Europaudvalget 2020-21
KOM (2020) 0408 Bilag 9
Offentligt
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april 2021
Denmark's
Recovery and
Resillience Plan
– accelerating the green transition
Ministry of Finance
kom (2020) 0408 - Bilag 9: Danmarks genopretningsplan iht. EU's genopretningsfacilitet kom (2020) 0408 - Bilag 9: Danmarks genopretningsplan iht. EU's genopretningsfacilitet
Denmark's
Recovery and
Resillience Plan
– accelerating the green transition
april 2021
kom (2020) 0408 - Bilag 9: Danmarks genopretningsplan iht. EU's genopretningsfacilitet kom (2020) 0408 - Bilag 9: Danmarks genopretningsplan iht. EU's genopretningsfacilitet
Content
Preface ........................................................................................................................
1.
Introduction .............................................................................................................
1.1
Economic Outlook ........................................................................................
1.2
General objectives/Executive summary ......................................................
1.3
Comprehensive and adequately balanced response to the economic
and social situation ......................................................................................
1.4
Links with the European Semester ..............................................................
1.5
Gender equality and equal opportunities for all ...........................................
1.6
Cohesion ......................................................................................................
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2. Components............................................................................................................
2.1 Strengthening the resilience of the healthcare system...........................................
2.1.1 Main challenges ...........................................................................................
2.1.2 Objectives ....................................................................................................
2.1.3 Clinical study on effect of COVID-19 vaccines ............................................
2.1.4 Measures to ensure stocks of critical drugs ................................................
2.1.5 Digital solutions in the healthcare sector .....................................................
2.1.6 Emergency management & monitoring of critical medical products ...........
2.2 Green Transition of Agriculture and Environment ..................................................
2.2.1 Main challenges ...........................................................................................
2.2.2 Objectives ....................................................................................................
2.2.3 Carbon rich soils ..........................................................................................
2.2.4 Organic Farming ..........................................................................................
2.2.5 Climate technologies in agriculture ..............................................................
2.2.6 Rehabilitation of industrial sites and contaminated land .............................
2.3 Energy Efficiency, Green Heating and Carbon Capture and Storage ....................
2.3.1 Main challenges ...........................................................................................
2.3.2 Objective ......................................................................................................
2.3.3 Replacing Oil Burners and Gas Furnaces ...................................................
2.3.4 Energy efficiency in industry ........................................................................
2.3.5 Energy savings in public buildings ...............................................................
2.3.6 CCS Storage Potential .................................................................................
2.3.7 Energy Efficiency in Households .................................................................
2.4 Green Tax Reform ..................................................................................................
2.4.1 Main challenges ...........................................................................................
2.4.2 Objectives ....................................................................................................
2.4.3 Emission taxes on industries .......................................................................
2.4.4 Expert group to prepare proposals for a CO2e-tax .....................................
2.4.5 Investment window ......................................................................................
2.4.6 Accelerated depreciation .............................................................................
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2.5 Sustainable road transport ....................................................................................
2.5.1 Main challenges ...........................................................................................
2.5.2 Objective ......................................................................................................
2.5.3 Incentives to choose green cars ..................................................................
2.5.4 Analyses, tests and campaigns for greener transport .................................
2.5.5 Green transportation and infrastructure .......................................................
2.6 Digitalisation............................................................................................................
2.6.1 Main challenges ...........................................................................................
2.6.2 Objectives ....................................................................................................
2.6.3 Digital strategy .............................................................................................
2.6.4 SME’s digital transition and export ..............................................................
2.6.5 Broadband pool............................................................................................
2.7 Investing in Green Research and Development .....................................................
2.7.1 Main challenges ...........................................................................................
2.7.2 Objective ......................................................................................................
2.7.3 Carbon capture and storage or use of CO2 (CCUS)...................................
2.7.4 Green fuels for transport and industry (i.e. Power-to-X)..............................
2.7.5 Climate- and environment friendly agriculture and food production ............
2.7.6 Circular economy focusing on reuse and reduction of plastic and
textile waste .................................................................................................
