There is not yet a sufficiently strong economic incentive for emitters to capture and store CO2. A political decision has therefore been made to create two subsidy funds to support the deployment of CCS technology in Denmark and achieve substantial greenhouse gas reductions by 2030 and 2050.
The two funds are called the CCUS Fund and NECCS Fund, and they have been designed to deliver cost-effective greenhouse gas reductions that contribute to climate targets. While the NECCS Fund will exclusively support the capture of biogenic CO2 to achieve negative reductions, the CCUS Fund can support the capture of both fossil and biogenic CO2.
Combined, the two subsidy funds are expected to achieve 1.4 million tonnes of CO2 reductions annually by 2030.
The CCUS Fund is a market-based, technology-neutral fund aimed at supporting carbon capture, storage and utilization. The first disbursement from the fund is planned to be from 2025/2026. Once the fund is fully implemented, a maximum of DKK 815 million per year can be disbursed to recipients. The fund is expected to support the achievement of 0.9 million tonnes of CO2 reductions per year from 2030.
In the agreement “A Roadmap for Capture, Transport and Storage of CO2” of 14 December 2021, it was decided to split implementation of the CCUS Fund into two phases.
The first phase aims to achieve CO2 reductions of 0.4 million tonnes per year from 2025/2026. In the first phase, funding will be allocated to either one major carbon source or a consortium of smaller carbon sources, which will then purchase transport and storage. The funding would thus cover the costs of CCS at all stages of the value chain from capture to storage. Funding is given per tonne CO2 captured and permanently stored.
Learnings from the first phase of the CCUS Fund and new market developments will be taken into account in designing the second phase of the CCUS Fund.
On May 15 2023, the Danish Energy Agency announced that the Danish Energy Agency and Ørsted Bioenergy & Thermal Power A/S have finalized negotiations of a contract concerning state aid for Denmark's first project with full-scale capture, transport, and storage of CO2 (CCS). The project will capture and store 430,000 tonnes of CO2 annually from 2026.
Tender documents
The updated documents for the first tender of the CCUS Fund are available at EU Supply and can be downloaded below. All communication with the Danish Energy Agency regarding the tender must be through EU Supply.
The tender documents have been adapted so that municipally owned waste incineration and biomass plants can participate in the tender by allowing municipalities to be responsible for the entire CCUS chain, even if the municipalities are only allowed to participate in the CO2 capture itself. In addition, the Danish Energy Agency has made minor clarifications to the material.
Notice for changes or additional information
Appendix 2 - Definitions - without track changes
Appendix 2 - Definitions - with track changes
Appendix 3 - Requirements Specification - without track changes
Appendix 3 - Requirements Specification - with track changes
Appendix 4 - Solution Description - without track changes
Appendix 4 - Solution Description - with track changes
Appendix 5 - Time Schedules - without track changes
Appendix 5 - Time Schedules - with track changes
Appendix 6 - Subsidy and economy scheme - without track changes
Appendix 6 - Subsidy and economy scheme - with track changes
Appendix 7 - Subsidy and costs
Appendix 8 - Governance - without track changes
Appendix 8 - Governance - with track changes
Appendix 10 - Change management
Appendix 11 - Model Performance and Warranty Guarantee - without track changes
Appendix 11 - Model Performance and Warranty Guarantee - with track changes
Appendix 12 - Model Parent Company Guarantee - without track changes
Appendix 12 - Model Parent Company Guarantee - with track changes
Appendix 13 - Information about Sub-Suppliers
Appendix C - Comments to the tender documents
Appendix D - Template for Offer Submission Letter - without track changes
Appendix D - Template for Offer Submission Letter - without track changes
Appendix E - Letter of Commitment
Appendix F - Calculation of Penalty
Appendix G - Notification of processing of personal data
CCS Subsidy Contract - without track changes
CCS Subsidy Contract - with track changes
Guide to the ESPD - How to complete in Digitale Udbud
Tender dossier from 28 November 2022
Appendix 2 - Definitions - with track changes - 28/11/2022
Appendix 3 - Requirements Specification - with track changes - 28/11/2022
Appendix 4 - Solution Description - without track changes - 28/11/2022
Appendix 4 - Solution Description - with track changes - 28/11/2022
Appendix 5 - Time Schedules - without track changes - 28/11/2022
Appendix 5 - Time Schedules - with track changes - 28/11/2022
Appendix 6 - Subsidy and economy scheme - without track changes - 28/11/2022
Appendix 6 - Subsidy and economy scheme - with track changes - 28/11/2022
Appendix 7 - Subsidy and Costs - with track changes - 28/11/2022
Appendix 8 - Governance - 28/11/2022
Appendix 9 - Code of Conduct - with track changes - 28/11/2022
Appendix 10 - Change Management - 28/11/2022
Appendix 11 - Model Performance and Warranty Guarantee - with track changes - 28/11/2022
Appendix 12 - Model Parent Company Guarantee - 28/11/2022
Appendix 13 - Information about Sub-Suppliers - 28/11/2022
Appendix A - Offer Evaluation - 28/11/2022
Appendix B - Negotiation Plan - 28/11/2022
Appendix D - Template for Offer Submission Letter - 28/11/2022
Appendix F - Calculation of Penalty - 28/11/2022
CCS Subsidy Contract - without track changes - 28/11/2022
CCS Subsidy Contract - with track changes - 28/11/2022
Tender Specifications - with track changes - 28/11/2022
Prior information notice for the first tender of the CCUS Fund
The prior information notice for the first tender of the CCUS Fund has now been published in Tenders Electronic Daily (TED).
