The UnSustainability Report 2023 – NO

In Norway, we currently operate with a tax and customs system that is designed for a linear economy. This system does not encourage reuse or repair. The FJONG clothing chain rents out surplus clothing and has to pay 25 per cent VAT each time a garment is rented out. Clothes manufacturers can, however, throw out unsold clothes for free.

The same VAT several times

Today, the government is in a position where it can charge VAT several times on a single product. If you buy a sofa from a second-hand store, rent a dress or repair a washing machine, you will be required to pay 25 per cent VAT - every time. This is a paradox, considering that we know that consumables such as textiles and electronics are some of the largest contributors to CO2 emissions.

What is the circular economy?

According to the Norwegian Environment Agency, products in the circular economy should last as long as possible. They need to be repaired, upgraded and reused to a greater extent. When products cannot be reused, waste can be sent for material recovery and used as raw materials in new production. This allows us to utilise the same resources several times.

Nine out of ten people believe that VAT should be abolished

In the Norwegian Consumer Council’s population survey on the circular economy from June 2021, nine out of ten people believed that VAT should either be reduced or abolished for repair services.

Use and discard

According to McKinsey, the average consumer buys around 60 per cent more clothes today than 15 years ago, while the useful period per garment has halved.

Fast fashion

This term is used, among other things, to refer to clothing manufactured through a business model characterised by large volumes, destruction of surplus stock, rapid changes in fashion, global trade and the use of cheap labour in low-cost countries.

Plan for new facilities

The Norwegian Retailers’ Environment Fund has drawn up a plan showing how Norway could become a pioneering country when it comes to the recycling of plastic packaging. They estimate that we need sufficient capacity to sort plastic waste from 1.6 million tonnes of general waste. In order to achieve this, we need:

• ten new pre-sorting facilities for household waste
• six new facilities to manage commercial waste
• one national facility for detailed sorting
• one national facility for further refinement through washing and extrusion

The new facilities would replace several existing facilities. The total investments required for the developments have been estimated at NOK 6.8 billion. According to Lars Brede Johansen, Head of the Norwegian Retailers’ Environment Fund, a significant boost is required to reach the 2030 recycling targets.

“The technology used at the most modern facilities in Europe can produce quality recycled plastic that fetches a good price and can be reused in other high- quality products. High-tech sorting and recycling facilities are crucial to being able to recycle more plastic packaging,” Johansen says.

Plastretur in the process of planning detailed sorting facility

Plastretur operates in the plastic packaging return business. The company plans to build a new detailed sorting facility. The CEO of Plastretur, Karl Johan Ingvaldsen, believes that the facility will be crucial to Norway’s future environmental performance.

“European capacity for detailed sorting of plastic is close to its limits. A detailed sorting facility
in Norway is crucial to the handling of pre-sorted plastic packaging. Cross-border transport of waste is becoming increasingly challenging and the regulations will be enforced more strictly going forward,” Ingvaldsen says.

According to Statnett, Norway is heading for a power deficit by 2027. In order to achieve the climate targets by 2030 and still have enough power for new industrial development, Norway needs more renewable power. According to Renewables Norway, we could cut the development time in half.

Power deficit in 2027

According to Statnett’s annual market report for the 2022-2027 period, Norway is heading towards a power balance deficit. The current power surplus of 18 TWh is expected to drop to -2 TWh in 2027. Additionally, NVE recently downgraded Norway’s annual hydro-power production by 1.7 TWh and the power deficit will therefore likely be greater and occur earlier.

Renewables Norway believes that the lead time can be halved

Lead time is the time it takes to develop a new power project. Lead time can be split into three parts: investigation, licensing and construction.

Toini Løvseth, Head of Renewables Norway’s division for production and marketing believes that we could halve the current lead times without compromising on health, safety and the environment.

