KEF, Alm.del - 2019-20 - Bilag 241: Publikationer fra dialogmøde med DI den 10/3-20 om den grønne omstilling af Europa (Green Deal) samt europæisk industri- og handelspolitik

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

AND PROPOSALS FOR THE EU

KEF, Alm.del - 2019-20 - Bilag 241: Publikationer fra dialogmøde med DI den 10/3-20 om den grønne omstilling af Europa (Green Deal) samt europæisk industri- og handelspolitik

EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Published by Confederation of Danish Industry

Photos: GettyImages and DI/Hans Søndergård

400.02.2020

ISBN 978-87-7144-196-3

KEF, Alm.del - 2019-20 - Bilag 241: Publikationer fra dialogmøde med DI den 10/3-20 om den grønne omstilling af Europa (Green Deal) samt europæisk industri- og handelspolitik

INTRODUCTION

Introduction

Climate change is the biggest societal

challenge faced by the EU and the rest of

the world. We all have a shared respon-

sibility in finding ways to accelerate the

path to a sustainable future. With the

right policies in place, business can drive

forward the technology development

and innovation needed for a sustainable

future in Europe. We see business as an

essential part of the solution to climate

change. Both at the national, European

and global level.

The Confederation of Danish Industry

(DI) supports the ambition of the Danish

government to reduce greenhouse gasses

by 70 per cent by 2030 as well as achiev-

ing climate neutrality in 2050. In fact, DI’s

economic plan for 2030 “Together we

create green growth” sets out 160 policy

recommendations, which combined will

reduce Denmark’s CO2 emissions by at

least 65 per cent in 2030, while increas-

ing annual growth to an average of 1.7

per cent and adding 120.000 new private

sector jobs to our economy. To reach the

70 per cent target, R&D efforts will have

to be strengthened significantly.

Denmark started its low carbon transi-

tion in the 1970s. We have since come a

long way. Today, most of the electricity

Danes use comes from wind or biomass

incineration. We have also become much

better at using energy more efficiently

in our buildings, businesses and private

households.

Denmark’s CO2 emissions is expected to

be 44 per cent lower in 2030 compared to

1990. This is due, in part, to decisions al-

ready adopted by the Danish Parliament

to stop burning coal in the electricity and

district heating sectors and to build more

offshore wind farms.

31 of the 160 recommendations in DI’s

2030 economic plan focus on climate

and sustainability. If implemented, these

measures will cut Denmark’s emissions

by an additional 20 per cent in 2030.

Aside from renewable energy and energy

efficiency, these proposals cover circular

economy, transport and water technolo-

gies.

Denmark cannot solve the climate change

issue alone. We need the EU and the rest

of the world to take similar ambitious cli-

mate actions and promote sustainability

more broadly. Danish businesses there-

fore welcome the Green Deal presented

by the Von der Leyen Commission.

An ambitious European Green Deal, with

climate neutrality by 2050 as the principal

objective, is the right starting point for the

EU. To deliver on our ambitious climate

targets, both medium and long-term,

thorough considerations should be given

to the regulatory framework for the green

transition. Europe needs a coherent mar-

ket-based framework that will enable the

market to deliver. A confident market is

the best way to mobilise private invest-

ments in the green transition.

The Danish business community wants to

contribute to the discussion on Europe’s

green transition by proposing concrete

initiatives on Europe’s green future.

Despite being a small EU-member state,

we hope that the EU and other member

states will look to Denmark as a pilot

country and a source for inspiration for

the green transition.

Lars Sandahl Sørensen

CEO

Confederation of Danish Industry

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Energy & Climate

The rise in CO2 emissions over the last 30 years and

a growing global demand for food, materials, stable

electricity, heating, cooling and transportation

represent major climate challenges worldwide.

The question the EU faces is therefore: How do we

reduce CO2 emissions and ensure access to clean

and affordable energy, while also creating economic

growth? How do we succeed in furthering our energy

use efficiency? And how do we decarbonise our

industrial value chains cost-effectively?

NATIONAL LEVEL

Sustainable progress will not be made

without firm political commitment. In

2018, Denmark decided to lead the

green transition and become entirely

climate neutral in 2050. Furthermore, in

late 2019, a large majority of parties in

the Danish Parliament supported a new

Danish Climate Law setting out a 70 per

cent reduction target for 2030, compared

to 1990 levels.

Energy efficiency

Energy efficiency has historically played a

large role in Danish emission reductions.

The Danish Industrial sector is today

amongst the most energy efficient glob-

ally. This has assisted the Danish compa-

nies to maintain their competitive edge.

Buildings are one of the greatest energy

consumers, representing almost 40 per

cent of all energy consumed. According to

the Danish Energy Agency, approximately

85 per cent of the buildings we will live in

by 2050 have already been built.

Decarbonisation of the buildings we use

today will therefore be key to reach the

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ENERGY & CLIMATE

goal of a fossil free society by 2050. Due

to an increasingly climate-friendly use of

green electricity and green district heat-

ing, CO2 emissions from buildings are

already relatively low, compared to the

amount of energy they consume. There

is nevertheless still further potential in

decarbonising our buildings.

successful deployment of renewable en-

ergy production in Denmark has, in part,

been driven by technological advance-

ment and significant cost reductions of

wind energy. In fact, today, wind energy is

cost-competitive compared to fossil fuels.