2.7.7 Incentives to boost R&D in companies ........................................................
3
Complementarity and Implementation ....................................................................
3.1
Pre-financing request ...................................................................................
3.2
Consistency with other initiatives .................................................................
3.3
Complementarity of funding .........................................................................
3.4
Implementation ............................................................................................
3.5
Consultation process ...................................................................................
3.6
Control and audit..........................................................................................
3.7
Communication ............................................................................................
Overall impact .........................................................................................................
4.1
Macroeconomic and social outlook..............................................................
4.2
Macroeconomic and social impact of the plan.............................................
4.3
Comparison of the investment expenditure with the spending baseline .....
Appendix. Sustainable Development Goals .........................................................
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Preface
”As a response to the COVID-19 crisis,
the Danish government and Parliament have
adopted a number of comprehensive green
deals that will kick-start the Danish econ-
omy and accelerate the green transition. Den-
mark’s Recovery and Resilience Plan will se-
cure a large part of the financing for these
green deals and will thus first and foremost
support massive investments that will acceler-
ate the green transition. The investments will
both stimulate the growth of a more green
economy and support jobs and companies.
At the same time, the plan contributes to re-
alising Denmark’s ambitious climate targets
on reducing greenhouse gas emissions by 70
per cent in 2030.”
Nicolai Wammen, Minister of Finance for Denmark
Global, European and Danish context
In July 2020, the EU heads of states and governments adopted a historical 750 bn.
euro recovery package. The package, Next Generation EU, is the joint answer to
the severe health and economic crisis caused by COVID-19. The decision to sup-
plement national crisis management with the ambitious and common recovery is a
strong signal of solidarity showing that that we must find our way out of the crisis
together.
The consequences from COVID-19 are enormous. Globally more than 3 million
have died of the virus. Assembly bans have limited the scope of social activities,
and many have had to avoid physical contact with friends, family and loved ones
for several months. At the same time, the virus has caused a recession in the
global economy – the first recession since the financial crisis in 2007-08 and just
the second in recent history. In 2020, global economic activity fell by 3.3 per cent
and the EU countries experienced an economic setback of 6.1 per cent.
In Denmark too, the pandemic has had large negative consequences. The latest
data shows a contraction in the Danish economy of 2.7 per cent of GDP in 2020.
However, through an unprecedented expansive fiscal policy response that in-
cluded emergency relief packages, liquidity support and stimulus, it has been pos-
sible to support tens of thousands of jobs and companies. This has limited the
drop in employment to 0.7 per cent in 2020.
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As an open and export-oriented economy, Denmark has a significant interest in
the recovery of the European economies. One out of four Danish jobs is directly
linked to the export sector and approximately 60 per cent of Danish exports goes
to countries in the Single Market. In 2020, Danish exports fell by 7.7 per cent. Re-
gaining momentum in exports crucially depends on the recovery of Denmark’s
closest trading partners. EU’s common recovery package is thus not only an ex-
pression of European solidarity. It is also a recognition of the fact that each coun-
try has a large interest in securing a strong recovery throughout the EU.
Denmark’s Recovery and Resilience Plan:
Accelerating the green transition
Denmark is expected to receive approximately 11�½ bn. DKK from the EU’s Re-
covery and Resilience Facility. The Danish recovery plan shows how Denmark in-
tends to utilise the funds in accordance with the criteria. The funds in the Danish
recovery plan are supplemented by approximately the same amount of national
funds.
The key cornerstone in the Danish plan is to support the massive investments in
the green transition, which are necessary to reach the target of lowering green-
house gas emissions in Denmark by 70 per cent in 2030. This reduction target is
one of the most ambitious in the world.
The foundation for the Danish Recovery Plan is thus to utilise the need to stimu-
late the economy to support and accelerate investments in the green transition.