“We could prioritise the consideration of new projects based on societal importance, such as the scope and importance for energy policy objectives,” she says and proposes the following measures to shorten lead time:

• Investigation: We can adapt impact assessments for each project.
• Licensing: License applications could be considered in parallel by NVE and OED.
• Construction: If a deadline is imposed for when the authorities need to make their final decisions, the detailed design process and commencement of contracts can take place before the final licence has been issued.

Is it sustainable to develop more hydro-power?

New hydro-power developments are not without negative consequences for nature and the environment. There are no plans to develop major new hydro-power projects. New hydro-power developments will take place by upsizing existing plants. Due to the resistance to onshore wind power, hydro-power is also the easiest green energy source that can be developed in the short term. Offshore wind power and solar power will not provide any power before 2030.

Unfavourable ground rent tax?

Ground rent tax is an additional tax on additional returns from scarce natural resources, such as oil, gas and hydro-power. Additional returns on such natural resources are called ground rent and are taxed as ground rent tax. A ground rent tax rate of 40 per cent was introduced from 1 January 2023 for onshore wind power and salmon farming. Ground rent tax is particularly unfavourable for onshore wind power. Onshore wind power is the energy type that could contribute new power most quickly. The ground rent tax was implemented without prior warning, which means that existing onshore wind projects could go bankrupt while also creating uncertainty. In turn, this could affect investors’ willingness to invest in offshore wind power and solar power in future. For now, offshore power and solar power are not affected by the ground rent tax.

Hydrogen will play an important role in phasing out current fossil-run lorries, buses, boats and ferries. With hydrogen in the tank, future heavy goods transport will emit only water. However, Norway lacks the required infrastructure to manage the transition. ASKO has taken matters into its own hands, but is calling for
a clearer plan.

What is hydrogen?

Hydrogen is the lightest and most common element in the universe. Pure hydrogen rarely occurs naturally and is usually produced from hydrocarbons or via electrolysis. Hydrogen is not an energy source, but an energy carrier that can be used as fuel. Hydrogen is more suitable for heavy goods transport than batteries. This is because large vehicles such as lorries, buses and boats require large batteries with long charging times.

Ambition to cut 1.1 million tonnes of CO2 by 2030 using hydrogen

According to Statistics Norway, the transport sector accounts for nearly one third of Norway’s total CO2 emissions, over half of which originate from road traffic. Under the Paris Agreement, Norway must halve emissions from the transport sector by 2030. In order to achieve this target, 50 per cent of all new lorries and 75 per cent of new long-distance buses must run on electricity or hydrogen by 2030. The Norwegian Environment Agency estimates that this will cut carbon emissions by 1.1 million tonnes of CO2 by 2030.

The Norwegian Hydrogen Forum would like to see the pace accelerate

In October 2022, the European Parliament decided that there must be at least one hydrogen filling station for every 100 km of road by 2027. In Norway, there are less than ten stations throughout the entire country.

“With the government’s one-sided focus on electric lorries and rapid charging, we are missing out on the important synergies between electricity and hydrogen, including flexibility in the energy system, better utilisation of space and security of supply. We are calling for a specific plan for the establishment of a nationwide network of hydrogen stations and we believe we should look to Sweden and Germany for inspiration, where excellent support schemes have been established. We are calling for Enova to establish a competitive programme with 80 per cent funding for stations and 80 per cent funding for the additional costs associated with the first 500 lorries,” explains Ingebjørg Telnes Wilhelmsen from the Norwegian Hydrogen Forum.

What about a CO2 fund?

Another suggestion that could contribute to speeding up the green transition in the transport industry would be a CO2 fund based on the same model as the NOx fund. Instead of the transport industry paying a carbon tax, it would pay a membership fee to a CO2 fund. Members would then be able to apply to the fund for funding for new investments such as better infrastructure for hydrogen or green vehicles. Together with the Confederation of Norwegian Enterprise (NHO), the environmental organisation Zero has been working on the establishment of such a fund.

“A CO2 fund would help ensure faster development of green infrastructure such as hydrogen stations and charging stations, as well as funding for the purchase of new vehicles.”

