Domestic Emissions Trading Scheme 2005-2007

The Emissions Trading bill was approved without amendments by the Parliament on 17 December 2004 and entered into force on 1 January 2005. The Norwegian Domestic Emissions Trading Scheme ran from 2005-07, and generally aligned itself with the EU Emissions Trading Scheme, covering only CO2 emissions. Industrial CO2 emitters are allocated a total amount of emissions, and reducing emissions generates credits which can be sold to other emitters needing more. The Scheme covered CO2 emissions from energy use and some industrial processes, and only covered installations not subject to the CO2 Tax (see separate entry) or special agreements on emissions reductions with the State Pollution Control Authority. According to this agreement, existing process industry plants agreed to commit themselves to a 20% reduction in all greenhouse gas (GHG) emissions by 2007, compared to 1990 levels. There was some overlap between installations subject to this agreement and those covered by the emission trading scheme, notably CO2 emissions from refineries and cement. New installations were covered by the emissions trading scheme and not the 20% GHG emissions reduction agreement. Accordingly, emissions trading applied to CO2 emissions in connection with: - Energy production (Combustion installations above 20 MW), - Mineral oil refineries, - Coke production, - Production and processing of iron and steel, including roasting and sintering of iron ore, - Production of cement, lime, glass, glass fibre and ceramic products. The scheme covered 51 installations, accounting for approximately 10-15% of total GHG emissions. In 2008, Norway linked its emissions trading system with the EU ETS (see separate entry).

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