Biannual address to the Storting on important EU and EEA matters

Mr President,

One of the fundamental objectives of the EEA Agreement is to ensure that conditions for trade and economic relations in Europe are as equal as possible.

This framework ensures that Norwegian businesses and industries are, with a few well-known exceptions, ensured predictable conditions that are on a par with those for the business sector in other countries in the internal market. It also ensures equal rights and obligations for citizens who move across national borders within the EEA.

Throughout the nearly 14 years that we have been part of the EEA, this cooperation has generally been predictable and had a long-term perspective. However, it is also important to ensure that the EEA is able to meet new challenges and deal with new areas of cooperation as they arise.

In the debate following my last address on important EU and EEA matters, it was agreed that these occasions should be used to deal both with key political issues in Europe and with important decisions taken within the scope of the EEA Agreement. Today, I would like to begin with a topic that relates directly to both policy and legislation in the internal market, i.e. climate change.

Mr President,

It is now generally acknowledged that global greenhouse gas emissions must be reduced. We must cut our own emissions, and we must take part in efforts to cut emissions in other countries. Both of these are important tasks.

The Norwegian Government has set ambitious targets for reducing emissions, and so has the EU. The EU countries intend to reduce their emissions by a minimum of 20% by 2020. If other developed countries commit themselves to doing this, the EU countries will cut their emissions by 30%.

A crucial step in efforts to stop the growth in and then reduce CO2 emissions is to put a price on these emissions. There must be costs associated with releasing CO2. Countries must develop their economic and legislative frameworks to encourage both individuals and businesses to adopt more climate-friendly patterns of production and consumption. Local government, businesses and individuals need to know about the problem and feel a sense of shared responsibility, but must also have financial incentives to reduce their emissions.

At present, there is no global price for greenhouse gas emissions, and no global emissions trading market. Under the Kyoto Protocol, developed countries have been allocated allowances on the basis of their historical emissions. However, the countries that are parties to the Protocol account for only 30% of global emissions.

It is important to draw countries that generate large volumes of emissions, such as the US and Australia, into efforts to reach an agreement for the next commitment period under the Kyoto Protocol. We must also draw the countries where emissions are rising most rapidly, such as Brazil, India, China and other developing countries, into the negotiations.

One of the most important tasks will be to find systems that ensure global burden-sharing, such as mechanisms for financing emission-reduction measures in developing countries. Norway is working actively towards this goal in connection with the UN Climate Change Conference in Bali in December.

Mr President,

The EU Emissions Trading Scheme is at present the system that has the greatest potential for bringing about large emission reductions. This scheme is an important element of international climate cooperation, not only in Europe, but also globally. Actors within the EU emissions trading scheme account for most of the demand for emission credits from developing countries through the Clean Development mechanism and other developed countries through Joint Implementation under the Kyoto Protocol. The scheme will provide a demonstration of how emissions trading can help to cut emissions in practice.

The common rules for the EU’s internal market paved the way for the development of a joint emissions trading scheme for the EU countries. It applies to a geographical area with common rules and where there are institutions that can ensure that these rules are properly followed and can check the results.

To give Norway access to this potentially very effective tool for reducing greenhouse gas emissions, the Government, with the support of the Storting, decided to seek to link Norway and the other EEA EFTA countries to the EU Emissions Trading Scheme. In Proposition No. 66 (2006–07) to the Odelsting, on amendments to the Emissions Trading Act, the Government proposed that Norway should join the EU Emissions Trading Scheme from 2008. With the Storting’s approval, this bill will mean that the Norwegian emissions trading scheme will apply to a good 40% of Norwegian CO2 emissions. A proposition to the Storting on consent to the decision by the EEA Joint Committee to incorporate the Emissions Trading Directive into the EEA Agreement will be submitted shortly.

I would like to use this opportunity to explain in more detail why it is important for Norway to join the EU Emissions Trading Scheme.  

