Oslo Court Overturns Million-Euro ETS Emission Fine Against Norwegian Air

During the COVID pandemic, international air traffic came to a near halt and airlines had hardly any revenue. Several companies went bankrupt or had to downsize. Norwegian Air underwent restructuring and legal reorganization, which made it no longer able to meet obligations such as purchasing and transferring EU ETS emission allowances. 

In January 2021, Norwegian and its subsidiaries began to reduce their fleet by returning various aircraft, including Boeing 787s for long-haul flights, to their respective lessors. On January 14, 2021, Norwegian announced the end of all long-haul services to focus on a smaller European route network.

Norwegian disputed the obligation to purchase emission allowances and offered the Norwegian government a share transaction equivalent to the excused ETS amount. The Norwegian government did not accept this form of settlement and imposed a fine of approximately 35 million euros. 

The Oslo court ruled last week in favor of Norwegian, stating that offering a dividend indeed fulfilled the EU ETS obligations and that the imposed fine was unlawful. As a result, Norwegian is entitled to a full refund of the fine, including interest and compensation for all legal costs incurred.

The ruling of the Oslo District Court is not yet final. The Norwegian Ministry of Climate and Environment can still appeal. The final outcome could also have implications for other companies in similar situations within the EU and beyond.