The Greatest Grift of All (2): Killing the Construction Industry
This is done by mandating 'emissions-free' (electric) construction machinery, which makes building anything much more complicated and expensive (but perhaps that's the point)
When suicidal empathy meets virtue-signalling delusions, you’ve arrived…in Norway.
This is the second instalment of a series on how ‘good intentions’ are wrecking regular people’s minds, wallets, and lives.
For part one, please see this piece:
Translation, emphases, and [snark] mine.
Obos CEO sounds the alarm: ‘Will kill house construction’
Forced electrification of Norwegian construction sites will destroy house building in many places, according to the country’s largest property developer.
By Olav Juven, NRK, 30 Dec. 2024 [source]
Electric excavators and asphalt pavers have made their way onto Norwegian construction sites.
But so far mostly in public construction projects.
Norwegian municipalities cannot order private developers to have emission-free construction sites. Nor can they force the state to do so, for that matter.
This is about to change.
A proposal to give municipalities the opportunity to impose such a requirement was recently submitted for consultation under the auspices of the Norwegian Environment Agency, on behalf of the Ministry of Climate and Environment.
More Expensive Homes
There is no shortage of critical voices. Among those warning are NHO Byggenæringen [the property developer’s association] and Norske Boligbyggelags Landsforbund (NBBL) [the Norwegian residential constructors’ association].
Daniel Kjørberg Siraj, CEO of Obos [the country’s largest developer], goes the furthest.
For all practical purposes, such a requirement would increase the cost of a home in Oslo by somewhere between NOK 150,000 and 300,000. And that’s a conservative estimate [divide by 11-12 to arrive at US$ or euro prices].
In that case, two things could happen. The homes could [sic] become more expensive for the customer. Or they won’t be built.
What I fear the most is that it will kill housing construction in many places. We’re about to start major projects at Mortensrud. With an extra NOK 5,000 per square metre, it’s basically a standstill. Those homes won’t be built.
‘There is talk of developing Groruddalen. In practice, this will mean that all housing construction in Groruddalen will be killed by such a requirement’, says Daniel K. Siraj.
Crisis Maximisation
‘With all due respect, I think this is perhaps a form of crisis maximisation’, comments Marit Kristine Vea (Venstre [Liberal Party]), Oslo’s city councillor for environment and transport.
Both the previous and current city councils have been advocating for emissions-free construction sites. Since 2019, this has been rewarded in tenders for the municipality’s own projects.
As a result, 77% of all work at municipal construction sites are electric.
The largest is the old Sophies Minde Hospital at Carl Berner. Here, the City of Oslo is building a nursery with 20 departments, a community centre, and a health centre.
‘The market is now delivering. Prices are falling at full speed’, says Marit Vea.
Zero Emissions From 2025
From the new year, Oslo is tightening the screws even further. Anyone who wants to build something for the municipality must do so without emissions.
‘Then there are some exceptions. If it's not possible to find an electric machine, we can grant an exemption, but in principle it must be electric’, Vea adds.
At the same time, the city of Oslo is pushing to be allowed to require this of all developers.
The construction industry accounts for a large proportion of Oslo’s greenhouse gas emissions, and not least global greenhouse gas emissions.
‘We will achieve far greater emission reductions, and also a faster market change, if we get these players on board and have the opportunity to impose these requirements on state and private players as well’, says Marit Kristine Vea [showing off, once more, the statist/central planning core of the ‘Liberal’ party].
Expensive Measure with Little Effect
The Confederation of Norwegian Construction Industries (NHO Byggenæringen) says it is in favour of all municipalities that want to reduce greenhouse gas emissions from their building and construction projects.
‘We welcome the fact that Oslo Municipality wants to take the lead. The construction industry has turned around very quickly and has delivered solutions very quickly’, says Guro Hauge, Director of Sustainability and Social Policy.
‘But demanding this of private companies is going too far’, says the industry organisation.
‘We are proactive when it comes to achieving climate reductions from our industry. That’s why we're keen to reduce emissions where it makes the most difference and costs the least’ [oh, look, private companies are looking at their bottom line in ways public entities never do].