In the period 2008–12, total CO2 emissions in the EU from sectors that are included in the emissions trading scheme are expected to be about 2 billion tonnes a year. Emissions from Norwegian firms that are included in the emissions trading scheme are estimated at 21-23 million tonnes a year, or about 1% of the emissions trading market.

The emissions trading scheme will bring about cost-effective reductions for participating firms. Norway plans to issue a much lower proportion of emission allowances free of charge than the EU. The Government intends Norway’s participation in the EU emissions trading scheme to increase the total quantity of allowances in the system by 15 million tonnes per year. This is four million tonnes less than emissions generated by the relevant Norwegian installations in 2005 and seven million tonnes lower than the projected emissions from such installations in 2010. We will also set a cap on the use of credits from the Clean Development Mechanism (CDM) and Joint Implementation (JI). I would like to point out, Mr President, that this applies to Norwegian firms and not to Norway as a state.

To sum up, joining the EU Emissions Trading Scheme will be an efficient means of reducing emissions.

The EU intends to reduce the proportion of allowances that are allocated free of charge. The Government shares this goal. In our view no allowances should be allocated free of charge after 2012. The business sector must prepare for this. There must be a price to pay for releasing CO2.

The Government also wishes more industrial sectors to be included in the Emissions Trading Scheme. This is also on the EU’s agenda. Specifically, inclusion of aviation from 2010 is being discussed. However, it seems most likely that there will be no major changes in the scope of the scheme until after 2012.

Mr President,

The EEA Agreement is based on a two-pillar system, with separate EU and EFTA bodies. We have been interested in maintaining this system for the Emissions Trading Scheme, so that the EFTA Surveillance Authority (ESA) will be responsible for approving the national allocation plans submitted by the EFTA states.  

In assessing national allocation plans, ESA will generally use the same criteria as the European Commission does in assessing plans submitted by EU countries. It has also been important for us to ensure that Norway’s adoption of the Emissions Trading Directive helps us to meet our Kyoto commitments.

Because the EU cooperation is binding, the EU Emissions Trading Scheme is also considered to be the most effective scheme of its type. We are not the only country to have realised this. Several other countries and regions are engaged in a dialogue with the EU and are interested in linking up to the Emissions Trading Scheme. This is a positive and encouraging development.

On 29 October, Norway took part in the launch of the International Carbon Action Partnership (ICAP) on cap-and-trade systems. This was an EU initiative. Other participants were Canada, New Zealand and several US states, including New York, New Jersey and California.

The aim of the partnership is to improve the efficiency of cap-and-trade schemes and their compatibility with each other, to promote innovation, and to increase demand for products and services that will reduce emissions.

However, emissions trading is not the only climate policy instrument available. Like the EU, Norway is working towards the development of alternative energy sources and seeking to improve energy efficiency. Norwegian researchers are taking part with European colleagues in 57 joint projects on the climate-related issues under the Sixth Framework Programme for Research and Technological Development. Fifteen of these are focusing on carbon capture and storage.

Norway has a great deal of experience to offer in this work. Norway was the first oil-producing country to introduce a CO2 tax on petroleum production in the early 1990s. Today, our petroleum sector has the world’s lowest emissions per unit produced.

Our experience of carbon capture and storage is an asset that we can use in many types of international cooperation. Norway has a historical responsibility for developing technology that can be used in carbon capture and storage.

The technology exists, but has not yet been tested in a full-scale power plant. As you know, the costs are too high for there to be any commercial interest in testing the process. This means that considerable government involvement is necessary, as we are planning for the Mongstad project. The Government intends to support the development of this technology, which the world needs, and which the Intergovernmental Panel on Climate Change (IPCC) views as an important part of the response to climate change.  

Mr President,

It is quite clear that the EU views carbon capture and storage as an important tool in efforts to make substantial cuts in greenhouse gas emissions. At their spring summit in March, EU leaders decided to promote carbon capture and storage as a climate policy instrument in addition to energy efficiency and the use of renewable energy sources.

