Part 1
Introduction

1 A plan to cut emissions, not economic growth

1.1 Introduction

Anthropogenic climate change will have serious and irreversible impacts on nature and society throughout the world. Changes are already occurring, and the impacts are becoming apparent in Norway. It is vital to prepare society for change and to adapt to a changing climate. Combating climate change requires a vigorous and concerted global effort to reduce greenhouse gas emissions.

Norway is stepping up and taking responsibility. We will do our share of the work at both national and international level. These efforts will come at a price, but the cost of climate inaction will be far higher than the cost of tackling the problem now.

The world is experiencing more frequent and more intense extreme weather events. Temperatures are rising, snow and ice are melting, sea levels are rising, seawater is becoming more acidic and wildfires are becoming more frequent. Vulnerable species and ecosystems are disappearing. Climate change will intensify in the years ahead.

Preventing catastrophic environmental degradation is crucial to safeguarding the well-being of future generations.

Climate change is a global problem, but emissions are caused by actions and processes at local level.

Under the Paris Agreement, Norway, like almost every other country in the world, has undertaken to reduce greenhouse gas emissions. Adoption of the Paris Agreement was a turning point in international climate cooperation. Together with the United Nations Framework Convention on Climate Change (UNFCCC), the agreement provides a solid framework for global climate action in the future.

The target of the Paris Agreement is to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C. The Agreement also aims to increase countries’ ability to adapt to the adverse impacts of climate change and to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

Norway has communicated a nationally determined contribution (NDC) under the Paris Agreement to reduce greenhouse gas emissions by at least 50 % and towards 55 % by 2030 compared to 1990. This is a crucial step on the path towards Norway’s target of being a low-emission society by 2050.

The action taken by Norway and the rest of the world over the next ten years will determine whether or not it is possible to check anthropogenic climate change.

Several countries that are major emitters have not yet enhanced their formal targets (NDCs) under the Paris Agreement, but there have been encouraging signals that the level of ambition is rising. In December 2020, the EU enhanced its target under the Paris Agreement. The new target is to reduce emissions by at least 55 % by 2030, up from the previous target of a 40 % reduction. The UK has adopted an ambitious new climate target of reducing emissions by 68 % by 2030. The new US President has announced that the country will be pursuing a more ambitious climate policy, and in autumn 2020, China adopted a long-term target of achieving climate neutrality by 2060.

The UN Sustainable Development Goals (SDGs) provide an overall framework for addressing the major national and global challenges facing the world today. Implementing the Paris Agreement is an essential basis for achieving SDG 13 on climate action. Climate change and climate policy have a bearing on most areas of society and thus on many of the other SDGs. The Norwegian Government’s climate policy is intended to improve welfare standards at the same time as cutting emissions. Climate policy must not be considered in isolation, but as the sum of policy in many areas. Close coordination and an integrated policy for sustainable development in all sectors are an essential basis for achieving climate targets and for a coherent approach that makes it possible to achieve goals in other areas. Various elements must be put in place to ensure that Norway can make a successful transition. Progress and emission reductions will also depend on the ability to take other considerations into account, for instance relating to the economy, food security, biodiversity and adaptation to climate change.

Norway will have to go through a major transformation process, which will involve reducing emissions but not hampering development. The Government will therefore pursue an ambitious climate policy that will make it possible to achieve climate targets and at the same time provide a good framework for more jobs, greater welfare and sustainable growth of the Norwegian economy. Efforts to halt climate change involve great challenges, but also offer the opportunity to create a better Norway.

Value creation is an essential basis for halting climate change, not a barrier. The real problem is not greater welfare and value creation, but the biodiversity loss and greenhouse gas emissions. Green growth is possible, but requires a policy that enables the business sector to develop and deploy new technologies to replace yesterday’s fossil solutions. Products and services will need to have a much smaller climate footprint in the future. It must pay to invest in green solutions.

In 2021, for the first time, Norway and the EU’s shared commitments apply to all Norwegian emissions. 2021 also marks the beginning of a new policy approach for non-ETS greenhouse gas emissions. This is no longer based solely on a target for the emission reductions to be achieved in ten years’ time – there is also an emission ceiling for each year of the period. The annual emission budget is reduced for each year up to 2030, and in the agreement on climate action with the EU, Norway’s final target for 2030 is a 40 % reduction in non-ETS emissions compared with the 2005 level.

The Government is planning to exceed this commitment. This white paper presents a plan for achieving the Government’s goal of reducing Norwegian non-ETS emissions by 45 % by 2030.

The agreement with the EU does not set national targets for ETS emissions in the same way as for non-ETS emissions. The installations covered by the EU Emissions Trading System (EU ETS) have to collectively reduce their emissions to achieve the overall target. Norwegian installations in sectors covered by the system are playing their part in achieving this target in the same way as installations in other European countries. The carbon price in the system is determined by the market, and emissions are reduced where it costs least to do so. In order to present the Government’s climate policy as a whole, this white paper also includes an account of how ETS emissions can be reduced, and policy instruments for achieving this. Among other things, the central government will support and promote further technological developments in the ETS sector.

Forest and other land categories play an important role in the context of climate change. The plan set out in this white paper shows how the Government intends to enhance removals and reduce emissions from forest and other land categories, and make use of renewable forest raw materials in bringing about a green shift in the economy. Norway’s commitment for the land use, land use change and forestry (LULUCF) sector in the climate agreement with the EU is that emissions from the sector will not exceed removals by 2030.

In developing Norway’s climate plan, the Government has taken into account uncertainty relating to emission trends, the effects of climate policy, technological developments and the costs of implementing mitigation and adaptation measures.

The Government also wishes to continue cooperation with the EU on a more ambitious climate target. In December 2020, the EU enhanced its target for 2030 under the Paris Agreement. The new target is to reduce emissions by at least 55 % below 1990 levels by 2030. This is formulated as a net target, which includes all CO₂ removals by forest and other sinks. To achieve the new target, the EU will need to update its climate legislation to implement deeper cuts in emissions. The action Norway takes to achieve its own target for 2030 will depend on how the EU implements its more ambitious 2030 target.

Tightening of the EU rules may mean that Norway’s obligations under the legislation will require deeper emission cuts than those presented in this white paper. It will take time before new legislation is in place, and it will not apply in Norway until the Storting (Norwegian parliament) has given its consent. In addition, new legislation may not apply until after 2025. It therefore makes sense to plan for implementation of Norway’s current obligations under EU legislation, while at the same time maintaining a higher level of ambition and being prepared to adjust the climate action plan at a later date if necessary. Norwegian emissions must be reduced in any case, and action will be needed to enhance removals by forests.

The Government will at intervals evaluate the policy instruments being used to implement the climate action plan and Norway’s progress towards the 2030 target. If necessary, the mix of policy instruments will be adjusted. The Government intends to present further white papers on climate policy at regular intervals, starting in 2024.

The challenges posed by climate change are global, and can only be dealt with through global cooperation. Norway is playing a leading role internationally in advocating that countries should pursue more ambitious climate policies to make it possible to achieve the long-term temperature target of the Paris Agreement. Active climate diplomacy and support for the efforts of developing countries to adapt to climate change and achieve a low-emission development pathway are both important elements of Norway’s efforts. Norway’s International Climate and Forest Initiative is Norway’s largest contribution to international climate action and its most important contribution to reducing emissions in developing countries.

Norway will set a good example at home and will be a leading advocate of international climate cooperation. Climate initiatives in Norway will be designed to bring about domestic emission reductions and to develop technology that can also be used internationally. Norway will play a part in creating climate solutions for the future.

The world is still in the midst of the COVID-19 pandemic, which is currently having an effect on greenhouse gas emissions. The pandemic resulted in a steep drop in economic activity worldwide in 2020. The eventual scale and duration of the pandemic is still uncertain, and we do not know what the long-term effects will be on economic growth, energy consumption and greenhouse gas emissions. To achieve lasting emission reductions, we must make use of low-emission technology and new climate-friendly solutions when economic activity increases again.

The Government is working towards a green transition in Norway after the pandemic. In 2020, about NOK 4.5 billion was allocated to a green restructuring package, including funding for research, innovation and green restructuring in the business sector and at local government level. In Norway’s budget for 2021, which is an extraordinary pandemic budget, funding for the most important climate and environmental priorities has been increased by about NOK 11 billion.

Efforts to curb climate change involve great challenges, but also offer the opportunity to create an even better Norway. One of the competitive advantages of Norwegian business and industry is its highly skilled workforce.

To achieve the deep cuts in emissions that are needed, Norway will need to develop and deploy new technologies and new solutions for the production and use of goods and services. Higher taxes on greenhouse gas emissions combined with regulatory measures and grants for research, innovation and technology development will contribute to sustainable development. Norway’s industrial policy must yield emission reductions while its climate policy encourages industrial development.

The Longship project for the capture, transport and storage of CO₂ in Norway is a milestone in the Government’s industrial and climate policy efforts. The project will cut emissions and contribute to technology development and thus new jobs.

Although a transition that results in more sustainable industries may increase value creation in the long term, it will also involve costs. Pursuing a proactive climate policy may strengthen the competitive position of the Norwegian economy and protect it against even higher costs further into the future. In the short term, it will be important to take steps to avoid unreasonable negative impacts for individual people.

Norway’s climate policy is closely intertwined with EU climate policy, both through the EEA Agreement and through the agreement on cooperation with the EU to fulfil the 2030 climate target. Norwegian and EU companies compete in the same markets. The EU’s ambitious climate targets and the implementation of the European Green Deal – the EU strategy for green growth – will influence Norway’s green transition.

It will be of crucial importance to shift public and private finance towards more climate-friendly investments. According to Norway’s Climate Risk Commission, both public- and private-sector investors need sound assessments of how a low-emission development pathway will influence the risks associated with long-term investments, and sound risk management systems. To help investors to reduce climate risk and finance green solutions, the EU is now formulating criteria for sustainable economic activities.

