How can Norway connect its Electrifying opportunities?
Global electrification, the movement from fossil to renewable energy, has obvious ramifications for the Norwegian economy. On one hand, the Norwegian trade balance is heavily dependent on oil and natural gas. On the other hand, mainland Norway has 100% renewable electricity production, and is one of the world's best places to live, work, and do business. With an ever increasing regulatory focus on sustainable industries, this gives Norway an increasingly tangible competitive advantage.
ARENDAL: Clarksons Securities invited Elinor Batteries to a panel with stakeholders from the entire value chains related to green industry, from mining to recycled product.
Among several leading global analysis firms there is a consensus that battery production and mineral extraction constitute real opportunities for Norway now and in the future. The main reason is Norways’ ability to run both high volume industry and mineral extraction more sustainably and environmentally friendly than most other places in the world. At the same time, the country is already becoming a hotspot for minerals recycling, thanks to the early dominance of electric vehicles in Norway.
With natural advantages in renewables and mineral reserves, Norway also has a regulatory framework restricting and reducing the negative environmental impacts of industry development. The Norwegian government has focused on both mineral extraction and battery production as central industries in their strategies to position Norway as a major player in global electrification. Already, Norwegian metal industries have a strong position in materials such as Aluminium and Silicon, which are and will be critical. What will it take for Norway to succeed, to establish and take sufficient market shares to compensate for the future reduced role of oil and natural gas?
Connecting people
Over the last months, Elinor has visited several arenas focused on electrification, both in Asia, in Europe, nationally and regionally. From Industrial Cluster organisations like the European UpCell Alliance and the regional circular economy focused Thamsklyngen, to fast growing European and Norwegian trade shows, to energy- and industry focused Norwegian conferences. Elinor believes that building strong relationships - partnerships - is what creates a sustainable, solid foundation for industry.
And from a broader, Norwegian societal perspective, there is one conference in particular that outshines all the others in its unique format, broad involvement of civil society, and impact on political discourse and relationships: Arendalsuka, simply named after the city of Arendal and the Norwegian word for week.
Arendalsuka is a political festival for the full civil society, including all political parties, small and large NGOs and public institutions, universities and businesses. Hundreds of small and large debates fill everything from the cinema to small shops and boats on the harbour of Arendal city in southern Norway. But It is rare that one single topic gets a lot of attention. However, that is exactly what happened this year: Battery and green industry was the real talk of the town throughout the week. This reflects a trend of rising attention and increased public and political support for new industries based on renewable energy.
Connecting resources
What was new at Arendalsuka, however, was the different events’ increased focus on Norway's potential for growth in mineral extraction and mineral processing. While mineral extraction in Norway has been a small industry for the last 4-5 decades, mineral processing based on renewable energy is central to many Norwegian communities. Elinor reflects the sentiment of many global analysis firms, and the experiences of battery companies world wide, that close cooperation with these industries can be an important competitive advantage. A regional or near-shore supply chain can give companies like Elinor more sustainable raw materials, produced with renewable energy, with low emissions and pollution, and with safe and sustainable working environments.
EU LEADS THE WAY: As in many areas, it is the strong focus and political priorities within the EU that drives growth and expected demand in the mineral industry.
Scaling on known technologies
So how can Norway seize these opportunities? The investment bank Clarksons Securities held a panel discussion with the heads of several central companies in these growing industries. Elinor's Director of Strategy, Truls Johansen joined the CEOs of Freyr Battery and Corvus Energy, the CEO of Siemens Norway, and the CEOs of four Norwegian and international mining companies. The lineup thus represented critical points along the full value chain of batteries and other critical components like electric drive trains and power generation. The top agenda point was the governments’ role as facilitator - how can the Norwegian government help secure a bridgehead onto these rapidly growing global value chains?
“It’s all about scaling up, if Norway is serious about these strategies,” was the panels’ consensus on the question of whether and how the government can be a skillful investor in the growth of new green industries.
