Regulation, uncertainty and unclear frameworks hinder investments in green technologies such as batteries, PtX, pyrolysis and CO2 storage – technologies that are central to achieving Denmark's goal of CO2 neutrality by 2050. This is the criticism from Finance Denmark.
The organization, which is the trade association for the Danish financial sector, has just published a political proposal "Financing a Green Denmark" with a number of recommendations on how investments in new technologies can be strengthened. The proposal is divided into three themes: investment in and financing of new technologies, expansion of renewable energy and expansion of the electricity grid infrastructure. Each theme contains proposals that will make the projects easier and more attractive to finance.
- The potential is enormous within these new technologies, which can be groundbreaking in relation to the green transition. But this requires that the framework conditions and the risk for the developers and companies are included in the projects, so that they become easier to finance. Therefore, we need regulatory simplification in this area, strengthened framework conditions and better risk sharing that contributes to getting these technologies off the ground, says Peter Jayaswal, deputy director at Finans Danmark with responsibility for strategic projects for societal transformation.
Finans Danmark refers to an analysis from Cowi, which shows that over 500 billion DKK must be invested in green technology by 2030 – and almost 1,500 billion DKK towards 2050. A large part of the funds must come from private capital. Today, green investments account for over 13 percent of of the financial sector's balance sheet, and the sector is ready to contribute further if the framework is improved.
Among the recommendations in the proposal are proposals for test zones for PtX plants, lower grid tariffs, greater risk sharing in financing and adjustments to the rules for electricity infrastructure and mortgage lending. At the same time, the organization warns of the risk of losing momentum in climate action if the barriers are not removed.
- Denmark's green position of strength must be maintained, and it is crucial that Danish market conditions are competitive. We must therefore clear the way so that we can make even more private financing available for the development of new green technologies. If politicians set a good framework, the financial sector can contribute even more financing and continue to be a strong alliance partner in the green transition, says Peter Jayaswal.
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