Offshore Norge – Climate and Environmental Report 2024

6. Greenhouse gas emissions and other emissions to the air

Emissions to the air from oil and gas activities consist mainly of exhaust gases containing CO₂, NOx, SOx, CH4, and nmVOC from various types of combustion equipment. Emissions to the air are, in most cases, calculated based on the quantities of fuel gas and diesel oil used on the facilities. The emission factors are based on measurements from suppliers, standard factors or field-specific measurements and calculations.

Reducing emissions to the air to a minimum has been a key objective for both the industry and the authorities since the start of the oil and gas industry in Norway over 50 years ago. There are both environmental and economic reasons why this is important. In addition, it has been a fundamental element of Norwegian petroleum management ever since "the 10 oil commandments" were established in 1971. Several of these gases are defined as greenhouse gases (GHG), and the efforts to reduce them as much as possible for climate reasons now dominate the debate on emissions to air.

6.1.1. Climate strategy for the Norwegian continental shelf

The oil and gas industry in Norway launched ambitious climate goals in January 2020, pledging to reduce emissions to near zero by 2050, in collaboration with the KonKraft partners. KonKraft's follow-up towards achieving the 2030 goals is based on the Norwegian Parliament's target of a 50 percent absolute reduction in emissions, which was adopted by the Parliament in connection with the decision to make temporary changes to the petroleum tax law. KonKraft's climate strategy also includes ambitious objectives for the development of new value chains for low- and zero-emission technologies, such as offshore wind, hydrogen, CO₂ capture and storage on the NCS maritime zero- and low emissions requirements and maritime emission goals.

This year's status report will be available by June 2024.

The main sources of emissions to air from the oil and gas industry are:

Combustion of natural gas in turbines, engines, and boilers
Combustion of diesel in turbines, engines, and boilers
Flaring
Combustion of oil and gas for well testing and well maintenance.

Other sources of emissions to the air include:

Gas venting, minor leaks, and fugitive emissions
Evaporation from storage and loading of crude oil offshore

Power generation using natural gas and diesel as fuel is the primary source of CO₂ and NOx emissions. These emissions primarily depend on the energy consumption of the facilities and the efficiency of power generation. The second-largest source is the direct combustion of gas, known as flaring. Flaring occurs only to a limited extent on the NCS, as stipulated by the Petroleum Act, but is permitted for safety reasons during operations and in connection with certain operational issues.

Half of the methane emissions (CH4) from offshore oil and gas installations are direct emissions from production processes, such as from compressors and the handling of produced water. For non-methane volatile organic compounds (nmVOC), the main sources offshore are the loading and storage of crude oil. Emissions of nmVOC occur, for example, when gaseous air is displaced by crude oil during the loading of crude tankers.

SOx emissions are primarily caused by the combustion of sulphur-containing natural gas and diesel. Since Norwegian natural gas contains low sulphur, the use of diesel is the primary source of SOx emissions which is very low compared with the international average. To minimize SOx emissions, low-sulphur diesel is used.

Figure 20 illustrates emissions to air on the NCS compared to the international average per barrel of produced oil equivalent. All figures are from 2022 because international data for 2023 are not available as of June 2023.

Figure 20: Emissions to air on the NCS compared to the international average.

6.2 Greenhouse gas emissions

Global warming is one of the greatest challenges of our time, and extensive reductions in human-induced greenhouse gas emissions are essential. Through the Paris Agreement, member countries have committed to reducing greenhouse gas emissions by ensuring that the average rise in global temperatures is kept well below 2°C compared to pre-industrial levels and to further strive to contain this temperature increase to 1.5°C.

As part of the Paris Agreement, Norway has committed to reducing its greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. This will be achieved in cooperation with the EU, and Norway has entered into agreements with the EU on how this will be achieved for both the emissions trading sector and the non-emissions trading sector. For the emissions trading sector, which includes the petroleum industry, the most important instrument is the EU Emissions Trading System (EU ETS).

The Norwegian government intensified the climate goals as defined by the Hurdal governmental platform, calling for a 55 percent reduction in GHG gases by 2030, compared to 1990 levels. This commitment applies to the entire economy, including the emissions trading sector. The Norwegian Parliament has requested that the petroleum industry reduce its greenhouse gas emissions on the NCS by at least 50 percent by 2030. To stimulate further reductions in greenhouse gas emissions in the petroleum sector, the Norwegian Parliament passed a Climate Plan in spring 2021, which proposed an increase in the CO₂ tax on emissions from oil and gas production subject to the ETS in line with the tax increase on non-emission trading emissions. The goal is for the total carbon cost (CO₂ tax + quota cost) to be approximately 2000 kroner per tonne of CO₂ by 2030 (estimated in 2020 currency). The Climate Plan further stipulates that the total carbon cost should not exceed 2000 kroner during the period from 2021 to 2030 unless the quota price alone becomes higher.

