How can Norway be ready for the energy transition when it depends on oil?
Norway has been ranked as one of the countries most ready for a shift away from fossil fuels. However, the country remains Western Europe’s largest oil and natural gas producer.
A report from the Renewable Energy Association released recently named Norway the country most ready for the global energy sector’s shift from fossil-based energy production and consumption.
Norway was awarded a “high 4” out of 5, putting it ahead of Denmark, Finland and Sweden in the rankings.
The Nordic country ranked well due to the majority of the electricity it generates coming from renewable sources and its adoption of other technologies, such as heat pumps.
However, Robbie Andrew, a senior researcher at the Center for International Climate Research (CICERO), told The Local that the report sat in a specific niche.
The report was “from the perspective of private investors in the flexibility services and technologies that support the deployment of renewable power and decarbonisation”.
Norway is Western Europe’s largest oil and gas producer, and the economy is highly dependent on fossil fuels.
Around 20 percent of government spending in Norway comes from the roughly 15 trillion kroner sovereign wealth fund, where the revenues from oil and gas are invested.
READ ALSO: What does Norway do with all its wealth?
When accounting for oil and gas, Norway’s readiness to transition from fossil fuels becomes less clear.
The Norwegian government is aware that the demand for oil and gas will decline over time, and production will need to be ramped down in line with the reduced demand. However, Andrew said anything other than a gradual decline may cause problems for the Scandinavian country.
“This position assumes that demand will decline gradually, such that production declines do not lead to any changes in Norway that cannot be readily adapted to. Anything other than a gradual decline might lead to difficulties in adjusting within Norway because of reliance on this industry,” Andrew said.
Furthermore, none of Norway’s governments have shown any willingness to speed up the transition from oil and gas.
“No sitting Norwegian government has shown such signs, although several other political parties certainly have. The issue is not one-sided within Norway, but those who have power are reluctant to say anything that sounds like it might threaten the industry,” Andrew said.
Aside from transitioning away from fossil fuels, Norway has set several emissions targets. The two most prominent are in 2030 and 2050.
By 2030, Norway plans to cut its emissions by at least 55 percent compared to 1990 levels. The 2030 goal aims to try and prevent the worst effects of climate change.
Earlier this year, the Norwegian Environment Agency identified 85 measures the country should adopt to try and reach its 2030 goal. Andrew said that even if every measure was adopted, Norway might still struggle to meet its 2030 goal.
“The 2030 goal, in particular, would require very sharp cuts year on year, because progress has been so slow since it was first announced,” Andrew said.
Regarding Norway’s “green credentials” overall, Andrew said the term was open-ended and hard to define.
“Norway is a large producer of oil and gas, and, in particular, is a significant exporter of oil and gas. When you look at what is happening within Norway, you still need to include Norway’s oil and gas industry since just producing oil and gas is a large source of emissions here,” he said.
However, factors like the mass adoption of electric vehicles (EVs) may be why some see Norway as a leader in green technology. In 2022, 79.3 percent of all new cars sold were fully electric, something which contributes to Norway being seen as a leader in EV adoption and infrastructure due to its vast charging network.
“Overseas, people hear about Norway’s EVs, because those are so far ahead of other countries, but road passenger transport is only one component of Norway’s emissions, and many emissions sources are not declining,” he added.
Andrew said that Norway as a whole doesn’t claim to be a green country, but some politicians speak up or play down the country’s environmental credentials.
“So, we do have politicians that say that Norway is a leading example on environmental matters. Often, these statements omit the gross exceptions to such conclusions, oil and gas being one such exception,” he said.
Other factors, such as the trade-offs when using energy sources which don’t produce as many greenhouse gasses, make it hard to assess how green Norway is overall.
“Then there is the scope of the term ‘green’. When considering greenhouse gas emissions, hydropower and wind are far preferable to coal and natural gas, but there are other environmental concerns with these,” Andrew said.
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A report from the Renewable Energy Association released recently named Norway the country most ready for the global energy sector’s shift from fossil-based energy production and consumption.
Norway was awarded a “high 4” out of 5, putting it ahead of Denmark, Finland and Sweden in the rankings.
The Nordic country ranked well due to the majority of the electricity it generates coming from renewable sources and its adoption of other technologies, such as heat pumps.
However, Robbie Andrew, a senior researcher at the Center for International Climate Research (CICERO), told The Local that the report sat in a specific niche.
The report was “from the perspective of private investors in the flexibility services and technologies that support the deployment of renewable power and decarbonisation”.
Norway is Western Europe’s largest oil and gas producer, and the economy is highly dependent on fossil fuels.
Around 20 percent of government spending in Norway comes from the roughly 15 trillion kroner sovereign wealth fund, where the revenues from oil and gas are invested.
READ ALSO: What does Norway do with all its wealth?
When accounting for oil and gas, Norway’s readiness to transition from fossil fuels becomes less clear.
The Norwegian government is aware that the demand for oil and gas will decline over time, and production will need to be ramped down in line with the reduced demand. However, Andrew said anything other than a gradual decline may cause problems for the Scandinavian country.
“This position assumes that demand will decline gradually, such that production declines do not lead to any changes in Norway that cannot be readily adapted to. Anything other than a gradual decline might lead to difficulties in adjusting within Norway because of reliance on this industry,” Andrew said.
Furthermore, none of Norway’s governments have shown any willingness to speed up the transition from oil and gas.
“No sitting Norwegian government has shown such signs, although several other political parties certainly have. The issue is not one-sided within Norway, but those who have power are reluctant to say anything that sounds like it might threaten the industry,” Andrew said.
Aside from transitioning away from fossil fuels, Norway has set several emissions targets. The two most prominent are in 2030 and 2050.
By 2030, Norway plans to cut its emissions by at least 55 percent compared to 1990 levels. The 2030 goal aims to try and prevent the worst effects of climate change.
Earlier this year, the Norwegian Environment Agency identified 85 measures the country should adopt to try and reach its 2030 goal. Andrew said that even if every measure was adopted, Norway might still struggle to meet its 2030 goal.
“The 2030 goal, in particular, would require very sharp cuts year on year, because progress has been so slow since it was first announced,” Andrew said.
Regarding Norway’s “green credentials” overall, Andrew said the term was open-ended and hard to define.
“Norway is a large producer of oil and gas, and, in particular, is a significant exporter of oil and gas. When you look at what is happening within Norway, you still need to include Norway’s oil and gas industry since just producing oil and gas is a large source of emissions here,” he said.
However, factors like the mass adoption of electric vehicles (EVs) may be why some see Norway as a leader in green technology. In 2022, 79.3 percent of all new cars sold were fully electric, something which contributes to Norway being seen as a leader in EV adoption and infrastructure due to its vast charging network.
“Overseas, people hear about Norway’s EVs, because those are so far ahead of other countries, but road passenger transport is only one component of Norway’s emissions, and many emissions sources are not declining,” he added.
Andrew said that Norway as a whole doesn’t claim to be a green country, but some politicians speak up or play down the country’s environmental credentials.
“So, we do have politicians that say that Norway is a leading example on environmental matters. Often, these statements omit the gross exceptions to such conclusions, oil and gas being one such exception,” he said.
Other factors, such as the trade-offs when using energy sources which don’t produce as many greenhouse gasses, make it hard to assess how green Norway is overall.
“Then there is the scope of the term ‘green’. When considering greenhouse gas emissions, hydropower and wind are far preferable to coal and natural gas, but there are other environmental concerns with these,” Andrew said.
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