The Danish Energy Agency is working with the Ministry of Climate, Energy and Utilities to implement the Danish CCS strategy, which includes the development of a new regulatory framework to remove market barriers and make CCS possible in Denmark. We are also designing aid schemes to support the development of CCS technologies and establish the CCS value chain in Denmark.
Political agreements and legislation relevant to the CCS area
Executive Order on the administration of international nature conservation areas and the protection of certain species in connection with the feasibility studies, prospection and extraction of hydrocarbons, storage in the subsoil, pipelines, etc. offshore
With the Climate agreement for energy and industry etc. of 20 June 2020, the Government, together with a broad range of parties in Parliament, decided that CCS is to play an important part in achieving Denmark's climate policy goals. Consequently, changes to the regulatory framework should be made in order to make possible capture, transport and storage of CO2 in Denmark, as well as transport of CO2 across national borders.
In order to achieve these objectives, the agreement furthermore stipulated development of the Danish CCS strategy.
With the agreement on the distribution of research reserves etc. 2021 of 30 October 2020, the Government and a broad majority in Parliament decided to allocate DKK 700 million to establish four green research missions under the auspices of the Innovation Fund. This included a mission focusing on capture, storage and utilization of CO2 under the name “Inno-CCUS”. The mission aims to develop cost-effective CO2 capture and storage solutions that can be used to reduce CO2 emissions and create negative emissions from large industrial emitters, waste incineration plants, biogas plants and biomass-based CHP installations.
With the agreement on the future of oil and gas extraction in the North Sea of 3 December 2020, the Government and a broad majority in the Danish Parliament decided to allocate DKK 200 million in 2021-22 for development projects for CO2 storage in the North Sea. This was based on the rationale that the North Sea holds great potential for storing CO2 in former oil and gas reservoirs and can support Denmark's green transition and path towards the 70% reduction target in 2030 and climate neutrality by 2050. At the same time, CCS projects have the potential to support local employment in the same areas as the oil and gas sector is based.
On 30 June 2021, the Government and a broad range of parliamentary parties agreed on A roadmap for CO2 storage – first part of a CCS strategy. The agreement consists of a number of initiatives enabling storage in the Danish subsoil in both the short and long terms.
Specifically, the agreement started the process of preparing for the granting of licenses for CO2 storage in the Danish part of the North Sea, so that storage in depleted oil and gas fields could take place as early as 2025. The agreement also enables the import, export and transport of CO2 across national borders.
Furthermore, the agreement has allocated funding of DKK 210 million for studies of all relevant and potential storage possibilities in the Danish subsoil with close involvement of relevant municipalities, citizens, etc.
On 14 December 2021, an agreement on A roadmap for capture, transport and storage of CO2 – Second part of a CCS strategy was reached by the Government and several political parties.
The agreement focused on the entire CCS value chain (i.e. capture, transport, storage and use of CO2) and aimed at ensuring that the first CO2 capture plants and stores are in operation in Denmark by 2025.
On 4 December 2021, the Government and a political majority 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.
On 24 June 2022, the Government and a broad majority in the Danish Parliament reached an agreement on green tax reform for industry etc. The agreement stipulates the creation of a new subsidy fund for the capture and storage of CO2 from fossil as well as biogenic CO2 sources.
It has been estimated that the fund will deliver 1.8 million tonnes of CO2 reductions by 2030.
On 21 June 2022, the Government and a broad political majority reached an agreement on Regulatory framework for CO2 storage in Denmark – Follow-up on Denmark's CCS strategy.
In this agreement, a decision was taken ensure that the Danish state will be a co-owner of CO2 storage licenses in Denmark. The Danish subsoil is a shared resource, and state participation ensures that the state can have influence on subsoil activities related to CCS. State participation will also ensure that Danish society gets a share in any potential economic gains from CO2 storage.
The parties to the agreement furthermore decided that state ownership will be assumed by Nordsøfonden, which is deemed to have the necessary experience and competence from its engagement in oil and gas activities to protect the state's interests.