Norway will next year implement a resource rent tax on onshore wind power that it says will give society a “fair share” of the value of its vast natural resources, despite industry objections.
The Norwegian government will today (Friday) present a modified bill for the introduction of the tax taking effect on 1 January.
It is proposing an effective rate of 35%, structured as a cash flow tax with an immediate deduction of investment costs.
The government said today that the tax will ensure that a “larger share of the value added in the wind power industry will accrue to society as a whole” and that “host municipalities will be better off under the proposal.”
“Government revenues will initially be marginal,” it said, “largely due to generous transitional arrangements for existing wind farms.”
Prime Minister Jonas Gahr Støre said that Norway has a “long and treasured tradition of ensuring that the value added by our common natural resources also benefits society,” a tradition that has “served the country well.”
Finance minister Trygve Slagsvold Vedum said that Norway “has some of the best wind resources in Europe” and the government believes that “society as a whole should receive a fair share of the value added by utilising our common resources.”
The government insists that investments that were profitable before the tax will also be profitable with it.
Norway began a consultation on the tax in late 2022, at that stage envisaging a 40% rate that could have kicked in this year rather than next.
But it pushed back its plans following industry objections, including a warning that the tax in its initially proposed form could bankrupt some projects.
In a statement today, Norwegian energy industry group Fornybar Norge said that the government “has listened to our objections”.
However, it added this was still “hardly good enough” considering the country’s need for new wind power and that the tax is “still not neutrally designed.”
It said that it had requested a total exemption for existing wind farms, which has not been accepted. "There have been changes to the transitional arrangements, but we need time to see if this is sufficient."
It added that it is “crucial that we can maintain the profitability of existing onshore wind power plants.”
