Oslo’s Climate Budget 2022
2 Emission limits towards 2030 and opportunities for target attainment
The City of Oslo has set very ambitious climate targets. The Climate Budget is a management tool regarding the way in which the municipality will achieve its climate targets.
In order to steer emissions over the term of the economic plan towards attainment of the climate target in 2030, annual emission limits are established through the Climate Budget. These emission limits are an aid in budgeting for a steady downward trend in emissions through to the targets in 2023 and 2030, and are used as a basis for prioritising and implementing measures in the Climate Budget. Developments in emissions are likely to be different in reality, which means that the emission limits between 2020 and 2030 can be adjusted in the annual climate budgets as new information becomes available.
The 2022 Climate Budget applies to the period covered by the economic plan of 2022 to 2025. The budget is aimed at achieving a reduction in emissions of 43 % in 2022 and 60 % in 2025, compared with 2009 levels (see Table 3 below). In the 2022 Climate Budget, the emission limit has been adjusted relative to previous climate budgets. The climate budgets of previous years assumed that the adopted target of a 41 % reduction in emissions in 2020 would be achieved. The City Government’s annual report for 2020 warned that the 2020 target was unlikely to be met, and that the emission limit would therefore not pass through this target. In the 2022 Climate Budget, the emission limit will start from the most recent emissions inventory in 2019, with a straight line down to the target of a 52 % reduction in emissions in 2023. The updated emission limit represents a more realistic emission limit to strive for.
Figure 3 of Proposition 1/2022, Chapter 2 presents an analysis of the climate impact of adopted measures where emission impacts are highly uncertain, and new measures under consideration. This analysis indicates that there is potential for further cuts in emissions over and above those brought about by the measures for which the impact is calculated in Table 2.2a of Proposition 1/2022. The analysis was carried out to estimate how close to the 2030 climate target the City of Oslo will come using measures which we are aware of today. The calculations are subject to considerable uncertainty, yet they show the possible development in emissions if these measures are implemented with full target attainment. If all the measures and instruments are implemented with the assumptions that have been applied, it may be possible to achieve an emission reduction of 72 % by 2030.
Table 2: Background figures for Figure 3 in Proposition 1/2022, Chapter 2, with emissions trajectory, emission limit and analysis of the potential for further target attainment
|Measures where emission impacts are uncertain
|New measures under consideration
The table above shows the potential for reductions in emissions compared with 2009 levels from the analysis, as well as the annual targets and emissions trajectory (impact of the measures in Table 2.2a of the Climate Budget included in the projection) contained in Figure 3 of Proposition 1/2022, Chapter 2. Measures where emission impacts are uncertain estimates the climate impact of measures and instruments from Table 2.2b in Proposition 1/2022, including carbon capture and storage at Fortum Oslo Varme AS’ facility at Klemetsrud, which is presented in Table 2.3. These measures have been adopted politically at either central government or municipal level, but are not included in the quantified measures in Table 2.2a of Proposition 1/2022 due to uncertainty associated with the figures, orientation and implementation:
- Carbon capture and storage (CCS) at Klemetsrud from 2026 (from Table 2.3)
- Ban on the use of mineral oil for temporary heating from 2022 (measure 27 in Table 2.2b)
- Requirements regarding fossil-free construction sites in all new zoning plans (measure 24 in Table 2.2b)
- Zero-emission zone within the Car-free city living area from 2023 (measure 20 in Table 2.2b)
- Measures from Table 2.2b with relatively low estimated emission reductions: Increased investment in public transport, climate-friendly travel to/from work, zero-emission motorised equipment, zero-emission/sustainable biofuel for non-Ruter buses and in transport of the municipality’s procurement
The calculations for New measures under consideration includes an estimate for the climate impact of measures which are being assessed, where the direction has not been clarified and where no firm decision concerning implementation has yet been made.
- Zero-emission zone within Ring 2 from 2026
- Carbon tax corresponding to NOK 2,000 in 2030 (without compensation in the form of relief from road use tax, etc.)
- Gradual escalation of prices in the road toll ring for fossil fuel cars (+NOK 100 for fossil cars per passage compared with zero-emission vehicles in 2030)
- Escalation of the sales requirement for biofuel to 40 % in road transport in 2030
- Elimination of emissions from the incineration of household waste
To prevent overlapping, and therefore the overestimation of the impacts of measures, consideration has been given to how the measures collectively impact on activity, technological choices and fuel amongst the various emission sectors. Nevertheless, there is considerable uncertainty linked to possible overlapping between the measures. There is also uncertainty associated with overlapping between the measures in this analysis and the measures quantified in Table 2.2a in Proposition 1/2022.
A more detailed description is presented below of how these measures and instruments have been calculated.