Climate initiatives in Norway are intended to contribute to domestic emission cuts, enhance CO₂ removals and promote technological advances that can be used both in Norway and internationally. However, as a small open economy, Norway is highly dependent on access to new technology that is being developed in other countries, such as electric vehicles.

Norway has a good starting point. Electricity production is already largely renewable: in 2019, renewable electricity accounted for 98 % of production. Many EU countries, on the other hand, are now shifting from power production based on fossil and nuclear energy to renewable energy. The proportion of renewable electricity production in the EU is rising steadily, and reached about 32 % in 2018. In other countries, heating of buildings is a major source of emissions, but this is not the case in Norway. Norway must therefore cut emissions from other sources to achieve its targets.

In many respects, Norway is leading the way in climate policy. Participation in the EU ETS is combined with a high standard carbon tax rate that applies to most non-ETS emissions. Norway is at the forefront in the use of electric vehicles. Various other regulatory measures have also been adopted, such as a prohibition on using mineral oil to heat buildings and biofuel quota obligations for both road transport and aviation.

Norway’s greenhouse gas emissions are declining, and in 2019 reached the lowest level for 27 years. Progress is being made, not by chance but as the result of a successful climate policy.

Having pursued an active climate policy for many years, Norway now has a broad mix of instruments in its climate policy toolbox. The Government will retain policy instruments that are known to give results and make them more effective to make it as certain as possible that Norway will achieve its environmental targets at the lowest possible cost to society. The Government will assess new instruments and introduce those that will be effective enough for Norway to achieve its emission reduction targets.

Cross-sectoral instruments such as taxation of greenhouse gas emissions and emissions trading are the main instruments of Norwegian climate policy. These instruments put a price on emissions and give every household and company incentives to reduce emissions and to develop and deploy climate-friendly solutions. They also ensure that emissions are reduced where it is cheapest to do so. A clear, predictable framework is vital for the business sector. This applies to climate policy just as it does to other areas. For example, businesses need a predictable framework if they are to invest in climate-friendly technologies and solutions. It must pay to make green choices. This is why the Government intends to make stepwise increases in the taxation level for non-ETS greenhouse gas emissions, reaching NOK 2000 per tonne CO₂eq in 2030. It is why vehicle taxes are designed to make it advantageous to choose emission-free vehicles. It is why Norway is participating in the EU ETS, which sets a cap on greenhouse gas emissions from a large number of installations in Europe. The cap, or number of emission allowances in the system, is being systematically reduced year by year. As a result, total emissions are being progressively reduced.

It is only possible to dispense with high-emission solutions if low-emission options are available. Together with pricing of emissions, the Government will therefore continue to provide financial support for the development and deployment of new technology.

The Government will make use of the purchasing power of the public sector to speed up the pace of development, for example by including climate-related requirements in public procurement processes in the transport sector.

In areas where the Government proposes the introduction of specific requirements, these will generally be requirements to use low- or zero-emission technology. It will be up to the market to determine whether electrification, hydrogen, biogas or another technology is most appropriate. The goal is to reduce emissions, not to choose one technology in preference to another.

Although the Government’s main climate policy instruments are emissions pricing, requirements in public procurement processes and financial support, it will also make use of regulatory measures and prohibitions where necessary.

The transformation process will require people with knowledge and skills, and the Government is therefore focusing on education and research. It will also require businesses that are innovative, and the Government is therefore fostering a competitive and adaptive business sector. Action will be required at every level, and the Government is therefore giving municipalities and counties a freer hand to introduce their own climate-related measures. Access to capital will also be vital, and the Government is therefore giving priority to ensuring robust government finances and well-functioning financial markets, financial stability and a productive and sustainable business sector. The Government has laid the basis for a green transition and green growth by reducing taxation of income and assets. At the same time, tax levels on greenhouse gas emissions and releases of environmentally harmful substances have been raised. A stable, predictable carbon price in the years ahead will provide a strong incentive to invest in and deploy zero-emission technology, and also simplify planning for companies and other stakeholders.

Nature and climate are closely interconnected. The same drivers are to a large extent behind both climate change and environmental degradation. The combination of climate change and loss of biodiversity may make it more difficult to provide food for a growing global population in the years up to 2050. Measures to achieve climate policy targets and biodiversity targets will therefore often, but not always, go hand in hand. Norway will choose solutions that are both climate-friendly and environmentally sound, and is advocating the same approach internationally.

Norway is now setting a course for 2030. If we are to achieve our climate targets and succeed in the green transformation, Norwegian society as a whole society must pull in one and the same direction.

1.2 The Government’s ambitions for transforming Norway into a more climate-friendly society between 2021 and 2030

Norway’s climate policy is intended to give people freedom and opportunities. During the next ten years, Norway needs to go through a green transformation process that will affect every sector of society. The Government will pursue a climate policy that improves people’s lives and gives room for growth in the business sector. However, government climate policy can never be better than the sum of the choices made freely by millions of people. The Government will provide a framework that encourages people to make climate-friendly choices and increases everyone’s freedom of choice.

1.2.1 Making it easier for people to travel in climate-friendly ways

By 2030, the aim is that it will be easy for people in Norway to find emission-free ways of travelling.

Sustainable transport systems provide benefits for society. Electric cars and buses improve air quality in towns, and quieter high-speed passenger vessels give commuters a more comfortable ride. If fewer people drive cars, there is less congestion for those who still need to use the roads. Road safety improves if more goods transport is transferred to rail and sea.

Good options must be available for people who do not travel by car. It must be made even easier for people to choose to walk, cycle or take public transport to work, school and leisure activities. Walking and cycling are good for people’s health. Densification of areas that already built up will be continued, both in cities and in smaller communities.

People who do travel by car must be able to choose vehicles that do not emit greenhouse gases. By making sure that it pays for people to choose climate-friendly cars, we will build a better society together, one where emissions are lower and the air is cleaner.

Emissions from the petrol and diesel vehicles still on the roads must be as low as possible. Using sustainable biofuels instead of fossil fuels is one way of reducing their emissions.

Emissions from public transport must be reduced or eliminated. The requirement for all new local buses to be emission-free from 2025 onwards will improve air quality and reduce noise levels in towns. This is another way of cutting emissions and making the air people breath cleaner.

Better train services will improve many commuters’ lives, allowing people to make a climate-friendly choice and leave the car at home. If trains are faster, more frequent and more punctual, people can choose more freely where they want to live and work.

Norway is already making good progress. Since the peak year 2015, annual greenhouse gas emissions from road traffic have declined from 10.1 million tonnes CO₂eq to 8.5 million tonnes CO₂eq in 2019. The Government’s focus on public transport is giving results. Before the COVID-19 pandemic, record numbers of people were using public transport in Oslo, and statistics showed more than one million passenger trips a day. In 2019, the light rail system in Bergen recorded 18.6 million passenger trips, which is a marked increase since the system opened in 2010. The same positive trend was apparent in the Trondheim region and in Nord-Jæren (Stavanger region). In all, passenger trips on public transport in Norway rose from 561 million in 2013 to 718 million in 2019. Once the pandemic is over, the Government hopes that people who can do so will go back to public transport rather than using private cars.

This would have a positive impact on air quality. In 2018, no Norwegian cities recorded concentrations of nitrogen dioxide (NO₂) in air exceeding the limit value. This was the first time since the limit value was introduced in 2002.

If people have greater freedom to choose climate-friendly ways of travelling, society as a whole is improved, and Government policy will therefore be designed to facilitate this.

1.2.2 Enabling commercial transport to become more efficient and sustainable

By 2030, the aim is that it will be easy for businesses to transport goods in climate-friendly ways. Reliable, efficient commercial transport is vital to the smooth functioning of society. Emissions from both goods transport in urban centres and long-distance transport the length and breadth of Norway must be reduced in the future. This will offer opportunities for a forward-looking transport industry, and will enable many businesses to reduce their climate footprint.

The share of electric vehicles in the passenger car fleet is already higher in Norway than anywhere else in the world, and the Government is promoting the same trend for the commercial transport segment. The proportion of small electric vans is rising faster than it did for passenger cars. The Government is using tax breaks and grants through Enova to ensure that businesses have the freedom and opportunity to choose electric vehicles.

The development of emission-free vehicles in the heavier commercial transport segment is proceeding more slowly, but will probably gain speed in the next ten years. The Government will take steps to make emission-free trucks a viable and attractive option for goods transport. The Norwegian business sector can lead the way in the green technology transition in the transport sector. This will both reduce emissions and give Norwegian businesses a competitive advantage in the future.

Maritime transport accounts for a large proportion of the volume of international transport, and ships call at many ports along the Norwegian coast. Facilities for shoreside electric power, charging infrastructure and at a later date, infrastructure for alternative transport fuels such as hydrogen, ammonia and biofuels, must be developed to facilitate zero-emission maritime transport. Enova is supporting the development of this type of infrastructure.

Road transport is the dominant mode of transport for bulk materials over short distances and for goods distribution in urban areas. Rail transport plays an important part in transport between Norway’s largest cities.

Emissions from internal combustion engine vehicles can be reduced by using biofuels and biogas. The Government intends to increase the biofuel quota obligation for road traffic so that the current volume of biofuels is maintained despite declining sales of liquid fuels as electric vehicles are phased in. To reduce the risk of a rise in global emissions, such increases will largely be in the form of requirements to use advanced biofuels. The Government intends to introduce biofuel quota obligations for offroad diesel and shipping from 2022. This will make it possible to reduce transport emissions without seriously inconveniencing the industries involved. The biofuel quota obligation for offroad diesel will be gradually increased to the same level as for road traffic by 2030. In the Government’s view, the same biofuel quota obligation should apply to road traffic and offroad diesel, and it will consider whether this can apply to shipping as well.

Stakeholders in the business sector have taken initiatives for private-public partnerships to speed up developments. The Green Shipping Programme and the new Green Land Transport Programme are developing pilot projects and sharing knowledge and experience to eliminate barriers and reduce the risk for individual businesses. The Government will continue this productive cooperation to accelerate the pace of development.

