ODENSEN /NORDFYN: District heating Fyn announced on Friday, as the fourth company in a day, that chooses not to apply for support from the Danish Energy Agency's CCS pool.
After several years of work with a CO2 capture project at the waste-to-energy plant in Odense, the company assesses that the framework conditions are too uncertain and that the market is still too immature to enter into the long-term contracts that the state requires. The company, which is owned by the municipalities of Odense and Nordfyn, states this in a press release.
- We have made a thorough assessment of District heating Fyn's options for applying for the state's CCS pool. But we can see that it is a bit too early to commit Fjernvarme Fyn to contracts that extend 20 years into the future, says Louise Høst, CEO of Fjernvarme Fyn.
Like the also municipally owned companies Kredsløb, ARGO and AffaldPlus, which have applied for the pool since Thursday, Fjernvarme Fyn points to poor framework conditions in the tender as a weighty reason for the company not seeking support.
According to Fjernvarme Fyn, the Danish Energy Agency's model in practice shifts a large part of the risk from the state to the bidders and, in Fjernvarme Fyn's case, its owner municipalities. The bidders in the tender are required to deliver precise catch volumes over a long period, and there are large financial sanctions if the value chain does not deliver as planned - even if it is due to private storage players not being ready. This is a risk that neither Fjernvarme Fyn nor the owner municipalities can control.
- It is both about the fact that we see an immature market with unrealistically high prices and major risks, but also about the fact that the Danish Energy Agency's conditions amplify those risks, says Louise Høst and continues:
- It simply emphasizes the need for a more robust and competitive market and a new and more flexible CCS pool if Denmark is to succeed in making CO2 capture a real climate policy tool.
Points to Christiansborg
However, the decision does not mean that Fjernvarme Fyn is giving up CO2 capture, and will present revised plans for CO2 capture during 2026.
- Even though we are withdrawing our application, the goal remains the same. CO2 capture is feasible at District Heating Funen, but we cannot reach the goal before 2030, says Louise Høst.
Chairman of the Board of District Heating Funen Mads Søndergaard Thomsen supports the decision to drop applying for funds from the CCS pool. He points out that it is now up to Christiansborg to create a better framework.
- We can see from the latest announcements from the government that CO2 capture is a prioritized tool if we are to achieve the new 2035 goals. Therefore, we are hopeful and would like to see a new CCS pool targeted at waste-to-energy companies being established. CO2 capture at waste facilities is not up for negotiation if Denmark is to achieve the climate goals and really make a difference in terms of climate, he says.
It is not only Fjernvarme Fyn, Kredsløb, ARGO and AffaldPlus that have announced that they will not seek funding from the state's CCS pool of DKK 28.7 billion before the deadline of December 17, 2025. Previously, Ørsted and the partnership Eon and Arc have also withdrawn from the race. A total of ten parties were prequalified to bid. Contracts are expected to be awarded in April 2026.
DOI.dk has been in contact with the Danish Energy Agency, which administers the pool, but the agency does not wish to comment on the withdrawn bidders before the deadline for the tender.
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