Carbon units are an instrument for the land-based industry and offshore installation sectors. From 2013 around 90 per cent of the greenhouse gas emissions from Norwegian industry will be subject to allowance regulations. It is primarily carbon dioxide (CO2) emissions that are regulated through carbon units, as well as nitrous oxide (N2O) emissions from the production of nitric acid. Allowance-regulated enterprises must submit annual allowances for their emissions.
Carbon units are a means of reducing greenhouse gas emissions. The basic idea of the system is that the authorities determine the aggregate amount that the allowance-regulated enterprises are allowed to emit. A number of carbon units corresponding to this aggregate amount are then made available. Some of these units are allocated free of charge to the industry sector, while the remaining units must be purchased. Carbon unit-regulated enterprises may buy and sell units among themselves, depending on whether they have surplus units (e.g. because they have implemented emission reduction measures) or need more units (e.g. because they have not reduced their own emissions).
Norway is part of the European Union Emission Trading System. The total units amount is therefore determined at the European level, and Norwegian enterprises can trade in units with industries all over Europe. This means that emission trends for carbon unit-regulated industries must be viewed for Europe in its entirety in order to assess the effect of any measure.
CO2 emissions from air traffic will be subject to carbon unit regulations from 2012. From 2013 further industrial sectors will be encompassed, such as the production of aluminium and ferrous alloys, as well as the chemical industry. The greenhouse gas perfluorocarbon (PFC) from the production of primary aluminium will also be included at that time.