1.2.3 A world-class maritime industry

By 2030, the aim is for emissions from domestic shipping and fishing vessels to have been reduced by half compared with the 2005 level. This will offer rich opportunities for the Norwegian maritime industry. Norway has a long and proud tradition as a seafaring nation. The green transition will provide new openings for ship designers, technology companies and clusters and workers at Norwegian shipyards. Various segments of the maritime industry are already leading the way in green transformation of the sector, and the Government will build further on this.

The world’s first all-electric car ferry, MF Ampere, was put into service on the Sognefjorden in 2015. It was built under an innovation contract, with some public funding. The Norwegian Public Roads Administration and the counties have been taking the lead in including requirements for low- and zero-emission solutions in procurement processes for ferry services that are part of the national and county road systems. The development of electric ferries is one of the best examples of how good coordination of grant schemes with official requirements and public procurement can speed up technology development. In the course of 2020, 26 ferry services were electrified, and by 2022 there will probably be around 70 electric ferries in operation. Electric high-speed passenger vessels are being developed. The first hydrogen-powered high-speed vessel is being developed, and the Government plans a call for tenders for a hydrogen-powered ferry to operate across the Vestfjorden. The industry has shown how much it can achieve when necessary, and has both created jobs and reduced emissions.

However, the transition will need to be speeded up to achieve the Government’s ambitions. The Government will therefore continue its initiatives for green shipping. Strong support for the development and deployment of zero- and low-emission technology is needed to encourage green fleet renewal and make the sector more competitive.

The Government’s action plan for green shipping was published in 2019. The Government will promote the development of low- and zero-emission solutions for all vessel categories, stimulate further green growth and boost the competitiveness of the Norwegian maritime industry, and facilitate an increase in exports of low- and zero-emission technology in the maritime sector.

By combining pricing of emissions, support for innovation and the use of climate-related requirements in procurement processes, the Government will do its part to ensure that the green transition continues. The Government intends to introduce low- and zero-emission requirements in all new procurement processes for ferry and high-speed vessel services where feasible. The Government also intends to introduce requirements for zero- and low-emission solutions for aquaculture service vessels, and will consider the introduction of new requirements for offshore support vessels.

The Government also has a clearly stated political ambition to shift freight transport from road to rail and sea, and this shift can also reduce greenhouse gas emissions. Growing transport needs may also make growth and green fleet renewal possible for the short sea cargo fleet. Laying the groundwork now can put the Norwegian maritime industry in a good position to develop green solutions for shipping in the years ahead.

1.2.4 A fulfilling life for people in all parts of Norway

The aim is that in 2030, people will continue to have opportunities to live in dynamic towns, cities and communities and find jobs in viable businesses in all parts of Norway. There are long distances between regions and communities in Norway, and a dispersed pattern of settlement. There is nothing to be done about the geography of the country, which means that driving or flying is the only option for many people. To maintain the dispersed settlement pattern, the Government has to pursue a proactive policy to enable people to live rich lives both in towns and in smaller communities.

Attractive cities with a dynamic urban environment combine higher population density with effective transport solutions and a high quality of life. By making effective use of existing built-up areas, it is possible to reduce transport emissions, limit nature and biodiversity loss and reduce the need to build roads, water supply and sewerage systems and other infrastructure. Green spaces in urban areas must be safeguarded. These areas can be used to build resilience to heavier rainfall and other extreme weather events.

It is also vital that land in more rural areas is used in ways that result in low emissions. Spatial planning can be used to provide a framework for safeguarding forest and other land categories and ensuring that homes, workplaces, shops and other facilities are all close together. Even so, people in small communities will need to use cars more often than those living in larger cities. Electric cars should be the natural choice. This will only be the case if everyone in rural districts has easy access to charging infrastructure.

The kinds of jobs that will be needed as Norway makes the transition to a low-emission society will be found in all parts of the country. Businesses that take responsibility at an early stage can gain a competitive advantage in the green transition in the ten years to 2030. Examples include shipyards that build electric ferries, plants that manufacture new products using organic waste from agriculture and aquaculture, new factories that produce low-emission hydrogen, and sustainable forestry that produces materials for climate-friendly buildings.

The primary industries will play an important part in Norway’s green transition. They supply biological raw materials from forests and other sources, which can replace materials and energy that are associated with higher emissions. They are also playing an increasingly important role in climate-resilient, sustainable food production.

Buildings where people live and work must be climate-friendly both in the construction phase and when they are in use. By re-using materials and buildings for new purposes, it is possible to reduce raw material and energy use and cut waste generation and greenhouse gas emissions. The central government administration owns large numbers of buildings all across the country, and will provide a good example by seeking to achieve a common set of climate and environmental aims for public buildings. These will apply to the central government administration in its roles as developer, manager and tenant of property.

1.2.5 Healthy, sustainable, climate-friendly food on Norwegian tables

By 2030, the aim is that Norway will be producing healthy, sustainable, climate-friendly food from the land and the oceans.

Norwegian farmers have drawn up an ambitious plan for cutting their own greenhouse gas emissions. The Government is supporting their important contribution to climate action. Priority areas in the plan include farmers switching from fossil fuels to electricity, sustainable biofuels and biogas for their machinery, which will give climate benefits, and making better use of livestock manure and of local fodder resources. Livestock will continue to be important in Norwegian food production, and to play a part in maintaining the cultural landscape in the areas of the country that are best suited to livestock production. At the same time, Norway has the potential to produce more fruit, vegetables and grain, which are the foodstuffs with the lowest climate footprint.

Norway has abundant water supplies, low levels of animal disease and a relatively cold climate. Farmers have access to advanced technology, and can therefore use effective production systems and methods. The current Government is giving high priority to the conservation of agricultural land. The target for limiting the conversion of cultivated land for other purposes has been met three years in succession.

Nevertheless, some agricultural land areas are still being lost to construction and infrastructure development and to soil degradation. The Government considers it important to halt land degradation and if possible enhance carbon uptake. This is a key element of the climate agreement between the Government and the agricultural sector.

The aquaculture industry supplies sustainably produced seafood. In future, emissions from aquaculture production will be reduced even further. The Government intends to introduce requirements to ensure that zero- and low-emission solutions are used for aquaculture facilities where possible. Requirements to use low- or zero-emission technology will also be introduced for aquaculture service vessels. This means that there will be lower emissions from more and more of the vessels and trucks that transport fish from fish farms to the markets.

All stakeholders in the food industry have an important part to play in the transition to a more sustainable food system. Sustainability is of key importance to the industry, which is constantly seeking to improve transport systems and packaging and to reduce food waste and energy use.

It must become easier for people to choose healthy, sustainable, climate-friendly food. Action to reduce food waste and to encourage people to follow the dietary recommendations from the Directorate of Health helps to reduce emissions. Following these recommendations means that people need to eat more fish, whole-grain foods, fruit and vegetables, and limit the amount of red meat and processed meat in their diet.

Central government agencies will set a good example by buying healthier, more sustainable and more climate-friendly food in line with the Directorate’s recommendations, and by reducing food waste. If everyone eats a little more sustainably, wastes less food and follows dietary recommendations, public health will improve and the climate will benefit.

1.2.6 A manufacturing sector for the future

The aim is that in 2030, Norway will have a competitive manufacturing sector that produces low-emission goods and products. Much of this sector is covered by the EU ETS, so that there is a price on emissions. In the years ahead, businesses will need to have a good overview of significant climate-related risks and take them into account in their planning and investments. Given a successful green transition, Norway will also be in a good position to provide secure employment for people in all parts of the country. The greater the increase in world demand for renewable energy and climate-friendly products, the more Norwegian industry will benefit, provided that Norway has switched to manufacturing such products at an early stage.

The Norwegian manufacturing sector has ready access to electricity from renewable sources. There is also a culture of cooperation between leading centres of expertise, innovative start-ups and established industries, which drives the development of innovative solutions. These are important competitive advantages that put Norway and Norwegian manufacturing in a favourable position. The Government will facilitate innovation and continue to promote initiatives that will be needed to achieve Norway’s climate targets.

New industries and businesses may arise as part of the transformation process over the next few years. The pace of development may be speeded up if there is stronger national and international commitment to tackling climate change. Fields where innovation is taking place include offshore wind power, using biochar and hydrogen to replace coal as a reducing agent, cellulose fibre in the production of fodder for the aquaculture industry and pets, and the recovery and re-use of construction materials.

The Government is seeking to ensure that its climate policy results in growth and does not encourage businesses and activity to move out of Norway. The taxation system is designed to promote growth, enable businesses to become more competitive, and encourage the creation of more new, competitive jobs. Lower taxation of businesses helps to strengthen their competitiveness while at the same time reducing emissions.

Electricity prices are rising as a result of EU climate policy. Countries that wish to do so may provide state aid to certain sectors to compensate for the higher electricity prices resulting from the operation of the EU ETS. This is permitted to reduce the risk of carbon leakage, i.e. the risk that companies in Norway and the rest of Europe will move production elsewhere or be outcompeted by businesses in countries with less strict climate policies. The Government is in the process of evaluating how Norway’s compensation system can be continued after 2020. Grants for the development of low-emission technologies also reduce the risk of carbon leakage. These measures make it possible to combine effective climate policy with an effective manufacturing sector.

The Government is working vis-à-vis the European Commission to ensure a favourable framework for the Norwegian business sector. One aim is to ensure close coordination with EU programmes so that Norwegian companies can make use of EU research and have opportunities to obtain research funding.

The Government has submitted a proposal to the Storting on support for the Longship project, a full-scale CCS demonstration project that comprises CO₂ capture, transport and storage. If successful, the project will contribute to the development of CCS as an effective mitigation tool and will facilitate industrial development. For CCS to function as an effective, competitive climate policy instrument, more facilities must subsequently be established elsewhere in Europe and in the rest of the world.

Support from public funding agencies lowers the level of risk, thus making it possible to carry out green projects that would not otherwise have been initiated. Public funding is being used to achieve Norway’s climate targets and at the same time support and promote industrial development.

