Carbon Removal Policy in Denmark

In a Nutshell

Denmark aims to become climate neutral by 2045, and to decrease greenhouse gas (GHG) emissions by 110% in 2050 compared to 1990 levels, relying on carbon dioxide removal (CDR) for both goals.
The 110% reduction goal would require around 8 million tonnes (Mt) of net negative CO₂ emissions. Total removals needed are likely twice that due to expected residual emissions in 2050.
Over the past years, Denmark has significantly increased efforts to become a leader on both carbon capture and storage (CCS) and CDR (primarily novel methods), funding research and demonstration projects on carbon capture and injection of CO₂ into geological reservoirs, as well as establishing funding and subsidies for a range of CDR methods, including afforestation, biochar and BECCS.
Denmark wants to become a carbon storage hub, aiming to provide part of its significant geological CO2 storage capacity to other European countries to store their CO₂.

Role for carbon removal in national climate policy

The Danish government increased its climate mitigation ambitions in 2022, announcing the goal of reaching climate neutrality by 2045 and achieving GHG emission reductions of 110% compared to 1990 levels in 2050. Based on Denmark’s net GHG emissions in 1990, this new goal would mean that it would need to generate net negative emissions of at least 7.8 Mt CO₂e (CO₂ equivalent) in 2050. Total removals would likely need to exceed this amount due to expected residual GHG emissions from hard-to-abate sectors and processes in 2050, which would need to be counterbalanced with further negative emissions.

Denmark has recently started assessing potential policies and actions for implementing and scaling a number of CDR methods for the years 2025-2035. Scenarios by the Danish Energy Agency examine CDR’s potential role in Denmark in 2050 and project that BECCS, DACCS, biochar and forest sinks could contribute to the generation of negative emissions of up to 13 Mt CO₂e in 2050. The Long-term Strategy of 2019 – which still foresaw Denmark reaching net zero GHG emissions in 2050 and which had been developed prior to more recent 110% goals – expected to counterbalance the residual emissions in 2050 with removals in the LULUCF (land use, land use change and forestry) sector.

Relevant legal frameworks

The cornerstone of Denmark’s climate ambition is set in its Climate Act. The 2020 Act outlined the country’s 70% GHG emissions reduction goal for 2030 compared to 1990 levels and established the goal of making Denmark a climate-neutral society by 2050 at the latest considering the Paris Agreement’s goal of limiting global warming to 1.5°C. The Act will now need to be amended to provide a legal basis for the new more ambitious 2045 target and the 2050 emission reductions target of 110% compared to 1990 levels.

The Climate Program 2022 suggests a variety of CDR methods which could be applied in Denmark before 2030 to reach the country’s climate goals, including biochar, afforestation, and BECCS. For BECCS, a broad range of potential application options is considered, from bioenergy combined heat and power plants to biogas facilities and waste incineration plants, from feedstocks such as manure, straw, and forest residues to industrial waste. Only through BECCS and pyrolysis for biochar production combined, does the Danish government consider it possible to decrease Danish net GHG emissions by nearly 3 Mt CO₂e annually in 2030.

In 2021, parties representing a majority in the Danish parliament developed a CCS strategy for Denmark, underlining its intentions to use CCS and CCS-based CDR methods to:

reach the country’s climate goals;
further CDR application and negative emissions generation in Denmark via negative taxes or subsidies;
invest in research projects relevant to CCS;
analyse DAC(CU/CS);
decrease its costs;
develop Denmark into a European Hub for CO₂ storage.

Denmark is one of the few countries that has ratified the London Protocol’s amendment to Article 6, provisionally allowing contracting parties to transport CO₂ for geological storage across maritime borders. This ratification has led Denmark, Flanders and Belgium to develop an agreement and, subsequently, a framework for the storage of Belgian CO₂ in Denmark in early 2022.

