Consultation on resource rent tax on onshore wind power

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The Government proposes to introduce a resource rent tax on onshore wind power from 2023 and is today sending the proposal for consultation, as described in the State Budget for 2023. It is one of several resource rent proposals which will lead to society gaining more of the profit generated from our common natural resources.

“The Government wants a larger share of the value which is created from using our common natural resources, to benefit local communities, municipalities and society as a whole. Our proposals for resource rent taxes were presented earlier this Autumn and are now well known. Today we are opening a consultation on the proposed resource rent tax on onshore wind power, which will contribute to more equitable distribution of the value generated through use of our common natural resources“, says Minister of Finance Trygve Slagsvold Vedum (Centre Party). 

The proposal introduces a resource rent tax on onshore wind power from the income year 2023. It is designed as a cash flow tax, with immediate deductions for new investment costs.

Tax liability for resource rent tax will apply to onshore wind farms that are subject to licensing under the Energy Act, meaning wind farms with more than five turbines or a total installed capacity of 1 megawatt (MW) or more. According to the proposal, the wind farm owner is tax liable and resource rent tax will be calculated per wind farm.

"We need to produce more renewable energy. Onshore wind power is the fastest and most cost-efficient way to achieve it. At the same time, it’s important to find ways to direct a share of the value generated, back to society.  We believe resource rent tax facilitates future investments, whilst returning more value to the host municipality. That is going to strengthen local support for profitable power projects", says Minister of Petroleum and Energy Terje Åsland (Labour Party).

Wind power production can come into conflict with important local environmental and social considerations. In its Hurdal Platform joint political declaration, the Government is clear that local communities and society as a whole should receive a fair share of the value created through the use of common natural resources. This will be implemented through the proposal’s allocation of half of the resource rent tax revenue to the municipal sector, through an excise duty on production, a new natural resource tax and an additional grant.

The deadline for submitting responses to the consultation is 15 March 2023.