This decision has been followed up by the member states in their decision that a network of up to 12 large carbon capture and storage demonstration projects is to be established by 2015. This shows that the issue is firmly on the EU agenda.

Nevertheless, neither the environmental legislation nor the state aid rules currently reflect the priority being given to this technology. Norway has made more progress than the EU in planning specific projects in this field. This means that the application of these rules as they are set out in the EEA Agreement and the EC Treaty to carbon capture and storage projects has never previously been evaluated.

The European Commission is considering the legislative framework for support for the development of technology for carbon capture and storage. In order for the carbon capture and storage project to be realised, it is of crucial importance for Norway to gain acceptance for providing the public funding needed. State involvement and government funding will be necessary for the test centre at Mongstad, for the full-scale carbon capture facilities at Mongstad and Kårstø, and for the facilities for CO2 transport and storage. The Government is concerned about the effect the issue of state aid could have on the progress of these projects. Active efforts are being made to deal with this within the time frame of the projects.

State investment in the test centre at Mongstad was notified to ESA this summer. We are also considering notification of a project for a full-scale capture facility at Kårstø and the project for transport and storage of CO2 from Kårstø and Mongstad.

Since there are parallel rules for state aid in the EU and the EEA, and legislative developments in the EU are subsequently reflected in the EEA Agreement, we maintain close contacts with the EU, including meetings at political and senior official level with EU institutions and EU member countries.

Mr President,

In addition to our commitments under the EEA Agreement, we have given high priority to dialogue with EU member states in the development of our own climate policy.

Since the summer, we have strengthened our dialogue with Germany, which is one of Norway’s most important partners in the energy field. Germany’s foreign minister has recently visited Svalbard to learn more about climate change and to discuss High North issues, climate and energy in greater depth.

The dialogue with France on climate issues has also been intensified. When Foreign Minister Kouchner visits Norway in a few weeks’ time, climate change, the environment and energy will be the main issues in our talks, and carbon capture and storage will be one of the topics we focus on particularly closely. The fact that both French and Norwegian companies are to be involved in the development of the Shtokman field may open up a new chapter in relations between Norway and France as regards energy and climate issues, as well as opening the way for closer cooperation with Russia on climate issues.

The Nordic cooperation is also important in climate policy efforts, as last week’s Nordic Council meeting here in Oslo showed. In December 2009, Denmark will host the international climate conference that we hope will adopt a new agreement for the post-Kyoto period. Sweden will hold the EU Presidency at the same time. This will make it possible for the Nordic countries to cooperate closely on achieving the best possible international climate agreement.

Mr President,

The new EU chemicals legislation, REACH, is another important EEA-relevant issue that has important environmental implications. REACH sets up a new, comprehensive system for registration and evaluation of chemicals that are marketed throughout the EEA. The rules will apply to about 30 000 substances, and registration is intended to ensure the provision of information on the effects that chemicals may have on health and the environment.

In the Government’s view, the REACH legislation will improve protection of health and the environment by strengthening the management regime for chemicals in Europe. REACH entered into force in the EU on 1 June this year. Norway has provided input and comments a number of times during its preparation.

It is important to incorporate REACH into the EEA Agreement at an early date, to make it possible to promote Norwegian policy in the new chemicals management regime. This will also be important for Norwegian consumers and in order to ensure that Norwegian industry operates within the same framework as competitors in the EU.

Mr President,

I would also like to stress how important it is that the 2002 EU Food Law and the 2004 rules on hygiene and control are now finally being incorporated into the EEA Agreement. This legislation is important as a means of ensuring that all actors along the whole food production chain take responsibility for food safety and for equitable, effective and clearly targeted public inspection and enforcement regime in the EEA.  

The new legislation will provide consumers with a high level of protection as regards food safety. It will also help to ensure that the internal market functions well for all types of food. The decision of the EEA Joint Committee to incorporate this legislation into the Agreement is subject to the Storting’s consent, and the Government will submit a proposition in January.