While the funds in the short run will help stimulate the economy and support jobs
and companies, they will also contribute to speeding up the green transition in the
medium to long run. This effort is crucial to realise Denmark’s ambitious climate
target and to underpin the common European climate targets. Since the Govern-
ment came into office a year and a half ago, decisions and political agreements has
been made, which contributes to a reduction of Denmark’s greenhouse gas emis-
sions by 9.1 Mt in 2030, of which the initiatives in the recovery plan contribute
with 2.8 Mt. This amounts to one third of the way towards the 70 per cent reduc-
tion target.
Getting all the way to 70 per cent will require large investments in inter alia re-
search, technology and infrastructure. The Danish recovery plan therefore chan-
nels 60 per cent of the funds towards green initiatives, according to the Commis-
sion’s definition. This is significantly above the EU’s criteria that at least 37 per
cent of the allocation should contribute to the green transition.
The Danish plan builds on a close dialogue with civil society as well as business
and industry. Last summer, the Danish government set up eight “restart teams”
on central lines of business with participation from the social partners. They in-
vestigated possible initiatives with a special emphasis on strengthening Danish ex-
port opportunities and regularly reported to the government on their conclusions.
In addition, the Danish recovery plan builds on the recommendations from the 13
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climate partnerships with business and industry. The climate partnerships were
tasked with identifying and developing new green solutions, which would both re-
duce business and industry’s emissions and strengthen companies’ green competi-
tiveness. Each of the 13 climate partnerships presented their recommendations to
the government and several have been incorporated into the Danish recovery
plan. Furthermore, the Ministry of Finance has had dialogue with a wide range of
stakeholders and has received many proposals in this context. These have been
taken into consideration during the preparation of the plan.
The Danish Recovery and Resilience Plan is categorised into seven components,
which will contribute to reaching the Danish climate targets, job-creation, digitali-
sation and health.
Figure 1
Overview of the Danish Recovery and Resilience Plan
Bn. DKK
5
4
3
2
1,3
1
0,2
0
Strengthening the Green transition of Energy Efficiency, Green Tax Reform Sustainable Road
Resilience of the
Agriculture and green heating and
Transport
Health Care
Environment
CCS
System
Digitalisation
Green R&D
1
2
0,7
2
1,6
3
1,8
3,9
4
Bn.DKK
5
Strengthening the Resilience of the Health Care
System
Health care systems all over the globe have been - and
are - under immense pressure due to the COVID-19
crisis. Uncertainty of sufficient supply chains for critical
pharmaceutical products has spread, as Denmark - as
well as other countries - has been highly dependent on
deliveries from abroad. The Danish recovery plan will
therefore contribute to making the health care system
more resilient and better prepared for unexpected crises
like COVID-19. This includes ensuring strategic stor-
ages of medicine, which can reduce the vulnerability of
supply chains. Furthermore, Denmark will strengthen
the digitalisation of the health system, making it ready
for the future today.
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Green Transition of Agriculture and Environment
The agricultural sector produces approximately a third
of Denmark’s greenhouse gas emissions. To reduce the
carbon footprint from the agricultural sector the Dan-
ish recovery plan supports the conversion to organic
agriculture, rewetting and taking carbon rich soils out
of production and it invests in demonstration of con-
crete and promising green research solutions. The re-
covery plan will also provide part of the funding for
cleaning up large generational pollutions across the
Danish landscape.
Energy Efficiency, Green Heating and Carbon
Capture and Storage
Securing energy efficiency is a crucial component in re-
alising both the EU’s and Denmark’s ambitious climate
targets in a cost-effective way. At the same time, invest-
ments in energy efficiency in inter alia buildings have
the potential to stimulate the economy and promote
job creation. Based on the recommendations from the
Danish climate partnerships, Denmark will accelerate
the conversion from oil- and gas furnaces to electrical
heat pumps, district heating as well as energy renova-
tions in private and public buildings. Furthermore, car-
bon capture and storage (CCS) is a key tool to reach
Danish reductions targets.
