Seems reasonable. Oil & gas have had a free ride for way too long now. It’s about time they paid their way.