Nine out of ten Norwegian businesses are defined as small and medium-sized businesses. Even though these businesses represent the majority of the Norwegian business community, many find that it is difficult for them to become part of the green transition. According to SMB Norway, a lack of information and adapted support schemes constitute the most important barriers to sustainable transition.

The role of small and medium-sized businesses in the green shift

Kristian Eilertsen, Head of Policy and Public Affairs at SMB Norway, believes that the current schemes for small and medium-sized businesses are not good enough. He highlights the following barriers:

• 62 per cent of small and medium-sized businesses in Norway say that they lack information about support schemes. These businesses would also like it to be easier to apply for funding from the support schemes.
• 52 per cent of the businesses say that there is a lack of support schemes from the authorities. Several of the projects that currently receive funding are major innovation projects. Support schemes must therefore be adapted to everyday businesses to a greater extent. For a small business, the green transition could revolve around switching to electric vehicles and reducing energy consumption.
• Small and medium-sized businesses often fail to succeed in tendering and application processes. This is a shame, as SMBs are in a position to quickly implement green initiatives that could have major effects in the long term.
• Many SMBs do not have the resources to follow up on and implement sustainability initiatives. New sustainability requirements should be better adapted to the reality of SMBs.
• Financial support schemes, security and predictability are key to businesses succeeding in the green transition. This is why investments must also be profitable. The green transition cannot be driven solely by idealism.

According to Deloitte, Norwegian food waste amounts to around 800,000 tonnes annually. This means that 2,200 tonnes of food are thrown away every single day. Each kilo of food thrown away corresponds to a CO2 emission of 3.4 kg. This leads to annual emissions of around 2.6 million tonnes of CO2. A food waste act could effectively contribute to reducing food waste and cutting emissions.

Hva er matsvinn?

I bransjeavtalen for matsvinn fra 2017 defineres matsvinn som «alle nyttbare deler av mat produsert for mennesker, men som enten kastes eller tas ut av matkjeden til andre formål enn menneskeføde, fra tidspunktet når dyr og planter er slaktet eller høstet».

What is a food waste act?

A food waste act could ensure that we minimise food waste throughout the entire food chain, from the farmer or fisherman via the food industry to grocery stores and finally the end user. In order to be effective, such legislation should introduce enhanced producer responsibility, as we already have for numerous products. This would lead to a duty of prevention in the food industry and would ensure joint financing of appropriate systems to manage surplus food. In practice, this would prompt grocery stores and food producers to:

• order the correct amount of food
• sell more food by loose weight
• use less packaging
• spread information about how we can better utilise food
• prevent and report food waste

Industry agreement without producer responsibility

In 2017, five ministries and 12 organisations from the food industry signed an industry agreement to halve food waste by 2030. However, the agreement says nothing about who is responsible for the surplus production of food. This means that it remains profitable to produce more than necessary, which contributes to increased food waste and emissions.

The government is looking into a food waste act

The government promised to draft an act on food waste in the Hurdal Platform. This autumn, the government decided that it would investigate such an act.

Nine out of ten Norwegians would like to see less food waste

86% of respondents to a survey conducted by Norstat on behalf of Too Good To Go wants more to be done to reduce food waste in everyday life.

In Norway, energy consumption in new and existing buildings has increased by
20 per cent since 1990. Fortunately, there is great potential for energy efficiency. According to several industry and environmental organisations, we could save 10 TWh through energy efficiency initiatives by 2030. But we need a plan to achieve this.

