The Norwegian Group did not have to fulfil its European Union Emissions Trading System (EU ETS) obligations for 2020 and Norway's government was wrong to fine the airline for not paying the climate quotas while undergoing restructuring during the pandemic, the Oslo District Court has ruled.
In a stock exchange filing, the airline said that the court had recognised Norwegian’s right to fulfil its EU ETS obligations for 2020 by “offering a dividend corresponding to the allowance obligations”. Furthermore, the court stated that it was unlawful for the government to fine Norwegian NOK399,685,275 kroner (USD35.1 million).
“This judgement confirms our understanding of the law, and we are grateful that the court recognised the unique circumstances surrounding our reconstruction and the constraints it placed on our ability to meet certain obligations. This outcome allows us to concentrate fully on our ongoing commitment to reducing our climate footprint,” said Norwegian CEO Geir Karlsen.
Norway's Ministry of Climate and Environment has the right to appeal the latest decision.
The Oslo court’s decision comes after the European Free Trade Association (EFTA) court ruled in August that the penalty could not be settled via a dividend.
In early 2023, the airline had decided to pay the fee but in parallel asked for legal clarification of the case and “seek a return of this amount plus interest following a final conclusion” of the matter.
The Ministry of Climate and the Environment issued the fine after Norway failed to transfer 372,818 quotas valid for settling emissions under EU ETS to the settlement account in the climate quota register. While the company was also undergoing restructuring in Ireland, the Irish authorities never imposed a fine on defunct Irish subsidiary Norwegian Air International. Norwegian argued that the company would have been criminally liable had it decided to fulfil quota obligations while undergoing restructuring.