With a full packed audience on the roof terrace of Thon Hotel Arendal, overlooking the harbour of the political festival that is Arendalsuka, the panel explained their companies’ position. Several of the directors pointed to the need for turning the focus away from incentivizing technological innovation, to supporting rapid scale-up using known technologies.
“This is about changing from words and analysis to action and production”, said the CEO of Siemens Norway, Nils Klippenberg, who also holds the position of Chairman of the Board on Electrical and Energy related industries at Norwegian Industrial Organization Norsk Industri.
“Norway will not reach its emission reduction targets in 2030, and neither will we for our 2050 goals, if we continue in the direction we have been on. We need politicians and business leaders to focus on smart solutions and green technologies. These technologies exist, what we have to do now is to deploy them.”
Accelerated deployment
This is where authorities, both national and local, can contribute much more than subsidies and other economic incentives going forward. The mineral extraction companies brought up examples of how permit and licensing processes have been the central barrier to market entry in Europe over the past decade.
“Permits and licensing are a key. We need to respect the democratic process, but that does not mean companies should need to wait ten times longer than they planned for”, Klippenberg stated.
Just as for the other necessary industries involved in electrification, the minerals extraction and processing industries will see their growth driven by powerful strategies and priorities of the EU. The Critical Raw Materials Act being formed at the moment is set to strengthen sustainable mineral extraction and processing, and to build robust supply chains for Europe. It focuses on European autonomy and self-sufficient supply, and puts demands on European extraction, processing, recycling and imports.
The same goes for battery production, where the EU has set a strategic target for self-sufficient battery supply through factories on European soil. Just as for the minerals industries, the EU battery regulations promote sustainable production, use and recycling of batteries and battery materials. The parallel regulations between the industries are not a coincidence, as raw materials are such a large part of the cost and value of any battery, these industries are mutually codependent.
Democratic process is a critical competence in Europe and Norway
The Director of Strategy in Elinor Batteries, Truls Johansen, focused on how Elinor and Norsk Industriutvikling is spending a substantial amount of time and resources on ensuring good, fast, and democratic permitting processes with a high degree of participation. One important task for industry developers is to build local awareness of the impact government level strategies will have on the regional level, and that was something we did from the very beginning, Johansen stated.
IMPORTANT TOPIC: Alf Reistad of Rare Earths Norway and Truls Johansen of Elinor Batteries (right) fdiscuss the need for inclusive and productive permitting processes.
“We are very experienced in permitting processes and the required stakeholder involvement. Our owner, Valinor, and the co-founders of Norsk Industriutvikling, have worked with such processes for decades in the siteing of large scale renewable energy and industries, and we know how to ensure good processes involving land owners, local authorities, and all necessary stakeholders. And we admit, this takes time, it takes a lot of footwork. We know that from the outside, for international players, it can be seen as quite a hurdle.
Norsk Industriutvikling helps international players navigate and cross these types of barriers, and at the same time we applaud the municipality of Orkland for being perhaps the most efficient, proactive and industry-supportive municipality of the country. We are confident that this puts us in a unique position for taking part in the growth of these industries,” Johansen said.
Gunnar Moe of the mining company Rana Gruver, who has extracted mineral ore in Mo i Rana for 60 years, concurred:
“As a mining company, we need predictable framework conditions and regulatory processes, with fairness and equality between the industries, and faster processes. We are spending too much time. We are situated in Norway, in Europe, with the world's best mineral extraction and processing industries. It should really be quite simple.”
With that conclusion, the panel at Arendasuka reflected the intention of the Norwegian government, working on ways of accelerating and prioritizing the development of green industries. Norsk Industriutvikling, drawing on the experience base of its team and of owner Valinor, has worked diligently to accelerate the permitting process of Eiktyr Giga Site by ensuring broad involvement and thorough impact assessments. The municipality makes its decision in the first week of October.