Plan for energy efficiency

Just as for greenhouse gas emissions, we need a plan to cut energy consumption in buildings. Such a plan would need to include instruments and specific targets to be reported on annually. In connection with the 2023 national budget, 27 environmental, consumer, employee and industry organisations signed an open letter to the government and the Socialist Left Party with a specific list of initiatives aimed at cutting energy consumption by 10 TWh by 2030:

• NOK 1 billion for household energy initiatives in 2023, including housing cooperatives and co-ownership properties.
• A supplementary agreement for Enova, under which Enova could support well known and proven energy initiatives.
• Reintroducing and expanding Enova’s support schemes for energy efficiency in commercial buildings. Businesses need to be able to conduct their activities in energy-efficient premises.
• The energy grant scheme must not become a barrier to reintroducing and expanding the broad support schemes for energy efficiency in non-residential buildings available through Enova.
• Dedicated support schemes through the Norwegian State Housing Bank for low-income families that own their own homes.
• A gradual reduction plan for a minimum of 10 TWh of energy savings in buildings by 2030, showing how a minimum reduction of 1.5 TWh can be achieved each year. Energy consumption in buildings must be reduced from a level of 79 TWh in 2015 to a maximum level of 69 TWh by 2030. The plan must be presented in connection with the revised national budget for 2023.

The government is trying to wriggle out of this

Bård Baardsen from the Norwegian Heat Pump Association is one of those whose organisation signed the letter.
He believes that the government is trying to wriggle out of initiatives that could yield improved energy efficiency.

“The government has redefined the energy efficiency target for buildings to apply only to buildings from 2015 or earlier. By redefining the target from “buildings” to “buildings from 2015 or earlier”, the total energy consumption in buildings could still be 79.3 TWh in 2030, the same as today. This is absurd, because in practice it means that the most important initiative is to demolish old buildings. What we need to reduce is the total energy consumption in buildings and that has to include the entire building stock,” Baardsen says.

Of a total of 223 TWh, 83 TWh is used for buildings

The total energy consumption in Norway in 2021 was 223 TWh, of which around 83 TWh was used for buildings. Energy consumption in Norwegian buildings has increased by 20 per cent over the last 30 years. Most of this energy comes from electricity.

Initiatives that could make buildings more energy-efficient:

• Energy consultancy
• Additional insulation
• Heat pumps
• Ventilation systems with heat recovery
• Energy-efficient electrical appliances
• Smart control systems for lighting, heating and ventilation
• Low-energy windows
• Balanced ventilation
• Clean-burning wood stoves
• Bio-ovens/bio-boilers
• Solar panels
• Solar collectors for water heating
• Heat recovery from greywater
• Connection to district heating

Those who have the most resources are able to access the most support

The figure shows energy upgrades to homes by income group. Those shown in red have received funding from Enova. Those shown in pink have not received any funding. The columns to the very left show those with the lowest incomes. The columns to the right show those with the highest incomes.

In order to encourage more people to leave their car at home, we need a proper public transport system in Norway. Unfortunately, public transport fails in most of the 13 largest cities in the country. In addition to this, the price of public transport has exploded in Norway compared to the neighbouring countries and compared to price rises in general.

Devastating verdict on public transport

In 2019, the Institute of Transport Economics (TØI) mapped public transport services in Norway on behalf of NAF. Among other things, the report looked at the disadvantages of switching between different modes of public transport, waiting times, walking times and queues. The conclusions were striking. The public transport system is failing in most of the 13 largest cities in the country and the current system is unable to compete with the car.

Key takeaways from the study:

• Half of residents in the 13 largest cities find that journey times by public transport cannot compete with travelling to the city centre by car.
• One in five have no real alternative to the car when travelling to the city centre.
• One in three (excluding Oslo) have no real alternative to the car.
• 64 per cent of residents in Oslo and 49 per cent of residents in Trondheim state that the public transport service is good. None of the remaining 11 cities come anywhere close to this.
• Bergen and Stavanger ranked worst among the major cities. In these cities, nearly half of residents lack access to satisfactory public transport. One in four also have no real alternative to the car when travelling to the city centre.
• Public transport is particularly poor in areas outside of the city centre, where many people work. Public transport to Haukeland Hospital comes in last at a national level, with
  only one per cent of passengers stating that they have access to decent public transport.
• For Stavanger, the study found that around half of passengers travelling to Forus have no competitive alternative to the car.
• Even in Oslo, which has excellent coverage for the city centre, the proportion of people stating that they have a decent service declines sharply for those working in Nydalen or Alnabru. Less than 30 per cent have access to competitive public transport to these areas.
• Tolls are not enough of an initiative to get people to leave their car at home.