Support for R&D and Innovation

Since 2007, Denmark’s Energy Technology Development and Demonstration Programme (EUDP) has provided funding for the demonstration of innovative green technologies, including those focused on geological CO₂ storage and direct air capture (DAC) technology. Projects include Bifrost and Greensand, both focused on enabling permanent geological storage of CO₂ in the Danish North Sea. The latter commenced injection of CO₂ which was captured in Antwerp, Belgium and transported to Denmark for storage in March 2023. The two projects could eventually reach a combined annual CO₂ storage capacity of 24 Mt CO₂. Furthermore, the EUDP granted funding for the research project CHOCO₂LATE focused on investigating and demonstrating DAC and turning captured carbon into fuel.

The Finance Act of 2022 established a subsidy pool for facilities generating negative emissions, such as direct air carbon capture and storage (DACCS) installations, facilities upgrading biogas, or pyrolysis plants, aiming to annually remove up to 0.5 Mt of CO₂ from the atmosphere by 2025. In addition, a CCUS subsidy pool provides subsidy opportunities to CCU and CCS installations capturing CO₂ at energy-intensive industrial facilities, waste plants, and heat and power plants. Should these plants use biomass as a feedstock (and therefore generate negative emissions), they would still be eligible for the CCUS subsidy. The CCUS subsidy pool is expected to generate an annual total of 0.4 Mt CO₂ emission reductions by 2025. Moreover, BECCS is expected to become eligible for further funding under the CCS fund of Denmark’s national green tax reform.

The fund for negative emissions via CCS (NECCS) has opened a round of funding for CDR projects until December 2023.

Denmark’s Climate Program 2022 gives an overview of existing policies and provides examples of ways forward for a range of conventional and novel CDR methods, including support for afforestation and peat/carbon-rich soils rewetting projects.

The government also plans to fund novel CDR methods, such as pyrolysis for biochar production, and further support for BECCS projects and applications.

On the horizon

In the coming years, Denmark is expected to scale up its geological CO₂ injection capacity. Several projects have already received permits for geological CO₂ storage below the North Sea in early 2023. The approved projects are expected to reach an annual injection capacity of 13 Mt CO₂ in 2030.

Adjacent to storage projects below the North Sea, a pilot project is currently under development and shall inject 0.5 Mt CO₂ annually onshore, following a broad cross-party compromise on new framework conditions of CO₂ storage in Denmark. Following the compromise, the Danish parliament has provided the Geological Survey of Denmark and Greenland with additional funding to explore CO₂ storage possibilities onshore and close to shore in Denmark.

Denmark’s climate minister has furthermore stated his intention to provide geological CO₂ storage space below ground in Denmark (estimated to amount to 22Gt CO₂) for other EU countries, underlining the willingness to increase international cooperation on CO₂ transport and storage.

In May 2023, Orsted was awarded about EUR 1.1 billion to capture and store 0.4 MtCO₂ from two heat and power plants from December 2025. The Government will open a new call for tender for CCS projects amounting to about EUR 1.7 billion next June and EUR 2.1 billion in 2025, with the aim to capture 0.9 and 1.4 MtCO₂ respectively.

Contributors

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Targets

Net zero target: 2050
Net Negative Target: 2050
First interim target: 2030
Type of interim target: Emissions reduction target
GHGs covered: Carbon dioxide and other GHGs
Separate target for emission reduction and removals: No
Comprehensive CDR Target: no
CDR Target for Conventional Removals: yes
CDR Target for Novel Removals: yes
Historical emissions: No
Annual reporting mechanism: Annual reporting

CDR Plans

Plans for carbon removal (CDR): Yes (nature-based and CCS-based removals)
Planning to use external carbon credits: Not Specified

Public consultations and upcoming policies

A public consultation on the design of the negative emission subsidy pool (‘NECCS-pulje’) is open until May 2023.

Key stakeholders

Danish ministry for Climate, Energy and Utilities (KEFM): ministry responsible for developing Danish climate policies and efforts in national and international contexts.
Danish Energy Agency (ENS): agency conducting modeling and preparing projections of and reports on Danish climate policies and its effects.
Danish Council on Climate Change: advising on and evaluating Danish climate change mitigation efforts.

Denmark