The Norwegian Environment Agency has issued a prior notice that could exclude two Norske Skog mills from the European Union Emission Trading System (EU ETS) for the period 2026-2030.
This decision would affect Norske Skog Skogn and Norske Skog Saugbrugs, potentially depriving them of free allocation of European Union Allowances (EUAs).
The proposed exclusion stems from a revised qualification criterion in the EU ETS scheme, which targets installations with over 95% of greenhouse gas emissions from sustainable biomass between 2019 and 2023. Ironically, this change could penalize facilities that have successfully reduced their fossil carbon footprint.
Geir Drangsland, CEO of Norske Skog, expressed disappointment, stating, "This is a significant setback for sustainable industry and very disappointing for everyone that has invested and prioritised a transition from fossil fuels to renewable energy". He warned that the new criterion might inadvertently encourage increased use of fossil fuels.
If excluded, the affected mills would neither receive free EUAs nor be required to surrender them for their emissions from 2026 to 2030. The decision does not impact Norske Skog's facilities in Golbey or Bruck, nor Norway's CO2 compensation schemes.
For 2025, Norske Skog Saugbrugs and Norske Skog Skogn anticipate selling approximately 150,000 EUAs net. The company plans to collaborate with industry partners to advocate for equal treatment of biomass with other decarbonization measures.
Drangsland noted a potential silver lining, citing positive developments in Austria regarding CO2 compensation, which could offset the effects of EUA allocation exclusion in Norway.
