The Danish Energy Agency has postponed the deadline for its carbon capture and storage (CCS) tendering procedure, which enables interested companies to get a slice of the DKK 28.7 billion ($4.59 billion) funding cake earmarked to lend Denmark a helping hand in achieving its climate neutrality vision.
The initial announcement about the availability of the latest CCS fund came last year and it was designed to encompass the costs of capture, transportation and geological storage of fossil, biogenic or atmospheric CO2 over a 15-year contract period, with the subsidies including a requirement for the commissioning of capture facilities by December 1, 2029, and full capture and storage from 2030.
This fund is expected to reduce Denmark’s annual carbon emissions by 2.3 million tonnes from 2030, corresponding to around 5% of the country’s total current emissions over a year. The deadline for submitting final bids in connection with the DKK 28.7 billion fund for capture and storage of CO2 will be moved from December 17, 2025, to January 7, 2026.
According to the Danish Energy Agency, the postponement of the deadline is based on a current consideration of the proposed bill to clarify the rules for energy taxation of the process of capturing CO2. The intention of the bill is to ensure a level playing field for companies that capture CO2 for subsequent geological storage.
Upon adoption, the bill is expected to enter into force on January 1, 2026. As a result, the deadline for submitting final bids for the funding related to capture and storage of CO2 will be moved to January 7, 2026, to give potential bidders the opportunity to formulate bids based on the new applicable legislation in the area.
However, the expected date for the award of contracts is anticipated to be maintained and come in April 2026. The implementation of the funding for capture and storage of CO2 requires state aid approval from the European Commission.
The capture and storage of CO2 is expected to play an important part of meeting Denmark’s climate goals. The Danish Energy Agency estimates, with some uncertainty, that the capture potential in 2040 is approximately 5.4 – 10.8 million tonnes per year.
Most areas with potential for CO2 storage are located in the northern North Sea, in Central and Northern Jutland and in the sea south of Lolland-Falster, Funen and Als. Denmark has struck political deals with several countries for cross-border transportation of CO2 for geological storage under the seabed.
After the first-ever permit for a CO2 storage project in Denmark was given to INEOS E&P and Wintershall Dea for the Greensand Pilot injection project in late 2022, the partners completed the first injection of CO2 in the North Sea in March the following year.