Broad agreement earmarks billions of Danish kroner towards boosting development of new green fuels

Published 18-03-2022

With a view to accelerating the development of green fuels, the Government has reached a broad agreement with the parties of the Danish Parliament on green hydrogen, including a government tender for DKK 1.25 billion. The aim is to develop green fuels for aircraft, ships and trucks in Denmark and abroad.

The agreement has been reached with the Danish Liberal Party, Socialist People’s Party, Social Liberal Party, Red-Green Alliance, Conservative Party, Danish People’s Party, Liberal Alliance and Alternative following the serious situation in Europe, where energy independence and accelerating the development of green alternatives have become more of a priority than ever before. 

“This agreement benefits the climate, Danish businesses and Denmark’s security of supply of green energy. I am thrilled that we have achieved a broad political consensus to set the bar so high that Denmark can play more than a national role in the development and production of new fuels. Europe is intensely searching for alternatives to fossil fuels, and we are in a hurry not only to become green, but also to become more independent from Russian fossil energy,” said Dan Jørgensen, Minister for Climate, Energy and Utilities.  

The agreement sets out an ambition to build up an electrolysis capacity of 4 - 6 GW in Denmark by 2030. The Danish target of up to 6 GW is among the top three most ambitious national targets in Europe. High ambitions for green fuels are essential to phase out fossil energy, reduce climate impact, encourage green growth and loosen Russia’s grip on Europe’s energy supply.  

The agreement consists of a subsidy scheme of DKK 1.25 billion in the form of a state tender for hydrogen production and better framework conditions for producers. It also builds upon a number of other business promotion measures and funding pools. This means that in total, the Danish Government has prioritised at least DKK 3 billion towards the development and maturation of green hydrogen production since 2019.

“Danish companies are ready to develop and produce the green fuels and technologies of the future. This agreement marks the start of a new green commercial and export saga, which is now also about achieving independence from Russian energy sources as soon as possible. This can create green jobs and accelerate the green transition of companies in Denmark and abroad,” said Simon Kollerup, Minister for Industry, Business and Financial Affairs.  

“With this new agreement, we eliminate the known barriers to large-scale hydrogen production, instead clearing a path for the production of new green fuels and a better and more flexible utilisation of our energy system,” said Anne Paulin, Spokeswoman for Climate, Energy and Utilities for the Social Democratic Party. 

“The Danish Liberal Party is pleased that with this agreement, we have contributed to expanding the production and use of hydrogen in Denmark. New green fuels are instrumental to the green transition of heavy industry and transport, and they hold considerable export potential which Denmark, as a green pioneer country and producer of renewable energy, must exploit. The Danish Liberal Party considered it crucial that the tendering process starts as soon as possible with a view to reducing our CO2 emissions, giving Danish hydrogen producers a competitive advantage and developing alternatives to the CO2-emitting fuels that are currently pressuring the finances of Danish households,” said Carsten Kissmeyer, Spokesman for Energy and Utilities for the Danish Liberal Party.

“We have now set a clear course for how to seriously turn Denmark into a hydrogen nation. “The Socialist People’s Party believes it is important that the strategy clearly demonstrates how the production of green electricity, electrification and hydrogen go hand-in-hand with the green transition of Denmark and Europe,” said Signe Munk, Spokeswoman for Climate, Energy and Utilities for the Socialist People’s Party.

“We can now finally embark on the next chapter of Denmark’s green transition. Yet if we are to succeed, we must dare to take political action more quickly in the future, which is why we in the Social Liberal Party are thrilled that the funding pool is being implemented as a call for tenders. The terrible crisis in Ukraine has taught us the necessity for unity around the green agenda. The fact that all the parties to the agreement now back a vision for Denmark as a net exporter of green energy is accordingly an important fundamental decision. With good wind resources in the North Sea, we have nothing short of an obligation to contribute everything we can towards a green and united Europe,” said Rasmus Helveg Petersen, Spokesman for Climate, Energy and Utilities for the Social Liberal Party.

“The Red-Green Alliance hopes that the future production of green hydrogen will be well-integrated into the overall energy system. We have pushed for energy waste from new hydrogen plants to be used in our district heating and for state-owned companies to own hydrogen pipelines. The next big challenge will be to ensure a rapid and significant expansion of renewable energy to supply enough electricity for the electrification of society, green hydrogen and sufficient energy to replace fossil natural gas,” said Søren Egge Rasmussen, Spokesmen for Climate, Energy and Utilities for the Red-Green Alliance. 

“The Conservative Party is pleased with the agreement. We have long called for action in relation to hydrogen and a plan for the expansion of renewable energy, both of which are crucial to the green transition. We need to replace fossil fuels by boosting the development of green fuels, electrification and hydrogen. This will ensure that we are far better able to transform, store and harness Denmark’s green potential, which will not only benefit the climate but also potentially lead to a new green era in Danish exports. We have pushed to raise the level of ambition, increase the pace to ensure we become a real contender at the European level and get as much of a climate impact out of the funding as possible,” said Mona Juul, Spokeswoman for Climate for the Conservative Party. 

“The Danish People’s Party sees this agreement as an important step towards green direct electrification as well as indirect electrification of Danish society, while at the same time, this agreement can help cut our reliance on Russian gas in the future. Hydrogen can contribute to a flexible energy system, thereby ensuring security of supply. Hydrogen can replace fossil fuels in sectors such as shipping, aviation, agriculture and heavy road transport, while also offering Denmark new green business and export opportunities,” said René Christensen, Spokesman for Climate, Energy and Utilities for the Danish People’s Party.

“In spite of the tragic war in Ukraine, the climate crisis still demands our attention. The crisis is so massive that we must do everything we can to lower our CO2 emissions. That is also why the Alternative is thrilled to be part of an agreement that boosts the development of hydrogen production, not only because we need to develop technologies that can help us, but also to keep development on a track that ensures hydrogen does not become a cushion but rather a technology reserved for industries where battery solutions will be very difficult in practice,” said Franciska Rosenkilde, Leader of the Alternative. 

Hydrogen requires lots of green electricity 

The Government will present a plan for expanding onshore and offshore renewable energy generation in Denmark which will ensure that the country can become a net exporter of green energy - also in light of the new ambitious hydrogen target. A target of 4 - 6 GW of electrolysis plants can result in a 2.5 - 4.0 million tonne reduction in CO2 emissions by 2030, including up to 2 million tonnes in the Danish climate account.

The strategy on the development and promotion of hydrogen and green fuels can be viewed here


The agreement includes: 

  • A total tendering of DKK 1.25 billion granted as operating aid for 10 years 
  • Improved possibilities for running power lines directly from wind and solar farms to hydrogen plants. 
  • The possibility of lower tariffs for major electricity consumers such as hydrogen producers.
  • DKK 57 million in 2022-2026 earmarked for a hydrogen task force responsible for providing guidance to project developers and authorities  
  • The first step towards establishing a national hydrogen infrastructure that can promote exports to countries such as Germany.

The Government presented its proposal on the Green fuels of the future in December last year and has now reached an agreement with the parties to the Climate Agreement for energy and industry, etc. from 22 June 2020.


Press Office, Danish Ministry of Climate, Energy and Utilities: +45 41 72 38 05