In exchange for the Greens Party’s support of the government’s 2026 budget plan, Norway announced on Wednesday that it will establish a committee to look at ways to shift its economy away from oil and gas.
Norway’s enormous oil and gas reserves, which are also the cause of climate change, are largely responsible for its success. Norway is the biggest producer of natural gas and oil in Europe, with the exception of Russia.
The Greens’ demand to establish the panel was accepted by the minority Labour administration after intense negotiations that took place overnight on Tuesday and Wednesday.
The commission will “examine various scenarios and measures aimed at improving the adaptability of the Norwegian economy, particularly how the workforce and natural resources can be used more effectively, as the Norwegian continental shelf enters a new phase marked by a decline in oil and gas production,” the government said.
The Greens wanted Norway to implement a strategy to phase out hydrocarbons by 2040 as part of their party platform prior to the September parliamentary elections.
In the late-night negotiations, the Greens also managed to gain another victory: a delay of the phase-out of a VAT exemption on the purchase of electric vehicles.
The Labour government suggested in its 2026 budget proposal to reduce the value-added tax (VAT) threshold for new electric car purchases from 500,000 kroner ($50,000) to 300,000 kroner beginning next year.
The VAT exemption — VAT is 25 percent in Norway — would have then been removed entirely in 2027.
But according to the agreement clinched early Wednesday, the removal of the VAT exemption will be pushed back until 2028, subject to approval from European authorities.
Norway has the highest rate of electric car adoption in the world, representing nearly 100 percent of all new car registrations.
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