‘We believe that requirements should not be imposed in the area that is perhaps the most expensive, but which means less when it comes to emission cuts from our projects’, says Guro Hauge.
Materials are the Biggest Culprit
According to NHO Byggenæringen, the biggest source of emissions are building materials and imported materials [which makes a mockery of these mandates…]
Instead, they would like to see a cap on emissions per square metre built. ‘Such a general climate requirement would stimulate the most cost-effective climate cuts’, says Hauge [I’m unsure if doing what the industry wants is the only way forward, but it sure seems more useful than a blanket requirement].
The industry will have different ways of implementing it. It may be to use other materials. It may be to design differently. It could be looking at circular solutions.
‘There have never been so few homes built since the Second World War. So it's important that we don't make the projects more expensive than necessary’, says Guro Hauge [as population grows due to immigration, this will drive up house prices even more].
Daniel Kjørberg Siraj agrees.
You get little climate effect for an awful lot of money, instead of focusing on what lasts: making the buildings themselves climate-neutral [which developers won’t do as it’s not cost-effective to do so…].
‘This involves the use of materials, energy supply and a number of factors that provide a better climate effect by building the buildings in a different way,’ says the Obos CEO [fine as far as the argument goes, but why aren’t you doing it?]
Intermission
The main issue I have with these political mandates is—is there a review procedure that allows us to learn if they worked?
I mean, that developer’s CEO cited at the end of the above piece has a point: blanket mandates vs. ‘carbon-neutral’ buildings is a fine argument, but what’s keeping developers from using these building materials in the first place?
Cost, is the first thing that comes to mind: I’d like to learn how much (more) using such ‘carbon-neutral’ materials would cost, and if it’s about the same compared to electric construction machines, why not offset them?
Alas, this all looks like political virtue-signalling coupled with the desire to be seen ‘doing something™’, esp. for politicos™ that live in large metro areas.
There’s a world of difference between these living arrangements and, say, my neck of the woods. Try clearing the road of 1.5m of snow in -15 degrees Celsius weather at around 1,000 metres above sea level…
Speaking of roads, let’s move on, shall we?
Road Construction will be Slow and Expensive if Electricity Replaces Diesel Power
The Norwegian Public Roads Administration wants to require more electric construction machinery from those commissioned to build roads. But this could be very expensive and cause major delays, warns the contractor.
By Allan Klo and Knut-Sverre Horn, NRK, 2 Jan. 2025 [source]
Road construction in Norway will become greener. That’s the goal of the Norwegian Public Roads Administration.
On national road 94 near Hammerfest, they have used both the summer and the cold darkness to check whether it is possible to replace diesel-powered construction machines with electric ones.
And the answer is yes, according to Erlend Eithun. He is project manager for the contractor Bertelsen og Garpestad, which was awarded the contract to repair the section:
We work twelve-hour shifts, and we charge at night. And that’s been enough for us to be able to drive full days without having to worry about charging.
The Egersund company has received government funding of NOK 8.8 million for the pilot project [divide by 11-12 to arrive at US$ or euro values].
They have used two gigantic dumpers to move enormous amounts of stone. They look like ordinary diesel-powered lorries—with one significant difference: They run on electricity.
‘That's the future’, says Eithun.
Cutting Emissions on All Fronts
The Norwegian Public Roads Administration has begun to take a closer look at how future road developments can be partially emission-free. Edgar Olsen is the project manager.
‘We are committed to reducing our emissions by 55% by 2030’, says Olsen.
This means that they make demands on contractors:
There are requirements not only for the use of electrical equipment, but also for the materials they use in the concrete, where they get steel from, what type of asphalt, and many other requirements to reduce emissions [which means that the gov’t will mandate the sourcing of such materials to private companies].
Using electric machines to transport thousands of tonnes of stone comes at a price. Snow, cold and strong winds make it challenging to build roads in the Arctic. With a fully charged battery, the dumpers can transport stones for ten hours before they need to be recharged.
‘Battery-powered machines quickly become a little weaker than the diesel machines. So when it comes to heavy lifting, electric machines probably still have some problems. But this is what we’re learning from now. That’s why we’re running a pilot project to see how we can achieve this’, says Olsen [remember: this is a public tender mandating these things for ‘private™’ companies].
