In Norway, it is required that a certain share of all the fuel sold to road traffic, so-called autodiesel or gasoline for cars, is biofuel, as specified in the Product Regulations § 3-3. The turnover requirement is 24,5 percent as of 1st of January 2021. Off-road machines and other vehicles that apply construction diesel (toll-free diesel) are not subjects to the turnover requirement. The Government has announced that it is planning on introducing a turnover requirement for bio diesel in construction diesel from 2022 on, which will be increased towards 2030 to the same level as for the road traffic. Such requirement is expected to lead to an increased price on construction diesel. Due to this backdrop, we have carried out a mapping of the market for construction diesel and estimated the effect of an increase in the price on construction diesel for different stakeholders, on behalf of the Norwegian Environment Agency.
The report shows that the consequences of an introduction of a turnover requirement for bio diesel in construction diesel will be limited for most sectors. For most of the large consumers of construction diesel, construction diesel amounts to a small share of total costs and/or the companies have the possibility of passing on a possible increase in costs to their customers. Forestry, however, stands out. Calculations for selected companies show that costs for construction diesel can constitute a significant proportion of total operating costs for forest contractors. To what extent forest contractors will pass increased fuel costs on to their customers depends, among other things, on competition and ownership structure in the forest contractor market. The introduction of a turnover requirement can have a significant effect on the profitability and competitiveness of the companies within this industry.
The report from our work is only available in Norwegian and can be read here.