1.2.7 Norway as an energy nation

The aim is that in 2030, Norway will be a major producer of renewable energy, and the petroleum industry will be producing oil and gas efficiently, with low emissions, and will be playing a part in developing and deploying new technology.

To ensure industrial development and jobs for the future, the connections between petroleum production and renewable energy developments must be taken into consideration. The electrification of installations on the continental shelf using power from shore ties the power supply system on land closely to offshore oil and gas production.

The Government is already giving priority to the development of offshore wind power, which will enable Norway to produce renewable energy offshore as well as on land. The world’s largest floating offshore wind project, the Hywind Tampen wind farm, under the leadership of Equinor, is receiving funding from Enova and the NO_x Fund. The wind farm will supply oil and gas installations on the Snorre and Gullfaks fields with renewable electricity. In 2021, several areas on the Norwegian continental shelf are being opened for development of offshore wind energy production.

Activity on the Norwegian continental shelf will have changed by 2030. The large oil and gas fields are maturing and gradually becoming depleted, and fewer and fewer large discoveries are being made. Global demand for oil and gas is also being affected by technology development and by the mitigation action countries are taking to achieve their targets under the Paris Agreement. Restructuring and adaptation will be needed in the time ahead. It will be vital to ensure that the skills and technology developed in the petroleum industry are transferred to other areas.

Norway’s petroleum policy must be used to an even greater extent to promote industrial development in other sectors. During spring 2021, the Government will present a white paper on long-term value creation from Norwegian energy resources. Oil, gas and renewable energy will all contribute to value creation, public welfare and viable jobs in the future. The Government will use the white paper to show how industrial development can be continued in Norway in the future while at the same time achieving the Storting’s target of halving emissions from the Norwegian continental shelf by 2030.

Achieving Norway’s climate targets will require electrification of various sectors, including transport, manufacturing and oil and gas extraction. This in turn requires adequate electricity supplies and a well-developed, flexible power supply system. The white paper on long-term value creation from Norwegian energy resources will also discuss the Norwegian power supply system and Norway’s access to renewable energy as a basis for the green transition and value creation, both on land and on the continental shelf.

The development of battery technology and battery production are vital for further electrification of the transport sector both in Norway and internationally. Norway and Norwegian industrial enterprises have a considerable potential for green growth in connection with the production of raw materials for batteries and battery cells and the recovery of materials from spent batteries.

Hydrogen technology is another area where Norway has considerable potential. The white paper on long-term value creation from Norwegian energy resources will include a roadmap for hydrogen technology. The Government published a hydrogen strategy in June 2020, which showed that this is a field where Norway can make an important contribution towards a low-emission development pathway, especially in the transport and manufacturing sectors. In line with a decision by the Storting that public procurement processes for ferry services should include requirements to use low- or zero-emission technology, the Norwegian Public Roads Administration will include a requirement to use hydrogen technology for the ferry service Bodø–Røst–Værøy–Moskenes, which is part of the national road system. This is a way of strengthening the position of Norwegian stakeholders along the whole value chain, including shipyards and hydrogen producers, and of making Norwegian companies in the hydrogen industry more competitive.

Norway also has considerable potential for bioenergy production on land, from forestry and agricultural resources. Using sustainable biomass to produce energy and heat is a win-win solution, particularly when biomass replaces fossil energy sources. Together with communal solutions such as district heating and the use of waste heat, stationary heating solutions based on biomass can increase flexibility and relieve pressure on the power supply system when the load is high. There is also a potential for using forest waste and residual raw materials from the forestry industry to produce advanced biofuels. In addition, biomass resources are vital in various carbon-negative technologies, for example electricity production combined with capture and storage of biogenic carbon.

As an energy nation, Norway will enjoy major opportunities in the next ten years. A worldwide process of electrification will be taking place, and Norway is engaged in the development of hydrogen technology and sustainable battery technology. Emissions from all sources must be reduced across the world, and the Government is promoting the development of CCS technology. The world needs more energy and new energy technologies. Norway will consider interactions between various sectors to facilitate innovative industrial development and the creation of green jobs.

1.2.8 A green knowledge society

Norwegian research groups and institutions and the business sector are working together to find good solutions for the transition to a low-emission society. A workforce with the right skills and expertise is vital to the deployment of new technological solutions. Together with the focus on lifelong learning in schools, university colleges and universities, ensuring a high level of relevant skills in the workforce will be essential to the success of Norway’s green transition.

To create new jobs in Norway and strengthen the country’s competitive position, we will need to give priority to innovation and development. Cooperation between the business sector and research and innovation groups and institutions increases the likelihood that climate-related solutions will be developed in Norway. Industry-oriented funding instruments are an important tool in the transition to a low-emission society. The Research Council of Norway, Innovation Norway, Enova and SIVA (the Industrial Development Corporation of Norway) offer a range of grant schemes and are cooperating on joint initiatives to promote green growth.

The Green Platform initiative was recently launched by the Government as a tool for coordinated, enhanced and targeted efforts to promote a green transition in the business sector.

As a party to the EEA Agreement, Norway has access to funding from the EU’s Horizon 2020, which is the world’s largest research and innovation programme. About 93 % of the funding available through the programme has now been allocated, and Norwegian research and innovation groups have been awarded the equivalent of almost NOK 14 billion. Norway has received support for a particularly large number of projects dealing with climate, environment and energy. Norwegian researchers and businesses will continue to have access to key arenas for research and innovation cooperation in Europe and globally. The results of this cooperation are apparent both in the maritime industry and in other sectors.

Rapid societal transformation will require people to be adaptable. The technologies and solutions we are using today may become obsolete in the near future. This is why knowledge institutions must encourage lifelong learning. People must be able to gain new skills so that they are not excluded when new jobs replace the old ones.

The country’s highly skilled workforce is a key competitive advantage for the Norwegian business sector. The entire educational system, from schools to higher education institutions, is involved in providing new opportunities and enabling emissions to be cut in the future.

1.2.9 Sustainable management of forest and other land categories

Sustainable management of forest and other land categories is an important element of the solution to global warming. Norway’s commitment is that by 2030, emissions from land use, land use change and forestry (LULUCF) sector will not exceed removals. Norway will manage forest and other land categories and resources sustainably and take steps to ensure a high level of CO₂ removals and low emissions. Forest and other land categories absorb CO₂, act as carbon sinks and provide materials, food, energy and clean water. Forests, wetlands and other areas protect against flooding, landslides and avalanches. They are also habitats for a variety of plants and animals and important for outdoor recreation.

Sustainable forest management is intended to promote CO₂ uptake and storage and boost supplies of renewable raw materials that can be used to replace fossil energy and materials. Forest management will focus even more on enhancing CO₂ removals and expanding forested areas so that CO₂ uptake increases. Use of forest resources will be combined with protection and conservation measures to ensure that forestry is sustainable, and that biodiversity and ecosystem services are maintained. Some current forest-related measures will have a climate impact in the next ten years, but most measures primarily have longer-term effects.

The Government will pursue a policy that reduces emissions from the conversion of forest, peatland and agricultural areas for other purposes. This will include promoting effective, sustainable spatial planning, which encourages the densification of towns and built-up areas rather than urban sprawl. Planning will take into account the need for green spaces, promote people’s well-being and result in dynamic cities and communities. The Government will provide a framework for effective spatial planning that finds a balance between interests relating to food production, infrastructure, climate change, biodiversity, the cultural environment, business and industry, and ecosystem services. Efforts to restore peatlands and other wetlands and carbon-rich areas will continue. A number of solutions that are both climate-friendly and environmentally sound have already been developed.

1.3 Summary of Norway’s climate action plan

1.3.1 Introduction

This climate action plan will put Norway on track to achieve its enhanced target of cutting greenhouse gas emissions by 50–55 % by 2030, and its long-term target of reducing them by 90–95 % by 2050. The plan includes measures and instruments for reducing both ETS and non-ETS emissions, and for increasing CO₂ removals and reducing emissions from forest and other land categories. Importantly, it also explains how adjustments to climate policy will be considered as necessary during the planning period so that the 2030 climate target is achieved. Specific measures and instruments to cut non-ETS emissions by 45 % form a key element of the plan. Norway will therefore be well prepared when the EU strengthens its climate legislation. Norway’s current commitment is a 40 % cut in non-ETS emissions, either in Norway or in other European countries.

The Government’s target is for Norway to reduce its non-ETS emissions by 45 % between 2005 and 2030. Converted into an emission budget, this corresponds to total emissions over the next ten years of no more than 201.8 million tonnes CO₂eq. If Norway’s current climate policy remains unchanged, it is estimated that its emissions during this period will total 218.4 million tonnes CO₂eq. The Government is therefore proposing new policy instruments and measures that will reduce Norway’s non-ETS emissions by at least 16.6 million tonnes CO₂eq over the ten years, so that the target can be achieved. In all, it is estimated that the climate action plan presented here will cut emissions by 20 million tonnes CO₂eq. This is more than is needed to achieve the target of reducing non-ETS emissions by 45 % set out in the current Government’s political platform

Under its climate agreement with the EU, Norway has an additional commitment to ensure that emissions from the land use, land use change and forestry (LULUCF) sector over the period 2021–2030 do not exceed removals. Preliminary calculations indicate that Norway’s net emissions may be around 18 million tonnes CO₂eq, if the managed forest land flexibility (often referred to as the compensation mechanism) that is part of the EU accounting rules is included. Without the compensation mechanism, Norway would probably have to record accounted net emissions of about 27 million tonnes CO₂eq. In this climate action plan, the Government presents policy instruments to increase removals of CO₂ and reduce emissions from the LULUCF sector.

The Government expects further adjustments to the rules for the EU ETS in addition to what is currently planned, so that the cap is tightened and emissions are reduced even more. The part of this climate action plan dealing with ETS emissions will equip the Norwegian manufacturing sector and the oil and gas industry to comply with stricter rules for the EU ETS and cope with the transition to a low-emission society.

