With the aim of an overall green transformation of the society, Denmark wants to show the rest of the world that climate action and economic recovery goes hand in hand. Therefore, a broad majority in the Parliament has signed the climate agreement and the green transformation of the energy sector and industry. The act is one of the most ground-breaking climate acts ever approved and sets the ambition of Denmark, higher than anyone could expect. In all, the climate agreement forecasts CO2 reductions amounting to 3.4 million tonnes by 2030. The climate agreement for energy and industry 2020 contains the following main elements:
New era with the world’s first energy islands
The agreement is a statement: Denmark is the first country in the world to develop the establishment of two energy islands by 2030 totaling 5 GW – one at Bornholm of 2 GW and one in the North Sea of 3 GW. In addition, the creation of a second park is promoted from the energy agreement 18 amounting approximately to 1 GW in Hesselø. For a total of 6 GW offshore wind, which is more than three times Denmark’s current volume of offshore. Not only will the energy islands generate power, but in the long run, the country aims at connecting technologies that can store and convert the green power to green fuels (so-called “Power-to-X”).
Priority is given to initiatives that ensure a transition to a market-driven expansion of solar cells and onshore wind power. Among other things, the technology-neutral tenders will continue in 2020 and 2021. Finally, the. importance of Energinet and the electricity grid companies is emphasized and subjected to the conditions explained in the framework of the agreement, consistent with the increasing electrification prospected.
The government is going to present an electrification strategy in early 2021.
Investments in the green technologies of the future
Meeting the 70% reduction target requires innovative new tools. Therefore, investing in the green technologies of the future. Specifically, the equivalent of 800 million DKK is allocated for this purpose. The amount of 20,000 DKK will be annually phased in from 2024 in a fund targeting the capture and storage of CO 2.
The fund will result in reductions of 0.9 million DKK tons of CO 2 / year in 2030 and must support solutions that can capture CO 2 from industry, then afterwards, reuse it. It is also possible to use CO 2 to produce green energy. At the same time, the government established a fund to support the creation of large-scale Power-to-X systems, for a total of total 100 MW. That’s more than five times the capacity of the largest plant existing in the world today. Moreover, the Netherlands has decided to invest around 1 billion DKK in the project.
Green restructuring of the industry
The agreement also includes initiatives that contribute to a green transformation of the industry through energy efficiency improvements, electrification and more biogas. In order to do this, 2. 5 billion DKK have been set aside between 2020-30 in the form of a subsidy fund for electrification and energy efficiency improvements for industries. At the same time, DKK 2.9 billion is allocated from 2020 until 2030 for the transition to biogas and other green gases, especially needed in industries where green power cannot be used.
Efficient use of energy
The agreement ensures a massive boost of efficiency efforts in industry and construction costs. This is obtained through a total amelioration of the electrification and energy pools efficiency in the industry. At the same time, state buildings are required to give priority to increase energy efficiency, through the use of targeted funds, where digital tools must support energy renovation efforts. The measures are based on the green housing agreement, which allocates 30 billion DKK from the National Building Fund for renovations of public housing and allows for the suspension of housing ceilings for municipalities and regions in 2020. The subsidy for green investment provides 1 billion DKK in 2021, which gives the municipalities and regions the opportunity to make extraordinary investments in, among other things, energy renovations and promoting the green transformation of housing
Green heat for the Danes
The heating sector must be green. Therefore, oil and gas must be removed and replaced by green district heating or electric heat pumps. The agreement therefore contains the reduction of prices of green power for heating, but simultaneously increasing the taxes on black heat. The surplus heat taxes are significantly reduced. The tax disappears completely for electricity-based surplus heat, for example in the case of certified heat, which ensures energy efficiency at the supplier. It has been agreed to provide support for the phasing out of oil and gas and to remove consumer ties. In addition, it is easier to establish new green and cheap heat generation by eliminating the outdated requirement that district heating systems must be able to produce both electricity and heat. Further, the agreement aims at developing a legal frameworks for regulating wood biomass production and increasing its proficiency. Specifically, 2.3 billion DKK is allocated to replace oil and natural gas boilers with green heat. The heat package is expected to reduce greenhouse gas emissions by 0.7 million. tons of CO 2 by 2030.
The new agreement also contributes to a greener transportation sector. Specifically, the remaining funds from the green transport fund will be used between 2020 and 2021. Further, another 50 million DKK will be added to the green conversion of transport. The funds are targeting, among other things, charging stations, heavy transport recovery and ferries. The initiative thus follows up on an agreement on the implementation of green transport fund from April 2020. After the summer holidays the government will present a comprehensive action plan for transportation.
Green tax reform
As part of the agreement, after the summer holidays, a green tax reform will be implemented, in order to increase the attractiveness of green solutions, with respect to black solutions, fully promoting the green transformation of the Danish society.
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