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CERAWeek: Norway’s Bru calls for carbon tax proliferation

02 March 2021 Keiron Greenhalgh

Norway wants to see an expansion of carbon tax regimes across the globe, Minister of Petroleum and Energy Tina Bru said 2 March, calling on her fellow policymakers around the world to accelerate such efforts.

Speaking at CERAWeek by IHS Markit, Bru said that countries cannot just set ambitious net-zero goals, they have to follow through on them.

"We really do need that to happen. We don't have a lot of time. We know this is key to reaching the goals. We can't just set an ambitious goal, you actually have to follow up with policy that makes that change happen," she said.

Instituting a price on carbon is such a way, she said, adding that one of the few silver linings from the global COVID-19 pandemic was an opportunity to reset the economic norms. The minister and her colleagues were "seeing many countries use this opportunity to enhance their green policies and think of rebuilding again from a greener perspective, which I think is putting us on the right track" to tackling climate change, she said.

"Carbon pricing is of course one of the main things that we are using in Norway, because we have seen that it works, we know it is effective. It is a good way to actually make that transition that we know needs to happen," she said.

Norway plans to cut its carbon emissions by 50-55% by 2030 compared with 1990 levels and 90-95% by 2050 even though the country is heavily dependent on oil and natural gas for jobs and taxes.

At the start of January, the government unveiled a white paper laying out a path to such emissions reductions on a sector-by-sector basis, and the white paper has a heavy weighting toward emissions not tackled by Norway's existing carbon tax.

That said, the white paper does call for a trebling of the country's carbon tax. The cost of emissions will be raised to Norwegian kroner 2,000 ($236) per metric ton (mt) by 2030 from Nkr 590/mt for most polluters currently.

There is no possibility for a green transition without the creation of jobs, in simpler terms, offering people a future, said Bru, adding that "we need to build, not tear down." Carbon taxes give countries a chance to build the industries, jobs, and society that ordinary citizens can buy into, she said.

New technologies need a lot of government support, but there must be the incentives for private capital to take part, Bru said. The Longship carbon capture and sequestration (CCS) project in Norway was an example of how this should and could work, she said.

The private partners involved in Longship -- including oil majors Shell and Total -- have been encouraged by the potential to bring in customers and the scale of the project, as well as the fact that it offers the prospect of similar projects across the globe and participation in such schemes, Bru said.

Bru said such nascent technology needs more countries to get involved. There is "only so much government can do," but projects such as Longship and the Norwegian government's support show the impact such technology can have, she said.

Norway has known since the discovery of oil and gas off its shoreline that it wasn't a renewable resource, Bru said, these are just the "cold, hard facts." But there will continue to be a need for oil and gas even as output declines, she said.

As a result, Norway's leaders and corporate executives have been looking into using their existing and coming funds and seeking to explore lower carbon products such as offshore wind, CCS, seabed mining, and hydrogen to meet the energy transition head on, she said.

Posted 02 March 2021 by Keiron Greenhalgh, Editor, Energy and Natural Resources Group, IHS Markit

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