Norwegian Ministry Supports Elkem in Free Emission Allowances Dispute with EU
In a significant development for Norway's industrial sector, the Norwegian Ministry of Climate and Environment (KLD) has recently announced its findings in favor of Elkem ASA concerning the allocation of free emission allowances under the EU Emissions Trading System (EU ETS). This ruling, delivered on July 9, 2025, addresses a key concern for Norwegian producers of silicon, ferrosilicon, and manganese who felt disadvantaged compared to their European Union counterparts.
Elkem ASA, primarily focused on silicon-based materials, has been vocal about the inequalities faced by Norwegian producers. Under the EU ETS, a system designed to support industries at risk of carbon leakage, different allocation percentages have created a competitive disparity. For the period from 2021 to 2025, these Norwegian producers were granted free emission allowances equivalent to approximately 72% of their historical emissions, in stark contrast to around 94% for similar EU companies. This substantial gap raises ongoing concerns regarding the ability of Norwegian industries to compete effectively in a market increasingly influenced by climate-related regulations.
The Ministry’s findings deem this treatment as unequal and contrary to the principles of the EU regulations, thereby sending the case to the Norwegian Environment Agency (Miljødirektoratet) for further evaluation. The focus of this re-evaluation is to ensure that the allocation process for emission allowances aligns with EU standards, potentially allowing for adjustments that could benefit affected industries.
"Elkem's complaint emphasizes the discrepancies in emissions allowance allocations that have put Norwegian metal companies at a competitive disadvantage," noted Inge A. Grubben-Strømnes, Senior Vice President at Elkem Silicon Products. He stressed that the Ministry's affirmation underscores the necessity of equitable treatment in emissions allowances, vital for maintaining a fair industrial playing field.
Should the Norwegian Environment Agency’s review lead to modifications, Elkem estimates it could receive approximately 1.3 million additional free emission allowances for the current period. This adjustment would aid in leveling the competitive landscape, enabling Norwegian companies to better navigate the complexities of regulatory pressures associated with climate policies.
Elkem is not just a major player in Norway but also a significant firm on the global stage, providing advanced silicon-based materials necessary for a sustainable future. The company's innovations span various sectors, including electric mobility, health care, and renewable energy technologies. With a history extending back to 1904, Elkem’s commitment to sustainable practices has strengthened its position, securing top scores in Forests and Water Security assessments among other environmental metrics.
With the developments surrounding the EU ETS allocations and the Norwegian Ministry's review, the outcome promises to influence both Elkem and the broader Norwegian industrial arena. If the future steps favor the recommendations set forth by the Ministry, we can expect a renewed vigor in Elkem's operational strategies, enhancing their role in moving towards a low-carbon economy while staying competitive amid EU regulations. These changes are pivotal in discouraging potential carbon leakage and sustaining Norwegian industry in an era where ecological footprint and sustainability are paramount.
Elkem ASA, primarily focused on silicon-based materials, has been vocal about the inequalities faced by Norwegian producers. Under the EU ETS, a system designed to support industries at risk of carbon leakage, different allocation percentages have created a competitive disparity. For the period from 2021 to 2025, these Norwegian producers were granted free emission allowances equivalent to approximately 72% of their historical emissions, in stark contrast to around 94% for similar EU companies. This substantial gap raises ongoing concerns regarding the ability of Norwegian industries to compete effectively in a market increasingly influenced by climate-related regulations.
The Ministry’s findings deem this treatment as unequal and contrary to the principles of the EU regulations, thereby sending the case to the Norwegian Environment Agency (Miljødirektoratet) for further evaluation. The focus of this re-evaluation is to ensure that the allocation process for emission allowances aligns with EU standards, potentially allowing for adjustments that could benefit affected industries.
"Elkem's complaint emphasizes the discrepancies in emissions allowance allocations that have put Norwegian metal companies at a competitive disadvantage," noted Inge A. Grubben-Strømnes, Senior Vice President at Elkem Silicon Products. He stressed that the Ministry's affirmation underscores the necessity of equitable treatment in emissions allowances, vital for maintaining a fair industrial playing field.
Should the Norwegian Environment Agency’s review lead to modifications, Elkem estimates it could receive approximately 1.3 million additional free emission allowances for the current period. This adjustment would aid in leveling the competitive landscape, enabling Norwegian companies to better navigate the complexities of regulatory pressures associated with climate policies.
Elkem is not just a major player in Norway but also a significant firm on the global stage, providing advanced silicon-based materials necessary for a sustainable future. The company's innovations span various sectors, including electric mobility, health care, and renewable energy technologies. With a history extending back to 1904, Elkem’s commitment to sustainable practices has strengthened its position, securing top scores in Forests and Water Security assessments among other environmental metrics.
With the developments surrounding the EU ETS allocations and the Norwegian Ministry's review, the outcome promises to influence both Elkem and the broader Norwegian industrial arena. If the future steps favor the recommendations set forth by the Ministry, we can expect a renewed vigor in Elkem's operational strategies, enhancing their role in moving towards a low-carbon economy while staying competitive amid EU regulations. These changes are pivotal in discouraging potential carbon leakage and sustaining Norwegian industry in an era where ecological footprint and sustainability are paramount.
Topics General Business）
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