The government’s proposal to cut the CO₂ compensation scheme put investment and industrial jobs at risk. We demand that the government and the Labor Party return to an industrial policy we recognize. In the state budget for 2024, the government again proposes to cut the CO₂ compensation scheme. It is bad industrial policy and bad climate policy. The CO2 compensation scheme is decisive in order to ensure a level playing field for Norwegian industry that uses renewable energy. The scheme compensates, in part, for Norway importing European CO₂ prices into our power price. German, Polish and other European gas and coal power producers pass on their climate bill to electricity customers. Because Norway is connected to Europe through a number of power connections, European CO₂ prices spill over into Norwegian power prices. In its latest power market analysis, Statnett estimates that as much as 40 percent of the Norwegian power price in 2028 will be the European CO₂ price. NVE says that the increase in European gas and CO₂ prices, together with a weakened Norwegian power balance, is the most important reason why the power price is expected to increase towards a whopping 80 øre/kwh in 2030! If it works, such a power price will knock the feet out of Norwegian industry. Mayor of Høyanger, Petter Sortland. Photo: The private CO₂ compensation scheme was introduced by the Stoltenberg government in 2012. The scheme helped ensure competitive power prices for Norwegian industry. The industry followed up with investments that have created new jobs and more new climate-friendly industrial production. Among other things, Hydro reopened one of its two electrolysis halls at Husnes. This is a direct consequence of the Stoltenberg government compensating for the CO₂ price contagion from Europe. A predictable and strong CO₂ compensation scheme has been a pillar of the Labor Party’s industrial policy. Now the picture is completely different. In direct contradiction to the promise in the Hurdal platform to “continue and strengthen the CO₂ compensation scheme”, the government has made proposals in both the budget for 2023 and 2024 to implement major cuts in the scheme. Under Stoltenberg, the industry was compensated for 75 per cent of the estimated European CO₂ price – in line with the EU’s rules and practice in other countries. If the last cut, which is now being discussed in the Storting, is carried out, the degree of compensation will in practice be reduced to 42 per cent. The cuts have been made without dialogue with the industry, and without professional analyzes of the consequences. The paradox is that while Norway is cutting the CO₂ compensation scheme, the large industrialized countries in Europe are going in the opposite direction. In mid-November, the social democratic government in Germany, which already has a significantly more robust CO₂ compensation scheme than Norway, announced that it will strengthen the German CO₂ compensation. In Germany, parts of the industry are now compensated for over 90 per cent of the estimated CO₂ price effect. France also has a CO₂ compensation scheme that protects to a greater extent against CO₂ price contagion in the power price. Over time, Norway has succeeded well in finding the balance between climate measures in industry and safeguarding jobs. The industry has taken the lead in cutting emissions, 40 percent of greenhouse gas emissions have been cut compared to 1990. This is due, among other things, to the fact that the industry has to pay for its own emissions through the EU’s quota system. Norway as a nation has cut 4 percent in the same period. At the same time, the CO₂ compensation scheme has contributed to the industry not flagging or closing down. We must take care of this balance. The same CO₂ price effects that give the industry increased power prices give the government significant income. When European CO₂ prices push up the price of power in Norway, it is primarily the state that takes advantage of this through increased power tax. If we assume the same quota prices as the government estimates, the state will, as a result of the effect that the European CO₂ prices have on the state’s income from ground rent alone, generate income of over NOK 240 billion until 2030. That is three to four times more than the combined costs of the CO₂ compensation scheme. The matter can be resolved if there is political will. The cut the government is proposing in the national budget for 2024 has retroactive effect. This means that a number of industrial companies now have to review their planned investments, and take large financial losses. This does not create the stable conditions that the industry depends on. This is not the industrial policy that will provide growth in green industry. Now this matter must be resolved. A couple of weeks ago, Norwegian Industry, Industri Energi and Fellesforbundet put forward a joint solution proposal that meets the government halfway. The parties in working life propose to re-establish an effective CO₂ compensation scheme, earmarking parts of it for climate and energy measures in the companies that receive support from the scheme. In this way, the industry’s needs for stable conditions are taken care of, while at the same time the Storting’s expectations to implement more climate measures in the industry are fulfilled. This is a solution that can turn a complex and challenging case into a possibility. The government must seize this. It is about the future of Norwegian industry, and about the Labor Party’s position as an industrial party. Hear the debate in the Political Quarter about the CO₂ compensation scheme:
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The politicians waltz over us – Speech