Green power

Another key element in reaching climate

neutrality is to expand the share of renew-

able energy harnessed from wind. This

also includes driving the development of

an intelligent energy system capable of

managing supply fluctuations of renewa-

ble energy.

Denmark installed its first commercial

offshore wind farm 30 years ago and has

since been a global leader in the wind

industry. In 2019, onshore and offshore

wind turbines along with solar power pro-

vided around 50 per cent of Denmark’s

electricity consumption. Implementation

of the 2018 Danish Energy Agreement

will ensure that 100 per cent of Danish

electricity consumption is to be gener-

ated by renewable energy by 2030. The

Green efficient heat

District heating is another key compo-

nent of Denmark’s energy transition.

Today, 63 per cent of Danish homes get

their heat and hot tap water from district

heating. Furthermore, around 70 per

cent of heating in Denmark is renewable

based in the combined heat and power

production with efficiency rates of up to

92 per cent. This makes district heating

essential to the Danish heat and power

supply. Because of the high efficiency and

flexibility in district heating, combined

heat and power systems will continue to

be a key element in Denmark’s vision for

climate neutrality by 2050.

Combined measures of scaling up

renewable energy production, district

heating and cooling and ambitious energy

efficiency measures have made Denmark

one of the most sustainable countries

in the world. However, with a target of

cutting CO2 emissions by 70 per cent by

2030, climate actions must be accelerat-

ed even further. Therefore, as part of our

economic plan for 2030, DI published

31 recommendations that will result in

an additional 20 per cent emissions re-

duction. With DI’s plan, Denmark could

reach 70 per cent reduction of CO2 emis-

sions in 2030.

How do we reach 70 per cent by 2030?

The faster we act, the better chances we

have of reaching the 70 per cent goal.

In fact, several of our recommendations

need to be implemented in the beginning

of this decade, in order to give both busi-

nesses and citizens time to adapt.

We also need to strengthen Danish com-

panies’ ability to compete. Neither our

economy nor the planet will win if our cli-

mate action results in companies moving

jobs or production abroad. This will only

relocate our greenhouse gas emissions

elsewhere. Therefore, our companies

must remain strong competitors in inter-

national markets.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

The below proposals are part of the 31

recommendations for energy and climate

in DI’s 2030 plan:

—

Renewable electricity should be

accessible and cheap for everyone

to use. To that end, Denmark should

establish two additional offshore wind

farms and continue to develop both

solar and wind onshore.

—

More efficient use of energy in our

buildings and companies. A better

legal and regulatory framework is re-

quired to enable energy efficiency as

well as introducing a green transition

financing mechanism for industry.

—

Better use of surplus heat from ovens

and machines in our factories. District

heating plants can use this surplus

heat for radiators in homes and offic-

es without emitting more greenhouse

gases. Outdated rules and taxes stand

in the way, preventing our society

from utilising surplus heat from one

sector to an energy source in another

sector.

—

Restructure taxes on cars to incen-

tivise purchase of cars that emit little

or no greenhouse gases. Rules for

company cars also need to be adjust-

ed to incentivise the purchase of low

or zero emission cars.

—

The annual public investment in

research and development of green

solutions should be raised by at least

EUR 300 million by 2022.

emissions in all parts of the economy.

Sector integration will enable us to har-

vest the benefits of positive symbiosis

between sectors and initiatives.

Energy efficiency in an industry has the

potential to boost competitiveness. The

industrial sector uses more energy than

any other end-use sector, consuming

about one half of the world’s total deliv-

ered energy. Lowering energy consump-

tion is therefore an important driver for

industrial productivity growth. Energy, on

average, represents between 1 per cent

and 10 per cent of total production costs

– and for energy intensive industries, such

as steel, chemical, paper, pharmaceuti-

cal, cement and construction materials,

the share of energy costs is even higher,

between 15 per cent and 40 per cent on

average.

A cost-effective low-carbon transition re-

quires acceleration of investments in low

carbon technologies across all sectors of

EU’s economy. Ambitious innovation pro-

grammes and utilization of merging op-

portunities such as digitalization should

be promoted to further push the green

transition.

EUROPEAN LEVEL

While Denmark may serve as a good

example for the green transition, neither

Denmark nor any other member state

will succeed in achieving climate neu-

trality by 2050 without corresponding

ambitious energy and climate policies at

the EU level. We need the EU to commit

to ambitious climate action, but also to

ensure economic growth and welfare.

This will require competitive companies.

Only a competitive Europe will be able

to facilitate transition towards 2050 in

which climate action, economic growth

and welfare are equivalent pillars.

Furthermore, this will require a coherent

market-based framework for EU’s energy

and climate policies. A framework that

covers all sectors of our economy in order

to stimulate cost efficiency and decreased

DI’s plan reduces CO2 emissions

CO2 emissions with DI’s 2030 plan

Million ton of CO

Carbon emissions reduction without further

initiatives (baseline)

Electricity and district heating

Buildings

Industry

Other

Environment

Transport

Agriculture

65 per cent reduction

70 per cent reduction

Note:

DI’s proposals include LULUCF and cancel-

lation of EU ETS quotas. Cancellation of quotas

contributes to reduction of CO2 emissions across

the EU rather than only within Danish territory.

