Mineral oil tax – affect on the fleet?

The fishing fleet is today in practice exempt from the mineral oil tax, as the CO2 and basic tax is reimbursed. In order to reduce fuel consumption and greenhouse gas emissions, the Government is considering removing the reimbursement scheme.

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Portrettbilde av Øystein Hermansen
Øystein Hermansen

Phone: +47 918 09 421

Contact person
Portrettbilde av John Roald Isaksen
John Roald Isaksen

Phone: +47 992 59 717

In a report completed for the Ministry of Fisheries and Coastal Affairs, Nofima Marked studies what affect withdrawal of the scheme will have on the Norwegian fishing fleet, industry and emissions, and who will be hit hardest.
The majority of us pay taxes when we buy and use fuel.

The fishing fleet is currently one of several sectors exempted from such taxes. Our coastal neighbours either have similar reimbursement schemes for the fishing fleet or the fishing fleet’s fuel consumption is not subject to tax.

The fishing fleet – a major polluter

The Norwegian fishing fleet is a major contributor to our emission of CO2 and other greenhouse gases. The environmental accounts for the production of seafood show that the fleet’s energy consumption in general is the largest source of greenhouse gas emissions. In an environmental context, it is therefore important to have knowledge about the fleet’s energy consumption, and how this can be reduced to limit the pollution.

Within the fishing fleet, we find large variations in fuel consumption, what price they pay for the fuel and consequently the costs they accrue while searching for fish, fishing and then transportation of the fish. The fishing vessels have limited opportunity to replace their mineral oil consumption with other alternatives. As such, a reduction in the emissions is dependent on the fleet cutting certain fisheries or that more of the quota is fished by the more energy-efficient vessels.

Many can be hit

As a consequence, it is difficult to envisage how the emissions will be effected by withdrawing the tax reimbursements. Many of the largest polluters can avoid the tax by refuelling abroad. Such a change can actually lead to increased emissions, and the tax will have the opposite affect than intended. The smallest and often most energy-efficient vessels cannot seize this opportunity.

Another consequence is that the competitive situation of the processing industry could also worsen. Landings of fish could go abroad, giving reduced availability of raw materials to the Norwegian industry. But if the fleet succeeds in passing on parts of the cost increase to the next link in the supply chain, there could be major consequences for the industry’s international competitive ability.

These are among the many effects examined in the report "Reimbursement of CO2 and basic tax in the fishing fleet. How much affect will this have – and for whom?" (This report is available in Norwegian language only.)

The project was commissioned by the Ministry of Fisheries and Coastal Affairs.

Industrial Economics  

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