EUR 168 million subsidy scheme to promote green fuels in Denmark

The government has adopted a Power-to-X strategy that will loosen Russia’s grip on Europe’s energy supply

Last week, the Danish government agreed to adopt a national Power-to-X strategy that will accelerate the development of green fuels in the country and abroad. In addition to this, it announced the launch of a DKK 1.25 billion (over EUR 168 million) subsidy scheme that will promote hydrogen production, among others.

Power-to-X is an energy conversion technology that allows the production of green fuels for transport and industry. More specifically, it converts renewable electricity (e.g., wind and solar energy) into fuels and other products. The main technology behind this process is electrolysis which uses electricity to split water into hydrogen and oxygen.

It is important to note that the Russian invasion of Ukraine influenced Denmark's decision as it put a spotlight on Europe's energy dependence and the need for green alternatives. It follows then that the government has now set out to accelerate the production of green fuels for aircraft, ships, and trucks (both at home and abroad).

High ambitions

In a press release, the government reveals that it aims to build an electrolysis capacity of 4-6 GW by 2030. In other words, it has high ambitions that will allow it to phase out fossil energy, promote green growth, and loosen Russia’s grip on the continent's energy supply. Expanding on this, Climate and Energy and Supply spokesman for the Radical Left Rasmus Helveg Petersen shared:

"The terrible crisis in Ukraine has taught us the need for green unity. It is therefore important that all the parties now support Denmark’s vision, where we are a net exporter of green energy. With good wind resources in the North Sea, it is our duty to contribute everything we can to a green and united Europe.”

The Minister of Trade and Industry Simon Kollerup also commented on the agreement and the subsidy scheme, sharing that Danish companies are ready to develop the green fuels and technologies of the future. Furthermore, Kollerup revealed that the strategy would create more jobs and accelerate the green transition of businesses.

According to the government, the Power-to-X strategy is expected to result in a CO2 reduction of about 2.5-4.0 million tons by 2030.