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

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ENERGY & CLIMATE

Our proposals for the EU

Adopt an EU climate law enshrining the 2050 climate neutrality

target and revise the EU 2030 climate targets. Greenhouse gas emis-

sions should be reduced by at least 55 per cent by 2030.

Strengthen EU’s internal energy market to allow for efficient trans-

portation of green energy between member states and European

regions. The EU Emissions Trading System should remain the key

instrument to drive forward the green transition based on mar-

ket-based principles and in a cost-efficient manner.

Ramp up the deployment of renewable energy production across

the EU. Wind energy, especially offshore wind, has huge potential

for further scaling in Europe. The EU should adopt a comprehensive

strategy for offshore wind.

Strive to become the most energy-efficient region globally. While

European industry is among the most energy-efficient industries

globally, there is still a huge potential for cost-efficient measures in

industry and in renovating Europe’s building stock.

Adopt a comprehensive strategy for smart sector integration. Smart

integration of renewables, energy efficiency and other sustainable

solutions across sectors will help to achieve decarbonisation at the

lowest possible cost. This will reduce the bill for renewable energy for

all citizens, while boosting industrial competitiveness in Europe.

Invest more in new green technologies, especially for industrial appli-

cations. New industrial applications of breakthrough technologies will

be a key component to maintain industrial competitiveness as Europe

transitions to a low carbon society. This includes battery technology,

green hydrogen, energy storage and carbon capture and storage.

Strive to become a sustainable supercluster. The EU should develop

and implement a common strategy to strengthen EU exports of

renewable energy solutions to the rest of the world.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Water sector

Europe is faced with water scarcity in some regions

and storm water situations in others. Europeans

demand quality drinking water. Meanwhile,

wastewater treatment is often costly and requires

massive use of energy. Improving the European water

sector with a view to reduce the sector’s energy

consumption will be a vital part of Europe’s transition

to climate neutrality in 2050.

NATIONAL LEVEL

Denmark aims to ensure an energy and

climate-neutral water sector in 2030. This

goal enjoys broad political support and is

also backed by both the water sector and

the industry. Innovation and deployment

of new technologies and digitalisation will

be key to achieve this ambitious goal.

The Danish water sector has reached

remarkable milestones. Today, it is con-

sidered a global leader in water resource

management, water savings, water

pricing, resource recovery and energy

efficiency. Not to mention water quality.

Nearly 100 per cent of our water supply

comes from clean groundwater.

Responsible management of water

resources

Water resource management is impor-

tant. Reduction of consumption in house-

holds and industries combined with re-

cord low leakage rates from water supply

infrastructure are the main drivers behind

Danish water management optimisation.

The per capita consumption of water in

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WATER SECTOR

Denmark is below 104 litres per person

per day compared to an EU mean per

capita consumption of 144 litres per day.

The average leakage rate in Denmark is

close to 7 per cent of water supplied. In

comparison, some European cities have

leakage rates of up to 50.

Denmark’s high standards of water sup-

ply and wastewater treatment is financed

through full cost-recovering water pricing.

A national water pricing authority keeps

track of the correct pricing, along with en-

during efforts into efficiency-enhancing

measures within the sector. For the in-

dustry, pricing of treatment of wastewater

at utilities is based on a basic wastewater

load and extra fees for wastewater load,

i.e. additional pollution loads. This cre-

ates an incentive for businesses to lower

their outlet of wastewater and polluting

residuals.

SCADA systems in water supply with

modern sensors and regulation on

pumps and valves lead to significant

reductions in leakage rates as well as

lower costs for water consumers. Modern

online or remote registration of metering

data supports digitalisation of the water

sector and reduces costs for consumers

and water companies alike.

The EU should support good manage-

ment of water resources in Europe. Not

least in terms of fostering cooperation

between member states on best practices

and exchange of knowledge.

EUROPEAN LEVEL

According to the International Energy

Agency (IEA), water losses in public sup-

ply are estimated at a staggering 24 per

cent in the EU, amounting to 13 billion

cubic meters. The energy consumption

of the EU’s water sector is equivalent to

3.5 per cent of the EU’s electricity con-

sumption and typically represents 30–50

per cent of the local authority’s elec-

tricity consumption. For comparison in

Denmark the consumption of electricity

in the water sector is 1.8 per cent.

As the water resource base in Europe is a

closed loop, with a circular reproduction

of the water resource, the political focus

should be on increasing water quality

and preserving our water resources.

This cannot be achieved without sound

management of both abstraction, reuse

and recharge and discard of water in EU

member states.

Benchmarking

Benchmarking the water resource

performance in member states such as

water consumption in households, agri-

culture and industry sectors (e.g. via the

Industrial Emissions Directive) is crucial

to promote best practice and shed light

on weak spots. A market-based exchange

of water technology will support use of

the best available technologies and en-

courage innovation in the water sector. A

coherent market for water technologies

will attract investments in innovative

solutions.

Transparent pricing

Transparent water pricing and uncovering

subsidies are important instruments in

good water management. Consumers

will have greater incentive to change their

behaviour and reduce their water con-

sumption if they are made aware of the

actual prices of their water consumption.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Average water distribution losses

Country EU27 + NO,UK

Per cent

Median = 23

Source:

EurEau: Europe’s water in figures – 2017 edition

Digital tools are essential to provide trans-

parent and efficient water markets for

taxpayers. Especially if water markets are

tax-subsidised. Likewise, open data on

performance and quality of water service

will make it more attractive for the private

sector to invest in the water sector.

per cent. To reverse this trend, energy

efficiency in the European water sector is

badly needed.

