An Energy Policy for Employment, Transition and security in times of uncertainty

On 8 April, the Norwegian Government presented its supplementary white paper on energy policy. The white paper shows how the Russian military invasion of Ukraine has affected world energy markets and underlines the importance of secure and stable energy access. The purpose of the Norwegian Government’s energy policy is to contribute to a secure, green transition and employment.

Minister Terje Aasland at Rosenberg Worley in Stavanger.
Minister of Petroleum and Energy, Terje Aasland, launched the government's supplementary white paper on energy policy on 8th April 2022. The Norwegian Government wants to lay the foundation for an energy policy that secures clean and affordable energy, continued stable oil and gas production on the Norwegian Continental Shelf and lower global greenhouse gas emissions. Credit: Tore Sandnes Becker / Ministry of Petroleum and Energy

— Norway shall continue to be the industry’s first choice. Access to clean and affordable energy has been a key advantage for  Norwegian industries and households. The Government wants to maintain  this advantage in the future to ensure value creation, employment and industrial growth throughout the country, says Minister of Petroleum and Energy, Mr. Terje Aasland.

The supplementary white paper supplement a the White Paper “Putting Energy to work” presented last year, clarifying the current Government’s ambitions on energy policies in a time of great uncertainty. 

— The situation in the energy markets is critical. This winter, experienced extraordinarily high energy prices in Norway and Europe, and the situation is worsened by the Russian military invasion of Ukraine. This underlines the importance of an energy policy that ensures employment, transition and security in times of uncertainty, the minister adds.

The invasion of Ukraine has had severe consequences for  the global energy markets, markets that already were under pressure due to the rapid economic growth following the pandemic.

— The Norwegian Government wants to lay the foundation for an energy policy that secures clean and affordable energy, continued stable oil and gas production on the Norwegian Continental Shelf and lower global greenhouse gas emissions. We want to help the growth of new and green industries such as offshore wind, hydrogen and carbon capture and storage, says Minister Terje Aasland.

In March the Intergovernmental Panel on Climate Change (IPCC) released a report showing that global emissions continue to rise. The report underscores the need for rapid emission cuts and  that we must speed up the green transition, also in Norway..

— The Government is actively supporting a green transition. We must develop, not dismantle, the Norwegian petroleum industry, and build new industries from existing ones. As for the Norwegian Continental Shelf, the Government will ensure a stable activity level of oil and gas production, with an increased share of new industries in sectors such as offshore wind, CCS, hydrogen, aquaculture and seabed minerals, he adds.

Offshore wind

  • The government takes a big step forward in facilitating profitable offshore wind production. The government is working to make the licencing process more efficient and to reduce the lead time for building offshore wind, with the aim of having the first offshore wind projects in operation before 2030.
  • The government will use qualitative criterieas for the offshore area Utsira Nord.
  • The government has proposed new measures aimed at speeding up the process. This includes a for offshore wind, provided additional grants in the revised national budget.
  • The government will facilitate so that the onshore grid users do not cover the investment costs of the offshore grid for the first projects.

Onshore wind

  • The Ministry will resume case processing of applications for onshore wind projects. The Norwegian Water Resources and Energy Directorate (NVE) will evaluate new projects,, provided support from the host municipality.
  • The Ministry will strengthen the role of the municipalities in energy development and the licensing process. The Ministry will also set stricter requirements in the licensing process, based on updated assessments.

Hydrogen

  • In order to help reducing Norwegian greenhouse gas emissions, the government will have an ambition to facilitate production of hydrogen with low or no emissions to meet domestic demand.
  • The Government will contribute to the development of a market for hydrogen in Europe, including participating in relevant cooperation forums and programs for hydrogen, development of regulations for hydrogen in Europe as an EEA country, research cooperation, bilateral cooperation with relevant countries and by creating a national market for hydrogen.
  • The Government will facilitate the establishment of socio-economically profitable production of blue hydrogen, including through Gassco's architectural function, by allocating areas for CO2 storage and by processing relevant applications for developments under the storage regulations quickly and efficiently.
  • The government will commission an external study of how the state can contribute to building a coherent value chain for hydrogen produced with low or no emissions, where production, distribution and use are developed in parallel. The study will include State ownership as a tool.

Carbon capture and storage (CCS)

  • The CCS project “Longship”, which is currently under construction, is a key part of the Government's policy and part of Norway's contribution to the development of necessary climate technologies.
  • The government will facilitate commercial CO2 storage on the Norwegian continental shelf.
  • The Government will continue to promote carbon capture, storage and use CCUS as an important tool in reaching the goals set out by the Paris Agreement, including through the Government’s Green Industry Initiative.

Oil and gas

  • The government's oil and gas policy will actively support a green transition where emissions from the Norwegian continental shelf will be further reduced. The expertise from the oil and gas industry will also be important in developing new industries.
  • The Government has ambitious targets for emission reductions in the petroleum industry. In collaboration with the industry, we will work to reduce emissions from oil and gas production on the Norwegian continental shelf by 50 per cent by 2030 and to net zero in 2050.
  • The Government will continue to develop the petroleum policy, facilitating a stable and long-term supply of oil and gas from the Norwegian Continental shelf to Europe in a challenging time.
  • The Government will continue the current licensing policy and award exploration licenses in new areas. Further exploration is important, also tofacilitate that Norway remains a safe and predictable supplier of oil and gas to Europe.
  • The Government will facilitate a stable oil and gas activity level on the Norwegian continental shelf, with an increased share of industries related to carbon capture and storage, hydrogen, offshore wind, sea farming and marine minerals.
  • The Government will specify in the PDO/PIO guidelines that licensees shall include a qualitative stress test against financial climate risk in their uncertainty analysis related to new development plans by comparing a project’s break-even price with different scenarios for oil and gas prices compatible with the Paris Agreement’s targets, including the 1.5 °C target.
  • The Government will assess the climate effects of emissions from both production and consumption in the evaluation of all new plans for development and operation (PDO), and make these assessments transparent in decisions related to such plans.