How Norway Affords Its Massive EV Subsidies
February 9th 2022
Friends of Science Extract from February 2, 2022
The Norwegian Petroleum Directorate announced that 2021 was a "great year" for oil and gas in Norway as both demand and prices increased. In the final quarter of 2021, revenues were $11.5 billion/month. Norway has now extracted approximately half of all oil and gas resources available on its continental shelf.
Despite all the oil and gas revenue Norwegians pay more for gasoline ($8.23/US gal.) than almost every other nation. Norway compensates for this exorbitant price by massively subsidizing electric vehicle purchases, e.g., no purchase/import taxes nor 25% value-added tax; 50% rebate on ferry fares, road tolls and parking fees; access to bus lanes. As a result, sales of EVs rose by 48% last year, such that almost 2/3 of new vehicles were battery powered, with Tesla becoming the best-selling brand.
Norway needs to sell over 100 barrels of oil (which emit 40 tonnes of CO2) to pay for the tax breaks it gives EVs to avoid emitting one tonne of CO2. Since nearly all Norway's electricity comes from cheap ($0.14/kWh) hydropower, an EV's emissions come only from its manufacture and shipping. Overall, Norway's EV subsidies result in the export of 45-73 tonnes of CO2 emissions for every tonne of avoided domestic emissions, which is good business for Norway.
Friends of Science
https://friendsofscience.org/
The Norwegian Petroleum Directorate announced that 2021 was a "great year" for oil and gas in Norway as both demand and prices increased. In the final quarter of 2021, revenues were $11.5 billion/month. Norway has now extracted approximately half of all oil and gas resources available on its continental shelf.
Despite all the oil and gas revenue Norwegians pay more for gasoline ($8.23/US gal.) than almost every other nation. Norway compensates for this exorbitant price by massively subsidizing electric vehicle purchases, e.g., no purchase/import taxes nor 25% value-added tax; 50% rebate on ferry fares, road tolls and parking fees; access to bus lanes. As a result, sales of EVs rose by 48% last year, such that almost 2/3 of new vehicles were battery powered, with Tesla becoming the best-selling brand.
Norway needs to sell over 100 barrels of oil (which emit 40 tonnes of CO2) to pay for the tax breaks it gives EVs to avoid emitting one tonne of CO2. Since nearly all Norway's electricity comes from cheap ($0.14/kWh) hydropower, an EV's emissions come only from its manufacture and shipping. Overall, Norway's EV subsidies result in the export of 45-73 tonnes of CO2 emissions for every tonne of avoided domestic emissions, which is good business for Norway.
Friends of Science
https://friendsofscience.org/
Photo by Mikita Karasiou on Unsplash
Click to close