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1.3.2 The most important elements of Norway’s current climate policy

There was much to build on in preparing this climate action plan. A number of important climate policy instruments are already in place. Norway was one of the first countries in the world to introduce a carbon tax, in 1991. Under the EEA Agreement, Norwegian companies have been included in the EU Emissions Trading System since 2008.

Today, climate-related taxes combined with emissions trading are proving effective in cutting greenhouse gas emissions across sectors. These two policy instruments apply to more than 80 % of greenhouse gas emissions in Norway. In addition, the design of vehicle taxes gives people incentives to buy zero-emission vehicles.

Funding provided through the Research Council of Norway is supporting research and the generation of new skills and innovation in both academia and business and industry. Funding through Enova supports the development of new technologies and their early market introduction. Innovation Norway contributes to sustainable growth and exports. The Klimasats grant scheme funds important climate initiatives at municipal and county level, and Nysnø Climate Investments provides capital that can be invested in new, climate-friendly technology.

Since its establishment in 2001, Enova has supported the implementation of more than 7 000 energy and climate projects. In 2021, Enova has been allocated NOK 3.3 billion to support solutions for the future. This is an increase of NOK 1.6 billion since 2013. The Klimasats grant scheme has so far funded 1300 different projects in all parts of the country.

In Norway’s largest urban areas, integrated urban land-use and transport agreements are being used to facilitate close cooperation between central and local government on coordinated spatial and transport planning, major investments in public transport and to provide better solutions that will encourage people to cycle and walk. As part of the implementation of the current National Transport Plan, Norway’s annual budgets have in recent years included larger allocations to the railways than ever before.

The Pollution Control Act is used to set various minimum requirements that enterprises must meet, and municipalities and counties are expected to give high priority to efforts to reduce greenhouse gas emissions in their planning activities.

The Government will build further on these policy instruments, and also plans to introduce new instruments.

There will be considerable uncertainty relating to emission trends, the effects of climate policy, technological developments and the costs of implementing mitigation measures well into the period 2021–2030. In addition, Norway may have to meet stricter requirements under EU climate legislation as rules are tightened to meet the enhanced 2030 target the EU has adopted. The climate action plan presented here is therefore both ambitious and flexible.

1.3.3 Reducing Norwegian emissions without causing a rise in global emissions

Although Norway, like other countries, has taken on obligations to cut its own emissions, it is important to ensure that the policy instruments introduced to do this are also rational in a global context. Norway’s agreement with the EU helps to avoid a situation where emissions elsewhere in Europe rise as a result of Norwegian climate policy.

The world will not benefit if Norway pursues a policy that results in carbon leakage, in other words if Norway reduces emissions in a way that directly or indirectly causes emissions to rise in other countries. This would not be sustainable, and would make it more difficult for other countries to succeed in their green transition.

The key sectors discussed in this white paper, such as transport and agriculture, are largely shielded from the risk of carbon leakage. However, many companies in aviation, shipping and long-distance road transport can choose the countries where it is cheapest for fuelling. Moving operations out of Norway is primarily an option for manufacturing companies if their competitive position is weakened by the climate policy instruments Norway uses. In addition, many goods and services that are produced and consumed in Norway could potentially meet competition from stakeholders abroad. The proposals for policy instruments presented in this white paper take this into account.

There is considered to be little risk that the proposed policy instruments targeting manufacturing industries will result in companies moving their operations out of Norway. The parts of the manufacturing sector that generate non-ETS emissions are largely shielded from international competition, although certain branches are exposed. The risk of carbon leakage is largely associated with imports of goods and intermediate inputs that have a large climate footprint in countries outside the EU. In such cases, consumption in Norway may increase emissions in other parts of the world.

In this white paper, the Government proposes only limited use of conventional biofuels, since their use may increase deforestation in production countries and in the worst case cause a rise in global emissions. The risk of carbon leakage is also the reason why the white paper proposes that dietary changes and reduction of food waste should be the first stages in restructuring production in the agricultural sector, so that the end result is not a rise in imports. At the same time, the agricultural sector must start to prepare now for consumption patterns to change in the near future in line with health and climate policy targets.

1.3.4 The most important changes for non-ETS emissions

In this white paper, the Government is announcing new policy proposals in several important areas to accelerate cuts in non-ETS greenhouse gas emissions, in other words emissions that are not covered by the EU Emissions Trading System. These proposals apply to emissions from transport, agriculture and certain other sources. The most important changes are outlined below.

In the Government’s view, the policy instruments proposed in this white paper will be sufficient to reduce non-ETS emissions by 45 % by 2030 and thus achieve the Government’s target. This will also meet the emission reduction commitment for non-ETS emissions that Norway has agreed with the EU, which entails a cut of 40 %. However, the level of uncertainty is high, and the actual emission reductions may be either lower or higher than estimated.

Green tax shift

The Government intends to raise taxes on greenhouse gas emissions and offset this by reducing other taxes for groups that are affected by greenhouse gas taxation. This will give stronger financial incentives to choose climate-friendly solutions. The carbon tax, which at present is about NOK 590 per tonne CO₂eq, will be increased to about NOK 2 000 per tonne CO₂eq up to 2030. The Government considers that this will be sufficient to ensure that Norway meets the commitment in its agreement with the EU to reduce emissions by 40 % by 2030.

CO₂ emissions from road traffic must be further reduced, and the Government is therefore maintaining the targets for the introduction of zero-emission vehicles, expressed as shares of new vehicles sold, as set out in the National Transport Plan 2018–2029. It is therefore important to ensure that vehicle taxes and other policy instruments continue to provide incentives to reduce CO₂ emissions and to phase in zero-emission vehicles.

Phasing in low- and zero-emission technology

Where technological developments make it possible, the Government will introduce requirements to use low- and zero-emission technology. From 2020, the Government intends to introduce requirements to ensure the use of zero-emission solutions in public procurement processes for passenger cars and small vans. From 2025, similar requirements will be introduced for procurement processes for local buses. The design of requirements for local buses will be considered to find ways of including buses running on biogas. These requirements will be important for achieving the targets for zero-emission vehicles, expressed as shares of new vehicles sold, as set out in the National Transport Plan 2018–2029. This white paper also announces the Government’s intention to introduce criteria concerning zero- and low-emission solutions, where feasible, for new procurement processes for ferry services and later for all procurement processes for high-speed passenger vessel services. Requirements for zero- and low-emission solutions for aquaculture service vessels will according to plan be brought in gradually from 2024 onwards.

The Government will work towards gradual phase-out of the use of fossil fuels for energy purposes in industrial installations that are outside the scope of the EU ETS by 2030, and of the use of fossil gas for heating and drying buildings during construction by 2025. An important means of achieving this will be the gradual increase in the carbon tax rate. If necessary, the Government will consider introducing further policy instruments, including a prohibition on the use of fossil fuels for these purposes.

Greater use of climate-related requirements in public procurement

The Government will include climate-related requirements in more public procurement processes, for example for construction projects in the transport sector. The Government also intends to facilitate a transition to fossil-free construction sites in the transport sector by 2025. Furthermore, the Government will promote the inclusion of environmental and climate-related requirements in public procurement processes for food and meal services.

A clearer climate profile for Enova

The Government has given Enova a clearer climate profile for the next four-year period, so that its purpose is to contribute to Norway’s emission reduction commitment and contribute to Norway’s transition to a low-emission society. Enova will contribute to the development of technologies necessary towards 2030 and the low emission society in 2050.

More use of sustainable biofuels

The Government is seeking to replace fossil fuels with sustainable biofuels in road transport, offroad diesel, aviation and shipping. The biofuel quota obligation for road traffic is to be increased in the period up to 2030, so that the current volume of biofuel is maintained as further electrification and other changes result in declining sales of liquid biofuels. In addition, the Government plans to introduce biofuel quota obligations for offroad diesel and fuel for shipping from 2022. The proportion of biofuel required in offroad diesel will gradually be increased so that the biofuel quota obligation is the same as for road traffic. In the Government’s view, the same biofuel quota obligation should apply to road traffic and offroad diesel, and it will consider whether this can apply to shipping as well. The Government will consider the proportion of biofuels required by the biofuel quota obligations every two years, and make adjustments if appropriate. This will be done for the first time in 2022. The Government will gain experience of application of the new advanced biofuel quota obligation for aviation before considering whether to increase the proportion of advanced biofuel required.

Cutting emissions from agriculture

The Government will use the letter of intent it has signed with the agricultural organisations as a basis for climate-related work in this sector in the years ahead. In the letter of intent, the parties have undertaken to reduce emissions and enhance carbon uptake by a total of 5 million tonnes CO₂eq in the ten-year period 2021–2030.

The specific measures and policy instruments that will be used to achieve this will be considered in the negotiations on the annual Agricultural Agreements. Climate-related measures in agriculture must not result in a rise in the level of subsidies. Moreover, the letter of intent signed by the Government and the agricultural organisations must not put constraints on the policy instruments the Government can use. The mitigation effect of the annual Agricultural Agreement will be set out in the budget proposals for each year’s agreement. The Government’s efforts to promote a healthy, sustainable and climate-friendly diet will be strengthened and further developed, as will efforts to reduce food waste.

Cutting other emissions

The Government will take steps to reduce emissions from the use of fluorinated gases in products.

The Government is launching the Longship project for the capture, transport and storage of CO₂. This will facilitate future projects that can reduce non-ETS emissions, for example from waste incineration. One example is the planned carbon capture project at Fortum Oslo Varme’s waste incineration plant. The Government intends to co-fund this project provided that the company provides sufficient funding of its own and obtains funding from the EU or other sources.

1.3.5 The most important changes for the land-use, land-use change and forestry sector

The land-use, land-use change and forestry (LULUCF) sector accounts for a large volume of CO₂ removals and provides raw materials and renewable energy that can replace products that result in higher emissions in other sectors. The Government is therefore proposing a number of measures to enhance CO₂ removals in forest and to maintain the carbon stock in soils in forest, agricultural areas and other green spaces. These measures will play an important part in achieving Norway’s 2030 climate targets, and will be even more important for achieving the long-term climate target.