Mr President,

The efforts to develop an integrated maritime policy are of particular interest to Norway. We have participated actively in the process and put forward a number of well documented proposals and comments. The integrated management of the coastal zone is essential for the long-term ecological and economic sustainability of these important areas and for settlement patterns.

The Government endorses the aims set out by the EU for this policy: the sustainable use of the oceans and seas; building a knowledge and innovation base for the maritime policy; delivering the highest quality of life in coastal regions; and promoting Europe’s leadership in international maritime affairs. These aims coincide closely with our own maritime policy aims and provide a good basis for further cooperation with the EU and the member states in this field.

In the time ahead we will encourage the EU to intensify its efforts as regards environmentally sound maritime industries. The European marine strategy and the new European directive on maritime policy are expected to be completed in the course of 2008. The directive will constitute the environmental pillar of the EU maritime policy. We will follow these developments closely.

In the Commission’s “Blue Book” on an integrated maritime policy, we have noted a number of interdisciplinary areas that could be of interest for further cooperation between Norway and the EU. This applies, for example, to surveillance activities, where we need to integrate existing systems and cooperate on greater use of satellite-based solutions. It also applies to exchange of experience and best practices in maritime spatial planning and integrated coastal zone management. And it applies to the efforts to develop a European marine observation and data network.

Mr President,

In January this year, the EU was enlarged by an additional two countries when Romania and Bulgaria became members. This marks the completion of an important phase of EU enlargement.

Enlargement to include countries that are at different levels in their economic and social development is one of the most important challenges facing the EU today. This is why economic and social cohesion is one of the EU’s high-priority sectors.

This also affects the EEA countries. And Norway is contributing to economic and social cohesion in the enlarged EU and EEA. There has been great interest in funding through the EEA mechanisms since the 2004 enlargement, and we note that Norwegian actors are building networks and establishing various forms of project cooperation. This is a promising basis for closer bilateral ties with these countries.

In the period up to 30 April 2009, Norway will contribute approximately NOK 1.1 billion to Romania and Bulgaria. About half of these funds will be channelled through the existing EEA financial mechanism for projects related to protection of the environment, human resource development, health and childcare, and conservation of the European cultural heritage, which are all priority sectors. The other half will be channelled through two newly established bilateral cooperation programmes.

The focus of these programmes is on the environment, climate change, energy efficiency and renewable energy, and sustainable production. Projects in these areas are much needed in these two countries, and Norway has experience and expertise to offer. This is a historic opportunity for us to intensify our cooperation and contact. The programmes will be based on partnerships between Norwegian and Romanian or Bulgarian actors. They will be administered by Innovation Norway, and Norwegian actors will be able to apply for funds directly.

Both the EEA mechanism and the bilateral programmes will be launched for a Norwegian audience here in Oslo tomorrow, during the official visit of the Romanian President to Norway. They will be launched in Romania and Bulgaria next week. Thus, the groundwork has been laid for developing close, fruitful cooperation with the two newest EU member states.

I would also like to emphasise that the Government attaches great importance to promoting dialogue between the social partners in Norway and their sister organisations in the new EU member states, for example on labour rights and other working life issues. The Government has proposed a separate grant scheme for this purpose in next year’s budget. I hope the parties concerned will make use of the opportunity this offers.

Mr President,

The EU heads of state and government reached agreement on a new reform treaty in Lisbon on 18 October.

As we all know, this was a demanding process.

It is expected that the reform treaty will be signed in December, after which it will have to be approved by the individual EU member states in accordance with their national procedures. The aim is for the ratification process to be completed well in advance of the elections to the European Parliament in June 2009. If this is achieved, the EU will have a new framework for cooperation.

Will the Lisbon agreement have any significance for Norway, assuming that the reform treaty wins sufficient support in the various member states in the coming months?

Yes, in my view, the new treaty will also be important for us because it will influence the approach we take in pursuing our active European policy.