Through The European Green Deal, the EU has committed to an emissions reduction of at least 55 percent by 2030 and to being climate-neutral by 2050. The EU's Green Deal and the "Fit-for-55" package will lead to changes in laws and regulations enabling these climate goals to be reached. Additionally, in March 2022, the EU launched a series of measures through REPowerEU aimed at becoming independent from Russian gas due to the war in Ukraine. These measures are designed to reduce gas imports from Russia whilst safeguarding the current climate objectives.

GREENHOUSE GAS EMISSIONS FROM THE NCS

Emissions to air from Norwegian oil and gas production are reported by several sources. However, both the reported figures and the development trends from year to year can vary significantly depending on the source. There are several reasons for this, but the most important is the differing definitions of which activities are included in the Norwegian oil and gas sector.

The environmental report from Offshore Norge is published annually at the beginning of June and contains total emission figures from the industry. Which emissions to include are mainly based on the definitions in the Petroleum Tax Act. These cover all exploration and production activities on the NCS, including emissions associated with pipeline transport of oil and gas, even if these may occur at land-based facilities such as Kårstø and Kollsnes. All activities at Melkøya are also included. Data is retrieved from the Collabor8 Footprint database, which has been developed to simplify the reporting of emission figures and the submission of annual emission reports from operators to the government.
Statistics Norway (SSB) publishes preliminary total figures for the entire industry in May, followed by emissions broken down by various sources in oil and gas production in December. The figures are reported to the UN under the UN Climate Convention on Climate Change and the Convention on Long-Range Transboundary Air Pollution. The emission figures differ from those reported via Footprint to the NEA by including more land-based activities. The inclusion of the Kårstø plant is an example of this. Therefore, the emission figures from Statistics Norway (SSB) will normally be higher than the corresponding Footprint figures, while figures from most emission sources are generally comparable. The emission figures from SSB also form the basis for the website Miljøstatus.no.
The NEA has its own database for Norwegian emissions (norskeutslipp.no) which is accessible to the public and contains emission data from all Norwegian sources, including oil and gas production. Generally, these are the same emission figures found in Footprint. However, the main category "Offshore Petroleum Activities" does not include land-based facilities or exploration activities. Therefore, the total figures for the industry will be lower than the corresponding figures reported in the Environmental Report and by the SSB.

In addition, there are also emission figures from the quota-liable part of the activities on the NCS and from the tax-liable part of Norwegian oil and gas production. Both of these have different delimitations in relation to each other and in relation to the three sources described above, so both the total figures and figures from different sources will therefore vary.

Greenhouse gas emissions from petroleum activities

Figure 21 shows that total greenhouse gas emissions from the NCS and land-based facilities subject to the Petroleum Tax Act in 2023 were 11.1 million tonnes of CO₂equivalent, a decrease of just over 4% from 2022. The decrease from 2022 to 2023 is partly linked to the electrification of Edvard Grieg and the electrification of Snorre and Gullfaks with wind power from Hywind Tampen. Additionally, Knarr was shut down in 2022. At the same time, emissions from Hammerfest LNG increased as it was fully operational throughout 2023, and Njord resumed production in 2023. Methane emissions also continued to decline from 2022 to 2023.

Figure 21: Emissions of CO₂ equivalent on the NCS

Emissions of greenhouse gases per produced unit are low for Norwegian oil and gas production compared to production in other geographic areas, as shown in the data in Figure 22 from the International Association of Oil and Gas Producers (IOGP). International figures for 2023 are not available as of May 2024. This report presents figures at a regional and not national level. Other studies from, among others, Rystad Energy confirm this picture.

Figure 22: Greenhouse gas emissions per produced unit in various petroleum provinces 2003-2022 (Source: IOGP*)

CO₂ emissions

In 2023, direct CO₂ emissions from operations on the NCS and onshore installation subject to the Petroleum Tax Law were 10.7 million tonnes, down from 11.1 million tonnes in 2022 (see Figure 23).

IOGPs data only reflects the performance of the IOGP Member Companies that have provided data in a given year. It does not represent the entire global upstream oil and gas industry

Figure 23: Historical development of direct CO₂ emissions (millions of tonnes and source distribution)

Figure 24: Volumes of gas flared per produced tonne o.e. on the NCS,
compared to the international average

Figure 24 shows the historical development of flared gas volumes per produced unit of oil equivalent in Norway and the international average (IOGP) for the period 2006–2021. International figures for 2023 are not available as of May 2024. Emissions from flaring are a significant reason why Norwegian production has much lower CO₂ emissions than other countries. In 2021, volumes of flare gas were ten times higher globally than in Norway. Figure 24 indicates that the reduction in flare gas volumes in Norway from 2006 to 2022 was 58 percent. In the same period, the reported volumes of flare gas globally were reduced by 60 percent.

