Norway has declared its goal to reduce emissions by 30-40% in 2020 below 1990 levels. Since 1990, GHG emissions in Norway have slightly increased, reaching 53 MtCO2e in 2012 (excluding LULUCF). This level was above the Kyoto Target in 2012, and Norway purchased 21.5 Million carbon credits to offset its surplus (IETA 2013).
Under current policy projections, Norway will not be able to reach its target, as GHG emissions are projected to stabilise at current emission levels up to 2030.
Economic growth in Norway is mostly based on exploitation of natural resources (OECD 2014). As a result, oil-related activities are the main sources of current GHG emissions, along with the transport sector. The electricity sector is almost carbon neutral, as hydropower facilities cover roughly 95% of domestic generation.
Norway's target under the Kyoto Protocol is to reduce average annual emissions by 16%
(QELRO1 of 84) from 1990 levels for the second commitment period. Under the Convention it pledged to reduce emissions by 30- 40% below 1990 emission levels by 2020. Its 40% reduction target is conditional on global action.
With currently implemented policies and measures Norway will not be able to meet its target (see figure). The national policy is to reduce most of the GHG emissions domestically, and to buy carbon credit offsets for the rest, to the tune of up to 30 Million credits during the second commitment period. However, the Government decided to refrain from purchasing credits from coal-based production without CCS (carbon capture and storage) and from industrial HFC projects. Norway will only acquire credits from projects at risk of discontinuing their operations, due to low carbon prices.
Current trends project an increase of around 10% above 1990 levels, reaching emissions of roughly 55 MtCO2e by 2020 and are thus far from achieving the targeted 27% domestic reduction.
Norway, with 30% of its land surface covered by forest, has substantial carbon sinks in its forests. The sink equals approximately half of Norway’s annual emissions. The net uptake of CO2 in 2020 is projected to decrease from 24 Mt/yr to around 20 Mt/yr towards 2030 (National Communication 6).
With currently implemented policies and measures, the latest projections for Norwegian national emissions from the sixth National Communication are 55 MtCO2e in 2020 and 53 MtCO2e in 2030 (Norwegian Ministry of climate and environment, 2014), which would be an increase of 9% and 5% respectively, compared to 1990.
During the last two decades, Norway has put in place many policies and measures to contain CO2 emissions and promote the use of renewable energy. Since 1991, emissions from offshore activities have been subject to a carbon tax. In 1999, (under the White paper on energy policy) the Government adopted additional energy and CO2 taxes. The taxation level is not constant across sectors, with higher rates for the oil-related activities. After the introduction of the ETS (Emission Trading Scheme), the rate levels are subjected to revisions, in order to embed changes in the price of carbon. In such a context, in 2013 the Government increased the offshore carbon tax by 200 NOK per tCO2e (IETA 2013).
Norway then delivered a strategy to promote small-scale hydropower plants (2003) and a white paper on National climate policy (2007). The legislation has also focused on offshore oil fields (with the “Offshore energy act”, 2010) and on the promotion of renewable energy (“Renewable energy action plan”, in 2012).
Historically, Norway’s most important instrument to tackle GHG emissions has been the carbon tax on petroleum activities. Nonetheless, emissions from offshore activities have doubled, from 7 MtCO2e in 1990 to 14 MtCO2e in 2010. The CO2 tax on offshore activities, together with the EU-ETS system, is expected to reduce emissions in 2020 by 7 MtCO2e, compared to a ‘Business as Usual’ (BaU) scenario.
Overall, the effect of measures and policies that have been adopted between 1990 and 2013 (including ETS) is estimated to yield a total reduction of about 16-19 MtCO2e in 2020 and 17-20 MtCO2e in 2030.
Targets for 2020 were calculated from the most recent national inventory submissions (CRF, 2014).
While Norway intends to become a carbon neutral nation, only part of the cuts in total emissions by 2020 would be made domestically and would include their LULUCF sector, which is currently a large sink. LULUCF removals are projected to slightly decline in 2030, reaching 20 MtCO2. In our analysis we assume that LULUCF emissions stabilise at 20 MtCO2 up to 2050. As a result, a carbon neutrality target in 2050 entails a pledge of 20 MtCO2.
Current policy projections
The current trend projections are based on the Sixth National Communication (Norwegian Ministry of climate and environment, 2014); Historical data is based on CRF 2014.
CRF (2014). UNFCCC AWG-KP Submissions 2014. Common Reporting Format.
Government of Norway (2012) Information by Parties included in Annex I listed in annex 1 to decision 1/CMP.7 on their quantified emission limitation or reduction objectives for the second commitment period under the Kyoto Protocol
Government of Norway (2010). Norway's pledge to the Copenhagen Accord. Compiled in: Compilation of economy-wide emission reduction targets to be implemented by Parties included in Annex I to the Convention, UNFCCC (2011).
Norwegian Ministry of Finance (2013). Perspektivmeldingen 2013. Stortingsmelding Nr. 12 (2012-2013) (white paper)
Norwegian Ministry of the Environment (2012). Norwegian Climate Policy, Stortingsmelding Nr. 21 (2011-2012) (white paper).
Norwegian Ministry of Petroleum and Energy (2011). Fullskala CO2-håndtering. Stortingsmelding Nr. 9 (2010-2011) (white paper)
Norwegian Ministry of climate and environment (2014): Norway’s Sixth National Communication, Norwegian Ministry of climate and environment - ISBN: 978-82-457-0482-2
IRENA (2013): Renewable energy country profile – Norway.
OECD (2014): Economic Surveys: Norway 2014, OECD Publishing, DOI: 10.1787/eco_surveys-nor-2014-en
IETA (2013): Norway The World’s Carbon Markets: A Case Study Guide to Emissions Trading, Last Updated: May, 2013
1 The QELRO, expressed as a percentage in relation to a base year, denotes the average level of emissions that an Annex B Party could emit annually during a given commitment period.