Seven test months of electric operation will reduce diesel consumption by up to 190,000 litres. According to the Norwegian Public Roads Administration, this is equivalent to more than 500 tonnes of CO₂.
‘We’re part of European networks to get suppliers to start introducing electric construction machinery into the market to a greater extent, so that development can be accelerated’, says Olsen.
Gina Ytteborg is Director of Sustainability at the Norwegian Public Roads Administration. She emphasises that in the coming years, increasing environmental requirements will be imposed on contractors when awarding contracts:
We will have a gradual escalation, where we introduce requirements to a greater extent as the various technologies mature and become more cost-effective. For example, the crushing and loading of stone, which was tested on national road 94. It can be used on several projects as early as next year [if it’s cost-effective, companies will adopt these machines w/o mandates…]
Lacking Rechnology and Power
Svend Ingvar Larsen is general manager of Larsen Maskin and a board member of Maskinentreprenørenes Forbund (MEF) [the machinery entrepreneurs’ association].
He is happy to pour a little cold water onto the head of those who believe that electrification will happen quickly—or work everywhere.
They're still operating and using prototypes to drive with. Their efficiency, i.e., the charging time in relation to the utilisation time of large machines, is still too low. And not least: The costs are enormous.
He believes that electric machines have the future ahead of them. In some cases, a long way ahead.
‘Today, we don’t have enough power. Especially up here in the north, the grid is poorly developed’, says Larsen.
According to Larsen, many stretches of road lack sufficient power today. This is particularly true in Finnmark.
[Larsen] You either have to expand the power grid to be able to use the machines and charge them, or you have to install large diesel generators to charge them, or you have to transport battery cells a long way to recharge them, and drive them back to the machine.
Larsen believes that biodiesel is an underestimated solution for achieving the green shift:
Then we can use the modern machines we have and not have to replace all of today’s machines. It’s also an important issue from an environmental perspective [this is crucial: is is ‘better’ to replace working machines with new electric vehicles and achieve ‘better’ emissions-related results? (to say nothing about business-related aspects…)]
Can’t Mandata EVs Yet
He is sceptical that the Norwegian Public Roads Administration will already favour contractors with electric construction machinery when awarding contracts.
‘These machines are very expensive and too few have been produced’, Larsen says, adding:
You shouldn’t start demanding electric machines in major road projects, because now is not the time for that. The consequence is that the projects will be very expensive, and they may be delayed.
Larsen believes that electric vehicles are perfectly fine for landscapers, smaller projects and ploughing in city centres.
Erlend Eithun is more optimistic on behalf of the road builders after the recent experiences from national road 94:
We need to keep an eye on developments, be forward-looking and keep pushing. As of today, it looks like that will be the case in the future, and we have to deal with that. And it turns out that things have gone quite well.
Bottom Lines
One of the stranger aspects of life in Norway is the prevalence of (a certain type) of women in these positions, e.g., ‘sustainability manager’ or the like.
While I’m hesitant to consider men to be ‘better’, it is quite important to note that with construction in particular, first-hand experience is important. I’d actually demand of politicians a bit more than political careers—and then we’d probably have fewer stupid things to contend with.
Requiring electric vehicles on construction sites in Oslo is one thing, with other, more remote areas being quite a different beast.
Then there’s the issue of gov’t mandates that pertain to private individuals contracting with private companies.
Mandating EVs for construction sites isn’t the same as getting rid of leaded gasoline, hence this is absurd, in particular as it means more regulations that will be easier to comply with if you’re a big company.
What the gov’t is doing, therefore, is picking winners and losers.
For better or worse, these mandates will kill most small and medium-sized construction businesses and facilitate the emergence of a few gigantic corporations.
I’m unsure if this will still at least look like a free-market economy; it certainly won’t be one.
Sounds like Norway needs a 1776
"This is done by mandating 'emissions-free' (electric) construction machinery, which makes building anything much more complicated and expensive (but perhaps that's the point)"
That's right. Read Stefan Wehmeier's blog "Opium of the people" ( https://opium-des-volkes.blogspot.com/ ) and find out, why.