8. Norway

In 2008, the Norwegian Parliament passed a climate neutrality target for 2050 and declared that it should be moved forward to 2030, provided major mitigation commitments by other industrialized countries. The Parliament saw this condition as met by the time of Norway’s ratification of the Paris Agreement in 2016 and asked the government to ensure emission reductions equivalent to the Norwegian emissions from 2030.

The assumption behind this decision was that emissions could be offset through international allowance trading and carbon credits.

The decision by Stortinget reads: ”Stortinget ber regjeringen legge til grunn at Norge skal sørge for klimareduksjoner tilsvarende norske utslipp fra og med 1. januar 2030, og at klimanøytralitet kan oppnås gjennom EUs kvotemarked, internasjonalt samarbeid om utslippsreduksjoner, kvotehandel og prosjektbasert samarbeid.” This target does not give any direction to domestic emissions.

The target is named ‘climate neutrality’, whereas the Norwegian target could be interpreted as a balancing of the country’s gross anthropogenic GHG emissions by corresponding removals. The target is not necessarily implemented within its own borders. The interpretation and operationalisation of this ambition in the context of Norway’s other climate policy commitments and ambitions have generated debate. The climate neutrality target is not part of the Norwegian Nationally Determined Contribution (NDC).

Norway has international commitments within two frameworks. First, in November 2022 Norway updated its NDC under the UNFCCC (the UN’s Framework Convention on Climate Change) and the Paris Agreement. The emissions are to be reduced by at least 55% by 2030 as compared to 1990 levels. Second, Norway has a legally binding agreement of climate policy collaboration with the EU (and Iceland) from 2016 relating to the European legislation for implementing NDCs of at least 40% reduction. Norway seeks cooperation with the EU on implementing the respective NDCs of at least 55% reduction. However, EU legislation was only in place in 2023 and the process related to the EEA agreement has just begun (ultimo June). These elements are reflected in the Norwegian Climate Act (that came into force in 2017 and was updated in 2022) along with the long-term target for 2050. The goal is to become a low-emission society, defined as mitigating emissions by 90-95% from the 1990 level.

Cooperation with the EU on implementing the respective NDCs will likely imply that Norway adopts an adapted Fit-for-55 legislation, with commitments along three pillars. The first pillar is the European emissions trading system (EU ETS), which has an emissions cap for the involved sectors, including electricity, fossil fuel extraction and energy-intensive industry. The emissions cap corresponds to a 62% cut from the 2005 level. States fulfil their parts, as domestic companies facing the allowance price are incentivised to abate emissions or trade ETS allowances. The second pillar is EU’s Effort Sharing Regulation (ESR), which covers emissions that are not included in EU ETS, including agriculture and transportation. For ESR, the EU’s Fit-for-55 goal is a 40% reduction from the 2005 level. Norway will likely be assigned a cap of 50% of the 2005 level for 2030, as well as caps for each of the years from 2021 to 2030. The third pillar relates to land use, where the EU has a net removal target of at least 310 million tonnes of CO₂ for the land use, land-use change and forestry sector (LULUCF). There will be flexibility in the fulfilment of all these targets, not only for the ETS-covered emissions, but also for ESR and LULUCF. Commitments can be fulfilled across borders, including some opportunities for trading within and across pillars across time.

The figure below shows Norway’s GHG emissions and removals since 1990. Removals are dominated by carbon fixation by a growing forest. Figure 10 shows a minor emis­sion reduction in recent years compared to 1990, whereas the forest sink is significantly larger than 1990 (although it was larger in the period 2000-2015 than currently).

Figure 10: Emissions and removals of GHG in Norway, 1990-2020

Table 2 breaks down Norwegian GHG emissions since 1990 into sectors covered by EU ETS and sectors outside of EU ETS, adding projections until 2035. Transportation, buildings and other non-EU ETS emissions are slightly reduced from 1990 till 2021, whereas the decline in industry emissions has been balanced by higher energy related emissions - mainly from oil and gas production.

Table 2: GHG emissions by sector until 2021, divided into EU ETS sectors and non-EU ETS sectors, including projections until 2035.

Transportation and petroleum are large GHG emitting sectors in Norway, and where emission reductions are most challenging. Industry is the third largest emissions sector, but where a clear long-term decline of emissions is found. The net removal in the LULUCF sector was 20.3 million tonnes of CO₂ equivalents in 2020, whereas the average annual net sequestration from the LULUCF sector for the period 1990-2020 was 18.0 million tonnes of CO₂ equivalents per year.

Norwegian Environment Agency (2022), Greenhouse Gas Emissions 1990-2020 – National Inventory Report, M-2268.
https://www.miljodirektoratet.no/publikasjoner/2022/april/greenhouse-gas-emissions-1990--2020-national-inventory-report/

Norway has adopted the same ambitious climate policy targets as the EU but cannot cut GHG emissions in its power sector, which is exclusively based on hydro power and some wind energy. Currently adopted policies and measures are substantially inadequate to meet these climate goals domestically as well as realising the goal to become a low emission society by 2050. Stronger or additional climate measures to meet the goals are especially needed for petroleum and agriculture to realise substantial domestic reductions. Some goals can be met through utilising flexibility in the cooperation with the EU (and through acquisition of carbon credits with the help of mechanisms in the Paris Agreement).

Figure 10 depicts Norway’s GHG emissions since 1990 and expected emissions cuts until 2030 for transportation, buildings, waste and agriculture (which are the sectors that are not included in EU ETS). The main policy tool is carbon taxing, where the plan is to increase the tax to 2000 NOK/t CO₂ by 2030. In addition, there is a biofuel mixing requirement for passenger vehicles and aviation.

Climate policy tools and measures currently implemented in addition to the planned strengthening of the carbon tax are not sufficient to meet Norway’s emissions reduction goal through domestic emission reductions alone. In Figure 11, the black dotted line shows projected emissions until 2030, the grey bars show a path for annual emissions aligned with the agreement with the EU for 2030 (40% reduction compared to 2005), the blue area illustrates the expected emission mitigation effect of the increasing carbon tax, the orange area illustrates the effect of biofuel mixing, and the shaded green area illustrates the expected emission reductions from policies and measures that are under development.

Figure 11: The contribution of various policy tools to GHG reductions for transport, buildings, waste and agriculture (non-EU ETS sectors)

Source: Norwegian Ministry of Climate and Environment (2022). Regjeringas klimastatus og –plan. https://www.regjeringen.no/contentassets/fad4e2d774cf45ac8ad0e8cbb1ea093f/no/pdfs/kld_regjeringas_klimastatus_og_-plan.pdf

The biggest challenges for reducing emissions in Norway include a petroleum sector that is difficult and expensive to align with the climate challenge. There are also land-use conflicts with local communities and nature values related to more hydro power, wind power and solar energy development, in addition to expen­sive and uncertain development of floating wind turbines, large invest­ments required in energy-intensive industries, difficult and controversial measures in agriculture, and tech­nical and economic limitations for removing all GHG emissions from transportation.

All types of energy efficiency improvements in production and demand, as well as increased user flexibility, will reduce the need for additional energy development, measures and technologies such as development of CO₂ capture and removal technologies (e.g. for waste-to-energy plants and some energy-intensive industries, such as cement and fertilizer production), electri­fication of transportation, and new process technologies in energy-intensive industries will, over time, contribute to GHG emission reductions.