It is in our general interest that the EU cooperation functions well. This means among other things that our agreements with the EU, the EEA Agreement and our cooperation in a large range of other areas will also function smoothly. We must not forget that the EU is our most important market and is important for Norwegian jobs and welfare. Nor must we forget that the EU member states are our closest allies and partners.

From 2014, new legislation in the EU will generally be adopted by a qualified majority of the Council and following simpler procedures than today. This means that it will be possible to develop new legislation more quickly.

Many claim that this also means that member states will no longer have the right to block a decision, or the right of veto, that they can use today to prevent legislation from being adopted. Formally speaking, this is correct.

At the same time, experience shows that in practice, such situations rarely arise. Decisions are made after a balance has been found between the interests of the countries taking part.

If the reform treaty is adopted, the national parliaments will have a more important role in the development of new EU legislation. This will probably strengthen the role of elected bodies in the legislative process.

The reform treaty could also strengthen the EU’s ability to play a role in foreign policy, since it will merge the two existing roles of the External Relations Commissioner and High Representative for the Common Foreign and Security Policy.

This could enable the EU to exert a greater influence beyond its borders. But at the same time, we must remember that the scope of the common foreign policy will be determined by what the EU member states are able to agree on. Where they speak with one voice, the reform treaty will help to strengthen the EU’s influence.

This also applies to all other policy areas. The headway the EU is able to make is dependent on the combined political strength of the member states. This is a not a fixed quantity, but will vary according to developments within the 27 member states themselves and the ability of the EU as a whole to meet new challenges. Handling the future status of Kosovo will for example be a major challenge for the EU as a whole.

Mr President,

The new EU treaty will also involve challenges for Norway. The current structure, with economic cooperation, foreign policy and justice and home affairs as three separate pillars, will be changed. The decision-making processes in the various areas will be more uniform.

The EU will have more freedom to take a holistic approach to policy areas and measures. For example, it will be able to consider the links between economic affairs, trade, cooperation in the field of justice and home affairs, aid, development and foreign policy when concluding international agreements. 

It is difficult to assess what consequences this will have for EEA cooperation. However, when the pillar structure no longer exists and more areas are under EU competence, it could be more difficult to clearly define what issues are EEA- and/or Schengen-relevant.

The increased use of majority decisions will make it more important to maintain close contact with the EU member states and to build networks and alliances in our practical efforts to follow up the development of EEA- and Schengen-relevant policy and other areas of importance to us.

The Government is of the view that the EEA Agreement is to the mutual benefit of the parties. It ensures predictable access to the EU market. And it ensures the EU member states equal access to the EFTA EEA market. In this community of interests, we must find solutions to any challenges that arise, regardless of whether they are institutional or political.

This also applies to issues related to foreign and security policy. We will continue our close dialogue on these issues with a view to further developing cooperation on common objectives. We already share many objectives, and believe this will continue to be the case.

The Government will carefully study the new EU treaty to assess the effect it will have on our participation in the EEA and the Schengen cooperation. We will also consider translating the new treaty into Norwegian after it has been signed by the heads of state and government in December.

Mr President,

EU cooperation in the broader field of justice and home affairs, including those aspects that are covered by the Schengen cooperation, is developing rapidly. New legislation is being developed and new political initiatives are being taken.

Over the years, we have positioned ourselves in such a way that we cooperate closely with the EU in a number of areas related to justice and home affairs. The purpose of this cooperation is to put our law enforcement authorities, particularly the police, in a better position to prevent and solve crime.

Our agreement with the EU on participation in the Schengen cooperation is the most important and comprehensive agreement we have concluded in the justice policy area. 

Norway has concluded agreements with the EU on participation in both Europol and Eurojust, which are the EU forums for police and justice cooperation. This has put the police in a better position to prevent and solve crime. We are also associated with the EU Convention on Mutual Assistance in Criminal Matters. This means that we now have both the legal authority and the necessary mechanisms to combat international organised crime, which is by its very nature transboundary.

