Comment: Support that the government will not provide

Comment: Support that the government will not provide

Certified Aluminium: Norway just paid $3.5 billion to subsidize the energy-intensive industry. Hydro gets the most, even though the group produces most of the electricity itself. Photo courtesy of Karmøy where Hydro has received 394 million in support.

The Norwegian industry receives an electricity boost thanks to the European Union.


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Just before Christmas, the energy-intensive Norwegian industry was paid large sums without any wire cutting or orchestra.

In total, the Hydro plants in Norway received NOK 1.4 billion in subsidies.

Hydro Aluminum in Sunndal received more than NOK 627 million. smelter king billion dollars last year.

It was decided in Brussels: the government of Jonas Gahr Storr did not want to subsidize companies that produced their own power. But the ESA watchdog disputed this. Now we have a big jump in government spending. The photo shows Støre at the Rosendal shipyard.

This was the first time Hydro had applied for a subsidy in the scheme. To the company’s surprise – without them pressing for it – they were allowed to join.

The government did not like it. the He was against Hydro getting the money. Or more precisely: they were against companies that produce their own energy and that receive electricity subsidies.

Hydro much of its stream Self.

However, the European Union decided that it would also receive electricity subsidies. They think it’s equal treatment.

Uses large amounts of force: Image from Eramet Norway in Sauda, ​​which received 57m backing.

The scheme is called CO₂ offset. It aims to prevent companies from leaving Europe due to increased spending on electricity as a result of EU climate policy.

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In search yet There are few indications of climate policy It led to a major industrial death in Europe.

Steven Kraft: Hydro Sunndal was the company that received the most support last year. The smelter was built here because of the access to cheap energy. The photo shows the aluminum ready for shipment at the port.

And the government is not against the scheme at all, they are for it.

Norway paid the maximum rate, unlike many European countries which do not pay support at all. Sweden and Denmark did not provide support in 2020.

On the other hand, the Norwegian government expects to incur very large expenses for this in the future, all of that 100 billion Norwegian kroner the next ten years.

Hydro will escape with the lion’s share. But a number of others, such as Alcoa, Rec, Elkem and Norske Skog, are also receiving support. A total of about NOK 3.5 billion was paid last year.

Subsidy war: The Swedes take over the EU presidency this spring, and the free-trade-loving Swedes are crashing with the subsidy-happy French. Energy Minister Ebba Bosch met last week with Commission President Ursula von der Leyen in Jokkasjärvi, northern Sweden.

So why was the government against Hydro getting this money?

They fear for the legitimacy of the scheme if it becomes too crude.

Despite the surprise gift, the group adapted quickly.

Access to sufficient new renewable energy and a solid CO2 offset scheme is crucial, said the plant manager at Hydro Sunndal when speaking about the good results in an interview with Tidens Krav before Christmas.

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So, it is not the whole point that Norway is not involved in the subsidy war that has escalated between the US, China and the EU.

The topic in Davos: EU President Ursula van der Leyen spoke in Davos this week, delicately balancing no to protectionism but a yes to more support. The union is grappling with how to meet rising US subsidies.

What matters to the companies that export is not the price of the energy per se, but what competitors have to pay.

The richest countries tend to subsidize the richest, to the chagrin of European Union countries whose coffers are depleted. They call subsidies distorting competition.

And rightly so, but is Norway being outdone?

Germany is having a huge summer: Germany’s latest support package to lower energy prices is €100 billion. Everything from ENØK and public transportation to electricity is supported. In Norway and other European countries, they fear competition.

Last year we had lower electricity prices than Germany. But Now introduce the Germans Inclusive Energy support.

Norway must still be able to handle it.

German consumers get The maximum price of electricity NOK 4.40/kWh at 80 percent of normal consumption. Thus they are liable to be billed higher than the Norwegians.

For German companies, the price cap is NOK 1.40/kWh for 70 percent of the electricity consumption. The rest must be bought at the market price.

If you buy a fixed-price Norwegian contract, you will get a lower price than that, but you get the disadvantage of committing yourself.

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For gas, on the other hand, the German maximum price seems to be competing with Norwegian prices at the moment. This is why Fredrikstad Corporation The Kronos Titan has moved more of its production to its factory in Germany. They want support in norway and.

And they might, if they’re not bailed out by falling gas prices. The government is constantly leaking small drops improving subsidy schemes.

Gas price cap too: Germany capped the gas price for 25,000 companies at around 75 øre/kwt for 70 per cent of consumption. The Norwegian company Kronos Titan has production in several countries and is now increasing production in Germany, where structural conditions are better.

In the energy-intensive Norwegian industry, it is not the transition and industrial death that characterizes the picture.

Groups like Elkem, Alcoa on Lista, Mosjøen, Hydro, Finnfjord and Sauda seem to be doing well.

Sometimes they shut down production lines to sell the energy to the market, as it was more profitable.

But these tend to have long PPAs. Product prices were very good. Business relocation costs are also high.

In doing so, they receive millions in electricity subsidies from the state. Hydro got a real baby egg.

HUGE SUPPORT PACKAGE: President Joe Biden’s Inflation Reducing Compact (IRA) will go into effect in the new year. $370 billion through 2030 will be used to support green industry on American soil. The package is seen as a move against China, which also supports such energy. The European Union fears that its industry will outpace the competition.

However, it may become more difficult in the long run for the energy-intensive Norwegian industry.

Because the problem is that we are not developing new power in Norway, while at the same time we have plans to use a huge amount of power.

If this happens, prices will rise and new projects will stop.

So one can worry more about the future in the midst of the energy price crisis.

Because blast furnaces need energy. You can’t run on subsidies alone.


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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