Reduced water consumption in house-

holds and industry means that less water

will be pumped. In turn, this reduces

energy consumption. Furthermore, re-

sources in the wastewater stream should

be recovered. The technology to do this

is already available. Especially recovery

of phosphor and other nutrients. But for

other types of resources, such as metals,

the right technologies for a widespread

use still need to be identified.

Energy efficiency

The water sector consumes approximate-

ly 3 per cent of Europe’s electricity use.

As all wastewater is required to be treated

in accordance with EU regulation, this

number is predicted to increase to 6–8

Reporting obligations

EU rules are needed to reverse the recent

lack of progress in improving the water

sector in the member states. Such rules

should focus on goals and reporting ob-

ligations. Member states should remain

flexible to some degree, in accordance

with the subsidiarity principle, in how to

reach the goals. Member states should

set out national action plans, while the

role of the Commission should be to en-

sure responsible monitoring.

Case

A case story from Denmark shows the incredible potential of the European water sector: Since

2010, the city of Aarhus has implemented energy-saving measures in the whole water cycle and

optimized the energy production from the wastewater facility. Today, the city has succeeded to

make the whole water cycle completely energy-neutral, and, as a side effect, water losses could

be reduced to only around 6 per cent, and, in 2016, the price of water dropped by 9 per cent for

consumers.

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WATER SECTOR

Our proposals for the EU

To lift the European water sector to a new level, the EU should

take up the following initiatives:

Benchmark water sector service in Europe. This can be done

as a follow up to the water framework directive and to support

a sustainable water sector finansing.

Promote full cost-recovering water prices throughout Europe to

support a sound behaviour of water consumers.

Promote use of management data and metering data in water

supplies. Enhance the use of data and digitalisation in moni-

toring, reporting of water resources, consumption and losses

as well as quality according to the requirements of the water

framework directive.

Set goals for energy efficiency in water sector operations in

Europe.

Work towards an energy- and climate-neutral water sector by

2030 with new initiatives under the urban waste water treat-

ment directive and the water framework directive.

Set goals and action plans for the recovery of resources from

wastewater streams in connection with the Commission’s

initiatives on circular economy.

Set up innovation programmes in the EU to promote innovation

into new recovery techniques. The focus on pharmaceuticals

should be both at the source and at the wastewater treatment

plants.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Circular economy

The worlds’ resources are being spent at an ever-

increasing pace. This puts a massive strain on our

planet. With only limited natural resources available,

circular economy presents a new way forward. A way

in which we can still meet the demand for production

and consumption without depleting the world’s

resources.

The key idea in circular economy and

bioeconomy is that materials are kept in

circulation for as long as possible to retain

or even increase their value and reduce

the impact on the environment.

NATIONAL LEVEL

In Denmark, companies in various sectors

have embraced the circular way, using

different strategies to increase their re-

source efficiency. For example, use of side

streams schemes or take-back schemes

and use of secondary materials.

Better use of side streams and

industrial symbiosis

Denmark has a long tradition as a food

producing country with sustainability as

a core value. The Danish food sector is a

major export industry. It prides itself of

contributing to better resource utilisation

of foods, both in high-income countries

and in developing countries.

The ingredients industry has many of

the skills and technologies, such as fer-

mentation and purification, required to

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CIRCULAR ECONOMY

spearhead a European circular bioeco-

nomy, in which side streams from feed

and food production are utilised. Waste

materials from one production line can

be used to produce other more valuable

products, thereby contributing to value

creation, innovation and mitigation of

wastage of raw materials and food. The

Danish company Arla Foods Ingredients

is a great case example. Arla has a full

range of high-value products based on

whey – formerly a waste stream from the

production of cheese.

Recycled materials in everyday

products

Recycled materials are part of everyday

products in a circular economy. This

reduces the demand for virgin materials.

For example, Danish plastics producer

Plastix relies solely on ocean plastics

coming from fishing gear, and the Danish

deposit system delivers high quality

recycled materials in a closed loop sys-

tem. There is, however, still some way to

reach full circularity. Danish companies

struggle to source recycled materials in

the right quality, and the waste sector is

challenged by a lack of common criteria

for sorting waste.

Take-back schemes and common

market for waste

Take-back schemes are a way for busi-

nesses to make use of their discarded

products and reuse parts or recycle

materials. Furthermore, businesses can

use take-back schemes to gain valuable

insights about future product designs.

Danish pump producer Grundfos is

among the companies which take back

used products, dissemble them and re-

cycle the materials. While ease of disas-

sembly has not previously been a priority

in the design process, the ambition is now

to include disassembly to enhance circu-

larity in future products.

such as the Nordics. For small countries

it is not always economically profitable to

build national recycling facilities, hence

a lot of waste is transported to other EU

countries for recycling. The existing EU

legislation on shipment of waste makes it

very expensive and difficult to ship waste

between member states for reutilisation.

Moreover, companies experience large

variations in waste administration be-

tween member states. Especially regard-

ing waste characterisation and definition,

assessment of impurities etc.

