Norway lags behind in Europe’s energy transition – Dagsavisen

Europe is now working to increase the development of renewable energy in order to reduce greenhouse gas emissions and become more self-sufficient, and is therefore less dependent on imports from third countries, such as Russia for example. This energy transition can only happen through closer cooperation and more infrastructure between European countries.

If Norway does not participate in this collaboration, we risk failure with our investment in offshore wind, hydrogen and carbon capture and storage (CCS). We also risk being left out of the investment in new power grids and pipelines for hydrogen and CCS. In addition, we may lose the opportunity to participate in common European research, innovation and technology in the energy area.

But it is not only in the area of ​​energy that the EU is now taking action. The EU’s heads of state are concerned that European industry will lose out in the competition with the US and China, and are therefore planning a large-scale European industrial investment. For Norway, this could mean that Norway falls behind in relation to the EU – and even more compared to the USA and China.

Access to affordable energy is central to a country’s competitiveness. One of the biggest dilemmas in this area is that Europe has electricity prices on average twice as high as the USA. It is also a problem for Europe that many European investors choose to place their money in the US and other countries, and thus do not contribute to financing the European energy transition.

It is not appropriate for the EU to adjust its ambitions for climate policy downwards in order to obtain lower energy prices, and thereby improve competitiveness in the energy area. Instead, they are now investing in further developing the internal energy market and strengthening access to capital. Through the EEA agreement, Norway is part of the EU’s internal market. Thus, any change made in this area has great significance for the Norwegian economy.

Norway risks being left on the platform when the European competitiveness train departs.

During the EU summit in mid-April, EU heads of state discussed Europe’s future competitiveness based on two reports: “The future of the single market” by former Italian Prime Minister Enrico Letta, and a report by European Commission Vice-President Maros Sefcovic entitled ” Energy dialogues for a green shift”.

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As usual, Norway was not at the table when the measures were discussed. It is a shame because what the EU chooses to do next will lead to Norwegian outsiderness becoming even more evident than before. And that despite the fact that we are an energy superpower.

Let’s start with the rollout of new infrastructure for electricity, hydrogen and CCS. The Letta report suggests that a new EU agency should be created which will be given responsibility for the energy transition. The agency will guide European businesses in licensing processes, how they get access to capital and the possibilities of getting state support for infrastructure projects.

According to the report, cross-border infrastructure for electricity, hydrogen and CCS are among the most important measures to improve Europe’s competitiveness. Hydrogen and CCS are important investment areas for Norway, and may in the very near future become decisive for continued Norwegian energy exports.

It will be serious if Norwegian players do not get access to cross-border infrastructure in Europe because of our externality. Furthermore, Norwegian companies are unlikely to gain access to the new EU agency and be able to receive guidance from them, unless we choose to enter into a separate agreement on the side of the EEA agreement.

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When it comes to energy taxes and fees, it is proposed to further harmonize and phase out taxes on renewable energy in the EU so that the electricity bill will be lower. Again, Norway will be left out since the EEA agreement is limited to tax issues. Without a separate agreement, we can therefore risk that Norwegian hydrogen and offshore wind will be taxed when it is exported to the EU.

The Letta report also proposes that the EU establish a capital market union. It will ensure that the capital markets in Europe work seamlessly across countries, and that state aid is harmonized and increased. This is “our Inflation Reduction Act”, says Letta, referring to the American master plan to ensure own competitiveness and trigger investments in renewable energy and zero-emission technology. Again, Norway will lag behind unless we secure an agreement on association on the side of the EEA agreement.

What the EU chooses to do next will lead to Norwegian outsiderness becoming even clearer than before.

Letta also proposes to introduce a fifth freedom for the free movement of research, innovation and technology, in addition to the existing four freedoms for the free flow of products, services, capital and labour. The question becomes: How should this fifth freedom apply to Norway?

In April last year, Norway entered into an agreement with the EU on the establishment of a “green alliance”. It is now time to fill this alliance with concrete content. Without Norwegian participation in the aforementioned reforms of the internal energy market, we may risk that offshore wind, hydrogen and CCS will not become attractive in Norway. In addition, we may be left out of European cooperation on research, innovation and technology.

If we do not ensure that Norway can participate in the new EU initiatives, we risk being left on the platform when the European competitiveness train departs. The departure time will be autumn 2024 after the election to the new European Parliament. It is urgent to rise.

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