Nitrogen oxides fund established to reduce emission reduction obligations - International Law Office

The addition of the November 1999 Protocol to Abate Acidification, Eutrophication and Ground-Level Ozone to the November 1979 Convention on Long-Range Transboundary Air Pollution (the Gothenburg protocol) committed Norway to reduce its nitrogen oxide emissions to an annual maximum of 156,000 tonnes by 2010. Nitrogen oxides are waste gases which lead to acid rain and increased concentrations of ground-level ozone. In order to fulfil its commitment to reduce national emissions under the Gothenburg protocol, Norway has introduced a nitrogen oxide tax.

On May 14 2008 the Ministry of Environment and 14 business organizations signed an environmental agreement. The agreement aims to prevent the environmental impacts of nitrogen oxide emissions and reduce emissions by approximately 30,000 tonnes in 2008, 2009 and 2010. The 14 organizations which signed the agreement have committed to implement measures to reduce annual nitrogen oxide emissions. The agreement was approved by the European Free Trade Association Surveillance Authority on July 16 2008.

The participating organizations established the Business Sector Nitrogen Oxides Fund to support them in fulfilling their obligations under the agreement. The fund is not-for-profit and all monies which it receives will be used for the purpose of reducing nitrogen oxide emissions in a cost-effective manner, with the exception of necessary administrative costs.

All enterprises which are subject to the tax may sign the agreement, irrespective of whether they are Norwegian or foreign owned or operated. Enterprises that wish to join the fund must sign a participant agreement and submit this to the fund. The enterprises will then receive a participant certificate as proof of their entitlement to a tax exemption and support from the fund for nitrogen-oxide-reducing measures.

The tax exemption is Nkr1 for each 16.14 kilograms of nitrogen oxide from the date on which the enterprise joins the environmental agreement. From this date the enterprise will have payment obligations towards the fund. From January 1 2008 the payment rate is Nkr11 for each kilogram of nitrogen oxide for offshore sectors (ie, oil and gas production) and Nkr4 for each kilogram of nitrogen oxide for other sectors (eg, fishing vessels, navigation and supply). Participating enterprises must submit quarterly reports on their nitrogen oxide emissions to the fund.

Over 560 enterprises have joined the environmental agreement. The parties will evaluate the effect of the agreement during the first half of 2010 and assess whether to extend the agreement beyond December 31 2010.

For further information on this topic please contact Stein Ove Erdel at Arntzen de Besche Advokatfirma AS by telephone (+47 23 89 40 00), fax (+47 23 89 40 01) or email (stein.ove.erdal@arntzendebesche.no).