Mundus Nordic Green News – 8 October, 2020

Norway’s government announces green priorities in 2021 budget

Yesterday, Erna Solberg’s Norwegian government announced its budget for 2021. Creating a green future was the third macro priority (out of 6) for the government, after getting people back to work and diversifying the economy. 

 

The main features announced were 

• Increasing the CO2 tax
• NOK 2.7 billion for CO2 capture, transport and storage – previously announced as the Longship program
• A Green Platform, as a (small) part of a NOK 9 billion investment in business R&D
• Climate-friendly transport solutions
• Continued measures to promote green shipping and fleet renewal

 

In total, the government claims that an additional NOK 11.2 billion is provided in new measures in 2021. But green groups were not fully in praise of the budget. One expert observed that rated against February’s promise to at least halve Norway's climate emissions by 2030, the budget only delivers 21% of the cut. “It will be very hard to reach the goal. There have been a little too many bad climate budgets in the thirty years that have passed, for this budget to be enough to reach the goal,” but then observes that as Norwegian policy is closely linked to the rest of the EU, if the EU succeeds, then Norway will too. Other professionals working in the area were also skeptical, with several citing that the government was double-counting green investments, for example, is NOK 4.1 billion in railways a green investment only? One particular point of interest was that the Government proposes to begin taxing electric vehicles. With electric cars forecast to dominate 95% of total car sales by 2025, the government argues that now is the time for them to pay their share of societal costs.

 

Avfall Norge, an organization representing Norway's waste and recycling industry, also noted that the Government was giving NOK 40 million for the circular economy, a waste incineration fee and an additional NOK 700 million to the state-owned company Nysnø Klimainvesteringer, which invests in companies that develop new, climate-friendly technology.

 

Sweden gets its extra year of waiver for biofuels

The European Commission has decided to extend Sweden's state aid application for tax exemption for clean and high blend biofuels. The decision means that biofuels such as E85, rapeseed-based biodiesel and HVO, which are not covered by the reduktionsplikt (CO2 reduction obligation), can continue to be tax-exempt in Sweden in 2021.

 

The European Commission's decision is only valid for one year. The background to this is the Commission's position that food-based biofuels only partially contribute to the common environmental objectives and can therefore not be considered compatible with the internal market after 2020. Although the Swedish government does not say so, a review of the entire system for driving transport reductions is due in 2021, as Nordic Green has explained in our blog. The Commission has evidently given Sweden one more year to get it right.

 

Norway’s oil fund CEO wants to sell down poor ESG performers

The incoming CEO of Norway’s Sovereign Wealth Fund, Nicolai Tangen told the Financial Times that the fund should “use risk in a more clever way”, particularly by increasing the number of divestments for ESG reasons. The fund, which owns an average of 1.5% of every listed share in the entire world, sold out of 42 companies in 2019, mostly for using or producing coal but also for breaching its expectations on human rights, anti-corruption and other ESG standards. Mr Tangen said he wanted that number to increase as the fund prepares to hire more staff to deal with ESG matters.

 

Solar M&A activity in Norway

There has been a lot of merger activity in Sweden within the solar installation sector in reent weeks. Now, 3 Norwegian companies have announced new arrangements. The electricity installer, Fjeldseth and the power company, FosenKraft Energi will each buy 40% of the solar energy company Getek. The three companies plan to invest heavily in renewable energy.

 

Biomethanol factory inaugurated

The Minister of Trade and Industry Ibrahim Baylan (S) inaugurated Södra's factory for commercial biomethanol at the pulp mill in Mönsterås. Magnus Björkman, Business Area Manager at Södra commented “With this powerful relocation and climate-friendly investment, we look outwards and show the way to a reduced fossil dependence in several markets. At the same time, this is just the beginning of a journey where we have the opportunity to develop products together with our customers. We are already seeing great interest from various segments and stakeholders from all over the world.”

 

Swedish wind energy hits record, but still not achieving full potential

So far this year, wind turbines have produced 20 TWh of electricity, an increase of over 40% compared to the same period in 2019. The main reason for this is that wind turbines have simply become bigger and better, which also makes them more profitable.

 

However, a high-profile group of debaters, including former MEP Anders Wijkman, the CEO of Siemens Gamesa renewable energy and the Chair of Swedish Wind Energy argue that the objective of 100 TWh of wind energy in 2040 remains out of reach, due to a failure in the system to approve development applications. The debaters point out that a new survey has shown that just over half of all proposed and applied for plants are rejected or revoked, and that fewer and fewer new projects are started. They conclude that, two things must be done. Firstly, municipalities must be encouraged to participate, which could be done in part by allowing part of the revenue from generated property taxes from wind power to be allocated directly to the municipality. Secondly, the climate benefits that increased investments into wind power have must be emphasised, as the role it plays in moving towards a sustainable future should not be downplayed.

 

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