New measures

1) A guide to Norwegian companies on how to calculate greenhouse gas emissions related to electricity use, highlighting that it is almost 100 % emission-free

Veyt does not foresee this measure significantly altering existing sustainability reporting practices.

Norwegian companies falling under the scope of the Corporate Sustainability Reporting Directive (CSRD), need to report their Scope 2 GHG using dual approach by displaying both location-based and market-based values. For market-based reporting, residual mix use can be used.

Below you can find a table with a list of Norwegian companies with government ownership and companies within the CSRD scope and their GO use for reporting purposes.

In the public sector, most companies use dual reporting, however, most do not use GOs, relying on residual mix instead.

2) Product declaration for electricity based on trade with GOs will be changed to show physically delivered electricity in Norway

NVE’s page has already been changed to house under one roof the product declaration for electricity supplies that displays the residual mix, i.e. electricity sold without GOs in the previous year, and the climate declaration for physical electricity flows.

3) The government will internationally promote location-based reporting of power use to emphasise the merits of physically delivered power in sustainability reporting

Throughout the years of lobbying the Norwegian government, Norsk Industri’s efforts have been successful to some extent. First, the domestic beneficiaries of the State aid scheme for indirect emission costs can receive financial compensation for part of the costs under the EU ETS provided that 30 % of renewable electricity is sourced from the grid (location-based method), as opposed to employing the market-based method such as in other countries with the same scheme.

Second, when Norway transposed the CSRD, it instructed the companies to use residual mix as a first recourse instead of GOs, when disclosing energy consumption mix, according to the market-based method under the European Sustainability Reporting Standards.

At the same time, the European Commission itself does not have an aligned view on the use of GOs. For instance, EACs cannot be used under the Carbon Border Adjustment Mechanism (CBAM), while in a public consultation for carbon methodology in Battery Regulation, the Commission embraced the location-based approach.

Norway does not have a direct say over the shape of the EU regulations by dint of being an EEA/EFTA country as opposed to EU Member States; hence, it has limited influence in the EU to promote the location-based method.

On the voluntary side, however, the Norwegian lobby and industry could have more room for action. Two major standards are currently undergoing revision: 1) the Greenhouse Gas Protocol (GHG) Scope 2 guidance, where the discussion centres around keeping dual reporting in place, or sticking to one accounting method over the other (e.g. location-based over market-based), and 2) the SBTi’s Corporate Net-Zero standard, where member companies could be required to set targets to reduce location-based Scope 2 emissions, and either a target to reduce market-based Scope 2 emissions or a zero-carbon electricity target.