Figure 25 shows the historical development of direct CO₂ emissions from the three primary sources, where flaring has been the smallest source of the three since 2019.

Total Norwegian greenhouse gas emissions in 2023 were, according to Statistics Norway (SSB), 46.6 million tonnes CO₂e, of which the petroleum industry's share accounted for about one-quarter.

Figure 25: Historical development of direct CO₂ emissions (tonnes) from the three primary sources

Figure 26: CO₂ emissions intensity for the period 2003–2023

Norwegian oil and gas production has for many years been world-leading in low greenhouse gas emissions. The average greenhouse gas emissions per produced unit are less than half of the global average. The sector is subject to a range of measures such as CO₂ tax, EU ETS, NOx tax/fund, flaring restrictions in production licences, emission permits with energy management requirements, and mandates for the use of best available technology. Additionally, there are requirements for assessing onshore power in connection with new developments. Together with a robust resource and recovery policy, these regulatory measures have triggered and will continue to trigger actions that represent emission reductions on the NCS.

Prolonged and increased production on existing fields will normally increase energy consumption per produced unit. It is therefore a significant achievement that the NCS has succeeded in maintaining low emissions per produced unit even as the age of the fields has increased.

The result is a Norwegian offshore industry that ranks among the best internationally in terms of low CO₂ emissions per produced unit, as shown in Figure 22. At the same time, we see that some other countries are gradually demonstrating clear emission improvements by implementing operational practices similar to those we have on the NCS, such as reduced flaring. This is very positive. Reduced flaring not only lowers CO₂ emissions but also boosts energy supplies for the market, as the gas is consumed rather than flared.

Figure 26 shows the historical development of CO₂ emissions per delivered volume of hydrocarbons. In 2023, the specific CO₂ emission was 7.3 kg per barrel of oil equivalent produced (marketable). This is down from 7.6 in 2022.

Short-lived climate forcers

Short-lived climate forcers consist of particles and gases with a short lifespan in the atmosphere and are characterized by their negative effects on climate and health. If emissions of short-lived climate forcers can be reduced, both climate and health benefits will be achieved. In the offshore petroleum industry, emissions of methane (CH4) and nmVOC from cold venting and diffuse emissions are the main sources of emissions.

Methane emissions

The primary sources of methane emissions from offshore oil and gas activities are 1) planned or unplanned emissions directly to the atmosphere, 2) incomplete combustion in flares and turbines, and 3) emissions during the storage and loading of crude oil. Annual methane emissions are reported according to methods and emission factors established by the Norwegian Environment Agency and the industry in collaboration. The petroleum industry is continuously working to improve the methodology and emission factors for methane and nmVOC. The use of equipment for direct measurement of methane emissions is essential in improving the quality of reported data. To detect leaks from process equipment, dedicated leak detection programmes (Leak Detection and Repair, LDAR) are conducted, utilizing handheld infrared cameras, among other tools. The use of cameras (Optical Gas Imaging) enables quick implementation of measures to reduce or eliminate emissions associated with minor leaks.

Figure 27 shows methane (CH4) emissions from activities on the NCS in 2023, categorized by source. Total methane emissions in 2023 were 11,579 tonnes, compared to 12,997 tonnes in 2022. This is a decrease despite increased gas production. Compared to 2014, there is a reduction of over 60 percent. The significant reduction from 2014/2015 to 2016 is primarily due to much more detailed monitoring of individual emission sources and the revision of emission factors.

Methane emissions associated with gas exports to Europe.

Natural gas produced on the NCS is primarily exported to Europe, where it is used in households, industry, and gas-fired power plants. Natural gas is composed mainly of methane, which is a highly potent greenhouse gas.

Since CO₂ emissions from gas-fired power plants are about 50 percent lower than those from coal-fired power plants per produced power unit, transitioning from coal-fired to gas-fired electricity generation is considered a good climate measure. To do this, the industry first needs to ensure that methane emissions from production and the gas pipeline system, out to the consumer, are not so high that they outweigh this advantage. Methane concentration on the NCS was 0.02 percent in 2022 (emissions per unit of gas sold), which is about 1/10 of the global average for upstream oil and gas production. This demonstrates that Norwegian natural gas has a clear climate advantage compared to the use of coal.

The reasons for the low methane concentration of Norwegian natural gas include subsea gas pipelines, a ban on routine flaring, high taxation levels, and a strong focus on minimizing gas leaks for both climate and safety reasons.

Figure 27: Historical development of total CH4 emissions (tonnes) and distribution by source.

Figure 28: Historical development of total nmVOC emissions (tonnes) and distribution by source.