Enhancing CO₂ removals in forests

The aim is to enhance CO₂ removals in Norway’s forests. The Government will therefore consider ways of strengthening existing mitigation measures for forest, introduce statutory requirements relating to a minimum age for tree felling and facilitate afforestation of new areas on the basis of clear environmental criteria. This white paper also gives an account of new mitigation measures in managed forest land that offer a high potential for enhancing CO₂ removals and are easy to implement. Measures to which this applies specifically include improving practices for tending young-growth stands, treatment of stumps to control conifer root rot, and choosing suitable tree species for restocking after felling.

Cutting emissions from the development of green (carbon-rich) areas

The Government will seek to reduce the development of forests, peatlands and agricultural areas for other purposes. Municipalities, counties and central government agencies will receive sound guidance and good tools so that they can take carbon-rich areas into consideration in spatial planning. The Government will emphasise that spatial planning processes should be used to promote the development of compact towns and urban areas, and that the potential for densification and transformation should be used before new areas are developed.

Cutting emissions from other forms of land use

The Government will promote a shift from peat-based to peat-free products, and consider the introduction of a tax on greenhouse gas emissions from peat extraction and a ban on opening new sites for peat extraction. The Government will continue the restoration of peatlands and other wetlands.

1.3.6 The most important changes for ETS emissions and Norway’s transition to a more climate-friendly society

The price of emission allowances is the main instrument for reducing ETS emissions. To speed up emission reductions in petroleum, industrial production and aviation, the Government will intensify work on the green transition, developing new technology and ensuring that Norway’s industrial sector is competitive in the future.

Higher, more predictable carbon price for the petroleum industry

The Government intends to raise the carbon tax in line with the rise for non-ETS emissions and consider the tax rate in conjunction with the price of emission allowances in the EU ETS, so that the total carbon price reaches NOK 2 000 per tonne CO₂eq in 2030, measured in fixed 2020 NOK. This will give stronger financial incentives to cut emissions, and make it easier for industries to plan emission reductions.

Strengthened Enova as a climate measure for innovation

The Government has given Enova a clearer climate profile for the next four-year period. The transition to a low emission society and innovation that contributes to this, are important goals. This is particularly relevant in the case of ETS emissions, since public funding for research and development is an important supplement to the emissions trading system.

Promoting carbon capture and storage (CCS)

The Government will implement the Longship project for the capture, transport and storage of CO₂. The aim of the project is to develop CCS as an effective mitigation tool and to contribute to technology development internationally.

Developing the Green Platform initiative

The Government intends to build further on the Green Platform initiative, which involves cooperation between the Research Council of Norway, Innovation Norway, SIVA (the Industrial Development Corporation of Norway) and Enova. The initiative was established as part of a green restructuring package to promote innovation and development despite the economic impacts of the COVID-19 pandemic.

Stepping up green research and innovation

The Government will maintain its focus on research and innovation, both in Norway and through Norway’s participation in the EU funding programme for research and development, Horizon Europe.

Improving reporting of climate-related and environmental information

The Government will follow legislative developments in the EU closely as it seeks to improve reporting of climate-related and environmental information, and consider whether amendments to the Accounting Act are needed so that investors and other stakeholders can receive relevant, comparable climate-related and environmental information. The Government will engage in dialogue with the business sector on how to facilitate better and more relevant corporate reporting of climate-related and environmental information.

Expert committee

The Government will appoint an expert committee to review the overall framework for promoting climate-friendly investment in Norway. The Government will tailor the committee’s mandate to fit with other related processes and committees and avoid unnecessary overlap with other work in the same field.

Climate and environmental aims for public buildings

The Government has formulated aims for public buildings and property in the civilian sector. These will apply to the central government administration in its roles as developer, manager and tenant of property. The central government will seek to make full use of existing buildings, ensure re-use of buildings, re-use materials and choose environmentally friendly materials. The central government will also establish a common methodology for measuring the overall climate and environmental impact of public buildings, and will attach importance to the environmental benefits of re-using already developed areas and existing buildings, and of siting its premises in line with central government planning guidelines.

1.3.7 Other policy instruments the Government will consider

The Government will also consider the introduction of a number of other policy instruments to reduce greenhouse gas emissions.

Zero- and low-emission zones

• At present, municipalities can establish low-emission zones in order to improve local air quality under section 13 of the Road Traffic Act and the regulations relating to low-emission zones for motor vehicles, which were adopted on 20 December 2016. The regulations do not currently provide the legal authority to establish such zones purely on climate-related grounds. The Government will consider how the conditions for establishing low-emission zones can be amended to include climate considerations.

• A number of municipalities have called for the authority to establish zero-emission zones. To enable the municipalities to play a leading role in developments, and as a way of speeding up the transition to zero-emission technology for both commercial and passenger transport, the Government will consider the use of the legal authority provided by section 7 of the Road Traffic Act to establish zero-emission zones on climate-related grounds. This will initially be in the form of a pilot project in a few cities. Zero-emission zones must not include trunk roads/national roads.

Emissions from the construction industry

• The Government will consider the introduction of a general requirement for construction sites in the transport sector to be fossil-free. Central government agencies will start pilot projects and consider policy instruments that can improve the efficiency of transport of bulk materials.

National transport plan

• Use the National Transport Plan 2022–2033 to support the ambition of reducing transport emissions by 50 %.

Requirements relating to conversion of forest land to pasture

• The Government will consider requirements and procedures for the conversion of forest land to pasture to ensure that conversion does not involve evasion of regeneration obligations under the forestry legislation.

Tax on mineral fertiliser

• The Government will review the effects and impacts of introducing a tax on mineral fertiliser, and how it could be introduced. The purpose of this would be to reduce nitrous oxide emissions.

Other taxes and policy instruments

• The Government will consider a gradual increase in the tax on waste incineration to the standard carbon tax rate. Policy instruments will be reviewed to reduce the use and emissions of sulphur hexafluoride (SF₆), a fluorinated gas that among other things is used in the power supply sector. Furthermore, the Government will review the introduction of a tax on methane emissions from onshore facilities in the petroleum sector, corresponding to the tax that already applies to offshore activities.

2 Climate action by Norway in a changing world

2.1 Introduction to the problem of climate change

The world population has risen from one billion in 1800 to almost eight billion today. Living standards have improved, and fewer and fewer people are living in extreme poverty. However, the development and alteration of natural ecosystems, greenhouse gas emissions and air and water pollution have been putting increasing pressure on the environment worldwide.

We are already witnessing the effects of climate change in Norway. Precipitation is rising and the duration of snow cover is decreasing. Glaciers are shrinking, patterns of flooding are changing and sea level is rising. In many places, the growing season is lengthening and winter is becoming shorter. Observations from monitoring stations in all parts of Norway show that the average temperature has risen by one degree Celsius since 1900, and by half a degree in the past 15 years alone. Dramatic changes are taking place in Svalbard and the rest of the Arctic – in fact, no other region of is warming more rapidly than the Arctic. Since 1971, the average winter temperature in Svalbard has risen by 7 degrees Celsius.1

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Photo: Geir Wing Gabrielsen/Norwegian Polar Institute

Addressing climate and environmental challenges is one of the most important tasks facing us today. Higher temperatures, more frequent and more intense weather extremes, and ecosystem degradation are jeopardising human survival and pose a threat to health, welfare and economic growth in the future. Climate change may also create and intensify conflict in different parts of the world through factors such as drought, flooding and extreme weather, and through shortages of water, food, soil, space and other resources. Norway and other parts of the world may face new security challenges as a result. Moreover, climate change in the Arctic, and the loss of ice cover, may result in growing interest in the potential of natural resources and in changes in sailing patterns and military presence in the region.

According to the IPCC, see Box 2.1, anthropogenic greenhouse gas emissions are the dominant cause of the observed global warming. Sources of these emissions include the combustion of coal, oil and gas, industrial processes and cement production, and forest degradation and deforestation.

Major wildfires in California and Australia, rain in winter in Svalbard and the severe drought in Northern Europe in summer 2018 are dramatic examples of the impacts of climate change. Both in Norway and in the rest of the world, we will have to adapt to the climate change that has already taken place and that we know will continue. At the same time, emissions must be cut drastically to avoid further irreversible impacts of climate change.

Nature and climate are closely interconnected. The way people use nature influences the climate, and at the same time climate change influences nature. We humans have never influenced nature as strongly as we are doing now, and climate change is intensifying environmental pressures. The combination of climate change and loss of biodiversity is jeopardising our ability to provide food for a growing global population. The same drivers are to a large extent behind both climate change and environmental degradation. Coordination of climate and biodiversity policies is therefore vital.

The Paris Agreement is a framework for climate action by the whole world. Climate change is a global problem, because emissions have the same impact on the climate irrespective of where they originate. Climate change will affect everyone. The problem can only be dealt with through global action to reduce and eventually eliminate greenhouse gas emissions. The UN Framework Convention on Climate Change entered into force in 1994, and its ultimate objective is ‘the stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.’ In 2015, the parties to the Convention adopted the Paris Agreement, under which almost every country in the world has agreed to the long-term temperature target of holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The parties have also agreed on the common aim of reaching global peaking of greenhouse gas emissions as soon as possible and undertaking rapid reductions thereafter, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

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Source CAIT

Under the Paris Agreement, each country has an obligation to communicate a nationally determined contribution (NDC) to the overall response to climate change every five years. Each country determines what its own contribution is to be, and each successive NDC is to represent a progression from the previous five-year period and reflect the country’s highest possible ambition. In setting their NDCs, countries are required to consider the results of five-yearly global stocktakes assessing collective progress towards the long-term temperature target and the common aim for emissions set out in the Agreement. This system is intended to ensure that the world over time achieves the long-term temperature target of the Paris Agreement.

The Paris Agreement also aims to increase countries’ ability to adapt to the adverse impacts of climate change, and to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

There is no time to lose. To limit global warming to 1.5°C, global CO₂ emissions must be reduced by 40–50 % by 2030. To achieve the targets of the Paris Agreement, several of the countries that are major emitters will have to enhance their national targets under the Agreement.

