The Danish Government has entered into a broad agreement on Power-to-X in order to speed up the development of green fuels. The agreement includes a state tender of SGD 250 million with a goal to create green fuel for ships, aircraft, and trucks at home and abroad.
The agreement on a Power-to-X (PtX) strategy has been concluded in light of the serious situation in Europe, which highlights that energy independence and acceleration of green alternatives are more pertinent than ever.
With the agreement, Denmark aims to build between four to six gigawatt of electrolysis capacity by 2030, putting Denmark’s national ambitions in the top three among European countries. High ambitions for green fuels are essential to phase out fossil energy, reduce climate pressures, support green growth and ensure greater security of supply.
The new strategy will push for production and use of green hydrogen in hard-to-abate sectors like shipping and aviation as well as heavy road transport and industry, and further aims to promote energy export in the form of green hydrogen and e-fuels. Denmark has very good conditions for production of green hydrogen due to the large wind resources and the massive expansion of offshore wind capacity in the coming years.
The strategy builds on a number of previous initiatives and consists of a grant scheme of SGD 250 million in the form of a state tender for hydrogen production and better framework conditions for producers. The purpose of the PtX-tender is to support industrialization and upscaling of PtX-production in Denmark, thereby reducing the cost of green hydrogen production. The introduction of the PtX-tender means that the Danish Government has prioritised at least SGD 600 million for PtX since 2019.
PtX can contribute to an integrated and flexible energy system, where PtX is integrated into the energy system in a way that supports and complements existing supply sectors, such as electricity, gas and district heating. PtX technology makes it possible to produce fuels and chemicals that can replace fossil products in one a number of difficult-to-adapt sectors, such as shipping, aviation, agriculture, parts of industry and parts of heavy road transport.
“This agreement benefits the climate, Danish businesses and Denmark’s security of supply of green energy. I am thrilled that we have achieved a broad political consensus to set the bar so high that Denmark can play more than a national role in the development and production of new fuels. Europe is intensely searching for alternatives to fossil fuels, and we are in a hurry not only to become green, but also to become more independent from Russian fossil energy,” said Dan Jørgensen, Minister for Climate, Energy and Utilities.
The following initiatives, among others, are included in the strategy:
A total tendering of SGD 250 million granted as operating aid for 10 years.
Improved possibilities for running power lines directly from wind and solar farms to hydrogen plants.
The possibility of lower tariffs for major electricity consumers such as hydrogen producers.
SGD 11 million in 2022-2026 earmarked for a hydrogen task force responsible for providing guidance to project developers and authorities.
The first step towards establishing a national hydrogen infrastructure that can promote exports to countries such as Germany.
In continuation of the strategy, the Danish Government expects to announce a plan for expanding onshore and offshore renewable energy generation in Denmark, which will ensure that the country can become a net exporter of green energy - also in light of the new ambitious hydrogen target. A target of four to six GW of electrolysis plants can result in a 2.5 - 4.0 million tonne reduction in CO2 emissions by 2030, including up to two million tonnes in the Danish climate account.
A press release on the agreement can be read in English here, and the full agreement can be read in Danish here.
Contact the Royal Danish Embassy in Singapore for more information about business opportunities and how Denmark seeks to inspire green transition in Southeast Asia:
Mark Edward Perry
Head of Trade at the Royal Danish Embassy in Singapore
Phone: +65 9088 5567
Email: markpe@um.dk
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