Use of different terminology or – even

worse – national rules create barriers to

trade with waste between EU member

states. In sum, a coherent legal framework

for waste in the EU should make it easier

for European companies to reuse waste.

This would unlock the huge potential

within the circular economy, ultimately

resulting in more green jobs and more

investments that facilitate technological

developments.

THE EUROPEAN LEVEL

Waste is a resource and should legally be

treated as such. The international market

for trade with natural resources should

include waste. As a minimum, this should

be the case internally in the EU. The EU

waste shipment directive currently hin-

ders or makes transport of waste across

borders unnecessarily expensive. This is

especially a problem in smaller countries

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Case

The Danish city of Kalundborg is another great example of large local industries creating value

out of side streams that would otherwise be considered as waste. The Kalundborg Symbiosis, a

partnership between nine public and private companies, has since 1972 developed the world’s

first industrial symbiosis with a circular approach to production. The main principle is that a

residue from one company becomes a resource at another, benefiting both the environment

and the economy. These industries have established a complex green resource symbiosis.

Residual water streams and resource streams from various industries can be utilised in neighbour

industries or at the local wastewater treatment plant. Resources and energy are recovered and

the water is widely reused in the industry.

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CIRCULAR ECONOMY

Our proposals for the EU

Revise the regulation on transboundary shipment of waste to make

it less costly and burdensome for businesses to establish take-back

schemes across boundaries.

Make it easier to obtain approval of Novel Food application.

Currently, the EU Novel Food Regulation presents an investment and

temporal barrier to the development of ingredients from side streams

of existing food production. Typically, sufficient documentation will

amount to some EUR 1-2 million, and it will take 3-5 years to obtain

final approval.

Ensure uniform implementation and practice of the European criteria

for by-products and end-of-waste to strengthen the market for sec-

ondary materials in Europe.

Ensure that waste facilities which upgrade waste to secondary raw

materials back into the circular economy are able to receive input

material from other EU countries in a fast track handling.

Revise regulation on recycled content in food contact materials to

allow for non-food packaging in the plastic waste streams to be

recycled. Other products, such as personal care products, have strict

requirements for the quality of their packaging. These could poten-

tially be included in the food packaging part of the waste stream to a

larger extent than today.

Ensure that good quality criteria for secondary materials are available

in sufficient quantities at competitive prices. Some sectors, such as

metals and paper, are already functioning well, but in other areas,

such as plastics, there are still challenges. This can be helped by

establishing defined standard quality criteria for secondary materials.

Consider wastewater streams in a resource perspective by recovering

nutrients, especially phosphor. Further, develop and scale up the use

of techniques for widespread reuse of the resources in wastewater.

Prohibit deposition of waste that otherwise could have been reused,

recycled or energy-recovered.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Transport

Transport is responsible for around a quarter of

greenhouse gas emissions in the EU. Climate

neutrality by 2050 can therefore not be achieved

without significant CO2 reductions from the transport

sector. There are no quick fixes. All transport modes

must contribute to the decarbonisation of the mobility

system. To succeed, a varied and system-based

approach is needed.

NATIONAL LEVEL

Denmark aims to reduce its greenhouse

gas emissions by 70 per cent in 2030.

Almost a quarter of emissions in Denmark

comes from the transport of people and

goods. Although many Danes cycle or

use public transport in their everyday life,

Denmark faces a situation with still more

private cars, vans and trucks on the roads.

To reduce the emissions of the trans-

port sector, the Danish government has

established climate partnerships with

relevant businesses and the trade and

industry organisations. Based on a sector

approach, these partnerships aim to find

ways to reduce carbon footprint, while

also ensuring Denmark’s competitiveness

and prosperity, and without creating

increased inequality. These partnerships

also focus on how to decarbonize the

transport sector.

Moreover, the Confederation of Danish

Industry has embarked on an ambitious

2030 economic plan for Denmark. As

outlined below, this includes several

initiatives pointing in the same direction

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THE TRANSPORT SECTOR

as the EU Commission’s proposal for the

“European Green Deal”.

to buy new and more climate-friendly

trucks.

The heavy goods road transport must

change into a more sustainable and green

reality. Alternative fuels will quite possibly

be the most important way forward. In

addition, hydrogen-based technologies

(such as electric vehicles and vessels

based on fuel cells) may become com-

petitive in the medium to long-term.

Liquefied natural gas with high blends of

bio-methane could also be a short-term

alternative for long-distance haul.

FACTS & FIGURES

Transport plays an important

role in today’s economy and

has a large impact on growth

and employment. The trans-

port industry directly employs

around 10 million people and

accounts for about 5 per cent

of gross domestic product.

Effective transport systems are

fundamental for the European

companies’ ability to compete

in the world economy.

Logistics, such as transport

and storage, account for

10–15 per cent of the cost of a

finished product for European

companies. The quality of

transport services has a major

impact on people’s quality of

life. On average 13.2 per cent

of every household’s budget is

spent on transport goods and

services.

EUROPEAN LEVEL

Private cars

It should be cheaper to buy cars that

do not emit greenhouse gases, or cars

that emit very little such as electric cars,

hydrogen cars and plug-in hybrid cars.

In lieu of the current Danish registration

fee, car owners should pay a recurring fee

depending on the car’s climate footprint.