Green Tax Reform
Greenhouse gasses from service and industry accounts
for approximately one fifth of Denmark’s emissions. A
uniform tax on greenhouse gasses is one of the most
cost-effective ways of reducing these emissions. The
Danish recovery plan provides funding for the first
phase of the green tax reform, which contains a win-
dow of opportunity for green and digital investments.
This will create clear incentives and make it possible for
companies to accelerate the green transformation of
production capabilities, reducing their emissions up
front and adapt to phase two of the tax reform and a
future tax on carbon emissions. This two-phased ap-
proach ensures that jobs and competitiveness will not
be jeopardised.
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Sustainable Road Transport
The transport sector produces approximately a third of
Denmark’s greenhouse gas emissions. The Danish re-
covery plan therefore provides financing for a more
sustainable road transport, aiming towards 1 m. green
cars on Danish roads in 2030, and to reduce CO
2
e
emissions with 2.1 Mt. A cornerstone in this endeavour
is the reprioritisation of the registration tax on cars,
which ensures significant financial support for increas-
ing the uptake of green cars. This is coupled with e.g. a
premium for scrapping old, polluting diesel cars. The
recovery plan also contains financing for investments in
green infrastructure and technology, more bicycle lanes,
more climate friendly ferries and car-sharing.
Digitalisation
A crucial precondition for rebooting the economies af-
ter COVID-19 is harnessing the potential of digitalisa-
tion in both the private and public sector. Digitalisation
is thus central in the Danish recovery plan. With a new
digital strategy, Denmark will promote the digital trans-
formation across sectors to strengthen welfare, equality,
growth, employment and the green transition. A new
digital strategy will be implemented, building upon the
recommendations from a digitalisation partnership. The
digitalisation partnership consists of high-level repre-
sentatives of the Danish business community, trade un-
ions, government and a range of other central actors.
Green Research and Development
Denmark is a world leader on green solutions and tech-
nology. Denmark’s recovery plan contributes to main-
tain this position with investments in new technologies
with significant green potentials. This includes carbon
capture and storage and green fuels for transport and
industry (e.g. Power-to-X as proposed by the climate
partnerships). These technologies possess great poten-
tial to contribute to the green transformations, to pro-
mote digitalisation as well as maintain and create new
jobs in the green sector. At the same time, the Danish
recovery plan provides clear financial incentives for
companies to increase their green R&D spending to de-
velop the solutions for a greener economy.
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Part 1. Introduction
The COVID-19 pandemic poses an unprecedented challenge to world health,
economy and society as a whole. It has had profound impact on all activities in
societies all over the world. In Denmark, the economic activity dropped as social
distancing measures were put in place, which led to a massive decline in supply
and demand.
The most recent estimate puts GDP growth at -2.7 per cent in 2020 while unem-
ployment went up by 29,000 persons. During the first wave of COVID-19, the
economy was severely affected by the pandemic and the restrictions adopted to
control it. However, during the spring and summer, the economy started to re-
cover. During the renewed wave of infections in fall and winter, when renewed
restrictions have been necessary, the setback to the economy has been markedly
smaller than during the first wave. Beginning in March, restrictions are being grad-
ually lifted. The reopening has led to increasing economic activity, which accord-
ing to high-frequency indicators is reflected in, among other things, rising private
consumption and falling unemployment.
The Danish Recovery and Resilience Plan combined with national stimulus funds
aims at ensuring a swift and green recovery from the pandemic. The combined
stimulus funds will simultaneously accelerate the green transition of the Danish
society. Massive investments are necessary to ensure 70 per cent reductions of
greenhouse gas emissions by 2030 and climate neutrality by 2050, which is why
more than 90 per cent of the funds in the Danish Recovery and Resilience Plan
are allocated to initiatives that support the green transition
cf. Table 1.1
1
. The Dan-
ish Recovery and Resilience Plan combined with national funds contributes signif-
icantly to these overall goals of a swift and green recovery.
