The case is being watched closely in a country that owes its vast wealth to its abundant oil and gas reserves, as it could impact its future oil production.
Greenpeace and Natur og Ungdom have already had their complaint dismissed by two lower courts, and have appealed to Norway's highest court to cancel the Barents Sea exploration licenses granted to 13 oil companies in 2016.
They argue the concessions violate the Norwegian constitution, which since 2014 guarantees the right to a healthy environment.
They also say that new oil activities in the region would be contrary to the 2015 Paris climate accord, which seeks to limit average global warming to under two degrees Celsius.
“Opening up the Arctic for oil drilling in the time of climate emergency is unacceptable, and the Norwegian government must be held accountable,” the head of Greenpeace Norway, Frode Pleym, said in a statement.
A legal victory for the two NGOs “could outlaw new oil drilling in the Arctic and set a precedent for similar climate cases all over the world.”
Symbolically, they placed a globe carved out of ice in front of the Supreme Court building before the hearing began Wednesday — by video link, due to corona restrictions — which coincided with the formal exit of the United States from the Paris accord.
The Norwegian state has meanwhile argued that Article 112 of the constitution is not “a ban on … activities that could have negative consequences for the environment or the climate”, but rather “an obligation for authorities to take measures to remedy any negative effects.”
Despite their previous legal setbacks, the plaintiffs did win some important points in the Appeals Court ruling.
Among other things, the court ruled that CO2 emissions from Norwegian oil ought to be calculated in their totality — in other words, not just during the production phase in Norway, but also in the much more polluting phase of consumption outside Norway.
Western Europe's biggest oil and gas producer, Norway owes much of its wealth to oil and gas, enabling it to amass the world's biggest sovereign wealth fund valued at more than $1 trillion.
Meanwhile the Barents Sea, at the heart of the legal battle, has so far yielded disappointing results for oil seekers.
The Supreme Court will examine the case until November 12th, with the verdict expected several weeks later.