The Norwegian National Budget 2022

What international companies need to know

Photo: Torstein Bøe / NTB
King Harald, in the presence of Queen Sonja and Crown Prince Haakon, prepares to hold the tradional throne speech at the parliament’s opening



Norway had a parliamentary election on Sept. 13, in which the conservative-led government of Prime Minister Erna Solberg, backed by the Progress Party, lost its parliamentary majority. One of the last things her cabinet did before leaving office, was to submit its proposal for the 2022 state budget on Oct. 12. Now, a new center-left government led by the Labor Party, dependent on the left-wing Socialist Left Party, is due to take office.

The proposed budget from the departing conservative-led government will be changed twice before it will be approved by a majority in parliament. First, the new Labor-led government will submit a proposition with proposed changes to the conservative budget proposal. Secondly, they will enter negotiations with the Socialist Left Party, where the likely result is a budget agreement with additional changes that then has the support of a majority in parliament. The Socialist Left Party will prioritize equality and emission cuts in the upcoming negotiations.

Municipalities and counties have their own budgets, separate from the national budget.

The political platform of the new Labor-led government was announced and made public on Oct. 13, and this platform gives us several clues on where we can expect the new government to make changes in the national budget in their upcoming proposition with changes to the conservative budget proposal.

Economic outlook




Mainland Norway gross domestic product




Employment, persons




Unemployment rate, registered (level)




Structural non-oil fiscal deficit, 2022 NOK billion




Fiscal impulse2




Transfer from the GPFG3




The economic figures from the proposed national budget highlight that Norway has a very strong economy and that it will be difficult for a new government to increase spending from the sovereign wealth fund without overheating the economy. Some experts will argue that the budget is tight, but the oil fund spending in the Conservative budget proposal is actually above pre-pandemic levels. The unemployment is expected to be only 2.4% in 2022, and GDP growth is estimated to be 3.9% in 2021 and 3.8% in 2022. GDP fell by 2.5% in the COVID-19 year of 2020. The Conservative-led government is therefore looking to phase out extraordinary pandemic measures and reduce the use of oil money to 2.6% of the oil fund, well below the action rule. Here is a summary of some of the most important macro numbers:

Percentage volume change from previous year, unless otherwise stated.

Structural non-oil fiscal deficit as a percentage of mainland Norway trend GDP. Change from previous year in percentage points.

Structural non-oil fiscal deficit as a percentage of the capital in the Government Pension Fund Global (GPFG) at the beginning of the year (2022 estimates).


There are two main themes behind the proposed changes in taxation. One is to increase economic value creation, and the other is to curb the emission of greenhouse gasses. The net tax relief in the proposed budget is only NOK 576 million on an annual basis, with a cost of NOK 193 million in the budget for 2022. This is quite low compared to some prior conservative budgets. Here are the key proposed changes of the departing government: 

They propose a drastic increase in carbon tax on the non-quota sector, where the price per metric ton of CO2 will increase by 28% from 2021 to 2022. This means, for instance, that the carbon tax on mineral oil will increase from NOK 593 to NOK 770 per metric ton of CO2 emissions. This is part of an escalation plan where the rate will be increased to NOK 2,000 per metric ton in 2030, and the increase from 2021 to 2022 provides NOK 2 billion in revenue on a full-year basis. The new political platform shows that the Labor-led government supports the increase in carbon tax to NOK 2,000 by 2030 but is open to change the timeline of the escalation and to partly relieve businesses through direct compensation or lowered fees.

They propose increased incentives to get people to participate in the labor market through a new tax deduction of NOK 23,500 for people younger than 30 and reduced tax on low incomes. The combined annual cost of these two proposed changes is NOK 4 billion.

Norway is among a very small group of countries with a wealth tax on net wealth. The Conservative-led government proposes to increase the discount on valuation of shares from 45% to 50% and to increase the bottom wealth threshold from NOK 1.5 million to NOK 1.6 million. The tax value of houses, cabins, and permits for aquaculture is increased, so that the net tax relief in the wealth tax is just above NOK 500 million. The new Labor-led government will not support reduced wealth tax and states in its new political platform that it will increase wealth taxation.

They propose to introduce a new tax on onshore wind farms with a rate of NOK 0.01 per kilowatt hour from 2023, and the ministry is looking into how municipalities with wind farms can benefit from the revenue. This kind of taxation is in line with the political platform of the new Labor-led government.

