Page 5 - EurOil Annual Review 2021

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Equinor’s Northern
Lights carbon capture
and storage project
stands to gain from
the increased taxation.
Source: company
website.

Industry kicks back value creation, government funding agen-
Oslo promised to lower other taxes and levies for cies and the rest of the policy framework must
those affected by the changes, although the oil therefore take account of this increase so that
industry has stressed the need to protect Nor- our overall competitiveness isn’t weakened,”
way’s competitiveness. Hauglie said. “That will also call for adjustments
“This will be expensive, increase the cost of to government instruments in order to gen-
the Norwegian Continental Shelf [NCS] and erate the necessary low-emission technology
could weaken Norwegian competitiveness,” development.”
Anniken Hauglie, head of the Norwegian
Oil and Gas Association (NOGA), said in a Carbon capture
statement. The obvious winner from the government’s
Norwegian oil and gas producers already plan will be the nascent CCS sector, namely
pay more than most industries globally for the state-owned Equinor’s Northern Lights
CO2 they emit, she said. “We must avoid the initiative.
NCS being outcompeted through high Nor- Northern Lights represents the offshore
wegian special taxes, so that investment moves transport and storage part of Norway’s $2.9bn
abroad.” Longship scheme, billed by the government as
The government stressed the important role the country’s biggest-ever climate project. Under
that oil and gas serves in Norway’s economy its first phase, Northern Lights aims to store
in its paper, and that this would remain the some 1.5mn tonnes per year of CO2 offshore
case for years to come. While this emphasis is by 2024, of which 0.8mn tpy will come from a
positive, Hauglie said, “the goal of increasing cement factory in Brevik and a waste-to-energy
the CO2 price must be to reach climate targets power plant in Oslo.
while also ensuring profitable petroleum out- Equinor will need to find more custom-
put from the NCS, which safeguards value cre- ers, both in Norway and further afield, and
ation, jobs and government revenues to fund the increase in CO2 taxation should it make
the welfare state.” this search easier. Northern Lights’ capacity
NOGA said that those sectors most affected is to be scaled up to 5mn tpy under a second
by the tax hike should also receive more govern- stage.
ment revenue to fund measures to lower GHG Parliament has already cleared initial funds
emissions. for Longship and is scheduled to formally
“To avoid reducing activity and weakening approve its development in the near future.™

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