Norske Skog to pay NOK100m less in materials costs as Norway proposes to reduce CO2 compensation.
In its budget proposal for 2024, Norway's government has reportedly proposed to reduce the CO2 compensation to Norwegian industry. According to Norske Skog, the government proposes to increase the price floor with industry receiving compensation only when the CO2 allowance price exceeds NOK375. Prior to today’s announcement the floor was set at NOK200, Norske Skog said.
"For Norske Skog, this implies that the Norwegian CO2 compensation to be paid in 2024 under the National Budget for 2024 will be reduced with approximately NOK100m. The CO2 compensation to be paid in 2024 is directly tied to electricity consumption and the related publication paper production in 2023 and has thus been recognised as a decrease in cost of materials in 2023," the company explained. The reduction of the Norwegian CO2 compensation for the first three quarters of 2023 will be reflected in the third quarter results for 2023.
The CO2 compensation is an EU initiative designed to mitigate the impact of high CO2 allowance prices on electricity costs. The size of the CO2 compensation is, among other, based on electricity consumption and the average CO2 allowance price for the preceding year.