Study of the effects of dual policy instruments to reduce CO2 emissions in the Norwegian petroleum sector

The majority of emissions from petroleum activities on the Norwegian continental shelf are subject to dual use of policy instruments (a carbon tax and the European emission trading system), resulting in high emission costs for the Norwegian petroleum sector. At the moment - the only two realistic solutions to reduce emission costs close to zero - are by replacing existing energy supply with power from shore or by shutting down the installations. Existing installations that are suitable for full or partial operation with power from shore already have implemented or are implementing such a solution. For the remaining installations, power from shore is seen as unrealistic, due to technical limitations, high cost and/or short remaining production period. Therefore, high emission costs resulting from the dual use of policy instruments (CO? tax and EU ETS) may, among other things, lead to fields and installations being shut down earlier than they otherwise would have been. The Ministry wants an independent study of the effects of a CO2-tax on top of EU ETS on future deliveries of oil and gas from the NCS, the net present value of production of oil and gas, production emissions and the net income to the state from the sector. The assignment will commence as soon as possible. The assignment should result in a written public report. The deliverables should be divided into a presentation of preliminary results, a first draft of report and a final report. The assignment is to be delivered within three months of contract signing. The consultant is to participate in meetings with the Ministry as agreed, but at a minimum, a start-up meeting, a status meeting with presentation of preliminary results, and a meeting to present the final report. The value of the procurement is estimated between 1 and 2 million NOK excl. VAT. This estimate is not binding for the Contracting authority. For further information on the scope and content of the procurement, we refer to appendix 1.