Emissions of short-lived climate forcers must also be reduced. These include gases and particulates, especially methane and HFCs in addition to black carbon (soot). They have a shorter atmospheric lifetime than CO₂, but have a substantial warming effect in the short term. Early cuts in emissions of short-lived climate forcers will therefore help to limit the temperature rise. Permanent cuts in these emissions will reduce the need to achieve negative emissions at a later stage. However, such reductions must be achieved in addition to, not instead of, reductions in emissions of long-lived greenhouse gases such as CO₂. Many mitigation measures that will reduce emissions of short-lived climate forcers also have other beneficial effects, for example on air pollution and public health. The Norwegian Environment Agency has published a mitigation analysis for Norway 2021–2030 and a separate report on the short-term climate impacts of the same measures, together with their health and environmental co-benefits.

By 2050, the world must be carbon neutral. This means that emissions have been minimised, and that action has been taken to compensate for the remaining emissions that cannot be eliminated by enhancing removals of CO₂, for example in forest and in soils in agricultural ecosystems, or through technical solutions such as carbon capture and storage. Measures to remove CO₂ from the atmosphere will be essential since it is not realistic to eliminate all emissions, for example emissions from food production.

2.2 Norway’s contribution to global climate action

The challenges posed by climate change can only be dealt with through global cooperation between countries. Norway is a driving force in international climate action. The legal framework for this work is provided by the Climate Change Convention and the Paris Agreement. The Paris Agreement sets out a long-term temperature target that has gained global support. So far, the nationally determined contributions (NDCs) that countries have communicated under the Paris Agreement are far from enough to give an emission trajectory in line with its long-term temperature target. Countries were requested to submit new or updated NDCs under the Paris Agreement in the course of 2020. Norway responded promptly, and submitted a substantially enhanced target on 7 February 2020.

Norway’s International Climate and Forest Initiative is Norway’s largest contribution to international climate action. It will not be possible to achieve either the targets of the Paris Agreement or the UN Sustainable Development Goals (SDGs) unless losses of the world’s rainforests are reduced and reversed. These forests help to maintain a stable climate, support high biodiversity, and provide livelihoods for millions of people who live in and near rainforests. The Climate and Forest Initiative will continue to pursue its strategy of supporting forest countries in their efforts to manage rainforests sustainably and reducing market pressures on rainforests by reducing demand for raw materials that drives deforestation.

Norwegian climate finance for developing countries will be designed to assist developing countries to achieve their targets under the Paris Agreement. In addition to the Climate and Forest Initiative, priority areas of Norwegian climate funding are renewable energy and climate change adaptation and climate-related disaster risk reduction. Norway also assists other countries to achieve their climate targets through active climate diplomacy and by supporting the efforts of developing countries to achieve a low-emission development pathway and adapt to climate change. The Green Climate Fund2 is the key channel for climate finance under the Paris Agreement. The Norwegian Government will contribute a total of NOK 3.2 billion to the fund over the period 2020–2023, and Norway also has a seat on the board.

Norway is working actively to ensure sound rules for market-based cooperation under the Paris Agreement. This type of cooperation on emission reductions can encourage countries to take a more ambitious approach to climate action. Through its involvement in initiatives including the Transformative Carbon Asset Facility (TCAF) and a bilateral programme organised through the Global Green Growth Institute, Norway is taking part in the development of pilot projects to test new forms of market cooperation within the framework of the Paris Agreement. The purpose of such forms of cooperation is to promote permanent change in developing countries through programmes that support the development of low-emission solutions for specific sectors in a country.

Norway is also promoting a shift to more sustainable public and private investments, in line with the aim of the Paris Agreement to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. In addition, Norway seeks to ensure that trade and investment agreements promote green growth and take climate change and environmental considerations into account. Norway is involved in the development of international carbon markets, carbon pricing, in phasing out subsidies on fossil fuels, and in action to reduce international transport emissions and emissions of short-lived climate pollutants. Furthermore, Norway is engaged in bilateral environmental cooperation with China, India and South Africa, and is supporting international initiatives to promote a transition to a green economy in developing countries.

2.3 Norwegian greenhouse gas emissions and removals

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Source Statistics Norway and Norwegian Environment Agency

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Source Statistics Norway

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Source European Environment Agency, EEA greenhouse gas data viewer

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Source Statistics Norway and Norwegian Environment Agency

Norway’s greenhouse gas emissions are declining. In 2019, its aggregated greenhouse gas emissions were 50.3 million tonnes CO₂eq, This is the lowest level since 1993, 12 % below the peak in 2007, and a reduction of 1.2 million tonnes since 1990. At the same time, GDP nearly doubled from 1990 to 2019. Emissions from oil and gas extraction totalled 14 million tonnes CO₂eq in 2019. Emissions from this sector have risen by 71 % since 1990, but have been reduced somewhat from the peak in 2007. Emissions from industrial processes were 42 % lower than in 1990, and this is the main reason for the drop in overall emissions. Emissions from road traffic rose by almost 37 % from 1990 to 2015. Since 2015, these emissions have been reduced by about 16 %, while at the same time the population has grown sharply. In addition, there are emissions and removals in forest and other land categories. In 2018, there were net removals of 23.7 million tonnes CO₂ in the land use, land use change and forestry (LULUCF) sector in Norway, calculated according to the accounting rules of the Climate Change Convention. There are some differences between these accounting rules and those for LULUCF emissions and removals under EU legislation. Among other things, the EU rules limit the share of net removals in managed forest land that can be included towards compliance with the ‘no debit’ rule. See Chapter 4 for more details.

The largest sources of greenhouse gas emissions in Norway are oil and gas extraction and road traffic and other transport, as shown in Figure 2.4. Other transport includes emissions from aviation, shipping and mobile motorised equipment.

Norway’s oil and gas production is high compared with the EU average, and emissions from the sector are therefore also high. On the other hand, Norway has abundant supplies of renewable energy, so that emissions from electricity generation are low. The share of emissions from industrial processes is relatively high, but emissions from energy use in manufacturing are lower than the EU average. A large proportion of the energy used to heat buildings in Norway is electricity. Emissions from heating buildings therefore make up a smaller share of overall emissions than they do in the EU, where fossil fuels are currently more widely used. In the period up to 2030, most EU countries will continue to make considerable reductions in emissions from buildings, whereas Norway will not be able to do as much in this sector. Figure 2.5 shows the shares of emissions from various sectors in Norway and the EU averages for the same sectors.

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Source Statistics Norway

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Source Norwegian Environment Agency

Figure 2.6 shows the split between ETS and non-ETS emissions for different sectors in Norway. Emissions in the ETS sector account for about half of Norway’s total emissions. In 2019, 24.6 million tonnes CO₂eq of the total were non-ETS emissions. ETS emissions originate largely from industrial processes and oil and gas extraction. In addition, some emissions from the energy supply and aviation sectors are included in the ETS sector. The largest sources of non-ETS emissions are road traffic, other transport and agriculture. There are also non-ETS emissions of F-gases and from the petroleum industry, manufacturing and other sources such as buildings.

Figure 2.7 shows Norway’s annual emissions of the three most important greenhouse gases, CO₂, methane and nitrous oxide, from 1990 to 2019, using 1990 as the base year. CO₂ emissions rose by 19 % from 1990 to 200S9, but have since declined somewhat. Nitrous oxide emissions have been reduced by about 42 % in the same period, and methane emissions by 25 %.

Figure 2.8 shows net emissions and removals for the LULUCF sector as calculated under UNFCCC rules. According to the accounting rules of the EU legislation, and given its obligation to comply with the ‘no debit’ rule for the LULUCF sector, Norway is likely to have to record accounted net emissions of about 18 million tonnes CO₂eq over the ten-year period 2021–2030, if the compensation mechanism that is part of the EU accounting rules is included. Certain conditions have to be met to make use of the compensation mechanism. Without the compensation mechanism, Norway would probably have to record net emissions of about 27 million tonnes CO₂eq. This is discussed further in Chapter 4.

2.4 Norway’s climate targets

Norway will become a low-emission society by 2050. Achieving this target will involve reductions in greenhouse gas emissions of the order of 90–95 % by 2050 from the level in the reference year 1990. The effect of Norway’s participation in the EU Emissions Trading System is to be taken into account in assessing progress towards this target.

This climate action plan for 2030 is intended not only to ensure that Norway achieves its 2030 targets, but also to ensure the necessary progress towards becoming a low-emission society by 2050. According to the Government’s long-term low-emission strategy, Norway and other countries will by 2050 have achieved low emissions in all sectors. This means that energy and resource efficiency are high and a circular economy underpins low-emission, sustainable production and consumption. The success of this transformation process will be vital to the competitive position of the Norwegian economy.

Norway will reduce emissions by at least 50 % and towards 55 % by 2030 compared to 1990. In February 2020, Norway was the third country in the world to submit an enhanced 2030 target to the UN as its commitment under the Paris Agreement. The Government wishes to achieve this target in cooperation with the EU. Through the agreement on climate action, Norway has already undertaken to cooperate with the EU to reduce emissions by at least 40 % by 2030 compared with the 1990 level.

Targets specifically for non-ETS emissions. Under the terms of the climate agreement with the EU, Norway is to cut emissions from transport, buildings, agriculture and waste (non-ETS emissions) by 40 % by 2030 compared with the 2005 level. This target can be achieved through national cuts in emissions and/or by using flexibility mechanisms. The Government plans to exceed this target, and aims to reduce emissions by 45 % through national cuts. If strictly necessary, it will be possible to make use of the flexibility mechanisms set out in the EU legislation.

Figure 2.9 illustrates Norway’s climate targets for 2030 and 2050.

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Norway has set itself an additional target of being climate neutral by 2030, see Box 2.5 for more information.