The Danish approach to the green recovery has been recognised by the UN Envi-
ronment Programme and Global Recovery Observatory
2
. They estimate that
among the 50 largest economies in the world, Denmark has used the largest share
of recovery spending on the green transition. Furthermore, they estimate that ap-
proximately 60 per cent of the
total
Danish recovery spending is used on green ini-
tiatives.
According to the Commission’s official tagging methodology, 60 per cent of the funds can be tagged as
green.
2
O’Callaghan, B. J. & Murdock, E. (2021): Are we building back better? evidence from 2020 and pathways
for inclusive green recovery spending; UN Environment Programme and Global Recovery Observatory.
1
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Table 1.1
Initiatives in the Danish Recovery and Resilience Plan
Bn. DKK
Share
(pct.)
2.1
11.4
17.6
33.7
14.0
5.7
15.5
100
CO
2
e
2030 (Mt)
-
-0.1
-0.1
-0.5
-2.1
-
-
-2.8
GDP
(%, 2 yrs)
0.00
0.00
0.03
0.22
0.02
0.01
0.03
0.31
1.1. Strengthening the Resilience of the Healthcare System
1.2. Green transition of Agriculture and Environment
1.3. Energy Efficiency, green heating and CCS
1.4. Green Tax Reform (phase 1)
1.5. Sustainable Road Transport
1.6. Digitalisation
1.7. Green Research and Development
Initiatives in total
0.2
1.3
2.0
3.9
1.6
0.7
1.8
11.6
Note: CO
2
e reduction effects are the total effects of the combined national stimulus funds and the funds from the
Recovery and Resilience Facility. The reduction effects are estimated partially and the estimated effects may
thus be overlapping.
The initiatives in the recovery plan are in line with the priorities in the European
Green Deal and contributes to Denmark’s climate targets. By adopting the Danish
Climate Act, the Danish government along with a large majority in parliament
committed itself to the world’s most ambitious climate target of reducing green-
house gas emissions by 70 per cent in 2030 compared to the 1990 level, and
achieving climate neutrality in 2050. When the law came into effect on July 2020,
it was estimated that Denmark needed to reduce its domestic greenhouse gas
emissions by 20 Mt by 2030 to reach this target. This scenario is depicted in
figure
1.1.
Figure 1.1
Total emissions by sector 1990-2030m.
Mt. CO2e.
90
80
70
60
50
40
30
20
10
0
-10
Energy
1990
2018
2025
2030
70 pct. target
30
20
10
0
-10
CCS
Mt. CO2e.
80
70
60
50
40
Agriculture and forestry
Industry
Transport
Waste and F-gasses
Note: The figure shows emissions under a frozen-policy scenario.
Source: Danish Energy Agency.
Under the incumbent government, annual greenhouse gas emissions have been re-
duced by approximately 9.1 Mt of CO
2
e by 2030. This corresponds to approxi-
mately 41 per cent of what must be achieved by 2030 to fulfil the Danish Climate
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Act, and has lowered the reduction residual from 20 to 11.8 Mt. Of these reduc-
tions, the initiatives in the Danish Recovery and Resilience Plan contributes with
1.7 Mt in 2025 and 2.8 Mt in 2030. The plan thus makes a significant contribution
to the Danish and European climate reduction target in 2030,
cf. figure 1.2.
Figure 1.2
CO
2
e-reductions in the Danish Recovery and Resilience Plan
Mt CO
2
e
3
Mt CO2e
3
2
2
1
1
0
2025
Sustainable Road Transport
Green Tax Reform (phase 1)
Energy Efficiency
2030
Agriculture and Environment
0
Note: CO
2
e-reduction effects are the total effects of the combined national stimulus funds and the funds from the
Recovery and Resilience Facility. The reduction effects are estimated partially and the estimated effects may
thus be overlapping.
