In 2005, the Directorate of the Environment conducted an action analysis for NOx where different industries were compared. The analysis showed a large spread in measures related to the implementation of NOx measures within various industries. The most reasonable measures existed in shipping where the reduction potential was also greatest. The most expensive measures were found in the offshore industry.
The state NOx fee was eventually introduced in 2007 and was NOK 15 per kilo NOx. This became tough for many in the industry. The oil industry therefore recommended a solution with a NOx fund to achieve the greatest environmental benefits from the investments. After several negotiations with authorities, 14 NGOs and the Ministry of Climate and Environment signed an Environmental Agreement on NOx, which entered into force on 1 January 2008. The purpose was to cut NOx emissions in industry and fulfill Norway's obligations in the Gothenburg Protocol. The NOx Fund was established and the NOx Fund's grant was exempted from the Government NOx fee against paying a lower payment rate to the Fund. All revenues return directly to the industry for emission reduction measures.
The NOx Fund quickly became a success and accelerated efforts to cut NOx emissions while giving industry financial support to implement competitive green technology. A continuation of the Environmental Agreement with duration from 2011-2017 was signed by 15 industry organizations.
The environmental agreements on NOx have been working for over 10 years. A new NOx agreement has been signed for a new period 2018-2025. This provides the basis for further development of technology and markets towards the low-emission society. At the same time, Norwegian NOx-taxable companies can maintain a healthy economy that enables investments in low and zero-emission solutions.
The Business Sector's NOx Fund is registered as an association in the Central Coordinating Register for Legal Entities at the Brønnøysund Register Centre.
The Fund's statutes provides information on rights and obligations. The statutes shall contain procedural rules that govern the Board’s work, including decisions relating to allocations of support from the NOx Fund. The Fund's statutes shall secure the Fund a high degree of legitimacy, credibility and transparency while taking care to ensure that competition-sensitive information is not lost or disclosed to unauthorised individuals. The Fund is subject to the internal control requirements stipulated in the Audit and Auditors Act.
The Fund shall be managed in accordance with the full cost principle (non-profit), i.e. all the financial means which the Fund receives will be utilised in accordance with its purpose of reducing NOx emissions in a cost-effective manner with the exception of necessary administrative costs. In the event of dissolution of the Fund, the capital shall be spent on NOx reducing measures in accordance with the Fund’s purpose. In the event that a signatory should be forced to withdraw from the Fund due to neglect or non-fulfilment or similar reasons, the contributed funds will not be refunded.
Board members are as follows:
|Tor Arnesen||The Confederation of Norwegian Enterprise|
|Jan Ivar Maråk||The Norwegian Fishing Vessel Owners Association|
|Ivar Ulvan||Coastal Shipowners|
|Hildegunn T. Blindheim||The Norwegian Oil and Gas Association|
|Øyvind Jonassen||The Norwegian Shipowners' Association|
|Per Øyvind Langeland||The Confederation of Norwegian Enterprise|
|Kjell Ingebrigtsen||The Norwegian Fishermen's Association|
|Frode Sund||The Federation of Norwegian Coastal Shipping|
|Marit Holtermann Foss||The Federation of Norwegian Industries|
|Svein Kamfjord||KS Enterprises|
The Board’s main task is to determine which measures shall receive support from the Fund, and how. Moreover the Board is responsible for determining the amount to be paid per kilo NOx emissions in to the Fund by participating enterprises.
DNV GL are responsible for the processing of applications for support for NOx reducing measures from ships, the mainland industries and the offshore sector. DNV GL will give recommendations to the Business Sector’s NOx Fund regarding the prioritisation of measures in order to ensure the most cost effective use of the Fund’s financial means while ensuring that the individual measures with the highest effect are granted priority.
The Business Sector’s NOx Fund will actively inform and provide follow-up for the enterprises that signed the Agreement in order to give rise to the best possible measures as soon as possible. The Business Sector’s NOx Fund will give support to NOx reducing measures. Allocated support will be paid once the relevant measure have been implemented and documented.
The Business Sector’s NOx Fund will stimulate to increased competition and capacity within the NOx solutions market and spread information on promising technologies. Capacity barriers may thus be identified and measures suggested. Interaction and collaboration with Government Incentives are vital (Innovation Norway and the Research Council of Norway).
The NOx Fund will adjust its efforts in accordance with the legislation relating to competition and take precautions to ensure that competition sensitive information are not readily available on the market.
When the NOx agreement 2018-2025 was approved by the EFTA Surveillance Authority ESA, Klima and Environment Minister Ola Elvestuen stated "I would like to commend the business community and the NOx Fund for their efforts to reduce emissions. The contributions from the NOx Fund have meant a lot of for the introduction of low and zero emission technology such as LNG and electrical operation on ships ". This statement is part of a large number of statements by politicians and business leaders, which show a broad consensus that the NOx Fund is a good instrument.
Ten years ago, the NOx tax was one of the few environmental policy measures to reduce NOx emissions. In several industries, especially those with high NOx intensity and weak economy, the state tax reduced the business's financial ability to implement measures. State tax alone therefore contributed to a small extent to measures such as reduced NOx emissions. This did not provide any basis for the development and phasing-in of new technology.
The NOx fund has been important for the supplier industry. The fund has triggered an increase in demand for NOx-reducing technologies (NOK 14 billion since 2008), especially within the maritime sector where the largest share of the funds income has been distributed to. This has contributed a Norwegian maritime industry with leading edge in an international market.
The environmental agreements on NOx have resulted in significant development and dissemination of environmental technology. An important motivation for the signing of the agreements was to develop new and better environmental technology solutions in shipping and fishing, as well as ensure the acquisition of solutions in the market. This has been successful. Electrification of maritime activity using battery technology, LNG operation of ships and NOx cleaning with catalysts are examples of high volume technologies triggered by the NOx fund's support. Norwegian companies are today the world's leading supplier of and using such technologies. Upcoming stricter requirements for emissions from international shipping provide opportunities for the Norwegian supplier industry in a market that is significantly larger than the Norwegian.
The NOx Fund has since 2008
Illustration of how the NOx Fund works