Likewise, companies should be encour-

aged to choose green vehicles. In the in-

tervening years, before all our vehicles are

replaced with CO2-neutral vehicles, we

must mix more sustainable fuel types e.g.

electro fuels and biofuels in the gasoline

and diesel.

Road freight

More trucks should run on biogas, elec-

tricity and other climate-friendly alterna-

tives to diesel. This might be achieved by

restructuring the energy taxes, so biogas

and diesel alternatives become cheaper,

while also providing subsidies for carriers

Aviation

Aviation is international. It is therefore

crucial for the competitiveness of the

sector that taxes on aviation are handled

in an international framework, preferably

globally, but at least at common EU level.

Aviation has been subject to the quota

system since 2013. The quota system is

in fact also a tax system. This should be

clearly reflected in any future revision of

the Energy Taxation Directive.

In the aviation sector Denmark is promot-

ing the establishment of a climate fund

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

based on contributions from passengers

flying from Denmark, dedicated to ensure

the off-take of alternative fuels especially

e-fuels.

Rail transport

Rail transport remains one of the most

energy-efficient solutions for carrying

freight over medium to long distances.

Therefore, rail freight should become

more competitive by removing operation-

al and technical barriers between national

networks and by fostering all around inno-

vation and efficiency.

Future investments need to focus on

the least polluting transport modes,

promote synergies between transport,

digital and electricity networks to ena-

ble innovations, such as vehicle-to-grid

services and smart features such as the

European Railway Traffic Management

System (ERTMS). This would enable, for

instance, high-speed train connections to

become the obvious alternative to flying

for short- and medium distance passen-

ger travel within the EU.

the bus and coach sector will contribute

in a positive way to the transition towards

the all around greening of transport.

Public Transport

Especially in cities and other urban areas

the use of public transport should be pro-

moted as a cleaner mode of transport and

the solution to the growing problem of

congestion. The use of alternative fuels in

Digitalisation

We need a more efficient organisation of

the entire mobility system based on digi-

talisation, data sharing and interoperable

standards. Digital solutions are key to

make mobility cleaner. Digitalisation will

enable smart traffic management and

increasingly automated mobility in all

modes, thereby reducing congestion and

increasing occupancy rates.

Share of transport greenhouse gas emissions

Per cent

44 %

19 %

14 %

13 %

Motorcycles

Cars

Light duty trucks

Aviation

Heavy duty trucks

and buses

Maritime

Rail transport

Source:

European Environmental Agency (EEA)

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THE TRANSPORT SECTOR

Our proposals for the EU

Ensure that all EU member states participate in a pan-European

effort to phase out fossil fuels in the transport sector.

Increase the share of sustainable fuels in the transport sector.

Revision of the fuel quality directive could be a means to achieve this

goal

Revise the Energy Taxation Directive. This should pave the way for a

harmonisation of fuel pricing across the EU and reduce tank tourism,

while also accelerating the uptake of lower CO2 fuels through the

introduction of a tax system that primarily focuses on the CO2 emis-

sions rather than the energy level.

Ensure that public procurement of vehicles and transport services

are CO2 neutral by 2030.

Revise the weights and dimensions directive to promote further use

of the modular concept for heavy duty vehicles in the EU.

Promote electrification of the European railway system. For side lines

and local network, alternative fuels could contribute significantly to

the greening of rail transport.

Promote European solutions for climate action in aviation. Encourage

solution-oriented partnership between businesses, legislators,

researchers and green organisations.

Expand the infrastructure for new zero and low-emission technol-

ogies. Harmonisation for loading and fueling facilities as well as

technical requirements throughout the EU should be considered.

Promote digitalisation in the transport sector, not least the establish-

ment of intelligent traffic management systems and an upgrade of

new sustainable mobility services to reduce congestion and pollution

in urban areas.

Promote connected and automated mobility, including solutions such

as Mobility-as-a-Service (MaaS).

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Financing the

green transition

Access to finance is key if the EU is to successfully

transition to a climate-neutral society by 2050. The

European Commission estimates that reaching the

current EU climate targets for 2030 will require EUR

260 billion annually in additional investments in the

green transition. It will therefore be pivotal to mobilise

further funding for climate action at both the EU and

member state levels.

NATIONAL LEVEL

Denmark has for years had a multilayered

strategy for incentivising financing of

the green transition. Long-term political

commitment to tackle climate change is

needed to mobilise capital for sustainable

investments. Ambitious climate goals,

adopted with broad political support,

serves as an important signal for the

financial markets. Ambitious climate tar-

gets will inject long-term confidence into

the market and mobilise private capital

for sustainable projects.

While market forces are key to raising pri-

vate capital for sustainable investments,

the public finances are also needed to

support technological research and

innovation as well as deployment of pro-

jects to overcome market failure and to

up-scale technologies. Denmark spends

roughly 3 per cent of GDP on research

and development, equivalent to almost

EUR 9 billion. This is compared to an EU

average of roughly 2 per cent of GDP. In

2019, the Danish government announced

that it will further increase funds for cli-

mate research.

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FINANCING THE GREEN TRANSITION

In symbiosis with political targets and

ambitions, public R&D spending has con-

tributed greatly to achieving the Danish

reduction targets and creating markets

for the green transition into which private

investments flow.