In addition to the concrete reductions from the initiatives in the plan, the differ-
ent measures pave the way for further reductions. The component on green tax
reform regards the first phase of the reform, and prepare industry to future higher
and more uniform taxes on greenhouse gasses. In the end of 2021, an expert
group will deliver its roadmap on how to implement a uniform tax on greenhouse
gas emissions. This tax is expected to be a key element in fulfilling the Danish cli-
mate targets.
Furthermore, the plan contributes to realising the large technical reduction poten-
tials of promising technologies, which are crucial to reach the climate targets.
Table 1.2
shows an overview of all the components and measures in the Danish
Recovery and Resilience Plan.
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Table 1.2
Overview of the Danish Recovery and Resilience Plan
Expenditures
M. DKK (2021-prices)
1. Strengthening the Resilience of the Healthcare System
1.1. Measures to ensure stocks of critical drugs
1.2. Digital solutions in the healthcare sector
1.3. Clinical study on effect of COVID-19 vaccines
1.4. Emergency management & monitoring of critical medical
products
2. Green transition of Agriculture and Environment
2.1. Organic farming
2.2. Plant based organic projects
2.3. Organic transition of public kitchens
2.4. Organic Innovation Centre
2.5. Climate technologies in agriculture
2.6. Carbon rich soils
2.7. Rehabilitation of industrial sites and contaminated land
2021
153
52
12
49
40
2022
66
-
2
29
36
2023
25
-
-
25
-
2024
-
-
-
-
-
2025
-
-
-
-
-
Total
244
52
14
102
76
360
20
5
10
10
100
165
50
360
20
5
10
10
100
165
50
260
20
5
10
10
-
165
50
265
20
5
10
10
-
165
55
75
-
-
-
-
-
-
75
1,320
80
20
40
40
200
660
280
3. Energy Efficiency, Green Heating and CCS
3.1. Replacing oil burners and gas furnaces
3.2. Energy efficiency in industry
3.3. Energy renovations in public buildings
3.4. Energy efficiency in households
3.5. CCS-storage potential
775
225
-
150
300
100
600
170
100
150
80
100
275
125
100
5
45
-
290
65
105
5
115
-
100
60
10
5
25
-
2,040
645
315
315
565
200
4. Green Tax Reform
4.1. Investment window
4.2. Accelerated depreciation
4.3. Expert group to prepare proposals for a CO
2
e-tax
4.4. Emission taxes on industries
1,039
626
410
3
-
1,351
1,038
310
3
-
758
608
240
-
-90
539
439
180
-
-80
218
318
140
-
-240
3,905
3,029
1,280
6
-410
5. Sustainable Road Transport
5.1. Incentives to choose green cars
5.2. Analysis, tests and campaigns for greener transport
5.3. Green transportation and infrastructure
589
254
5
330
422
182
20
220
333
163
-
170
151
141
-
10
132
132
-
-
1,625
870
25
730
6. Digitalisation
6.1. Digital strategy
6.2. Broadband pool
6.3. SME's digital transition and export
125
-
100
25
145
125
-
20
145
125
-
20
125
125
-
-
125
125
-
-
665
500
100
65
7. Green Research and Development
7.1. Research in green solutions
7.2. Incentives to boost R&D in companies
700
700
-
1,100
-
1,100
-
-
-
-
-
-
-
-
-
1,800
700
1,100
Initiatives in total
3,741
4,044
1,795
1,370
650
11,600
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The Danish Recovery and Resilience Plan contributes significantly more to ful-
filling green and digital objectives
3
.
Table 1.3
shows the share with which each
component contributes to fulfilling the green and digital objectives respectively.