We also participate in Frontex, the EU agency established to coordinate the operational cooperation between member states in the field of border security, which plays an important role in the prevention of cross-border crime.

The EU is currently giving considerable priority to efforts to combat cross-border organised crime. This is important for Norway as well. The battle against drug trafficking, human trafficking and prostitution, and the laundering of proceeds from these illegal activities, must be fought at international level.

The EU recently decided to implement parts of the Prüm Convention, which is intended to increase and speed up the exchange of information between law enforcement authorities across national borders. This applies in particular to information from DNA and fingerprint databases. This will improve the possibility of solving serious crimes.

The Government hopes that Norway will be able to take part in this cooperation.

We are also seeking to conclude agreements with the EU and the individual member states on the transfer of foreign prisoners so that they can serve their sentences in prisons in their own country.

Mr President,

One of the greatest political challenges facing Europe is large-scale migration from Africa, the Middle East and Asia to our part of the world. Management of global migration flows is now an important item of the agendas of the EU member states. The challenge is to strike a proper balance between open borders and control measures. Europe needs labour immigration, but also needs to keep this under control.

With this in mind, we must not focus all our attention on controlling external borders, even though this is important. We must also develop a sound migration policy by forging closer partnerships with countries of origin and transit countries.

European countries must focus attention on the causes of migration, and must recognise that migration flows cannot be prevented or controlled without an active development policy vis-à-vis the countries of origin. There are also other reasons for migration, such as instability and local or regional conflict, and EU foreign policy considerations will thus also become increasingly important.

Tomorrow the EU will hold a public hearing in Brussels on the Green Paper

on asylum policy, which will provide an opportunity to discuss some of the questions of principle. This debate will also have a bearing on the path Norway takes. The Government has submitted its comments on the green paper to the EU and has encouraged several Norwegian organisations to do so as well.

The links between migration policy, development policy and foreign policy in the EU will in time lead to changes in European policy vis-à-vis Africa and the countries to the east of Europe. Norway must follow these developments closely. In my previous address, I mentioned that Norway has been invited to participate in the development of new EU policy in this field. I can confirm that we intend to follow this up.

By taking part from the very beginning of this process, we are seeking to have an influence on the direction and formulation of this policy. As in other areas, we must use the political opportunities arising from our active European policy and our formal forms of association with the EU, and apply sound knowledge of developments in the EU.

In our deliberations on the white paper on an active European policy, we conducted a broad-based review of our working procedures. We are following this up area by area. This is a task for the Government, but we also believe that most other actors in Norwegian society would benefit from a similar process.

We should come back to this in a year’s time and consider the experience we have gained. There is no specific roadmap. We must gain experience and learn from it. We must utilise not only formal channels and systems, but also informal ones. And not least, we must share the lessons learned. It would be useful to bring together key actors, both private and public, to share their experience in 2008.

Mr President,

The Government’s aim is to encourage reflection and debate on developments in our cooperation with the EU, how we should respond to these developments and how they affect us. In next year’s budget, we are increasing allocations to organisations that provide information on European issues. We are also allocating funds to the social partners for network-building in the new member states.

We have further developed the dialogue on European issues with civil society by establishing the National Forum on Europe, which meets once a year. The next meeting is this coming Friday. It will take the form of a roundtable conference in Bergen, to which I have invited 40 participants from the political parties, the research community and NGOs. The topic will be climate change and maritime policy.

This year, the meeting will also for the first time include a youth forum on Europe. This is intended to stimulate greater interest in and debate on European issues among young people.

Mr President,

Today I have talked about some of the key issues in our relations with the EU. I have focused in particular on current issues related to the EEA Agreement and the Schengen cooperation. The progress we have made on these issues shows that we can engage closely with the EU when we have strong arguments and make use of good channels.

But it is also clear that our task is to respond to the initiatives taken by the EU and do what we can to safeguard Norwegian interests and gain acceptance for our views.