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Overview
The Regulation requires a gradual reduction in GHG emissions from offshore vessels used in petroleum activities in Norway. The Regulation is set to commence 1 January 2029 and be phased in until 2040.
The Regulation stipulates a requirement for operators on the Norwegian continental shelf to reduce the GHG intensity of offshore vessels used in petroleum activities. The GHG intensity is to be reduced by a set percentage over three-year periods:
- From 2029 to 2031: 10% reduction in GHG intensity
- From 2032 to 2034: 15% reduction in GHG intensity
- From 2035 to 2037: 20% reduction in GHG intensity
- From 2038 to 2040: 40% reduction in GHG intensity
GHG intensity refers to the emissions of GHG per unit of energy consumed, measured in grams of CO₂ equivalents per megajoule (MJ). The limit for maximum allowable GHG intensity is set as a reduction from the reference value of 91.16 grams of CO₂ equivalents per MJ. The reference value aligns with the FuelEU Maritime regulation.
The Regulation contains a provision which could permit the NEA to grant an exemption from the Regulation in "exceptional circumstances", but does not provide further guidance as to which types of circumstance this includes.
Verification period and responsible party
It is the "operators" who are responsible for fulfilling the requirement. The operator is defined as the person who, on behalf of the license-holder, is in charge of the day‑to‑day management of the operations. Petroleum activities are defined as all activities related to subsea petroleum deposits, including survey/exploration, exploratory drilling, extraction/production, transport, utilisation and decommissioning, as well as planning of such activities; however, not the transport of petroleum in bulk by ship.
The operator must fulfil the prescribed requirement for the specific three year period for all vessels that are used for petroleum activities for the operator. The requirement applies for the combined energy use of all vessels performing the following activities on behalf of the operator in connection with petroleum activities:
- Transport of supplies, materials, personnel and equipment.
- Installation, operation and decommissioning activities, including anchor handling, towing and pipeline- and cable-laying.
- Tasks related to emergency preparedness around installations.
However, vessels performing activities for less than a combined period of 30 days during a compliance period are excluded from the requirement.
This means that the requirement to reduce the GHG intensity is not linked to the specific vessel but rather to the operators who must ensure that the combined emissions from all the vessels in their service for more than 30 days during a compliance period are in compliance. This entails that there is no requirement that the vessels are owned or chartered by the operator.
In order to allow for flexibility the operators may buy or sell compliance surpluses between each other in order to fulfil the requirement. Furthermore, if an operator has a compliance surplus in a compliance period, the compliance surplus may be rolled over to the next compliance period.
Permitted fuels
In order to meet the requirements, offshore vessels will need to gradually increase the use of fuel with lower GHG emissions than fossil fuels. Certain types of fuel (referred to as "energy carriers") will be considered to have the same emission factor as the least favourable production process for equivalent fossil fuel, despite actually having a lower emission factor:
- Renewable fuels of non-biological origin (RFNBO);
- Low-carbon hydrogen based fuel;
- Fuel based on low carbon gas, and
if these energy carriers do not comply with the emission reduction criteria in Article 29a of the Renewable Energy Directive (EU) 2018/2001, and
- Biogas not made from raw materials listed in Annex IX of the Renewable Energy Directive (EU) 2018/2001 and which does not comply with the emission reduction criteria in Article 29 of the Renewable Energy Directive (EU) 2018/2001
- Biofuel
- Fuel based on recycled carbon
In order to incentivise technological advancement, a multiplier of 2 shall be used for use of electricity, RFNBOs, low-carbon hydrogen, and fuel based on low-carbon hydrogen in the period between 1 January 2029 to 31 December 2033.
Reporting, verification and supervision
Operators must submit an annual report to the NEA by 31 March each year with an overview of total consumption of each energy carrier for ships covered by the GHG‑intensity requirement. After each three‑year period, operators must also submit a period report to the NEA by 31 March the following year documenting that the GHG‑intensity requirement has been met. The three-year period report must be verified by an external, accredited verifier. A form published by the NEA shall be used for the reporting.
Non-compliance and sanctions
The NEA is entitled to unhindered access to installations and vessels used in connection with the petroleum activities, as well as access to documentation and related materials, in order to supervise compliance with the Regulation.
If an operator fails to meet the GHG‑intensity requirement at the end of a three‑year compliance period, the NEA may require that the operator make up the shortfall in the following compliance period.
The NEA may also issue an administrative penalty for breach of the Regulation in accordance with the Pollution Regulation Chapter 41A. This entails that the NEA can issue an administrative penalty capped at 15 times the National base amount (G), which as of 1 May 2026 amounts to approximately NOK 2.05 million.
When deciding the amount of the penalty, the NEA must take into account, inter alia, the gravity of the infringement, whether the responsible party has previously committed similar violations, and the factors set out in section 46(2) of the Public Administration Act, which include whether the undertaking gained or could have gained any advantage from the breach, and the undertaking's financial capacity.
Who does it impact?
The Regulation impacts operators on the Norwegian continental shelf as well as shipping companies operating offshore vessels that are providing services to such operators, as these will be contractually obligated to assist in compliance.
Status: In force
The Regulation came into force on 12 May 2026. The first compliance period will commence 1 January 2029.
Relation to other initiatives and regulations
The Regulation has significant similarities to FuelEU Maritime and the IMO Net-Zero proposal. However, the Regulation is national Norwegian and applies in parallel to any EU or UN legislation.
Participants
Norway
Thommessen's comments
The new Norwegian Regulation might entail a double or triple burden on offshore vessels in Norwegian waters depending on how the relevant EU and international regulations evolve.
The Regulation bears similarities with the FuelEU Maritime Regulation (the "FuelEU Maritime" (although the FuelEU Maritime does not currently include offshore vessels, this may change in the years to come).
In addition, if the IMO's Net-Zero Framework (the "Net-Zero Framework") is adopted in its current form, it may cover offshore vessels with a gross tonnage of above 5,000, with a possibility of later being extended to vessels with a gross tonnage of above 400. The outcome of the negotiations regarding the Net-Zero Framework remain uncertain.
However, there are some notable differences between the Regulation and the FuelEU Maritime and Net-Zero Framework. One key feature of the Regulation is that it applies to the total emissions from all vessels performing services for the operator, rather than to the ISM Company or registered owner on a per vessel basis. There is no requirement of ownership or a charterparty, which entails that it may be difficult to determine whether a vessel is performing services for an operator in certain circumstances. As it is the operator who will be responsible for compliance, the operator will need to include contractual specifications in the contracts for the offshore vessels performing services for them in order to ensure compliance.
Some stakeholders in the industry have criticised the Regulation for adding an additional regulatory burden on operators on the Norwegian continental shelf, for conflicting with EU legislation, for being unclear in scope and legal basis and for being a competitive disadvantage for the Norwegian offshore operators.