September 28, 2022

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- No roof - E24

– No roof – E24

Each year, the state gives billions to Norwegian companies to offset climate costs. As benefit prices rise, the compensation plan could increase to 77 billion or more by 2030.

Yara is one of the companies receiving CO₂ compensation from the state.

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To prevent Norwegian companies from moving jobs to other countries, the state has for several years compensated for climate quotas for energy-intensive industries.

In 2021, the compensation was a record NOK 2.8 billion.

There is not much against what the country might have to achieve in 2030.

at the discretion of Ministry of Climate and Environment The Norwegian industry could receive compensation of up to 9 billion NOK in 2030. And if quota prices rise more than the ministry estimates, the state may have to spend more. There is no cap on spending money.

There is no cap on how much the CO₂ compensation system can save, as Secretary of State Sigrid Hagerup Milos assures E24.

Compensation goes to about 150 companies. See the list of companies below.

77 billion

As quota prices rise in the EU, the compensation scheme risks becoming more expensive by 2030.

EU quota prices set new records in the past three months, reaching €96 per tonne of Co₂ in February. In comparison, a year ago the price was about 38 euros per ton.

The estimate of the Norwegian Directorate for Climate and Environment is based on a share price of approximately €80.

The government was first expecting to spend NOK 64 billion through 2030 to make up for the fact that the Co₂ quota system provides a higher price for electricity.

But if stake prices stay around $80 on average, this could rise to 77 billion kroner.

Sigrid Hagerup Milos at the Ministry of Climate and Environment.

The Ministry of Climate and Environment relies on the quota tracks from the analysis agency Refinitiv when it calculates the future costs that the CO2 offset scheme will provide.

– However, it is very difficult to give accurate estimates of what share prices will be in the future – they could be higher and lower than what Refinitiv estimated, Melhuus says.

Working with new regulations

Although there is no cap on how much spending the carbon dioxide offset scheme can save, the European Union recommends member states limit the expenditures associated with the scheme to 25 percent of auction proceeds from climate quotas.

Norway has a large number of industrial companies that are entitled to subsidies, and these companies also enjoy high energy consumption. Thus, Norway is spending much more than the EU recommends on a carbon dioxide compensation scheme, Milos says.

Milos stresses that it is important for the government to have measures in place to counter carbon leakage, and that there is reason to believe that the risks of carbon leakage are increasing in line with higher provision rates.

– At the same time, it is important to arrange the scheme so that it is sustainable for the budget. She says the government is now working on a new regulation on CO₂ compensation for the 2021-2030 period.

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