The documentation for the prior notification
With the prior notification, the Danish Energy Agency invites interested stakeholders to provide written input.
Second prior information notice for the first tender of the CCUS Fund
The second prior notification for the first tender of the CCUS Fund has now been published in Tenders Electronic Daily (TED).
The documentation for the second prior information notice
With this second prior information notice, the Danish Energy Agency is again inviting interested stakeholders to provide written input. The deadline for such feedback was 18 March 2022
See the invitation to the first informational meeting on the CCUS call for proposals
Webinar: Launch of the CCUS tender documentation, 2 May 2022
On 2 May 2022, the Ministry of Climate, Energy and Utilities held a webinar to mark the publication of the tender documents for the first phase of the CCUS pool.
On 4 December 2021, the Government signed an agreement on Investments in a continually greener Denmark under the Finance Act for 2022. The agreement introduced a new subsidy fund (the NECCS Fund) of DKK 2.5 billion, aiming to achieve negative emissions of an additional 0.5 million tonnes per year from 2025 onwards through CO2 capture.
The fund will support the achievement of negative emissions from CO2 capture of biogenic sources and subsequent geological storage. Biogenic sources refer to CO2 capture from biogas upgrading, biomass-based power and heat production, the biogenic share of CO2 captured in waste incineration plants, as well as carbon captured directly from the atmosphere (DACCS).
On November 10th, the Danish Energy Agency has announced on the Digital Tendering System/EU-Supply that the deadline for submission of offers in relation to the NECCS fund has been extended from December 1, 2023, to January 15, 2024. The expected contract signing date has been postponed from February 29 to March 15, 2024. The NECCS Fund's target for negative CO2 reductions in 2025/26 remains unchanged.
The EU Commission's state aid approval for the NECCS fund is approaching its final stages. In connection with this, the Commission has required the introduction of an additional safeguard against overcompensation of the aid beneficiaries in the tender documents - a so-called "clawback mechanism" - in case biogenic CO2 emissions are integrated into the EU ETS system.
Therefore, the extension of the deadline for submission of offers provides the potential tenderers with the necessary time to adjust their offer to the updated tender material. Furthermore, this will allow time for obtaining the European Commission's state aid approval before the deadline for submission of offers.
Moreover, the Danish Energy Agency, based on questions received in the Digital Tendering System/EU Supply with potential tenderers, has chosen to reduce the total contract value by DKK 50.2 million for technical reasons. This amounts to 1.9% of the total contract value of approximately DKK 2.6 billion.
These funds could only have been disbursed if a market actor were able to capture and store a certain amount of CO2 already in 2024. The Energy Agency has received no indications that there is one or more market actors capable of achieving this.
The questions received in the Digital Tendering System/EU-Supply from potential tenderers have also led to the introduction of several minor clarifications in the tender documents.
The DEA has uploaded the updated tender documents in the Digital Tendering System/ EU-Supply and has sent a corrigendum notice to Tenders Electronic Daily (TED) for publication.
Tender specifications - 10112023 clean
Tender specifications - 10112023 TC
Appendix A - Evaluation of offers - 101123 clean
Appendix A - Evaluation of offers - 101123 TC
Appendix 2 - Definitions - 10112023 clean
Appendix 2 - Definitions - 10112023 TC
Appendix 3 - Requirements specification - 10112023 clean
Appendix 3 - Requirements specification - 10112023 TC
Appendix 5 - Subsidy and economy scheme - 10112023 clean
Appendix 5 - Subsidy and economy scheme - 10112023 TC
Tender documents
The Danish Energy Agency has now published the tender material for the Negative Emissions via CCS fund (NECCS fund). The tender material is available on Digitale Udbud/EU Supply. All communication with the Danish Energy Agency regarding the tender must be conducted through Digitale Udbud/EU Supply.
The deadline for submitting proposals is December 1st. Proposals must be submitted via Digitale Udbud/EU Supply.
The Danish Energy Agency (Energistyrelsen) will hold an information meeting regarding the tender material on September 28th from 13:00 to 16:00 CET at the Danish Energy Agency's address, Carsten Niebuhrs Gade 43, 1577 København V.