Admittedly, we do not yet have all the an-

swers to mobilise the investments need-

ed to achieve EU’s 2030 goals or climate

neutrality by 2050. We must therefore

continue to pursue new avenues to raise

investments in the green transition.

Public private investment partnerships is

an example of such avenues.

Denmark has several public and private

funds, which allow both public and

private money to be pooled together in

sustainable projects. For example, the

Danish Green Investment Fund provides

loans to researchers and entrepreneurs,

who seek to develop innovative solutions

for climate-related goals. 60 per cent of

total project costs and up to EUR 13 mil-

lion can be borrowed through the fund.

Several of such funds exist, some are

broadly defined and some more narrowly

defined towards environmentally related

projects etc.

Public and private funds are also used

for investments in developing countries.

Considerable investments have been

made in developing countries with the

help of blended finance models. Blended

finance refers to the strategic use of devel-

opment finance and philanthropic funds

to mobilise private capital flows to emerg-

ing and frontier markets. For example,

the Danish Climate and Investment Fund

provides risk capital as a minority inves-

tor in a project to offset climate-related

technology or create jobs. This fund has

made more than 60 investments worth

EUR 200 million in renewable energy and

energy efficiency projects in developing

countries.

Today, the market for renewable energy,

in Europe and abroad has matured to an

extent where private investors are actively

looking for sustainable investments.

Already in 2014, the amount of pension

funds that went to renewable energy

investments was three times higher than

the amount that went to fossil fuels. Much

of this money went to infrastructure pro-

jects like offshore wind farms and other

renewables, which are generally seen by

pension funds as attractive investments

compared to other assets. In 2019, the

Danish pension sector announced a fur-

ther commitment to spend 10 per cent of

their total pension assets in renewables

by 2030. This means that by 2030 almost

EUR 50 billion will be spent on the green

transition.

THE EU LEVEL

Reaching climate neutrality by 2050 will

be a monumental challenge for Europe.

The EU must be at the forefront of a

concerted effort to deliver on our climate

ambition. Considering the significant

current gap in sustainable investments

in Europe, the EU must solve the puzzle

of how to increase access to sustainable

finance. The Commission estimates that

additional investments of EUR 260 billion

a year are needed, compared to a base-

line scenario, to reach our 2030 goals of

cutting EU-wide CO2 emissions by 40

per cent, including the sub-targets on

renewable energy production and energy

efficiency.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Yearly average investments needed in Europe to reach

our current 2030 climate goals

EUR billion

300

250

200

150

100

Energy e iciency

in residential

Source:

European Commission

Additional investments needed

Baseline scenario

Energy e iciency

in tertiary

Decarbonising

power sector

Decarbonising industry

Decarbonising transport

The Sustainable Investment Plan, as

presented by the Commission in January

2020, aims – through the EU budget – at

mobilising at least EUR 1 trillion of sus-

tainable investments over the next dec-

ade. While this is not enough to close the

investment gap, it is an important step to

mobilise sustainable investments at the

EU level. The EU Multiannual Financial

Framework (MFF) will be key to increase

the investment levels as foreseen in the

investment plan. Therefore, at least 30

per cent of the MFF should be directed

towards the green transition. This will

require coordination across budgetary

headlines and sharp prioritisation.

The EU unfortunately still lacks behind

other regions in R&D funding, for exam-

ple the US and China. The HorizonEurope

programme will therefore be more im-

portant than ever in scaling up Europe’s

research funding, especially in relation

to climate research, development and

innovation.

While climate-proofing the MFF will

help to reduce the current investment

gap, more still needs to be done. The

EU should make full use of the InvestEU

programme. The announcement of the

European Investment Bank’s (EIB) efforts

to become Europe’s climate bank is simi-

larly important.

To avoid “green washing”, Europe needs

a common framework to classify “green”

financial products. The taxonomy for

sustainable finance holds great promise.

The taxonomy will not only create a level

playing field for sustainable financing,

increased transparency of sustainability

in the financial sector will hopefully also

incentivise investments in Europe’s green

transition.

Case: Private financing for RE in Africa

In 2011, DI was a key part of a private initiative that launched a fund with the purpose of

developing renewable energy projects in Africa. Today, Frontier Energy is a leading investor in

the African renewable energy market. Frontier Energy has a hands-on and integrated approach

to investing in the development, construction and operation of renewable energy projects and

develops, constructs and operates more than 45 renewable energy projects in Africa within

hydro, geothermal, wind and solar PV with a total capacity of more than 750 MW and total

project costs of more than USD 1.8 billion.

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FINANCING THE GREEN TRANSITION

Our proposals for the EU

Commit to mobilise at least EUR 1 trillion of sustainable investments

over the next decade as laid out in the Sustainable Investment Plan

by the European Commission.

Ensure proper climate-proofing of the EU’s multi-financial frame-

work. At least 30 per cent of the EU funds should be aimed at climate

action.

Boost funding in the HorizonEurope programme, particularly funding

for climate research, development and innovation.

Maximum use of InvestEU to leverage private investments in the

green transition, for example sustainable energy and transport.

Support European Investment Bank’s efforts as a climate bank.

Ensure a fair and just transition. A public sector loan facility with the

European Investment Bank backed by the EU budget under the Just

Transition Mechanism to ensure national co-financing.

