Norwegian Government To Discuss CCS Tax Exemption Proposals
The Norwegian government, through its Tax Directorate, has sent a proposal for consultation that would see all CO2 from mineral products that are captured and stored permanently be exempt from tax. The proposal also involves some minor adjustments to the existing exemption for CCS in the tax on waste incineration.
The purpose of the CO2 tax on mineral products is to reduce CO2 emissions into the atmosphere. CO2 that is captured and stored permanently is not released into the atmosphere, but according to current regulations, it will have to be considered in each specific case whether such storage is tax exempt.
“A tax exemption will help to provide predictable framework conditions for companies that want to use CCS technology to adapt in a green direction. This is climate policy that works. An exemption could also contribute to stimulating research and development on green technology,” said Minister of Finance Trygve Slagsvold Vedum.
“I am very positive about regulatory changes that contribute to making CCS a competitive and efficient climate measure. CCS will play a particularly important role in achieving our climate goals,” said Minister of Climate and Environment, Espen Barth Eide.
The tax exemption proposal comes right at the time when the Norwegian Ministry of Petroleum and Energy received applications from three companies that want to be allocated areas for future storage of CO2 on the Norwegian continental shelf.
“There is considerable industrial interest in projects that include commercial storage of CO2 on the Norwegian Continental Shelf. Further allocations of the area will strengthen the development of an important climate measure and contribute to a new, commercial industry on the Norwegian shelf,” said Minister of Petroleum and Energy Terje Aasland.
Carbon capture and storage (CCS) is important to the government because it creates employment and cuts emissions. Allocation of the area is a prerequisite for succeeding with CCS.
The Ministry has received inquiries from commercial actors with a desire to be allocated a specific area for CO2 storage. The area is located in the North Sea and was announced on April 8 per the storage regulations.
“Companies that have the will and ability, and have matured projects that include storage of CO2, will be able to apply for a storage permit. I am happy to receive more requests to announce additional area for CO2 storage,” Aasland continues.
By the application deadline of June 1, the Ministry had received applications from three companies. The Ministry will process the applications received and aims to allocate areas per the storage regulations during the second half of 2022.
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