According to Erik Bjørnson Lunke, Project Manager at TØI, it is now time for action.

“Public transport in Norway struggles to compete with the car. If we are to get people to leave their car at home, we need to improve the service to include more frequent departures and quicker routes,” Lunke explains.

Justified public action against tolls?

During the 2019 local elections, People’s Action against More Tolls (FNB) experienced impressive results. The party was the third largest in Bergen and Stavanger, with of 16.7 per cent and 9.2 per cent of the vote respectively. According to the TØI study, Bergen and Stavanger have the worst public transport in the country. Maybe the frustration with increased tolls was justified when the alternative to the car turned out to be the worst in the country?

In Norway, we recycle 90 per cent of all bottles and boxes through the deposit and return scheme. However, we have no such scheme for electronics and that is noticeable. Norwegians actually throw away the most electronic waste worldwide. The Norwegian Society for the Conservation of Nature believes that a national deposit and return scheme for electronics could strengthen the circular economy and contribute to cutting emissions.

A deposit and return scheme would be a good place to start

According to Joakim Sandvik Gulliksen, Specialist Adviser for Waste and the Circular Economy at the Norwegian Society for the Conservation of Nature, a deposit and return scheme could be a good place to start. He points out several advantages of a deposit and return scheme:

• Increased recycling of electronics is a low-hanging fruit for Norway to become more sustainable. Deposit and return schemes are excellent instruments, as these are schemes with which most people are familiar and have positive associations. It is easy to communicate such schemes.
• There is a greater chance of the collection and reuse rate increasing if we establish an overarching system with a single responsible party at the helm. This leads to increased trust, while also allowing us to avoid prioritising competitiveness over environmental impact, as has been achieved for plastic packaging.
• A deposit and return scheme could provide much better protection for electronic waste reception sites.
• The reuse of important metals and minerals could save enormous amounts of CO2 emissions.
• Increased use of resources. A deposit and return scheme would ensure that the materials contained in an old product can be reused in another product or sold on.
• Fewer environmental toxins would be discharged into nature.

It is impossible to meet the climate targets without carbon capture and storage for industry. The “Longship” project for storage in the Norwegian continental shelf has therefore been awarded public funding. But it is not enough. According to Bellona, we will never reach the climate targets unless we also support similar projects in future.

What is carbon capture and storage?

Carbon capture and storage (CCS) technology is a technology that captures CO2 emissions directly at the facility instead of being released into the atmosphere. How much of the emissions are captured varies, but the most suitable systems can capture up to 95 per cent of emissions.

We need to store 300-640 million tonnes each year

According to Eivind Berstad, Head of CCS at Bellona, it is crucial that we accelerate carbon capture and storage to reduce CO2 emissions. He references studies from the International Energy Agency (IEA) and the European Commission stating that the EU needs to capture between 300 and 640 million tonnes every single year until 2050 to meet the climate targets.

“In order to achieve the climate targets, CO2 capture must increase twenty-fold by 2030. It is particularly important that we accelerate the pace of development of capture facilities and storage,” Berstad says.

He says that we have experienced progress in several CCS projects in Norway in the wake of the Longship project, but that things are still moving too slowly, both globally and at home.

“CCS is currently not profitable for the industry. We are dependent on public support schemes to close the gap between the costs of CO2 emissions and the costs associated with CCS. A lack of funding is the greatest barrier to installing CCS in Norwegian industry,” Berstad explains.

Bellona has proposed the following eight initiatives to accelerate carbon management:

1. Establish systematic support systems for CCS
2. Improve access to CO2 storage
3. Demand low-emission products
4. Increase access to power
5. Investigate CCS as a supplement and alternative to electrification
6. Develop frameworks for the removal of CO2
7. Ensure predictability in CO2-related costs
8. Increase research, development and piloting