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The Office of the Auditor General’s investigation into the public authorities' initiative relating to bioenergy in order to reduce greenhouse gas emissions

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Summary

​Background and objectives of the investigation

In 2008, the Storting determined the government goal of increasing the production and use of bioenergy by up to 14 terawatt hours (TWh) by 2020. This is equivalent to approximately 10% of Norwegian electricity production in 2016. This emphasis on bioenergy is part of the work to change energy use from fossil fuels to renewable energy, reduce greenhouse gas emissions and curb global warming. The production and use of bioenergy can also exploit Norway’s significant biomass resources, and thus contribute to economic development in the regions and to increase the supply of energy. This investigation covers the period 2008–2017.

The aim of the investigation has been to assess the authorities’ contribution to the increased production and use of bioenergy in light of the need to reduce greenhouse gas emissions by 2020.

Findings

A small growth in the use of bioenergy has a significantly smaller effect on the climate than the potential resources in Norway allow for

The annual consumption of bioenergy increased by 1.6 TWh between 2008 and 2016, while in 2007 it had been expected to increase by up to 14 TWh.

Only the use of liquid biofuels has increased — within road transport and mainly involving imported fuel.

The biofuels which have replaced fossil fuels are estimated to have reduced Norwegian greenhouse gas emissions by 1%.

In 2014, the potential resources in Norway were calculated to be 21 TWh per year, with forestry the largest source.

Government measures to increase bioenergy have shown poor returns

Measures to promote the production and use of bioenergy are managed by a number ministries and organisations, and no overall assessment has been made of the effectiveness of the measures.

Between 2008 and 2016, investment grants from Enova and Innovation Norway contributed to an increase in the annual consumption of bioenergy in heat production of 3.5 TWh.

Business requirements for biofuels for road transport, combined with levies, increased use from 1.6 TWh in 2015 to 3.9 in 2016.

The authorities do not have coordinated goals and strategies to increase the production of bioenergy

The ministries involved – the Ministry of Petroleum and Energy, the Ministry of Agriculture and Food, the Ministry of Climate and Environment – have not clarified how much emphasis should be placed on the goal of increased bioenergy production, in line with the energy supply and climate targets. Changes in measures and unclear signals may have impeded the increased production of bioenergy.

Continued low power prices, the Electricity Certificates Act and layoffs in the timber industry have reduced options for increasing production and use of bioenergy. The ministries have not assessed and adjusted their efforts in light of developments in the resource base and changing market conditions.

Recommendations

The Office of the Auditor General recommends that the Ministry of Petroleum and Energy, the Ministry of Climate and Environment and the Ministry of Agriculture and Food: 

  • Evaluate the results of the commitment to the use and production, respectively, of bioenergy, and identify the most effective measures
  • Establish a common understanding of the Storting's goals and prerequisites
  • Develop a common and uniform strategy for bioenergy, which should also include taxes and charges
  • Ensure the best possible predictability for businesses and users
Ministry/ministries:

Riksrevisjonen, Storgata 16, P.O. Box 6835 St. Olavs plass, 0130 Oslo, Norway

Phone: +47 22 24 10 00

Org.nr: 974 760 843