Finalise the taxonomy on sustainable finance to create a level playing

field for sustainable finance.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

Sustainable

Development Goals

Denmark is strongly committed to achieving the

Sustainable Development Goals (SDGs) in both

national and global arenas. While the climate and the

environment are important aspects of this agenda, we

can only achieve sustainable development by acting

on all 17 goals.

Denmark possesses unique conditions

for fulfilling the SDGs at the national le-

vel. The Danish economy is predominant-

ly based on sustainable economic growth,

high employment rates, a high level of

prosperity, gender equality, a high level

of social welfare, effective environmental

protections, high energy efficiency and

use of renewable energy, a large degree of

freedom, a high level of public trust, and

an open democracy with respect for hu-

man rights. This has helped integrate the

SDGs into the Danish society and attain a

range of significant results when it comes

to their realisation, including that:

—

Of all the countries in the world,

Denmark comes closest to fulfilling

the goals, according to Bertelsmann

Stiftung’s SDG Index. Denmark tops

the 2019 index ahead of Sweden,

Finland and France.

—

The Danish government has intro-

duced a national plan of action for the

SDGs. The plan includes an ambition

to assess new Danish legislation

against the backdrop of the SDGs

when relevant.

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SUSTAINABLE DEVELOPMENT GOALS

—

The Danish Parliament has estab-

lished a Network 2030 comprising

members from all political parties.

The network seeks to facilitate an

inclusive dialogue on sustainable

initiatives, ambitions, and priorities

between politicians, businesses, civil

society, and other central stakehold-

ers.

—

To enhance its efficacy, Network 2030

has introduced a 2030 panel consist-

ing of individually appointed SDG

experts from private businesses, civil

society organisations and academia.

The 2030 panel supports the Network

2030 through analyses, advice, and

continuous counselling.

—

A coalition covering public and private

partners has invited all interested

citizens, businesses, organisations

and think tanks to discuss how to

transform the SDGs into tangible

indicators adjusted to the Danish so-

ciety and way of life through the ‘Our

Goals’ campaign. The indicators will

be tailormade to Denmark and will

supplement the official UN indicators.

—

The data and statistics of the ‘Our

Goals’ campaign will be collected and

presented by the central authority on

Danish statistics, Statistics Denmark.

Statistics Denmark is considered a

world leader in this arena and pro-

vides comprehensive and reliable

data on sustainable trends and pro-

gress indicators at both the national

and global levels.

UN Sustainable Development Goals

The Sustainable Development Goals

are the blueprint to achieve a better and

more sustainable future for all. They

address the global challenges we face,

including those related to poverty, ine-

quality, climate change, environmental

degradation, peace and justice. The 17

Goals are all interconnected, and in order

to leave no one behind it is important that

we achieve them all by 2030.

The 17 Goals were adopted by all UN

Member States in 2015 as part of the 2030

Agenda for Sustainable Development

which set out a 15-year plan to achieve

the Goals.

Private sector commitment has been a

critical enabler for Denmark’s world-lead-

ing position on sustainability. Danish

businesses are increasingly integrating

the SDGs into their mindset and busi-

ness models. A 2019 analysis conducted

among the members of the Confederation

of Danish Industry showcased a remark-

able growth in the amount of Danish

businesses familiar with and working

strategically with the SDGs. This reflects

a sincere aspiration to help mitigate glob-

al challenges such as climate change and

social injustice as well as a strategic am-

bition to pursue the commercial potential

that follows from fulfilling the SDGs at the

global level.

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EUROPEAN

GREEN DEAL

LESSONS FROM DENMARK

— PROPOSALS FOR THE EU

The SGDs match key strengths of Danish

businesses. Danish companies have

many years of experience in providing

sustainable solutions that contribute to

solving global challenges. For instance

in the areas of water, food and renewable

energy Danish companies are particularly

well positioned to deliver the requested

sustainable solutions. According to the

2018 IMD World Competitive Business

Rankings, Denmark ranks first on com-

panies’ prioritisation of sustainable devel-

opment. Danish companies are placed in

the top three in relation to CSR, account-

ing practices and ethical standards, and

Denmark is among the top ten regarding

public service partnerships supporting

technological developments. This reiter-

ates that sustainability is an integral part

of the mindset of Danish businesses.

The Danish example can help inspire

politicians, civil society actors and com-

panies in Europe and beyond to promote

the SGD agenda through unique partner-

ships between public and private actors.

The following initiatives could help the

European Commission fulfil the ambi-

tions of the European Green Deal based

on the Danish experience.

Danish companies are integrating the SDGs into their business strategies

Companies that are familar with the UN Sustainable Development Goals

Companies that have integrated the UN Sustainable Development Goals into their strategy

Per cent

63 %

32 %

22 %

12 %

2017

2018

Source:

DI’s Company Panel.

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SUSTAINABLE DEVELOPMENT GOALS

Our proposals for the EU

Take on a leading role in promoting the SDG agenda in the European

community.

Invite all interested citizens, businesses, organisations, and think

tanks to discuss how to integrate the SDGs further into the European

community and everyday life through a joint European campaign and/

or individual campaigns in each member state.

Encourage all member states to formulate a national action plan for

SDG fulfilment.

Encourage the European Parliament to establish a broad 2030

network to discuss sustainable ambitions and solutions among politi-

cians, businesses and civil society organisations.

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LESSONS FROM DENMARK

— PROPOSALS FOR THE EU