Denmark Allocates $3.9B to Carbon Capture/Storage as it Accelerates Timing

Denmark announced a comprehensive plan for carbon capture and storage that includes significant government support as the country also accelerates its timeline while saying that CO2 capture and storage is one of several critical tools to achieve climate goals in Denmark, Europe, and the rest of the world. The announcement of the new plan comes just a week after Denmark postponed its second tender for offshore CO2 storage saying the government needed to finalize a comprehensive plan that resolved government participation in the industry.

“We are moving the requirement for full capture from 2030 to 2029 so that we get more CO2 from the air and into the underground faster,” said says Climate, Energy and Supply Minister Lars Aagaard during a briefing about the new plan at Avedøreværket, a power station just south of Copenhagen. “The plan must also ensure a clearer framework for the burgeoning industry and in this way bring the Danish CCS industry up in scale and down in price. It may well be that it's geeky, but it's in the geekery that things happen.”

The plan was presented as a comprehensive approach to with the government stressing that by pooling resources and creating clear framework conditions for CO2 capture and storage it was providing clarity to Danish industry. The energy minister was joined by Business Minister Morten Bødskov and Transport Minister Thomas Danielsen in presenting the new plan.

Instead of smaller tenders, the government plans to launch two large, comprehensive tenders, one in 2024 and a second in 2025. They plan to invest approximately $3.9 billion, with approximately $1.5 billion for the 2024 tender and a further nearly $2.4 billion in 2025 allocated over a 15-year period to support the programs. The goal for 2024 is to set up plans for 0.9 million tons of carbon capture and storage and a further 1.4 million tons in the 2025 tender.  Going forward the government will continue to hold 20 percent state ownership, which is the model that was used for the first three licenses and the key point that the ministry said needed to be resolved before the next offshore tender.

While saying as a country Denmark must capture at least 3.2 million tons of CO2 annually by 2030, the new plan moves forward by one year the requirement for the programs to 2029. They said the possibility is also provided to start the large-scale capture and storage efforts by 2028.

The plan also ensures clear framework conditions for the industry regarding ownership and regulation for the transport of CO2 via pipes. Among other things, the government said it will expand the existing rules for the transport of CO2 to include all forms of CO2 transport, which is particularly important for the transport of CO2 for use in PtX facilities and for CO2 that must be shipped via ports for offshore storage.

The goal in addition to providing greater clarity was to increase the size and scope so that more companies can bid and participate in the efforts.

Denmark earlier this year awarded the first exploration licenses for offshore carbon storage after providing a provisional license for the testing and demonstration of the world’s first offshore storage operation. In addition, they awarded the first licenses for industrial plants to establish capture initiatives first centered on one of Ørsted’s plants but designed to also create the infrastructure for other industrial emitters to participate.