Norway: tax exemption for waste incineration under the ETS deemed compliant (EU)

Norway's introduction of an exemption from excise duty on waste incineration in companies covered by the Emissions Trading Scheme (ETS) has been found to be in compliance by the European Free Trade Association (EFTA) Surveillance Authority, in a decree published in the Official Journal of the EU on 26/03/2026.

The purpose of the Authority's investigation was to determine whether or not the tax exemption constituted State aid, which would have been incompatible with the provisions of the Agreement on the European Economic Area, of which Norway is a member.

The exemption was notified by the Norwegian authorities on 29/02/2024. The aim is "to reduce CO2 emissions by internalising the costs of CO2 emissions from waste incineration", at a level "at least equivalent to the excise duty".

Indeed, "emissions covered by the Emissions Trading Act do not currently benefit from a total exemption from excise duty on waste incineration, but are subject to a reduced rate", explains the text.

"The aim of the measure is to avoid activities linked to CO2 emissions being subject to two sets of legislative…