6.3 Emissions of nmVOC:

In 2023, the total nmVOC emissions from the NCS were 23,253 tonnes. This represents a decrease compared to 2022, when emissions were 26,423 tonnes, as shown in Figure 28.

Since 2001, total nmVOC emissions have been reduced by almost 90 percent. A significant reduction in emissions has been achieved through investments in new facilities for the removal and recovery of oil vapour on storage ships and shuttle tankers. In recent years, the collaboration between the NEA and the industry on methane and nmVOC has also resulted in significant emissions.

6.4 Emissions of NOx:

The primary source of NOx emissions on the NCS comes from the combustion of natural gas and diesel for energy production on the installations. Additionally, diesel-powered engines on mobile rigs are a significant source of NOx emissions. These mobile rigs are used for both exploration drilling and production drilling.

The environmental agreement on NOx regulates the obligations of industry organizations towards the authorities to reduce their total NOx emissions. Norway met its NOx obligations under the Gothenburg Protocol well before 2020, and efforts to reduce NOx emissions through the NOx Fund have been crucial in fulfilling this obligation. The importance of the NOx Fund for emission reductions is described below.

NOx emissions have been significantly reduced through measures initiated by the NOx Fund. The NOx agreement for the period 2018–2025 was approved by the ESA in 2018 and has now been extended to 2027.

In 2023, total NOx emissions from petroleum activities amounted to 33,691 tonnes. This is a decrease from 2022, when emissions were 37,430 tonnes. The reduction is due to a general decrease in combustion.

Figure 29 shows NOx emissions from activities on the NCS and their distribution across sources in 2022, while Figure 30 displays specific NOx emissions.

Figure 29: Historical development of total NOx emissions (tonnes) and distribution by source

Figure 30: Specific NOx emissions

6.5 The NOx Fund and its significance for emission reductions

The NOx agreement is an environmental agreement between businesses and Norwegian authorities, which involves businesses committing to keep total NOx emissions below established biennial emission caps. The agreement was established in 2008 and has been extended several times since.

The business community set up a NOx fund in 2008, where participating companies are exempt from the financial NOx tax. Instead, businesses contribute to the fund based on a payment model linked to reported emission figures, with rates somewhat lower than the financial tax would have been. The NOx Fund uses the contributions to support businesses that implement measures to reduce their NOx emissions. Support from the NOx Fund is disbursed when the measure has been implemented and documented. Funding can also be requested for certain types of industries that are exempt from the financial tax.

The following sectors are included:

Oil and gas
Shipping
Industry and mining
Fishing and hunting
Aviation
Railway

In the first two periods of the agreement (2008–2010 and 2011–2017), the goal was annual or biennial emission reductions. Overall, throughout the entire period, emissions reductions of 34,000 tonnes were achieved.

In the current agreement period (2018–2025, with an extension until 2027), the agreement is structured to adhere to a specified biennial emission cap:

Total for 2018 and 2019: 202,510 tonnes
Total for 2020 and 2021: 192,510 tonnes
Total for 2022 and 2023: 182,510 tonnes
Total for 2024 and 2025: 172,510 tonnes
Total for 2026 and 2027: 161,000 tonnes

If the target is not met, it may result in sanctions, and the entire or part of the financial NOx tax must be refunded.

For 2022 and 2023 combined, the reported emissions were 166,495 tonnes, well within the cap of 182,510 tonnes. Emissions are decreasing across all industry categories.

From 2018 to 2023, a total of 404 projects were implemented and verified, resulting in a total NOx reduction of 13,304 tonnes. Many of these projects also contribute to reduced CO₂ emissions. DNV has calculated on behalf of the fund that projects completed from 2018 to 2023 have contributed to a reduction of CO₂ emissions of approximately 720,000 tonnes per year. If all projects that have received funding commitments are included and all are completed, the estimated expected reduction is around 3.3 million tonnes of CO₂ for the agreement period 2018 to 2023. The most significant individual measures contributing to large CO₂reductions are electrification projects within oil and gas.

Examples of measures in the petroleum industry that have received support from the NOx Fund:

Hywind Tampen
Partial electrification of Gullfaks and Snorre with 11 floating offshore wind turbines. Production started in November 2022, cutting approximately 200,000 tonnes of CO₂ and 1,100 tonnes of NOx annually.
Electrification of platforms with power from land: Troll B and C, Sleipner Vest, Draugen, Oseberg, Njord
Drilling rigs installing catalytic NOx reduction, battery technology, and other energy efficiency measures.

6.6 SOx Emissions

Figure 31 shows SOx emissions from operations on the NCS and the distribution of emissions in 2023 based on source. In 2023, total SOx emissions were 479 tonnes, a reduction from 516 tonnes in 2022.

Figure 31: Historical SOx emissions from the shelf, broken down by source.