Carbon Dioxide Offset, Climate | Want cuts in industry subsidies: – It is quite clear that this is not sustainable

Carbon Dioxide Offset, Climate |  Want cuts in industry subsidies: – It is quite clear that this is not sustainable

As Nettavisen has shown in many cases, in the coming years the state will spend huge amounts of money on carbon dioxide offsets, which is, in fact, a kind of electricity subsidy for energy-intensive industries.

Heavy-emitting industrial companies such as Elkem, Norsk Hydro and Alcoa would cost the country up to NOK 100 billion in such subsidies through 2030.

There is a political majority in favor of this scheme, but in recent days many people have criticized it. Among other things, the tax commission proposes Statistics Norway to remove the scheme.

– It makes no sense at all. This is prioritizing money wrong, journalist and author Jon Hustad tells Nettavisen.

The two ruling parties, the Labor Party and the Center Party, referred to the plan as “a political matter of course”, and increased the money for carbon dioxide offsets in the 2023 budget from NOK 2.8 to 4.7 billion.

Nettavisen asked other parties in the Norwegian Parliament what they think about the state spending NOK 100 billion until 2030 to prevent Norwegian industry from going under, but without any commitment to emissions cuts or other climate measures.

Read also: Sweden gives zero – Norway gives one hundred billion: – Completely useless spending

Billion will be transferred to subsidize private electricity

– It is not taken for granted that the CO2 offset scheme is a good scheme from a climate perspective, and it is very expensive, Kjell Ingolf Robstad, KrF’s climate policy and fiscal policy spokesman, tells Nettavisen.

KrF has proposed to reduce the scheme by NOK 1 billion for 2023, by increasing the minimum share price from NOK 200 to NOK 270 – this is the ‘special share’ a company must pay for a climate share, per 1 ton of CO2 , which currently costs around NOK 800.

– This helped finance investments in our alternative state budget, for example better electricity subsidies for households with 100 percent compensation for prices over 50 øre per kilowatt-hour, says Robstad.

He says that although the KrF is also interested in having good framework conditions for businesses and acknowledges that the industry sees the scheme as very important, there is room for changes:

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– We think the scheme should be revised for reasons of industry, public spending and climate, says Kjell Ingolf Robstad.

The arrangement is not sustainable

– It is clear that we must reduce the scope of the carbon dioxide compensation scheme in the coming years so that the amounts do not escalate further, and set climate requirements for the companies receiving support, says member of the Finance Committee of the Left and Youth, leader of the Liberal Party Ann Breivik to Netavizn.

In its replacement budget, Venstre, like KrF, cuts the compensation scheme by NOK 1 billion. The party favors spending money on climate measures and tax cuts.

– The carbon dioxide compensation scheme is not financially sustainable today, and in order to create predictability for industrial companies in the long term, we must design a scheme that is financially sustainable over time and reduces emissions. Not the current arrangement, says Breivik, who will appear for Svenong Rotivatn, while he is on vacation until April.

Reporting should be prohibited

The price of carbon dioxide quotas is rising sharply, and this affects energy prices and, accordingly, energy-intensive business costs. Because energy is bought and sold on the European market, Norwegian costs are also affected, although the actual energy production in Norway comes from renewable energy.

The offset scheme aims to prevent so-called carbon leakage due to increased costs – that industry that uses a lot of electricity, hoisted to countries that don’t have the same emissions costs.

But the scheme is very expensive.

Also read: The state sponsors 100 billion – Makes no demands: – Not sustainable

As Nettavisen reported Thursday, both Sweden and Finland have moved away from this type of direct subsidy, on the grounds that it does not reduce emissions.

Sweden opposes the whole system in principle, and believes it undermines the means to reduce carbon dioxide emissions, says research leader Catherine Hajem at SSB.

In Norway, on the other hand, the scheme continues without any requirements for companies to take measures to reduce emissions. Nor is there a link between the spending and the EU’s goal of halving climate emissions by 2030.

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The top three payout recipients made a solid $1 billion in 2021, and they could have done so even without that cash boost:

Also read: Huge profits after CO2 compensation: – The scheme must be stopped

– It’s grown so big

The SV government support party also thinks it’s time to look at this expensive device:

– The CO2 offset scheme has grown too large to continue without some form of demand, says SV’s energy policy spokesman, Lars Haltebreken.

In the SV’s alternative budget, the party proposes strong demands for climate action, but without being so explicit in the ordinance’s recently amended regulations.

– A large proportion of Norway’s greenhouse gas emissions come from Norwegian industry. So the CO2 offset scheme should be used to secure financing for costly and challenging climate reduction. In any case, the scheme should definitely be reviewed, says Haltbriken.

– important to the industry

However, fellow Haltbrekken to his left wants to continue the ranking as is:

– Companies are compensated due to higher electricity prices, although they operate on a reasonable hydroelectric basis. The offsets will prevent the relocation of renewable energy-based industry to places with fossil fuels and poor working conditions, says Sophie Marhaug, Rødt’s parliamentary representative and second vice chair of the Energy and Environment Committee.

She believes the arrangement is important to prevent so-called carbon leakage.

– The scheme will ensure that we still have industry in Norway, and that we produce the metals, wood and other products the world needs using renewable energy instead of, for example, coal and cheap labour.

But Rødt also believes that climatic requirements should follow the blueprint:

Companies should be required to use a percentage of the offsets for climate measures and emissions reductions. We believe this percentage should be increased to 50 percent of compensation in the coming years, says Marhog.

– Then they go out

Like Rødt, the Progress Party (FrP) wants to continue the CO2 offset scheme.

– Without a compensation plan, climate measures in Norway and Europe could lead to the decline of energy-intensive industry and Norwegian jobs. FrP will prevent that. The increased share price will increase the cost of the scheme, but FrP has no plans to reduce the subsidy scheme. Increasing the share price would also increase income for the state, says Terry Halliland, a member of Parliament’s Energy and Environment Committee.

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Without compensation plans, the industry will quickly end up in countries with less ambitious climate policies, which are found pretty much everywhere in the world outside of Europe, Halliland claims.

You favor an increase in the carbon dioxide tax

In contrast to the Liberal Party and the Iraqi Kurdistan Party, the Green Party (MDG) will continue the compensation plan as follows:

– It is a reasonable compensation for the fact that the Norwegian industry uses clean energy, while competitors use energy with high CO2 emissions. In terms of climate policy, it’s a good idea to make the use of clean energy more profitable than CO2 energy, says Rasmus Hansson, a member of the European Parliament’s Business Committee for the Millennium Development Goals.

Hanson believes this is actually a refund for clean energy use, rather than being issued to taxpayers.

– There is also a way to keep industrial jobs in Norway, the Millennium Development Goals want it.

Emissions from this industry stem largely from the production process rather than from energy consumption, so the Millennium Development Goals believe that the price of carbon dioxide, i.e. the carbon dioxide tax, should instead be increased.

It must rise from the current level of about NOK 800 to NOK 2000 per ton, the Millennium Development Goals believe, in order to stimulate cleaner production methods:

– It is fair for the industry to be compensated because it uses clean energy, but it is reasonable for the policy to reduce carbon dioxide emissions as much as possible by increasing the allowance price and doing other climate requirements, says Rasmus Hanson.

The Conservative Party did not respond to Netavisen’s inquiry on this matter.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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