Biodiesel tax 'a shame for Norway'

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A Labour Party-led government proposal to levy a new tax on biodiesel fuel has set off howls of protest from both environmentalists and commercial interests. Frederic Hauge of environmental group Bellona said on national TV Monday night that the tax will shame Norway at the upcoming UN climate talks in Copenhagen, and prompt participants to brand Norwegians as a bunch of “petroholics.”

Hauge led a chorus of critics on Norwegian Broadcasting (NRK)’s talk show Redaksjon en . He implored Finance Minister Sigbjørn Johnsen of the Labour Party to drop the proposed tax, and he was joined by Ulf Leirstein from the Progress Party.

It was a rare example of Norway’s most conservative party siding with an environmental activist more usually allied with the Socialist Left. But production of biodiesel, Hauge notes, offers a “unique possibility” to combine lofty goals for the environment and business development.

Biodiesel is an environmentally friendly fuel that can decrease consumption of oil while also making use of waste products and creating hundreds of new jobs, Hauge noted. Forestry firm Norske Skog, for example, has been considering investing more than a billion kroner in biodiesel production.The Labour-led proposal to slap biodiesel with a new tax, though, threatens demand for biodiesel and thus production of it. Lierstein blasted the government’s lack of predictability while a Norske Skog representative confirmed that the tax will force Norske Skog to reconsider its investment in biodiesel production.

Finance Minister Johnsen remained calm under the strong attack, saying there are taxes on all other sorts of fuels to fund road improvements. Users of biodiesel fuel should also pay their share, he reasoned.

Johnsen also stressed that the tax was a proposal from the government, not just Labour, although representatives from both of Labour’s government partners (the Socialist Left and Center Party) oppose the tax. That has led to speculation that the government is split on the issue, but Labour’s dominance has forced the two smaller parties to go along.Labour likes to portray itself as an environmental champion as well, but the biodiesel proposal is another example of its support for the oil industry and the jobs it creates. Labour also has refused to go along with a ban on drilling off Norway’s scenic northern coast, and has proposed opening more sensitive areas of the Arctic to oil exploration.

Lierstein of the Progress Party claimed Labour is mostly interested in the money a biodiesel tax would raise. Others can’t understand why Labour won’t consider the jobs a fledgling biodiesel industry could create.

Truck drivers like Tore Velten of Tore Velten Transport are disappointed in Labour, and feel cheated. Velten told NRK the new tax will cost his trucking company NOK 50,000 extra per truck per year.