Norwegian lawmakers said they would postpone a plan that would have slapped a 40% resource rent tax on land-based wind farms after protests from industry.
(Bloomberg) — Norwegian lawmakers said they would postpone a plan that would have slapped a 40% resource rent tax on land-based wind farms after protests from industry.
A revised bill will be put forward in the second half, with the new statute taking effect in January, the government said Thursday. No details were given as to what the final proposal might look like, though the government said it will take into account feedback from companies, unions and municipalities.
“The postponement is a good thing, but there is still uncertainty as to what kind of proposal the government will put forward in the fall,” Nikolai Astrup, a member of parliament with the opposition conservative party, said Thursday. “It’s a big setback that we didn’t get some sort of indication today as to what the proposal they will put forward in the fall will look like, because that means there is still months and months of uncertainty.”
The tax sparked criticism when it was proposed in September, with investors including BlackRock and Finnish private equity firm Taaleri pushing back against the plan. KPMG warned that the proposal could bankrupt projects and drive investors away. That would be disastrous at a time when the country needs to add green power production as factories and smelters move from gas to electricity.
Norway was able to attract foreign investment due to its strong wind resources, local competence and the possibility of signing long-term power-supply contracts with industrial partners, BlackRock’s Fredrik Norell said at an event in Oslo Thursday.
“When you change the rules of the game and it actually has such a large financial impact – that we can see from our perspective that it has – that is not great at all,” Norell said. “We need a broad agreement,” he said, “because otherwise how do you know how much tax you are going to pay?”
Still, he said, the postponement means that there is “an open door for a broad debate.”
Speaking at the same event, Petroleum and Energy Minister Terje Aasland said that the government is intent on stimulating investment, creating a predictable framework and gaining broad support in the Norwegian parliament.
“Nobody wants new hydropower, there is resistance to onshore wind and nobody really wants to build a new power grid, but everyone wants plentiful and cheap electricity,” Aasland said. “That doesn’t add up. You have to make decisions and come up with good solutions for the future.”
The debate over how to tax onshore wind in Norway comes as governments elsewhere are rolling out the carpet to attract green projects. Neighboring Sweden is forecast to grow onshore wind by 54% to 20 gigawatts by 2030 and Finland sees a tripling in onshore capacity to 15 gigawatts, according to BloombergNEF.
“The context is international,” Augusta & Co. Partner Simon Clement-Davies said Thursday, “against the perspective of global stimulus for renewable energy, Norway should be doing the same thing.”
(Updates with comments from parliamentarian, BlackRock starting in third paragraph.)
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