Political Adviser Mr. Alfred Bjoerlo, The Norwegian Ministry of Transport and Communications
Nordic Hydrogen Seminar –Reykjavik,
Iceland, 13. November 2003

Norwegian policy for promoting zero and ultra low emission transport

Twenty years ago, the destruction of the ozone layer probably was regarded as the most serious of all environmental problems. Norway was one of the countries that took an initiative to establish international agreements on reduction of the emissions, set strict standards in the national law systems, and to help the developing countries economically to do their part of the job.

To day, the production and use of CFC, the most important ozon layer pollutant, is reduced by more than 85 per cent world wide. And, most interestingly, no one has expierenced decreased living standard or life quality as a result of this dramatic change. New technology has replaced the old one – and the environment has become cleaner.

This, I think, is an extremely important lesson to learn. As far as I know, not a single person or company anywhere has a burning desire to pollute or to destroy the environment. When we take our car for a ride, it is not because we want to contribute to global warming or health problems – it is because we want to get to work or visit friends. There is no market demand for a polluted environment.

Therefore, to create a sustainable society is about making the environmentally friendly solutions the most attractive ones – economically and/ or in other ways. This is far more efficient than trying to prohibit or force people and companies to choose which solutions they don't really want. A modern environmental policy is first and foremost to find new and environmental friendly solutions on how to live, eat, and travel in a way that is sustainable in the long run.

As politicians, we have many of the means to make this happen. We can support new technology directly by grants, we can use the tax system to promote the environmental friendly solutions, and we can set strict enviromental standards for all goods and services.

All these means must be used - at a local level, a national level, as well as the international level. The transport sector is one of the main sectors of interest. We all know that continually increasing transport contributes to global, regional and local environmental problems. Emissions of different substances from combustion engines run on fossil fuels, are the major environmental challenge facing transport policy makers, car manufacturers and energy(oil)companies around the world.

However, statistics clearly demonstrate that there is a close link between economic growth and rising transport volumes. Improved transport systems are considered to be a necessary prerequisite for increased economic welfare. To stop moving – or stop transporting goods – is not an alternative.

Despite considerable transport growth in the EEA-area, especially in road traffic, some emissions, such as sulfur dioxide (SO2), nitrogen oxides (NOx) and particulates (PM10), have been reduced over the last decade.

The reason for this positive development is a series of international directives setting gradually stricter environmental standards for road vehicles and fuels. If this will continue as the internationally agreed policy, it seems that improved technology in the medium long term can be able to reduce transport emissions with regional and local effects to a minimum.

But when it comes to greenhouse gas emissions there is no such “technological fix”. The last twenty years, the Norwegian CO2-emissions from transport have risen by 23 %, mainly due to growth in road traffic. In an overall national policy for reaching the goals set in the Kyoto agreement for reducing greenhouse gases, the transport sector has to be a part of it. I guess this development is familiar to most other industrial countries, not to mention the long term potential for increased contribution to global warming from developing countries.

That leaves us with an unsolved problem of reducing CO2-emissions, from transport and stationary use of energy. A contribution to solve the problem in the transport sector, is to increase the market share of public transport, compared to the use of private cars. In Norway, this is now the strategy of the government in the larger city areas, including various local traffic-regulating measures in order to regulate the use of private cars.

However, although this can have a considerable influence on local pollution problem in the city areas, it will not nearly be enough to reach our goals when it comes to reducing CO2-emissions. To manage the climate challenge, we will have to develop alternatives to combustion engines based on fossil fuels. Therefore, hydrogen is now definitely on the political agenda in Norway.

The Norwegian Ministry of Transport and Communications has for more than ten years supported projects aiming at developing more environmentally friendly means of transport and cleaner fuels. In the 1990’s the main focus was to promote natural gas and electric vehicles. The current government has been in government for two years has changed and narrowed this scope with top priority to zero-emission (and ultra low emissions) technologies. In practice, this is to a large extent means projects on hydrogen and fuel cells. In next years budget, the ministry propose to almost double the grants to promote zero-emission technologies in the transport sector, compared with 2003.

