Main moments
In the face of the geopolitical challenges of our time, the EU is drawing up increasingly sectoral and comprehensive regulatory frameworks. Policy areas are woven together, and the dividing lines between climate, trade and industrial policy are being blurred. So far, Norway has not been able to keep up.
It is not uncommon for new EU legislation to regulate both the internal market and promote other objectives. Several initiatives aimed at the single market touch on fields that initially fall outside the EEA agreement, such as trade policy and security. That makes it all the more demanding to clarify what are Norway's obligations under the EEA Agreement, and what are the EU's obligations to us.
The report”Much more than a market”, penned by Italy's former Prime Minister Enrico Letta in 2024, warns that developments in the EU could lead to unintended barriers against EEA countries. An EFTA working group has expressed similar concerns, particularly emphasizing the risk of fragmentation in the single market and that countries such as Norway could potentially be treated as third countries.
In other words, the fundamental purpose of the EEA Agreement is at risk. The warning lights should flash bright red.
The EU Carbon Limit Adjustment Mechanism (CBAM), as my Master's thesis on legal criteria for EEA relevance taken as a starting point, is illustrative of developments with sectoral legislation from the European Union.
The remedy was introduced as part of the package “Ready for 55”. CBAM has a stated climate purpose, namely to prevent carbon leakage. Importers of cement, steel, aluminium, fertilisers, hydrogen and electricity produced outside Europe pay a levy equivalent to the EU carbon price so they compete on equal terms.
The European Commission has identified the Regulation as EEA relevant. Norway, on the other hand, considers it differently.
The Norwegian authorities state that the act is not relevant to the EEA because it affects trade with third countries. But such an understanding of EEA relevance should be called into question. Both because it appears inconsistent with previous practices on the part of Norway and does not harmonize well with the EU's further development.
Interestingly, despite the lack of EEA relevance, the Government has decided that Norway should incorporate CBAM into Protocol 31 to the EEA Agreement on Voluntary Cooperation. They believe that we are not obliged to incorporate the carbon tariff, but that we should do it anyway.
The same solution has been applied to the so-called “climate agreement with the European Union”. Instead of including the EU's most central climate legislation in the regular annexes to the EEA Agreement, Norwegian politicians have incorporated the EU's Forest and Land Use Regulations (LULUCF), into the Stake Allocation System (ESR), and in parts of the EU's climate governance, for the period 2021 to 2030, in the corresponding part of the agreement that provides for cooperation that does not follow from the EEA Agreement.
But how real is this boundary drawing? If Norway “voluntarily” incorporates EU legislation that in effect extends our cooperation with the EU without the authorities admitting it, it is under a rather false charade of so-called “right of self-counsel”.
I am concerned that our attitude towards Europe is characterised by naivety. We see the contours of this with the notified customs duty against Norwegian steel.
Relying on goodwill from Brussels is neither reassuring nor predictable for Norway's foreign policy interests. We are doing ourselves a disservice by not clarifying the framework for EEA cooperation more clearly.
In working towards “open strategic autonomy,” the EU will reduce dependence on third countries for resources such as energy, technology and raw materials. In practice, there will be a clearer distinction between countries that are inside and outside the cooperation areas of the European Union. This could have consequences for the EEA.
The vision of the single market is constantly expanding in the EU. It is a significant challenge if Norway does not share the same understanding.
CBAM is a type case for sector-wide legislation with disputed EEA relevance, but not unique. A number of legislative acts in the future will raise doubts as to the extent to which the EEA Agreement's substantive scope goes.
The question of how new sectoral legislation from the EU coincides with our commitments to incorporate EEA relevant legislation under what is our most important and comprehensive agreement is absolutely crucial for the further development of our cooperation with Europe. This is something Norwegian politicians must take more seriously.
