The government in Norway aims to provide a total of Nkr2.7 billion ($289 million) in funding for CCUS in its proposed state budget for 2021, of which Nkr2.3 billion will be part of its Nkr16.8 billion in financial backing for the proposed Long ship demonstration project unveiled last month. Remaining Nkr400 million will be provided for research and development in this area, as well as for Technology Centre Mongstad, which is a testing ground for carbon capture technologies, and state agency Gassnova. In addition, Nkr100 million of budget cash is being earmarked for infrastructure to support hydrogen-based technologies, following up on initiatives unveiled earlier this year to boost innovation in this area as part of a new hydrogen-focused strategy, including Nkr2 billion of additional funding for energy transition agency Enova.
To finance such measures, the government expects to receive cash flow of Nkr99 billion from its key oil and gas sector in 2021, up from Nkr87 billion this year, as it sees a gradual revenue rebound following the impact of the Covid-19 pandemic and global energy demand destruction that hit oil prices. However, industry investments are expected to drop to Nkr165 billion next year from about Nkr185 billion in 2020, despite a recent tax relief package to boost spending on field development projects.