CO2 Exemption in Norway for EU ETS Companies: What Changes and How It Affects Your Business in 2026

Key data

Norwegian industrial and energy companies participating in the EU Emissions Trading System (EU ETS) that use LPG or natural gas in their processes are exempt from Norway's national CO2 tax starting April 8, 2026. The measure, approved by the EFTA Surveillance Authority through Decision No. 064/2026/COL, eliminates a double taxation situation that economically penalized these companies.

Although the regulation directly affects Norway as a state in the European Economic Area (EEA), its relevance extends beyond: it establishes a key interpretive precedent on the compatibility between national carbon taxes and the European emissions trading regime. Any Spanish company with subsidiaries, joint ventures, or productive activity in Norway must understand this framework to optimize its tax position and climate compliance strategy.

What does this regulation establish?

The decision approved by the EFTA Surveillance Authority—the body equivalent to the European Commission for EEA countries not belonging to the EU—validates the exemption from the Norwegian national CO2 tax for companies already integrated into the EU ETS and consuming the following fuels:

• LPG (liquefied petroleum gas)
• Natural gas

The logic is clear: companies included in the EU ETS already pay for each ton of CO2 they emit by purchasing emission allowances in the European carbon market. Requiring them to also pay the Norwegian national CO2 tax on the same fuels would constitute a double tax burden on the same emissions, which would distort competition and unfairly penalize these companies compared to competitors in other countries.

The decision confirms that this exemption is compatible with EEA state aid rules, clearing any legal doubts about its legality.

Economic and operational impact

For affected companies, the exemption represents a direct and significant tax relief: they stop paying the Norwegian national CO2 tax on the LPG and natural gas they consume in their industrial or energy processes, as long as they are within the EU ETS.

From an operational perspective, the impact translates into:

• Reduction in tax costs associated with LPG and natural gas consumption in Norwegian facilities covered by the EU ETS.
• Simplified compliance: companies do not have to manage two tax obligations simultaneously on the same emissions.
• Precedent for climate tax planning: the decision establishes a clear criterion on how national carbon taxes should be structured when coexisting with the EU ETS, which may have implications in other EEA countries.

For Spanish companies with operations in Norway, this change can translate into an improvement in the profitability of their Norwegian subsidiaries and the need to review tax planning models and climate cost reporting at the consolidated level.

Who does it affect?

• Norwegian industrial companies with facilities included in the EU ETS that consume LPG or natural gas.
• Norwegian energy companies participating in the European emissions trading market.
• Spanish business groups with subsidiaries in Norway in industrial or energy sectors covered by the EU ETS.
• CFOs and financial directors of companies with operations in Norway managing climate tax at the consolidated level.
• Tax advisors and sustainability consultants working with clients with operations in the EEA.
• Companies in energy-intensive sectors (chemicals, paper, steel, ceramics, glass) with operations in Norway.

Practical example

Imagine a Spanish industrial group with a subsidiary in Norway dedicated to the production of building materials. This subsidiary consumes natural gas in its production furnaces and is included in the EU ETS, so it already acquires emission allowances in the European carbon market to cover its CO2 emissions.

Before this decision, the Norwegian subsidiary also had to pay the Norwegian national CO2 tax on that same natural gas consumed: that is, it paid twice for the same emissions. With Decision No. 064/2026/COL in force since April 8, 2026, that subsidiary is exempt from the Norwegian national CO2 tax, eliminating the double tax burden.

The direct result: lower operating costs in Norway, higher margins in that subsidiary, and a more competitive position compared to producers in other countries that did not suffer from that double taxation. The group's CFO must reflect this change in consolidated tax planning and verify that the subsidiary meets the requirements for inclusion in the EU ETS to benefit from the exemption.

What should companies do now?

1. Identify if you have subsidiaries or operations in Norway in industrial or energy sectors that consume LPG or natural gas and are covered by the EU ETS.
2. Verify the EU ETS status of each Norwegian facility: the exemption only applies to companies effectively included in the European emissions trading regime.
3. Review climate tax planning at the consolidated level to incorporate the savings derived from the exemption of the Norwegian CO2 tax from April 8, 2026.
4. Coordinate with the local tax advisor in Norway to confirm the procedure for applying the exemption and the documentation required by Norwegian authorities.
5. Update climate cost reporting models (CSRD, sustainability reports) to correctly reflect the actual tax burden on the Norwegian subsidiary's emissions.
6. Follow the interpretive precedent: this decision may influence how other EEA countries structure their national carbon taxes with the EU ETS. Maintain active regulatory monitoring.

Official source

Consult the complete regulation in official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601748