About
Norway has participated in the EU Emissions Trading System (EU ETS) through the EEA Agreement since 2008. The EU ETS is legally anchored in Directive 2003/87/EC ("ETS Directive") and several subordinate legal acts. For a further description of the EU ETS, see our article on this matter.
The system has been implemented in Norwegian law through the Climate Quota Act and the Climate Quota Regulations. The Climate Quota Act is primarily an enabling act that, through delegation decisions, has given the Ministry of Climate and Environment the authority to make detailed provisions on the emissions trading system in Norway through regulations. A large part of the substantive content of the law is found in the Climate Quota Regulations, which goes into detail on the set of rules and deadlines that is decisive for the participants covered by the regulations.
The Norwegian Environment Agency (NEA) is the competent authority in Norway, and also the registry authority. They are, among other things, responsible for the applications for allocation of free allowances and the establishment and operation of the Norwegian Climate Quota Registry. The ETS regulations are fully harmonized across countries participating in the quota system, so there is little room for national adjustments.
Who does it impact?
Status: In force
The Norwegian Climate Quota Act entered into force on 1 January 2005 and is regularly updated to implement the newest changes from the EU on this matter.
Relation to other initiatives and regulations
- The Climate Quota Regulations is amended and updated to incorporate rules from the ETS2 regarding monitoring and reporting of emissions from fuels used in the building sector, road transport sector and other sectors into Norwegian law. For further information regarding the ETS2, see our article on this matter.
- The gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU ETS. This phase-out follows from section 4-7 of the Climate Quota Regulations. The Norwegian Government has determined that CBAM is not EEA relevant, which means that Norway is not legally obligated to implement CBAM. However, the Norwegian Government supports the incorporation of the CBAM regulation in Norway as a voluntary collaboration. It is still too early to say when such a scheme could be implemented. For more information regarding CBAM, see our article on this matter.
- The Climate Quota Act and the Pollution Control Act are linked, as the companies participating in the quota system must have obtained a formal emission permit according to the Pollution Control Act section 11 before they can be allocated quotas.
Thommessen's comments
The law is largely a framework law that provides the basis for implementing relevant European emission trading regulations through the Climate Quota Regulations. We have seen frequent adaptations to the rules the past year based on the revised EU ETS directive, both with reference to include the maritime sector in the ETS and the establishment of the ETS2. The legislation is comprehensive and detailed, and imposes mandatory obligations for those in scope. Whether or not your business is within scope, the legislation may affect your business' finances. It is therefore important to be familiar whether and how the legislation is affecting your sector.
The Norwegian Environment Agency (NEA), as competent authority, are consecutively updating and presenting relevant information on their websites, including the launch of public consultations for the Norwegian regulations to be aligned with the process and timelines within the EU.
On 4 April 2025 the Ministry of Climate and Environment presented a legislative proposal that aims to provide the legal basis for completing the national implementation of ETS2 in Norway. The scope of the Climate Quota Act is proposed to be expanded to include the activities and obligated entities covered by ETS2 and provide the authority to introduce requirements for aircraft operators to monitor and report "non-CO2 effects" on the climate from flights starting 1 January 2025. 20 June 2025 the legislative proposal amending the Climate Quota Act entered into force.