The European Commission has approved a €1.7 billion (DKK 13 billion) Danish scheme to support the production of renewable gases, including hydrogen and e-methane, which will be injected into Denmark’s energy grid. This initiative aligns with the European Green Deal and the REPowerEU Plan to reduce reliance on Russian fossil fuels and accelerate Europe’s green transition.
Key Focus on Renewable Hydrogen and E-Methane
The scheme aims to produce 7.9 petajoules of renewable gases annually, supporting both new and expanded production facilities. Specifically, e-methane plants must adhere to strict sustainability criteria for renewable hydrogen fuels of non-biological origin (RFNBOs), ensuring compliance with EU directives.
Under the program:
- Aid will be provided as a price premium per gigajoule of renewable gas produced, supplementing market prices for natural gas.
- Support will be granted through a competitive bidding process, with five bidding rounds planned between 2024 and 2030.
- Projects must connect to the gas grid within three years of receiving aid.
Significant Climate and Emissions Impact
The scheme is expected to reduce greenhouse gas emissions by approximately 450,000 tonnes of CO₂ annually starting in 2033. This effort contributes to Denmark’s ambitious climate goals, which include a 70% reduction in GHG emissions by 2030 (compared to 1990 levels) and achieving carbon neutrality by 2050.
Commission’s Approval and Safeguards
The Commission assessed the scheme under EU State aid rules and concluded that:
- The scheme is necessary and appropriate to meet EU climate objectives.
- It creates a clear incentive effect for investments in renewable gas and hydrogen production.
- Competitive bidding ensures that aid is transparent, fair, and minimal, limiting potential distortions to competition within the EU.
The approval marks a significant step for Denmark in developing its renewable gas and hydrogen infrastructure, advancing its role as a leader in Europe’s clean energy transition.
This initiative not only supports the decarbonization of Denmark’s energy sector but also reinforces the EU’s strategy to expand renewable hydrogen production, paving the way for a more sustainable and secure energy future.
