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Western Europe’s biggest oil and gas producer, Norway, will start to analyze ways to cut its dependence on oil and gas, because fossil fuels are bound to lose value over time with the energy transition, Norway’s Minister of Climate and Environment, Vidar Helgesen, told Reuters on Thursday.
The government will task a commission of experts to study ways to make Norway’s economy greener and spare it from financial risks connected to climate change policies. The commission will likely report on its findings in around one year’s time, Helgesen said.
“Given the energy and transport revolutions, fossil energy resources will be of less value over time,” the minister told Reuters.
“The energy transition to renewables is going faster than anyone thought. And almost any scenario is being out-competed by reality,” he noted.
Last year, the Norwegian government approved the goal of achieving climate neutrality by 2030, but its current status of implementing policies is rated as “insufficient” by Climate Action Tracker.
The oil and gas industry is central to the Norwegian economy, accounting for 12 percent of GDP in 2016, and for 13 percent of state revenues.
According to Helgesen, Norway is “fairly well” positioned to mitigate financial risks from the energy transition due to its giant sovereign wealth fund, which hit a value of US$1 trillion for the first time last month.
Norway may be the biggest oil and gas producer in Western Europe, but it is also a leader in electric vehicles (EVs) adoption, market penetration, and sales, thanks to green incentives.
“Six out of seven most popular car brands are now EVs,” Helgesen tweeted in July. According to an article the minister shared, 28 percent of car sales in Norway are EVs, and the share rises to 42 percent if hybrids are included.
Last month, 29 percent of the new car sales in the country were EVs, with Tesla deliveries soaring.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.