2.2.1 Potential for emission cuts from adopted measures with uncertain calculations
Carbon capture and storage at Klemetsrud from 2026
The calculation is based on CO2 emissions from Klemetsrud originating from the incineration of household waste outside Oslo, industrial waste and imported waste. This is related to population development and waste volumes in the projection. Carbon capture and storage at Klemetsrud may not be fully operational until 2026 at the earliest. The potential for emission reductions is estimated to be just under 200,000 tonnes CO2e annually. The calculation only includes the fossil fraction in the waste (fossil CO2).
Requirements regarding fossil-free construction sites in all new zoning plans and a ban on the use of mineral oil for temporary heating from 2022
The calculation includes an estimate of the type of impact that the requirement for fossil-free construction sites in new zoning plans could have. This is based on estimates of the number of square metres of buildings (housing and industry) which will be covered by the requirements in zoning plans through to 2030. The Agency for Planning and Building Services has estimated a gradual increase of up to 86 % in 2030, based on empirical figures. As there is no underlying data for a zero alternative, expected emissions from the entire emissions sector «other mobile combustion» are used in the calculation. A discretionary downward adjustment of the projections of 30 % in each year has also been implemented. This is partly based on the assumption that 20 % of the construction activity is municipal (which is already fossil-free), and that there is a given share in other mobile combustion that is used for other purposes. In isolation, this measure could cut emissions by up to 155,000 tonnes CO2e in 2030.
A ban on the use of mineral oil for temporary heating is also included in the calculation. This is based on the Norwegian Environment Agency’s study concerning the potential impact of a ban on the use of mineral oil for heating buildings through to 2030 (Norwegian Environment Agency, 2021c). The Norwegian Environment Agency estimates that the measure could result in an annual national reduction of just under 85,000 tonnes CO2e. For Oslo, the impact of the measure was calculated by using the Norwegian Environment Agency’s estimate, scaled down for the population projections for Oslo from 2022 to 2030, which are included in the projections. The scaling down from the national estimate leads to considerable uncertainty in the calculation, partly because demand for heating will differ between the regions. However, it is the best underlying data that is available. In 2022, it is estimated that the ban could have an impact of up to 11,000 tonnes CO2e.
Overlap assessments of the two measures have been carried out, where the ban on the use of mineral oil for temporary heating was scaled down over the period, as it will be covered by the requirements concerning fossil-free construction sites. This means that the impact on emissions of a ban on the use of mineral oil for temporary heating is set to zero in 2030. The uncertainties in the data mean that the Agency for Climate has no basis on which to assess whether the impacts of the two measures are conservative or optimistic, and the impact calculations should only be seen as illustrations of possible climate impacts.
Zero-emission zone within the Car-free city living area from 2023 – 2030
The calculation is based on a report from Norconsult (2021) concerning the isolated emission-reducing impact of introducing a zero-emission zone within the “Car-free city living” area (Kvadraturen and adjacent areas in central Oslo) from 2023, with expansion to within Ring 2 from 2026 to 2030. The report assumes that the zero-emission zone will result in a reduction in the use of fossil fuel-powered cars, vans and heavy vehicles. The impact of introducing a zero-emission zone within the Car-free city living area is estimated to be 8,000 tonnes CO2e in 2023. This is only the impact within the boundaries of the City of Oslo itself. If the potential impact of such a zone for road transport generally (including that outside the boundaries of the City of Oslo) is also considered, it could have an impact of up to 27,000 tonnes CO2e.
The calculations performed by Norconsult (2021) indicate the impact of introducing a zero-emission zone within the Car-free city living area from 2023, with expansion to within Ring 2 from 2026 to 2030. Thus, they have not provided any figures for a zero-emission zone within the Car-free city living area from 2026 to 2030. The Agency for Climate has therefore projected a linear decrease in the number of fossil kilometres travelled corresponding to the decline calculated by Norconsult for the period 2023-2025.
Measures from Table 2.2b with relatively low estimated emission reductions
The analysis also includes the possible impact of measures from Table 2.2b in Proposition 1/2022, Chapter 2, where the basis for the figures has made it possible to estimate the impacts of measures. The measures for which a possible impact has been estimated are: measure 17 Increased investment in public transport, measure 18 Zero emissions/sustainable biofuels in transport in connection with the purchase of goods and services, measure 21 Climate-friendly travel to/from work, measure 23 Zero emissions/sustainable biofuels in non-Ruter buses, and measure 26 Zero-emission motorised equipment.
The calculations were partly based on how the measures impact on the level of activity in road transport and the phasing in of electricity, compared with the projection.
2.2.2 Potential for emission cuts resulting from declarations of intent and assessed measures with uncertain calculations
In the analysis of the measures which impact on road transport, corrections have been made for overlaps in order to avoid the double-counting of impacts. The overlap assessments represent a considerable uncertainty in the analysis.
