Policy status:In Force
Date Effective:2008
Policy Type:Voluntary Approaches>Negotiated Agreements (Public-private sector), Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Regulatory Instruments>Other mandatory requirements
Policy Target:Industry
Agency:The Norwegian Pollution Control Authority
Enforcement:The Norwegian Pollution Control Authority
Funding:NOK 500 million per year
Penalty:Full or partial payment of nitrogen oxide tax in case of non-compliance with obligations.
Description:In May 2008, the Norwegian government and industry officials signed a new agreement allowing many companies operating in Norway to avoid nitrogen oxide (NOx) emission taxes by paying into a new foundation that finances emissions reduction projects. The European Free Trade Authority Surveillance Authority approved the agreement on 16 July 2008, allowing it to take effect. Participating companies will pay into the Business Sectors NOx Fund NOK 4/kg of emitted NOx, instead of the NOK 15.39/kg they were charged in nitrogen taxes. Offshore oil and gas exploration companies will pay a higher rate of NOK 11/kg. Road transport is excluded from the agreement. The agreement replaces the tax on NOx from 1 January 2008 for all companies signing up to the agreement before July 2008. The new fund will provide resources to projects designed to reduce NOx emissions, with business organisations committed to reducing NOx emissions by approximately 30 000 tonnes. Companies applying for funding for projects that will be implemented before 31 December 2011 will be entitled to have up to 80% of their investment costs covered if the application is made in 2008. The rebate may be lower if funding is requested in 2009 or 2010, with planned support of up to 70% and 60% of investments respectively. The support will be paid in NOK per kg of NOx emissions reduced. Support will also be granted to measures implemented during the second half of 2006 and 2007 that comply with the requirements for measurement and verification. However the Fund will have to request approval from the Norwegian Government before being able to grant funding for such projects. The Norwegian Pollution Control Authority is responsible for verifying whether emissions reduction obligations for a given year have been complied with. Both parties may terminate the Agreement should the obligations relating to reductions have been under-fulfilled by more than 25 % for a given year. In this case, the tax exemption would also cease to apply as of 1 January of that year. If the Agreement is upheld, the obligation shall be transferred to next years obligations. In case of a deviation of more than 10% from the emission obligations for a given year, a collective sanction shall enter into force. The undertakings in question will then have to pay NOx tax for the percentage of the obligations to which the non-compliance applies. All parties are to evaluate the agreement in the first half of 2010 to determine whether or not to prolong it beyond 31 December 2010.

Last modified: Mon, 09 Jul 2012 11:43:37 CEST