2.4.1 Norway’s commitments under the climate agreement with the EU

The agreement with the EU on climate action provides a framework for Norwegian climate policy. Norway and Iceland entered into this agreement with the EU in October 2019. Under the agreement, Norway will take part in EU climate legislation from 2021 to 2030. The legislation is designed to achieve emission reductions of at least 40 % compared with the 1990 level. This is an overall target for all EU member states, Norway and Iceland and for all sectors. Since the EU, Norway and Iceland have separate NDCs under the Paris Agreement, each party reports separately on its emissions and progress towards its NDC. Figure 2.10 shows how Norway’s 2030 targets fit together. The EU’s climate policy has three main pillars.

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The first pillar of EU climate policy deals with non-ETS emissions. Norway’s target for non-ETS emissions under its agreement with the EU is a 40 % reduction by 2030 compared with the 2005 level. This will be translated into a binding emission budget with emission ceilings for each year in the period 2021–2030. The legislation allows for each country’s emission budget to be met through a combination of emission reductions within the country and transfers of emission units from other European countries.

The Government has set itself a more ambitious target than Norway’s obligation in the agreement with the EU: to cut non-ETS emissions by 45 % through domestic measures. Non-ETS emissions are dealt with in greater detail in Chapter 3.

The second pillar of EU climate policy deals with ETS emissions. The EU Emissions Trading System applies to the largest emission sources within Norwegian manufacturing industries and the petroleum industry. The cap, or number of emission allowances in the system, is being gradually reduced to achieve a reduction of 43 % in emissions in 2030 compared with 2005. This is an overall reduction for all installations covered by the EU ETS. Emissions from European aviation have been included in the EU ETS since 2012. ETS emissions are dealt with in greater detail in Chapter 5.

The third pillar of EU climate policy deals with the LULUCF sector. This includes anthropogenic emissions and removals of greenhouse gases from land use, land use change and forestry. The factors that particularly influence emissions and removals are the level of harvesting (relative to the reference level), land-use change such as deforestation and afforestation, and the natural spread of forest and scrub. The EU’s climate legislation includes accounting rules for emissions and removals in the LULUCF sector. Norway has an obligation to ensure that overall greenhouse gas emissions from the LULUCF sector do not exceed removals (this is known as the ‘no debit’ rule). If Norway has net accounted emissions for the period 2021–2030 as a whole, this obligation must be fulfilled by making use of flexibility mechanisms. The LULUCF sector is dealt with in greater detail in Chapter 4.

The legislation provides for various forms of flexible implementation both within each of these policy pillars and between them. If a country reduces its emissions or enhances removals by more than it is required to do, the surplus can be traded. For example, emission units for non-ETS emissions can be transferred between the EU member states, Norway and Iceland. If there is an emissions gap in the LULUCF sector, countries can meet their commitments through further domestic cuts in non-ETS emissions, or by buying emission units from other countries that have a surplus in the non-ETS or LULUCF sectors. Norway and eight other countries can also use a limited number of emission allowances from the EU ETS to achieve their targets under the Effort Sharing Regulation, and thus indirectly in the LULUCF sector.

The EU legislation and Norway’s climate agreement with the EU are discussed further in Prop. 94 S (2018–2019)3 requesting the Storting’s consent to the agreement between Norway and the EU (in Norwegian only).

2.4.2 Cooperation with the EU on a more ambitious climate target

When Norway and the EU concluded their agreement, the target both parties had communicated to the UN was still a 40 % reduction in emissions by 2030 compared with the 1990 level. Norway will therefore take part in the climate legislation the EU has adopted to ensure that emissions are cut by 40 %, as discussed earlier in this chapter.

The Government has since submitted an enhanced NDC under the Paris Agreement, with a target of cutting emissions by at least 50 % and towards/up to 55 % by 2030 compared to 1990. The Government wishes to cooperate with the EU on achieving this target. In December 2020, the EU enhanced its own 2030 climate target. The new target is a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990. This is formulated as a net target, which includes all CO₂ removals by forest and other sinks. It is based on the European Commission’s proposal for a 55 % cut in emissions by 2030, see Box 2.6. Emissions and removals of CO₂ in the LULUCF sector can be accounted for in various ways. The EU has not yet communicated the methodology it wishes to use.

The EU will be making necessary amendments to its the legislation to ensure that the new and enhanced 2030 climate target is achieved. The European Commission has announced that legislative proposals will be presented in June 2021. Once the legislation has been adopted by the EU, Norway will need to consider whether the updated legislation should also be made applicable in Norway, and if so on what conditions. The legislation will not apply in Norway until the Storting has given its consent. The Government will therefore have to wait until the EU’s legislative proposals have been presented and the EU has made its decisions before presenting its views on how Norway should achieve its enhanced target and whether this should be done in cooperation with the EU.

Until new EU rules for achieving the enhanced target are adopted, Norway will follow the current legislation and will plan its climate policy on this basis. This applies to the rules on the Emissions Trading System, the non-ETS emissions covered by the Effort Sharing Regulation, and the LULUCF sector. Regardless of the outcome, Norwegian emissions must be reduced, and removals in the LULUCF sector must be increased. In the case of non-ETS emissions, the Government is planning to exceed its commitment under the agreement with the EU.

2.5 The SDGs and EU climate action are vital to the transformation process

Norway’s climate action plan must be in line with the SDGs

The 17 UN Sustainable Development Goals, the SDGs, are the world’s plan for ending poverty, reducing inequality and combating climate change by 2030, see Figure 2.11. SDG 13 concerns action to combat climate change; several of the other goals are also of key importance for achieving climate targets. Countries must take urgent steps to combat climate change and its impacts, recognising that the UNFCCC is the most important international and intergovernmental forum for negotiations on global climate action. Climate policy involves action to cut emissions and at the same time adapt to a changing climate. It is important to ensure that Norwegian society develops along a path that continues to allow people to lead good lives and offers attractive places to live. The transformation process must be equitable. We must avoid any inequitable consequences of Norwegian climate policy, and maintain high employment.

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Source United Nations Association of Norway

This climate action plan describes the part Norway intends to play in achieving SDG 13, and how these efforts can be organised to be in line with the other SDGs. Climate policy must be harmonised with action in other areas such as eliminating poverty and safeguarding the environment.

The Government is preparing a national action plan for Norway’s work on the SDGs. This will be in the form of a white paper, to be presented in spring 2021.

Climate policy must contribute to the transition to a low-emission society

The transition process will involve costs, but by taking a normative and proactive approach to climate policy, the Government is seeking to avoid far higher costs at a later stage. If Norway is to achieve its climate targets, both public and private investments must be made more sustainable. Decisions taken now will influence how difficult it is to achieve the 2030 and 2050 targets. A stricter global climate policy and technological developments mean that investments that were profitable yesterday will not necessarily be profitable tomorrow. This applies particularly to investments in infrastructure and other long-term investments. Investments in low-emission solutions not only help to curb climate change and speed up the transition to a low-emission society, but can also reduce the risk of making unsound investments.

Climate policy must promote competitiveness

The Norwegian business sector is facing a world undergoing transformation, and where climate and environmental policy is becoming more and more ambitious at both national and international level. The operating framework for businesses is changing because of stricter rules on greenhouse gas emissions, environmental matters and the use of resources and shortages in raw material supplies.

There is growing awareness among consumers and businesses, and demand for greener goods and services is rising. This is opening up opportunities for value creation in new, green commercial activities, and for making use of new business models. The competitive position of businesses will be more closely linked to the extent to which they can offer green goods and services. Combined with a policy that results in rising costs for greenhouse gas emissions, this will provide financial incentives to use resources more effectively. One result may be that products and materials are kept in use for longer.

Developments in the EU affect Norway

The EU is Norway’s most important trade partner. Much of the policy developed in the EU also applies to Norway or influences Norwegian businesses directly and indirectly.

The European Green Deal is the EU’s ambitious strategy for green growth and a climate-neutral Europe. The document establishes climate and environmental policy as integral to all policy areas. Regardless of whether the subject is consumer issues, the transport system, industry or the energy we all use, it is vital to ensure that policy in an area does not result in environmental damage or rising greenhouse gas emissions.

The policy being followed by the EU is also providing support for the green transformation of the Norwegian economy and the establishment of new jobs in green industries. Both consumers and the business sector in Norway will observe changes in the production of, demand for and financing of goods and services in the EU.

The EU is preparing action plans and strategies for all sectors, including the financial sector. These will be linked to the budgets and research effort needed to achieve EU climate targets. As time goes on, policy will also be laid down in the form of new and revised legislation. Through the EEA Agreement, Norway is part of the EU internal market and largely shares EU legislation on products, food, the environment, financial services, climate change and waste. Relevant legislation in these areas will also be applicable in Norway.

In the period 2014–2020, Norway has participated in Horizon 2020, the EU framework programme for research and development, which has been very important for Norwegian research institutes and businesses. Norway will also take part in the next funding programme for research and development, Horizon Europe (2021–2027), see Chapter 6.2 on research and innovation. Norway is involved in Copernicus, the EU Earth observation programme, whose services include climate and environmental monitoring. In addition, Norway will participate in the new EU space programme (2021–2027). From 2021 onwards, Norway will also be involved in the EU’s Innovation Fund, which will be funded through the auctioning of 450 million allowances in the EU ETS. The fund will provide grants for commercial demonstration of innovative low-carbon technologies in the period 2021–2030. For further information, see Chapter 5.2.

The EU’s long-term budget for 2021–2027 and the COVID-19 recovery package show that the EU is taking climate change seriously. At least 30 % of total expenditure from the long-term budget and the recovery package (Next Generation EU) will target climate-related projects. It has also been decided that 35 % of total research and investment funding in the Horizon Europe programme will be allocated to climate-related activities. All allocations and loans from the EU must meet sustainability criteria. The long-term budget and recovery package include major initiatives concerning digitalisation and support to European industry and employees.

Figure 2.2 shows the main elements of the European Green Deal. It is essential to the success of the green transition that it is both fair and inclusive. The EU is taking steps to mobilise public and private funding for the transition process.

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Source European Commission: The European Green Deal (COM 2019/640 final)