Norway’s Green Party (Miljøpartiet de grønne, or MDG) is proposing a new 170 billion kroner tax targeting what it describes as “war profits” in the country’s oil and gas sector. Unveiled ahead of the alternative state budget negotiations, the policy aims to levy a 95 percent marginal tax on extraordinary corporate profits exceeding 20 percent of historical norms.
MDG’s Proposed 95 Percent Marginal Tax Model
The proposed tax structure would trigger automatically whenever an oil company’s surplus exceeds 20 percent of normal levels, calculated using a multi-year average that accounts for current market conditions. Frøya Skjold Sjursæther, MDG’s energy and environmental policy spokesperson, detailed the party’s stance in an interview with VG, stating that the extraordinary surplus would face a 95 percent marginal tax rate.
According to MDG’s internal calculations, the mechanism would generate approximately 170 billion kroner in state revenues based on historical averages. Sjursæther argued that Norway’s petroleum industry has profited heavily from rising global energy prices driven by recent conflicts in Ukraine and the Middle East, labeling the sector’s gains as war-induced superprofits.
International Precedents in Europe and the UK
The Norwegian proposal draws direct inspiration from windfall taxes implemented across parts of Europe. The UK government introduced the Energy Profits Levy on May 26, 2022, specifically targeting extraordinary profits generated by high oil and gas prices. Germany and other European Union nations have similarly adopted targeted levies on energy sector revenues to capture market spikes resulting from geopolitical instability.
While standard petroleum taxation in Norway sits at a high 78 percent—which balances state deductions for investments against future tax liabilities on production income—MDG argues that exceptional geopolitical circumstances justify an additional tier of taxation. The party intends to channel these funds directly into the Government Pension Fund Global (Oljefondet) to finance citizen relief programs.
Political Hurdles in Budget Negotiations
Major parties including the Conservative Party (Høyre), the Progress Party (Frp), and the Labour Party (Ap) continue to support ongoing petroleum exploration and extraction on the Norwegian continental shelf.
Sjursæther acknowledged that securing adoption from parties firmly backing the oil and gas industry presents a significant challenge. However, MDG plans to press the measure during upcoming state budget negotiations, aiming to redirect funds toward cash transfer programs and reductions in public transit fares to assist citizens grappling with high inflation and rising living costs.
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