Budget for green restructuring

The 2015 budget lays the foundation for achieving the Government’s long-term goal of making Norway a low emission society.

“We have started out on the road towards a low emission society. The future winners will be those who saw the green shift coming and grasped the opportunities. Norway wants to be wearing the green jersey. That will be no easy task. But the budget we are presenting today will facilitate restructuring. I’m a restructuring optimist,” said Climate and Environment Minister Tine Sundtoft.

In the budget, the Government proposes a number of measures that will help to achieve both short- and long-term climate goals. These apply to the budget areas of many different ministries. The proposal implies that the Climate Agreement will be followed up and strengthened.

“Climate policy is cross-sectorial. There are no easy solutions. But the totality of the measures proposed in the budget points towards the necessary restructuring. The oil industry will no longer be the growth engine in the Norwegian economy. This is reflected in our budget proposal,” emphasised Sundtoft.

The main measures for the green shift in the national budget for 2015:

• Significantly increased investment in climate technology. If we are to take the leader’s jersey in the green shift, we must help Norwegian business to develop the climate solutions of the future. By raising the annual allocation to the Fund for Climate Change, Renewable Energy and Energy Conversion (the Climate Technology Fund) by NOK 4.25 billion in 2014, 2015 and 2016, the Fund will increase to NOK 62.75 billion in 2016 as compared to the ambition of NOK 50 billion in the Climate Agreement. Increased funding will encourage environmentally friendly energy conversion and enhance the development of energy and climate technology in Norway. Increased return from the Climate Fund to the Energy Fund under Enova will amount to NOK 202 million in 2015.
• More funding for environmental technology in industry. The private sector is involved in considerable environmental research and technology development. It is important to provide Norwegian companies with risk relief when they commercialise environmental technologies. Innovation Norway’s environmental technology programme will therefore receive an increased allocation of NOK 50 million.  
• Taxation system for new investments. The Government will enhance the competitiveness of mainland industries by reducing the tax on wealth creation. Relatively speaking, this gives mainland business a competitive advantage in the restructuring. Reduced capital tax will strengthen access to capital for new investments that will help to realise the green shift in industry.
• Green relief for increased renewable production. The Government will introduce green relief for wind power. This will lead to the realisation of more wind power projects in Norway. The result will be increased value creation from renewable energy, more green jobs and a strengthening of the Norwegian renewable energy cluster.
• Accelerated phasing out of oil heating in Government property. NOK 15 million is proposed as part of efforts to phase out oil as the main energy source in Statsbygg properties by the end of 2016. A general ban on heating with fossil fuel will take effect in 2020.
• Increased investment in future transportation systems. The focus on sustainable transport will be heightened. The Government proposes to increase the budget for the Norwegian Rail Administration by about nine percent from NOK 16.2 to 17.7 billion. This includes NOK 1.2 billion extra for the new double track between Oslo and Ski. In addition, the Government proposes an increase of NOK 3.2 billion in the funding for the purchase of railway passenger services.  
• Improved urban accessibility. Urban environment agreements are one of the new governmental initiatives in the 2015 budget. These agreements will provide for improved public transport and accessibility in towns and cities. An allocation of NOK 70 million is proposed as a start. The Government also proposes a special grant of NOK 25 million for the Fornebu railway and NOK 10 million for a reward system for pedestrian and cycle paths.  
• Enhanced Climate and Forest Initiative. The Government proposes a total of NOK 3 billion for international efforts to reduce deforestation. This is an important climate measure which also contributes to poverty reduction. We have just signed new agreements with Peru and Liberia. The Government will increase its focus on the role of the private sector in curbing deforestation.
• Stepping up international climate financing. The Government proposes to allocate NOK 200 million to the Green Climate Fund. A strengthening of the fund will probably be essential to achieve a satisfactory climate agreement at the UN climate summit in Paris in 2015. Norway will play an intermediary role in the negotiations.
• Increased international commitment to renewables. Renewable energy is becoming more competitive, and there are many profitable projects internationally. Funding for renewable energy under Norfund is estimated to increase by NOK 125 million. Norfund is one of the Government’s tools for investments in developing countries.  
• More support for domestic energy saving. The Enova scheme for ENØK energy efficiency support aimed at private households will be reorganised and expanded. This means that Norwegian households will receive increased support to save energy at home. The government wishes to increase this funding by NOK 250 million next year. This is covered within Enova’s existing framework. The government also intends the scheme to be changed later to involve tax deductions.
• Biogas pilot plant. NOK 10 million for compliance with the biogas strategy through allocations for a pilot plant and research. Biogas can be an important climate solution, and there is a need to develop a more mature technology.  
• More funding for further development of carbon capture and storage. The Technology Centre at Mongstad will receive a boost of NOK 65 million for development, modifications and maintenance. Norway has been invited by the EU to contribute to the realisation of a CCS project. We are pleased to help realise a research programme supported by the EU research and innovation programme Horizon 2020 The programme will support research in the operational phase of a full-scale project for CO₂ sequestration in the EU.
• Participation in international climate research. Norwegian participation in the EU research framework programme Horizon 2020 has achieved a good environmental performance. The 2015 budget proposes an increase in funding of NOK 115 million. This will encourage greater participation in the EU programme, where a portion of the funds will go to environmental and climate-related research.

 


Climate-related measures in the 2015 budget:

                                                                                                                (in 1000 NOK)

Expenses
The Green Climate Fund	UD	200 000
Norfund - increased funding for renewable energy	UD	125 000
Encouragement for increased participation in Horizon 2020	KD	115 000
Innovation Norway’s environmental technology programme	NFD	50 000
Increased purchase of rail passenger transport services	SD	183 000
Funding for pedestrian and cycle paths	SD	10 000
Establishment of environmental base/oil spill response base in Lofoten/Vesterålen	SD	40 000
Urban environment agreements	SD	70 000
Special funding for Fornebu railway	SD	25 000
New double track railway line Oslo-Ski	SD	1 224 000
Technology Centre at Mongstad - development, modifications and maintenance	OED	65 000
Increased return from the Climate Fund to the Energy Fund under Enova	OED	202 000
Phasing out of oil heating in Statsbygg properties	KMD	15 000
Climate and Forest Initiative reaches 3 million	KLD	134 100
Biogas	KLD	10 000
Fund
Capital contribution to the Fund for Climate Change, Renewable Energy and Energy Conversion	OED	9 250 000

 

UD = Ministry of Foreign Affairs, KD = Ministry of Education and Research, NFD = Ministry of Trade, Industry and Fisheries, SD = Ministry of Transport and Communications, OED = Ministry of Petroleum and Energy, KMD = Ministry of Local Government and Modernisation, KLD = Ministry of Climate and Environment