Zero-emission zone within Ring 2 from 2026
The calculations were taken from a report by Norconsult (2021) on the emission impacts of zero-emission zones in Oslo. They calculated that a zero-emission zone within Ring 2 from 2026 could have an emission-reducing impact within the City of Oslo’s boundaries of 31,000 tonnes CO2e. Such a zone would also have an impact outside the boundaries of the City of Oslo, as the vehicles which are converted will also be used outside the boundaries of the municipality. Norconsult has calculated the overall impact of a zero-emission zone within Ring 2 from 2026 to be a reduction in emissions of up to 73,000 tonnes CO2e. The figures refer to the isolated impact of a zero-emission zone, and have not been assessed with respect to other instruments such as the road toll ring or similar.
In the calculation, the Agency for Climate subtracted the impact that was added from 2026-2030 for the zero-emission zone only within the Car-free city living area (see above).
Carbon tax equivalent to NOK 2,000 in 2030
The calculation assumes that a carbon tax corresponding to NOK 2,000 in 2030 will affect the number of vehicle-kilometres travelled by cars, vans, heavy vehicles and buses. The calculation does not include the effect of carbon tax for non-road vehicles, industry, etc. An increase in the carbon tax of NOK 2,000 per tonne corresponds to NOK 3/litre (including deduction from the blending of biofuel). It is estimated that this will result in a reduction in the number of vehicle-kilometres from fossil fuel cars of around 3 % in 2030. It is also estimated that an increase in carbon tax in 2030 would result in a transfer of goods to sea and rail of 2.5 %, along with a reduction in the number of vehicle-kilometres of 20 % as a result of the optimisation of logistics. The assumptions are the same as those used in national calculations of the impact on an increase in the carbon tax. The calculations assume that road use tax will not be adjusted to compensate for the increase in carbon tax. In total for all road transport, an isolated reduction of around 51,000 tonnes CO2e can be achieved in 2030 with a carbon tax of NOK 2,000, with the largest reduction stemming from heavy vehicles. A tax increase will have the greatest impact for those who travel the longest distances and could therefore act as a stimulus for those who travel extensively, e.g. taxi drivers, to change their vehicle sooner than they would otherwise have done. In order to avoid any overlap between the impact of the zero-emission zone and the carbon tax, an assumption has been made regarding the overall impact on the number of vehicle-kilometres arising from the two measures.
Gradual escalation of prices in the road toll ring for fossil fuel cars
The calculation is based on a study by Norconsult (2020) concerning how escalation of the road toll payment system, with a gradual price rise towards +NOK 100 per passage for fossil fuel cars in 2030, would affect the phasing in of electric vehicles and the number of vehicle-kilometres travelled by cars and vans. It was only possible to obtain figures for cars and vans. This means that no impact has been assumed for heavy vehicles and buses for this measure. The impact of the measure is therefore underestimated. To include the impact relating to heavy vehicles and buses, a more thorough study will be necessary.
Norconsult (2020) shows that the measure will increase the proportion of electric vehicles in 2030 amongst cars from 64 % to 85 %. In the case of electric vans, it is assumed that the measure will result in an increase from 40 % to 58 % in 2030. In isolation, it is estimated that this measure could contribute to a reduction in emissions from road transport of just under 100,000 tonnes CO2e in 2030.
Escalation of the sales requirement for biofuel to 40 % in road transport in 2030
The projection of Oslo’s emissions through to 2030, discussed in section 2.1, includes a share of biofuel in road transport of 16 % over the period from 2022 to 2030. This is the expected actual volume percentage without the double-counting of advanced biofuels. The central government sales requirement in 2021 is 24.5 %, with a secondary requirement of 9 % for advanced biofuels. In Climate Cure 2030, a measure was considered where the blending requirement in 2030 was increased to 40 % for road transport. The analysis includes the potential impact of increasing the sales requirement for biofuel to 40 %. Advanced biofuels are counted twice, which means that only 50 % of the volume is needed if advanced biofuel is chosen over other biofuels. Based on this, a development in the sales requirement through to 2030 which follows Climate Cure has been assumed. However, for the years from 2021 to 2025, Oslo’s projection for biofuels lies above Climate Cure, which means that the measure will not have an additional climate impact during these years. At the same time, the industry has pointed out that it will continue to use some conventional biofuels. An assumption has therefore been made that some conventional biofuels will continue to be used until 2024. The calculation also assumes that only advanced biofuel will be sold from 2025. This is based on the fact that advanced biofuel will be cheaper than conventional biofuel after the road use tax is introduced on 1 July 2020 (due to double-counting).
The impact of the measure has been calculated based on the difference between the sales requirement and the bio-share assumed in the projection. A 40 % blending requirement in 2030 would give an actual volume of 20 % after the double-counting of advanced biofuel has been avoided. An additional impact from the use of 4 % additional biofuel has therefore been calculated in 2030, which corresponds to around 6,500 tonnes CO2e in 2030 following an overlap correction with respect to the other measures presented here.
The analysis also looked at the impact of eliminating all emissions from the incineration of household waste, with escalation from 2023 through to the full impact from 2026. This is based on the projection for Oslo’s emissions from household waste incinerated at Haraldrud. In 2030, this corresponds to just under 70,000 tonnes CO2e.