Tenderers interested in participating in the meeting shall sign up via the electronic tendering system by sending a message to the DEA via the tab “Messaging” not later than 3 days before the meeting with specification of name of business and number of participants, in accordance with section 10 of the document Tender specifications. The DEA reserves the right to reduce the number of representatives per tenderer participating in the information meeting. If the tenderer wishes to participate online the tenderer is asked to specify this in the message. The participants will subsequently receive a link to the online version of the information meeting.
Appendix A - Evaluation of offers
Appendix B - NECCS template for offer submission letter
Appendix C - Declaration of intent regarding a performance and warrenty guarantee
Appendix D - Notification of processing of personal data
Appendix 3 - Requirements specification
Appendix 5 - Subsidy and economy scheme
Appendix 6 - Offered Rate and Contracted Quantity
Appendix 8 - Change management
Appendix 9 - Model performance and warranty guarantee
Appendix 10 - Information about Sub-Suppliers
Second round of market dialogue on the NECCS Fund
On March 31, the Danish Energy Agency invited stakeholders to participate in the second round of market dialogue on the NECCS fund. The market dialogue has now concluded, and the Danish Energy Agency is in the process of preparing the tender material based on the extensive feedback received.
Memo summarizing and addressing replies received in the public consultation on the NECCS Fund
The political agreement on improved framework conditions for CCS in Denmark merged the second phase of the CCUS Fund and the GSR Fund (from the green tax reform) into one overall CCS Fund to be implemented through two tender rounds. The first tender round will be announced in June 2024, the second in June 2025.
The agreement provides for tenders of around DKK 10.5 billion and DKK 16.3 billion, respectively, and funding will be paid over a 15-year period. The expected result is annual capture and storage of 0.9 and 1.4 million tonnes CO2, respectively. Funding will be available for capture and storage from 2028, with requirements for full capture and storage from 2029.
The objective of the agreement is to realise the goal of political parties to the agreement to ensure that market players understand the terms and conditions for the funding. Another objective is to ensure that the CCS tender rounds are relevant for large point sources and regional clusters.
Funding will be paid per tonne CO2 captured and stored, and contracts may be awarded to more than one player. Beneficiaries can be players from throughout the CCS value chain, consortia or a third party responsible for the entire value chain, i.e. capture, transport and storage.
Similar to the first CCUS tender, the tender rounds will allow some flexibility for opt-out after 2030, which means it will be possible to opt out of the contract if a winner of a contract deems it more profitable to sell the CO2 captured for industrial purposes, for example.
Implementation of the new merged CCS Fund requires state-aid approval from the European Commission.
The market dialogue provided market players, including potential tenderers, with an opportunity to submit written feedback and recommendations to the Danish Energy Agency about the design of tender documents and tender specifications for the CCS Fund tender rounds.
The deadline for submitting written contributions expired on 15 January 2024. In total, 18 market players participated in the market dialogue and the Danish Energy Agency is grateful for the many valuable inputs.
The Danish Energy Agency has now compiled a general summary of the first round of market dialogue on the CCS Fund.
Here is information on some Danish and European CCS-related funding programmes.
Note: Descriptions of the funding schemes below may not necessarily contain the most up-to-date information. In the event of inconsistencies, the material supplied by the organisation administering the aid scheme in question must be used. This overview is not an exhaustive list of all current CCS-related funding programmes.
EUDP
The Energy Technology Development and Demonstration Programme (EUDP) is a public funding programme. The programme supports the development of new technology, including CCS-related technologies that can contribute in meeting Denmark's energy and climate objectives.
Contact EUDP staff (English) if you have any questions about the programme.
Examples of EUDP-funded development and demonstration projects concerning CCS (English)
INNO-CCUS
In 2020, it was decided to establish four green research missions under the auspices of the Innovation Fund, including one mission focusing on carbon capture and storage or use under the name INNO-CCUS (English). INNO-CCUS is a broad-based research partnership with 54 different public as well as private actors, including universities, knowledge institutions and large and small enterprises.
In 2022, the partnership disbursed the first pool of project grants.
The four green research missions are financed by funds from the research reserve.
EU Innovation Fund
The EU Innovation Fund targets innovative technologies and large-scale flagship projects in Europe that can deliver significant CO2 reductions. These include CCS projects. The EU Innovation Fund itself is financed by proceedings from the EU ETS, but companies from both the ETS and non-ETS sectors can apply for funding.
The EU Innovation Fund manages two funding schemes: one targeting large-scale projects (projects with a total budget above €7.5 million) and small-scale projects (with a total budget below €7.5 million).
The EU Innovation Fund manages two funding schemes: one targeting large-scale projects (projects with a total budget above €7.5 million) and small-scale projects (with a total budget below €7.5 million).
Connecting Europe Facility, Energy
In the EU, CCS projects involving at least two EU Member States and/or countries participating in the single European market (Norway, Iceland and Lichtenstein) may also apply for funding. Funding is available via the Connecting Europe Facility (CEF), but eligibility is conditional on the project being included in the EU's Projects of Common/Mutual Interest lists. The lists are revised every two years, and the next list is expected to be published by the end of 2023.
EU's lists on Projects of Common / Mutual Interest