They propose to increase car taxation to make sure that Norway reaches its target of all new cars sold by 2025 being zero-emission. The largest increase in the budget proposal is on the one-off registration tax, with NOK 1.2 billion in increased taxation. Most of this burden is put on plug-in hybrid electric vehicles by decreasing the discount in the one-off tax.

They propose to reduce the tax on electricity by NOK 0.015 per kilowatt hour, and this brings a NOK 1.1 billion decrease in revenue on a full-year basis.

The air passenger tax was temporarily abolished because of the COVID-19 pandemic but is now reintroduced with a revenue of NOK 1.75 billion. The new Labor-led cabinet wants to change the air passenger tax, but they don’t have a completely alternative model yet.

They propose a 5% increase in tobacco product tax. This comes after the budget agreement for the 2021 budget that contained a 25% reduction in the tobacco product tax on snus with nicotine. The upcoming Labor-led government will, according to their political platform, have a restrictive tobacco policy, and it is unlikely that they will not support the proposed increase.

There is a fierce competition among small European countries on corporate tax rate, even among Norway, Sweden, Denmark, and Finland, all trying to attract the same companies. The Norwegian Conservative-led government has therefore since 2013 reduced the corporate tax rate from 28% to 22% to stay competitive and is highly supportive of the new Organization for Economic Co-operation and Development (OECD)/Group of Twenty (G20) internataion forum framework for international tax reform and a global minimum corporate tax rate. The new political platform from the Labor-led government says that it wants to intensify the efforts on fair taxation of multinational companies, including taxation of the digital and platform economies.

Photo: Torstein Bøe / NTB
Minister of Fisheries Odd Emil Ingebrigtsen reads the government’s report on the state of the kingdom.

Defense and security

The outgoing government increases defense spending in their budget proposal for 2022. Unfavorable exchange rates between the Norwegian krone and the most relevant foreign currencies, such as the dollar, have resulted in significant additional expenditures throughout 2021. This led to significant delays in some projects, as well as an increase in costs, some of which are compensated for in this year’s defense budget.

Defense spending increases by NOK 4.3 billion when compared to 2021, largely driven by investments in and upgrades of various materiel.

In 2022, defense expenditure as a share of GDP is estimated to about 1.9%.

The government allocates NOK 2.2 billion to strengthen capabilities, in line with the priorities set forth in the Long Term Plan (LTP) for the Norwegian Armed Forces.

NOK 20 billion will be invested in defense materiel throughout the year.

Starting in 2022, the F-35 fighters will be the only fighter planes in active use by the Norwegian military. The budget allocates NOK 7.4 billion to this procurement in 2022.

The government is discontinuing the current Leopard A24 tanks. A supplier for new main battle tanks (MBTs) will be chosen by the end of 2022, and the projected cost of the acquisition is NOK 17 billion.

NOK 243 million are set aside for a new helicopter base in Tromsø for the Norwegian Search and Rescue services.

The new government will be bound by the same LTP for the Norwegian Armed Forces as the previous one was, including the planned investments in submarines, fighter jets, MBTs, etc. At the same time, the Labor-led government will prepare the groundwork for the next LTP, due to be adopted in 2024. Additionally, the new government seeks to increase the use of procurements in the defense sector to further strengthen Norwegian industry and focus on acquiring off-the-shelf materiel.


Seeking to continue its efforts to reduce emissions and promote, among others, hydrogen as an energy solution, the government proposes to continue investing in renewable energy.

NOK 100 million will be invested in hydrogen as an energy carrier, mainly toward infrastructure and commercial use, as a continuation of an identical sum from 2021.

Offshore Wind Farms: The government is looking to let interested companies apply for licenses to develop bottom-fixed offshore wind farms in the regions Utsira Nord and Sørlig Nordsjø II. These can be built without government subsidies if they can be connected to the UK/European grid, in addition to the Norwegian grid.

NOK 240 million over up to eight years to finance a new research center on renewable energy (Centers for Environment-friendly Energy Research, or so-called FME) specifically focused on hydrogen and ammonia.

Norwegian petroleum policy in general remains unchanged in the new political platform from the Labor-led government, provided the new government avoids any significant concessions to the Socialist Left Party in parliament. When it comes to hydrogen, the government will consider establishing a separate, state-owned enterprise, to achieve a goal of a complete value chain with a consistent yearly production of blue and green hydrogen by 2030. Furthermore, the government wishes to create an overall plan for energy construction that requires licenses, such as wind power. Apart from this, the Labor-led government hopes to intensify the work on offshore wind farms through a new national strategy.

