Announced as part of Denmark’s 2021 Recovery and Resilience Plan, the Green Tax Reform introduces a more ambitious corporate carbon (CO2) tax. The agreement introduces a CO2 tax rate of 750 DKK/tonne of emitted CO2 in 2030 for companies that fall outside of the European ETS. The agreement also introduces a minimum price ‘floor’ that can come into effect if the European ETS underperforms in reducing emissions. The energy taxes that apply to fossil fuels will change to a total tax up to 750 DKK per tonne of CO2 emitted in 2025.

<div>To benefit from the support of the Recovery and Resilience Facility set up by the EU in the aftermath of the COVID-19-induced economic crisis, Member States submit their recovery and resilience plans to the European Commission. Each plan sets out the reforms and investments to be implemented by end-2026 and Member States can receive financing up to a previously agreed allocation. Each plan should effectively address challenges identified in the European Semester, particularly the country-specific recommendations of 2019 and 2020 adopted by the Council. It should also advance the green and digital transitions and make Member States’ economies and societies more resilient. The Commission validates the plan after which it effectively enters in force and EU subsidies can start flowing towards the member state. The European Commission has given a positive assessment to Denmark’s recovery and resilience plan, which will be financed by €1.5 billion in grants. 59% of the plan’s total allocation for reforms and investments supports climate objectives, including:</div><ul><li>Support for green transport: providing premiums for the scrapping of old diesel cars, building new bicycle paths, infrastructure for electric bicycles and support to purchase green ferries. €259 million</li><li>Investment window and green tax reform: temporarily increasing tax deduction for companies investing in technology and software to facilitate their transition to new business models with lower greenhouse gas emissions. €407 million</li><li>Green research and development projects: supporting public-private research cooperation to accelerate the development of climate-friendly technology solutions. €94 million</li><li>Replacing oil burners and gas furnaces: expanding district heating grids into new areas and providing support to households to convert to electric heat pump systems. €65 million</li><li>&nbsp;SME support measures for energy renovation: supporting SMEs to grow and create local employment with projects such as energy renovation of buildings or boosting energy efficiency for industry. €80 million</li></ul>

The National Energy and Climate (ENCP) Plan is a ten-year integrated document <a href="https://ec.europa.eu/energy/topics/energy-strategy/national-energy-climate-plans_en">mandated by the European Union</a> to each of its member states in order for the EU to meet its overall greenhouse gases emissions targets. &nbsp; The plan exposes the key objectives and its measures :&nbsp; 1) decarbonisation : reduction of GHG emissions, transport green transition with a stop to sales of all new diesel and petrol cars as of 2030, ban on burning of straw residues on fields, public afforestation and a grant scheme for afforestation on private agricultural land and subsidy for conversion of arable land on organic soils to nature, etc;&nbsp; 2) renewable energy : three new offshore wind farms of at least 800 MW each, reduction of the electrical heating tax and of the electricity tax, support of geothermal energy, etc;&nbsp; 3) energy efficiency : to build a competitive subsidy scheme related to private enterprises, efficiency of existing buildings through renovation, etc;&nbsp; 4) energy security : stable energy supply thanks to laws on responsibilities regarding electricity supply, gas supply and emergency plans, prevention of risks in the energy system, increased international cooperation, interconnectivity concerning energy supply.&nbsp;

This document sets the government's strategy to boost cycling's use in the country, both for commuting and leisure purposes.

The Climate Policy Plan set a target of 40% reduction in emissions by 2020 compared to the 1990 levels and outlined the government's proposal for a Climate Change Act. Oil for heating purposes and coal are to be phased out by 2030, and electricity and heating supply is to be 100% covered by renewable energy by 2035. Further non-ETS reductions for the period of 2013-2020, is set to 20% by 2020 compared with 2005.

The Climate Act sets a target to reduce Denmark’s emissions by 70 percent in 2030 compared to 1990 and climate neutrality by 2050. The Act sets a rolling five-year target, 10 years in advance. The UN accounting rules are used to calculate greenhouse gas emissions and reductions against the target.&nbsp;</div><div> The climate council is strengthened and expanded; its funds doubled, and its independence strengthened by self-election of new chairman and members. The Act sets a series of reporting obligations on government, including an annual parliamentary examination of the government’s action towards meeting the targets. Government is&nbsp; required to produce on the impact of its climate policy on Danish imports and consumption. Government must also produce an annual global strategy stating how the government's foreign, development and trade policies ensure Denmark’s role as a global driver in international climate policy. Section 13 of the Act provides for the repeal of the previous Climate Change Act (Act No. 716 of 25 June 2014)</div><div> The Act was amended in 2021 to include the emission reduction target for 2025 of 50-54%.

The 2019 amendment to this Act implements the political decision of 22 February 2018 to stop exploration and production of hydrocarbons on land and in the inner waters of Denmark.

Comprehensive agreement passed by a majority in the parliament that aims at reducing emissions via energy efficiency and increasing the share of renewable energies towards a green socio-economic transition. The overall objective is to shift energy supply to have a share of 35% renewable energy in final energy consumption by 2020 and 100% renewable energy by 2050 expected to reduce GHG emissions by approximately 34% by 2020 over 1990. It proposes a 7.6% reduction of gross energy consumption in 2020 in comparison to 2010. 
 
It contains a number of key elements that contribute to the overall target. Energy companies must realise specific energy savings beyond current standards. It also includes development of a comprehensive strategy to improve energy efficiency standards in buildings, expansion of wind power from 25% (2012) to 50% (2020), demonstration and use of new renewable energy technologies (wave, solar, geothermal), amendment to the Heating Supply Act to increase attractiveness of shifting from coal to biomass, phasing-out of oil-fired boilers via encouraging shifts to natural gas boilers and electrical heat pumps using ambient heat in existing buildings and subsidies to promote investment in energy efficient use of renewable energy in industrial production processes, calls to draw up strategy on establishing smart grids, improving opportunities for using biogas (provision, financial support), facilitating a shift in transport sector from fossil fuels to electricity and biofuels via subsidies for car recharging stations as well as the implementation of the 10% target for renewable energies in transport by 2020 and the implementation of efficiency improvements in the energy sector.

Obligations for companies that produce, process, receive or dispatch energy products to pay pre-defined, annually varying taxes on these energy products. &nbsp; &nbsp;A tax reduction is available if the mineral oil product is blended with biofuels.

Tax on certain energy products to discourage their extensive consumption, used in conjunction with the energy tax. Includes fuels for transport and energy generation as well as products with high carbon intensity.

Denmark. National Communication (NC). NC 8. Biennial Reports (BR). BR 5.
, National Communication,Biennial Report from Denmark in 2023

Denmark. 2022 National Inventory Report (NIR), National Inventory Report from Denmark in 2022

Denmark. 2021 National Inventory Report (NIR), National Inventory Report from Denmark in 2021

Denmark's Mid-century, Long-term Low Greenhouse Gas Emission Development Strategy, Long-Term Low-Emission Development Strategy from Denmark in 2020

Denmark. Biennial report (BR). BR 4, Biennial Report from Denmark in 2019

The Danish Climate Policy Plan

Law passed

Law amended

39% GHG emissions reduction from non-EU ETS sectors by 2030 against a 2005 baseline

The Danish Climate Policy Plan

Main documents

Targets (1)

Timeline

Note

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