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Political framework to support an emerging green sector

With an ambitious political framework Denmark aims to become a frontrunner of green hydrogen. The 2022 Agreement on green hydrogen and green fuels sets a goal of 4-6 GW electrolyser capacity in 2030 and defines economic subsidies to kick-start the sector.
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18 September 2023

Green hydrogen plays an important part in fulfilling the 2020 Danish Climate Act’s goal to decarbonise Danish society by 2050. As such, the Danish parliament has agreed on ambitious targets for the roll-out of PtX in Denmark.

How do you start up a brand-new green energy sector?

That is the question Danish policymakers and industry had to answer as it became increasingly evident that hydrogen would play a key role in fulfilling the 2020 Climate Act to create of a greener future. Since then, several political milestones have been accomplished, most importantly the Power-to-X agreement of 2022, as well as the Joint Declaration with Germany, and the 2023 agreement on hydrogen infrastructure.

Photo credit: The Danish Parliament/Christoffer Regild

Establishing the framework: the PtX agreement

The PtX agreement builds on the visionary 2020 Climate Act and sets the ambition for Denmark to become a frontrunner in the production of green hydrogen. The agreement sets a target for building 4-6 GW of electrolyser capacity in 2030 with the goal of further Danish participation in the emerging European hydrogen market. It is a principle for the Danish approach that the roll-out of hydrogen and hydrogen derivatives should be market-based.

To kick-start the emerging hydrogen economy, the Danish state has initiated a tender to subsidise the production of green hydrogen, awarding DKK 1.25 billion (EUR 167 million) towards the end of 2023 to green hydrogen producers. The purpose of the tender is to support the industrialisation and scaling of Danish hydrogen production and prize discovery. Since 2019, more than DKK 3 billion (EUR 402 million) of public funding has been allocated to support the Danish hydrogen sector.

The Power-to-X-taskforce, which is anchored in the Danish Energy Agency, was also established to ensure smooth cooperation between government, municipalities, and private stakeholders, and to help identify and clear barriers to allow the growth of the Danish hydrogen sector.

The future of Danish hydrogen

The roll-out and success of the Danish hydrogen adventure hinges on an extensive planned build-out of renewable energy, mostly from North Sea wind farms. To ensure consistent efficiency, the Danish government allows for overplanting of offshore wind turbines. The Danish government is working to ensure a framework that can accommodate smart regulation and cost-effective differentiated grid tariffs that can reward flexibility and interruptability to ensure that green hydrogen production is integrated into the national electricity grid, which will be dominated by wind and solar power in the future.

Green hydrogen is Danish hydrogen

This article is a part of the white paper “Green hydrogen is Danish hydrogen”. Discover Denmark’s plans to produce green fuels and decarbonise global transport and energy-intensive industries.

Explore the white paper

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