Electric vehicles make up about 90 per cent of all new car sales in Norway and as such the country is typically held up as the poster child, a model, for the transition to net zero road transportation.
However, some recent reports do not paint Norway as the electric utopia that many believe it to be, and Australia could do well to understand why decarbonisation in Norway is struggling to achieve its intended goals.
In 2023, 82 per cent of all new passenger cars sold in Norway were battery electric, up from 79 per cent in 2022, according to data from the Norwegian Public Roads Administration and the Norwegian Road Federation.
That share has grown to over 90 per cent in the first quarter vehicle sales this year.
Now Norway is blessed with an abundance of green hydro generated electricity, so it has a significant advantage over most countries in the world, including the driest continent on earth, Australia.
The uptake of electric cars in Norway has also significantly benefited from ‘generous financial incentives,’ which have been partly funded by the Government’s Pension Fund Global, the world’s largest sovereign wealth fund that has amassed its wealth from sales of oil and gas. This insight was detailed in a recent financial piece by investment bank UBS.
A report by Rystad Energy in late 2023 detailed that electric cars have accounted for at least 80 per cent of all passenger vehicle sales for the past three years, 2020 to 2022.
More than 50 per cent of passenger cars on the road in Oslo, Norway’s capital, are electric, or hybrid and it is estimated that battery electric vehicles alone, will pass the 50 per cent threshold in the next two years.
One would think that such an aggressive growth in electric vehicle sales should lead to a dramatic fall in Norway’s fossil fuel consumption, however that is yet to materialise and sales figures from Statistics Norway (SSB) show diesel and gasoline demand has declined only modestly since 2017.
In the first half of 2023, road fuel sales hovered around 62,000 barrels per day, just a 10 per cent fall from the 70,000 barrels per day sold in 2017, well after Norway’s electric vehicle boom started.
According to Rystad Energy, current consumption is relatively stable between 60,000 and 70,000 barrels per day, with a precipitous drop not forecast in the near term.
The above referenced USB article sheds a little more insight into why Norway is struggling to make a significant dent in its road vehicle fossil fuel use.
The electric vehicle take-up rate in Oslo is not typical for that across Norway, with adoption slower across the country.
Pure electric cars make up 21 per cent of the total car fleet at the end of 2023, while petrol cars accounted for around 23 per cent and diesel cars for about 33 per cent, with the remainder being hybrids and LPG fuelled.
This highlights the better suitability of electric vehicles for city applications, but that they are less desirable for regional transportation. So, what can Australia learn from the Norway experience?
Firstly, the road to net zero for road transport will require a mix of technologies, battery electric, hybrids, hydrogen (possibly, a little further out) and low carbon fuels.
The latter being essential for use in our existing truck fleet that will take decades to replace due to our very old truck park.
Our nation’s heavy vehicle fleet, having an average age that is approaching 15 years, would require 30 years to replace, if we start in earnest today.
Battery electric trucks and vans are increasingly becoming a viable alternative to diesel trucks in city/metro/urban environments, however over longer distances they are less optimal.
Here hybrid, diesel/electric trucks, are a better solution at present. While for intrastate, interstate and remote area linehaul, diesel trucks running on low carbon fuels, such as renewable diesel, can reduce CO₂ emissions by 90 per cent, over mineral diesel.
Such fuels must be factored into the decarbonisation pathway for our industry. The Truck Industry Council calls on all levels of Australian government to develop technology neutral decarbonisation strategies for the road transport sector.
Supported by the necessary regulatory frameworks and fiscal environment that will allow all CO₂ reducing pathways to foster and not lock the sector into a singular focused technical solution.
One that may not deliver the required outcome. Tony McMullan CEO, Truck Industry Council
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