In addition to this funding arrangement the government has promoted electric vehicles through a lot of exemptions from taxes and charges. Natural gas is also exempted from taxes on fossil fuels. This is a relatively strong instrument in a country with high taxes on cars and fuels compared to most other countries, and this also gives Norway an advantage when it comes to introduction of hydrogen vehicles to a competitive price to the mass market some years ahead.

As a test in a couple of city-areas, electric cars recently also have been allowed to drive in dedicated bus lanes. Interestingly, the latter instrument instantly created a significant increase in demand for electric cars in the Oslo-region.

The authorities in the USA, Japan and the EU have in close co-operation with the car and oil industries during recent years launched ambitious programmes to promote alternative transport technologies with emphasis on hydrogen and fuel cells. This long term international development projects of fuel cell vehicles, ships and planes fuelled by hydrogen is necessary and interesting. First of all as a precondition for long term sustainable transport, but also as a future possible business opportunity for countries and companies taking active part in it.

However, I believe that there may also be a role to play for small countries like Norway possessing essential knowledge related to a hydrogen based energy system and being willing to put a significant amount of financial resources into R&D etc. About 90 per cent of the world’s hydrogen production is based on natural gas. Norway is a major exporter of oil and gas. Norway will also probably be among the first countries to produce natural gas with sequestration of CO2. If hydrogen is produced in such a system, the fuel system becomes 100 per cent “zero-emission”.

In addition, we have industry and research institutions with long experience and high competence on hydrogen and fuel cells. Norwegian companies and researchers are already taking an active part in international projects, mainly within the EU 6th Framework Programme for R&D. In important niche areaes such as hydrogen storage and materials technology we have high-quality expertise. The new hydrogen filling station here in Reykjavik, produced by Norsk Hydro in Norway, is a good example.

Compared to the mentioned initiatives from the US, Japan and the EU, (not to mention Iceland) Norway so far is somewhat behind these super-powers in formulating a national strategy and action plan for the way towards a “hydrogen economy”.

But this is now about to change. The Norwegian Minister of Oil and Energy in close co-operation with my Minister, Mrs Torild Skogsholm, in June this year appointed a commission on hydrogen and fuel cells, both for stationary energy use and transport.

According to the terms of reference the commission are going to define targets and suggest instruments to promote the use of hydrogen for energy purposes, as a contributor to solve environmental problems and as a source for future economic growth. The commission is asked to present a proposal for a national hydrogen programme and how this could be organised and financed. The report from this report will be submitted to the ministers of energy and transport in June next year.

In addition, we have appointed two so-called expert groups, one on transport and the other one on stationary use of energy, to produce input to the hydrogen commission. The expert group on transport is chaired by a representative for Hydro Energy and have members from SINTEF, Det norske Veritas, Norwegian Institute of Transport Economics and an importer of cars and trucks.

The mission of this group is firstly to investigate the status and potential development of different fuels and technologies for road transport vehicles and ships regarding energy efficiency, environmental performance, user requirements, costs and market penetration. As part of this task they should give an overview of ongoing national and international R&D, including a description of the strategies of the major car and ship manufacturers. On this basis the group should also identify barriers for introduction of hydrogen driven fuel cell vehicles and make suggestions on how Norwegian authorities may contribute to overcome them.

To me it seems obvious that systems for zero emission transport, which in the long term probably means hydrogen and fuel cell systems, must be developed in co-operation between national and international authorities, research institutions and industries within the EEA-region and globally. No single country has the necessary competence or the financial resources to meet this challenge alone. This conference is an excellent way of sharing knowledge, exchange ideas and find inspiration to go further.

At the same time competition between countries and companies may contribute to innovation in this field. From the Norwegian government's point of view, Norway can and should be one of those players, in making the hydrogen society a reality.

Thank you for your attention.