Policy Overview
The Norwegian Petroleum Tax Act provides a world-leading fiscal environment for offshore CCS operations. With a combined marginal tax rate of 78% (22% corporate + 71.8% special tax), Norway applies a ‘Cash-flow system’ where CCS investments since 2022 are 100% deductible in the year they occur against the 71.8% special tax base.
Operationally, the regime offers three massive benefits: 1. CO2 Tax Exemption: Since 2023, emitters can reclaim CO2 taxes paid on fuel once sequestration is verified; 2. VAT Exemption: Cross-border T&S services on the NCS are zero-rated for VAT; 3. Full OPEX Deductibility: All maintenance and monitoring costs are fully deductible before tax. Combined with the direct state funding of the Longship project, these provisions de-risk the full value chain for operators like Northern Lights, enabling Norway to serve as the carbon management backbone for Northern Europe.