There is no doubt that cars and road traffic have a very central place in people’s lives. Much of the debate has a negative connotation, such as greenhouse gas emissions, local air pollution, traffic accidents, queues and bad roads. These are absolutely central challenges that are taken very seriously, both by the authorities and the car industry itself.
Nevertheless, it must be said that the car’s many positive aspects are often under-communicated. There is hardly any industry which has changed society more in the last 100 years or so, and which has contributed to a greater extent to economic growth – and thus also to improvements in prosperity. Cars, lorries and buses are in most contexts the world’s most efficient means of transport, and road traffic is a prerequisite for all trade, for a modern working life and for a settlement pattern where we can live and live throughout the country. Road traffic is now also undergoing a green shift, where zero-emission vehicles are becoming the rule.
Road transport is important for the economy
Menon Economics has prepared the report in 2023 on behalf of the Norwegian Public Roads Administration“The value of the road”. The report shows that the annual value creation from road traffic is NOK 1,100 billion a year. In comparison, the state budget’s expenditure side in 2023 is NOK 1,700 billion.
Of the total value creation of NOK 1,100 billion, NOK 580 billion is the value of transported goods, while the value of work-related travel is estimated at NOK 220 billion. The value of leisure travel and everyday logistics is estimated at NOK 330 billion, such as the value of driving the children to football matches, or visiting relatives and friends.
The car is Norway’s most important means of transport
Figures from Statistics Norway show that the passenger car is the dominant means of transport in Norway. In 2022, it will account for 76 percent of all passenger transport(passenger kilometers). Road traffic’s overall contribution to value creation and social development is therefore significant and has increased over the years. Just look at the development in the number of kilometers driven on the road since 1970[1]. This represents a significant strengthening of the freedom of people and businesses.
[1] SSB 2022 03982 Domestic passenger transport, by transport, statistical variable and year
The car and transport industry creates great value
Considerable value is created in the car and transport sector as an industry. With the help of Statistics Norway, we have looked at the development in turnover, employment and other important parameters from 2017 until 2021. We then define the car industry broadly as everything from the trade in cars, to the repair of cars, to transport services and petrol stations.
The industry generates more revenue than several of Norway’s largest businesses combined
In 2021, the car and transport industry consisted of nearly 33,000 companies. These had a total turnover of NOK 580 billion a year.[2]. That is more than the turnover of large companies such as Telenor, NorgesGruppen, Statkraft, DNB, Hydro and Orkla combined. Annual growth in the industry has been 3.3% since 2017.
[2] Statistics Norway 2023, 12910. Trade and repair consists of business code 45.1, 45.2 and 45.3, transport of 49.3, 49.4, 52.1, 52.2, 53.1, 53.2 and petrol station of 47.3
|
Number of companies, 2021 |
Turnover, 2021 |
|
|
Trade and repair, motor vehicles |
10,554 |
351 033 |
|
Petrol stations |
2,022 |
45,871 |
|
Transport services |
20,411 |
183,859 |
|
Total for the entire industry |
32,987 |
580 764 |
|
Employed, 2021 |
Annual work, 2021 |
Salary, 2021 |
|
|
Trade and repair, motor vehicle |
53,584 |
45,754 |
26,041 |
|
Petrol stations |
9,927 |
7,314 |
2,778 |
|
Transport services |
93,043 |
72,338 |
41 007 |
|
Total for the entire industry |
156,554 |
125,406 |
69,826 |
[3] Statistics Norway 2023, 12910. Trade and repair consists of business code 45.1, 45.2 and 45.3, transport of 49.3, 49.4, 52.1, 52.2, 53.1, 53.2 and petrol station of 47.3
Car taxes finance a lot of welfare
Although car taxes have been turned in a more environmental direction in recent years, the main purpose of the taxes is still to provide the state with revenue. In 2024, car taxes are estimated to be barelyNOK 40 billion[4]. It includes one-off tax, traffic insurance tax, weight year tax, road use tax and re-registration tax. The car taxes amount accordingly the state budget for 2024 enough money to finance e.g.:
The entire child benefit
The entire police and prosecution authorities
Almost half the defense or transport budget
In addition, there is toll revenue, estimated at NOK 13.2 billion in 2022. This is an increase of 80 per cent in ten years[5].
[4] Prop. 1 LS (2023-2024), page 140
[5] SSB 10723: Public administration. Payments for public services (million NOK), by statistical variable, type and year. A6127 Tolls.
In addition to contributing to value creation, employment and welfare, it is important for the industry to help limit the negative consequences of driving, such as greenhouse gas emissions, local pollution and traffic accidents.
The car industry contributes to us reaching the climate targets
Thanks to good cooperation between the car industry and the authorities, greenhouse gas emissions from road traffic are falling sharply. This applies in particular to the passenger car fleet, where almost 90 per cent of all new cars sold in 2023 were emission-free. According to the government’s green book, the proportion of zero-emission vehicles increases year by year and the development is positive for both passenger and heavy transport. Right now this is the status:
8 out of 10 new passenger cars zero emissions
3 out of 10 new, light vans zero emissions
4 out of 10 new, heavy vans zero emissions
9 out of 10 new city buses zero emissions
3 out of 10 long-distance buses zero emissions
1 in 10 new trucks zero emissions
Towards 2030 forecasts The Norwegian Environment Agency in Klimakur that the emissions from passenger cars will be reduced by 75 per cent compared to 1990. This makes a major contribution to reaching Norwegian climate targets. The development is even better if you extend the time horizon. As the phase-in of heavier vehicles with zero-emission technology accelerates, an ever smaller proportion of the traffic will consist of fossil vehicles. Emissions from road transport in 2035 are expected to be more than halved compared to today’s level, according to the Institute of Transport Economics. However, this requires that the politicians do not increase the purchase taxes and thereby weaken the possibility of reaching the climate objectives, as Oslo Economics has documented that will be the consequence.
[1] SSB 2013 12575: Driving lengths, by statistical variable, vehicle type and year
Less and less local pollution
Road transport contributes to local pollution mainly through particulate matter (PM10) and NOX emissions. Suspended dust is wear particles from the road, car tires and brakes. The total exhaust emissions of particulate matter from vehicles reached their highest level in the late 1990s. Since then, emissions have decreased, accordingly SSB[7]. The reason is constantly improving technology for light and heavy vehicles, as well as increased phasing in of zero-emission vehicles in the car fleet. The development is expected to accelerate according to the Institute of Transport Economics.
[7] SSB 2023, 08942: Particulate matter, organic pollutants, by emission source, energy product and component 1990 – 2021
Emissions of nitrogen oxide (NOX) are also falling. NOX occurs at high temperature, for example when diesel is burned in an internal combustion engine. Today, emissions are falling sharply due to better engine technology and cleaning systems, stricter emission requirements for both heavy and light vehicles and that the proportion of zero-emission vehicles on the roads increases. In just 10 years, emissions have been reduced by 46 per cent, according to Statistics Norway[8]. The positive development is expected to increase sharply, according to Institute of Transport Economics.
[8] SSB 2023, 08941: Acidifying gases, ozone precursors etc., by emission source, energy product and component 1990 – 2022