The European Commission has approved a Danish scheme of 1.1 billion euros under EU state aid rules to support the deployment of CO2 capture and storage ('CCS') technologies. The Commission announced this in a press release.
Therefore, there are no changes from the EU to the implementation of the CCUS pool of 8.1 billion kroner that the Danish state is currently offering to promote CCS and CCUS in Denmark. Currently, three pre-qualified bidders, Vestforbrænding, Ørsted Bioenergy & Thermal Power and Aalborg Portland, are in the running for the funds.
The aid will cover the difference between the estimated total costs of capturing and storing one tonne of CO2 over the lifetime of the contract and the return that the beneficiary expects. The maximum aid amount will be equal to 54.9 million kroner. euro per year (408.4 million DKK), adjusted for inflation.
The CCUS pool aims to establish CO2 capture in Denmark from 2025 and realize CO2 reductions of 0.4 million tonnes annually from 2026. In the first phase of the CCUS pool, the funds are used to contribute to the establishment of a comprehensive value chain for the capture, transport and storage of CO2.
The support is given per reduced tonne of CO2 and will be adjusted for the development of CO2 taxes, including any negative taxes for negative emissions. Similarly, the development of the quota price will be included in determining the amount of support.
- This scheme of 1.1 billion euro will enable Denmark to capture and store a significant amount of CO2, preventing its release into the atmosphere. This will help Denmark achieve its ambitious goal of climate neutrality by 2050 at the latest, in line with the objectives of the European Green Deal, while ensuring that distortions of competition are kept to a minimum, says Margrethe Vestager, EU Commissioner for Competition.
The winner of the tender is expected to be announced in early 2023. The Danish Energy Agency's contract with the future winner of the tender will run for 20 years.
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