Norway’s government has decided to end free allocation of CO2 quotas to Norske Skog, the country’s largest forestry company. The move follows a review of national climate policies to comply with the EEA Agreement, which aligns Norway’s environmental rules with those of the European Union.
Climate Minister Anders Samuelsen confirmed the decision on Tuesday, stating that free quotas would violate the agreement. Norway is not an EU member but participates in the single market through the EEA Agreement. The government had previously granted Norske Skog free allowances under a temporary arrangement, but this is no longer permissible under current EU regulations.
The decision affects Norske Skog’s financial planning, as the company had relied on free CO2 quotas to offset emissions from its paper mills. Without them, Norske Skog will need to purchase allowances on the market or reduce emissions to stay within legal limits. The company has not yet commented on how it will adjust to the change.
Government officials say the shift is part of a broader effort to tighten climate policies. Norway has committed to reducing greenhouse gas emissions by at least 40% by 2030 compared to 1990 levels. Ending free quotas for major emitters like Norske Skog is seen as a necessary step to meet these targets.
Analysts expect the decision to have a limited impact on Norway’s overall emissions, as Norske Skog’s operations account for a small fraction of the country’s total CO2 output. Still, the move signals a stricter approach to industrial emissions ahead of Norway’s next climate reporting cycle.
Source: e24.no