Sustainable development, carbon capture and storage, and investment 

Continuing to provide capital for green initiatives and investments, the government also proposes to further prioritize a full value chain for Carbon Capture and Storage (CCS).

The “Langskip” CCS project, mainly concerning CO2 capture at the Norcem cement factory in Brevik, increases its financing by NOK 1.2 billion from last year. The total investment in 2022 is now NOK 3.45 billion, within the total projected cost of NOK 17 billion for the project toward 2030.

In line with prior statements, the government is also prepared to contribute to CCS at the waste management facility of Fortum as part of Langskip. This is dependent on sufficient self-financing and financing by the EU (or others). If this is the case, the government could provide up to NOK 3 billion in 2022.

NOK 528 million to The Green Platform Initiative, which provides funding for enterprises and research institutes engaged in green growth and restructuring, driven by research and innovation, an increase of NOK 200 million from 2021.

NOK 900 million to fresh capital for Nysnø, the government’s climate investment company. After this capital injection, Nysnø’s total assets will amount to NOK 3.3 billion.

NOK 192 million to finance a partial membership in InvestEU, providing access to European capital investments.

The new political platform from the Labor-led government strengthens the previous government’s work on CCS, as well as hydrogen and battery industries. Prime Minister Jonas Gahr Støre wants to propose a national strategy for the preparation of areas designed for new industrial initiatives. Long-term capital investments will be made available to such initiatives. For the battery industry, the government will seek to secure internationally competitive operating parameters for building large-scale production in Norway.

Photo: Terje Bendiksby / NTB
Newly elected President of the Storting Eva Kristin Hansen reads the government’s report on the state of the kingdom during the solemn opening of the Storting.


As COVID-19 recedes, the need for extraordinary spending in the health-care budget does, too.

NOK 225 million to implement the adopted changes to the Law on Biotechnology, introduced by parliament in 2020. This mostly concerns early ultrasound and the changed age limit for prenatal testing, including non-invasive prenatal testing (NIPT) paid for by the state. It is meant to cover the costs of establishing these examinations, as well as costs related to assisted reproductive technology and egg donation.

The government still plans to use NOK 3.2 billion in the 2022 budget on vaccines and vaccination programs for COVID-19.

Budget process – milestones

Oct. 12: Ministry of Finance submits its proposal for state budget to parliament.

Oct.13: New government platform for the new Labor-led government made public.

Oct. 14: New cabinet enters government.

Oct. 25-26: Hearings on the state budget in the Finance Committee.

October – November: Opposition parties publish their own alternative state budgets.

Tentatively Nov.10: The new Labor-led government submits a proposition with proposed changes to the conservative budget proposal.

Tentatively Nov.15: New hearing in the Finance Committee on the additional proposition with changes from the Labor-led government. Most likely written submissions only.

Tentatively Nov. 29: Deadline for the Finance Committee to decide on spending limits.

Tentatively Dec. 3 Finance debate in parliament.

Tentatively Dec. 15: Deadline for budget appropriations and final decision in parliament.

What can you do?

With an ongoing Labor-led minority government scrambling to make the conservative budget their own, there is considerable room to influence the final budget agreement. If your business or organization is affected by the state budget, some possible initiatives are:

Map out key decision-makers: Which committee is responsible, and who are the ministers serving on that committee? How can you relate to their interests and political objectives?

Build an alliance: Find out which interest groups agree/disagree with you and define your message accordingly. Is there a localized impact? Can you get the attention from the politicians by creating media attention?

Get in touch: Norway is a small and open country. You can contact decision-makers, arrange a meeting or submit proposals in writing. Keep it short and simple. Explain the issue and provide a solution.

No time to wait: The state budget process is fast paced and often unpredictable. The one primary interest for your business is just a minor part of the puzzle to politicians. To wield influence, you need to keep up with the timeline.

Socialist Left Party: The Socialist Left Party is a key player in the 2022 national budget. Whatever budget changes the new Labor-led government proposes must be agreed upon in negotiation with the Socialist Left Party. Anyone who seeks to influence the budget should take their views into consideration.

This article was first published by AmCham Norway on Oct. 14, 2021, and is reprinted with permission from AmCham Norway and Gambit Hill+Knowlton. The content is attributed to Gambit Hill+Knowlton and Peter Skovholt Gitmark, director of public affairs.

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