Norway Says CO2 Tax Leads to Reduced Emissions

The CO2 tax reduces CO2 emissions on the Norwegian continental shelf by 2 million tons (16%) per year.

Enforcement of the CO2 tax act has been under the Norwegian Petroleum Directorate's (NPD's) jurisdiction since 1991. As well as collecting the CO2 tax, the NPD follows up the effect of the tax in relation to each operating company on the Norwegian shelf. A review earlier this year shows that a number of emission-reducing measures have been implemented on the shelf, leading to emission reductions of around 2 million tons CO2 per year. A key reason for this is the introduction of the CO2 tax in 1991.

Compared with international petroleum activities, the emissions to air on the Norwegian shelf are considerably below average.

The amount of CO2 tax that has been paid by the petroleum activities has varied from the introduction of the tax and until 2003. In all, the accumulated CO2 tax that has been paid from 1991 onwards amounts to approximately NOK 40 billion (2003). For 2003, NOK 3.18 billion has been paid.

CO2 emissions for 2003 were at the same level as in 2002, and are two percent lower than the NPD's forecast for emissions in 2003.

NOx emissions also remain at the same level as in 2002, while emissions of nmVOC had a reduction of as much as 23 percent from 2002 to 2003. Emissions of methane were reduced by five percent.

Emission Type Emmission 2003 Emmissions 2002 NPD's Forecast for 2003
CO2 12.0 million tons 11.9 million tons 12.3 million tons
NOX 50,300 tons 49,600 tons 47,800 tons
nmVOC 172,300 tons 223,300 tons 165,600 tons
Methane 31,700 tons 33,400 tons 26,800 tons

From 2002 to 2003, CO2 emissions increased by approx. three percent from fixed facilities and by approx. nine percent from land facilities subject to the Petroleum Act. For exploration drilling CO2 emissions have been reduced by approx. 60 percent even though the number of exploration wells remained at the same level (26 in 2002 and 23 in 2003) For development drilling, the reduction in CO2 emissions amounts to about two percent.

The reason for the considerable reduction in nmVOC emissions is that the oil companies have started using new, emission-reducing technology because of new regulatory requirements and lower oil production. This reduction is expected to continue in the years ahead.

Due to increased production and transport of gas, emission of CO2 and NOx is expected to increase until 2006 and then to decrease.
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