Table 1.3
Green and digital
M. DKK
1.1. Strengthening the Resilience of the Healthcare System
1.2. Green transition of Agriculture and Environment
1.3. Energy Efficiency, green heating and CCS
1.4. Green Tax Reform (phase 1)
1.5. Sustainable Road Transport
1.6. Digitalisation
1.7. Green Research and Development
Total
Total
244
1,320
2,040
3,905
1,625
665
1,800
11,600
Green transition
0
1,040
2,040
1,628
1,550
0
700
60 %
Digital
14
0
0
1,724
0
665
440
25 %
The Danish recovery plan thus contains measures where 60 per cent of the plan’s
total allocation contributes to the green transition and 25 per cent contribute to
the digital transition.
Figure 1.3
provides an overview of the green and digital
shares of the plan
figure 1.4
shows how each component contributes to the fulfil-
ment of the objectives.
Figure 1.3
Green and digital share of costs
B. DKK
14
12
10
8
6
4
25 %
2
15 %
0
Total
Green
transition
Digital
Other
0
2
60 %
B. DKK
14
12
10
8
6
6
4
4
2
0
Total
Green transition
Digital
Health
Energy Efficiency etc.
Road Transport
Green R&D
6
4
2
0
Agriculture and Environment
Green Tax Reform
Digitalisation
Figur 1.4
Green and digital - decomposed
B. DKK
14
12
10
8
B. DKK
14
12
10
8
The Danish Recovery and Resilience Plan thus contains measures that effectively contribute to the green
transition which represents 60 per cent of the recovery and resilience plan’s total allocation, based on the
methodology for climate tracking set out in Annex VI of Regulation (EU) 2021/241. Furthermore, the Dan-
ish recovery plan contains measures that effectively contribute to the digital transition which represents 25 %
of the total allocation, based on the methodology for digital tracking set out in Annex VII.
3
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1.1 Economic outlook
Table 1.4
lists key figures from the latest economic forecast in the development in
the real GDP and unemployment during the pandemic.
The Danish economy contracted in 2020 as a consequence of the pandemic.
However, the setback is expected to be relatively short-lived and the recovery fast.
Thus, real GDP is expected to grow by more than 2 per cent in 2021 and almost 4
per cent in 2022. The unemployment rate is set to remain above pre-pandemic
levels but on a declining path.
Table 1.4
Key figures from Denmark’s Convergence Programme, April 2021
2019
Real GDP, growth, per cent
Inflation, per cent
Nominal wages, growth, per cent
Employment, 1,000 persons
Employment, change, 1,000 persons
Unemployment, 1,000 persons
Unemployment, change, 1,000 persons
Unemployment, per cent of labour force
Labour force, 1.000 persons
Labour force participation rate, per cent
2.8
0.7
2.5
3,003
37
104
-4
3.4
3,105
82.9
2020
-2.7
0.4
2.2
2,981
-22
133
29
4.3
3,113
82.3
2021
2.1
1.1
2.4
2,988
6
124
-9
4.0
3,109
81.4
2022
3.8
1.5
2.6
3,025
37
118
-7
3.8
3,140
81.3
Source:
Denmark's Convergence Programme,
April 2021.
Similar to Denmark, other EU Member States as well as non-EU countries have
experienced contractions of GDP and spikes in unemployment rates. Countries
are now generally facing and trying to curb the spread of different mutations of
the coronavirus. The global economy remains in a vulnerable situation.
As a small open economy, Denmark is reliant on both the EU’s Single Market and
the global market. The recovery of the economies in the Single Market is there-
fore crucial to the recovery of the Danish economy. Next Generation EU will un-
derpin the recovery of the European economies and therefore the Danish econ-
omy. Up to 500.000 jobs – equivalent to every sixth Danish job – are connected
to trade within the single market. This indicates how important a common Euro-
pean effort is. The EU Recovery and Resilience Facility will help the Danish and
other European economies recover.
Mitigating measures to recover
The Danish government has initiated measures to mitigate the consequences of
the pandemic by introducing historically large financial support packages in order
to avoid a deep and lasting economic crisis. For instance, the government has fi-
nanced parts of the salaries for workers during lockdowns in order to ensure that
companies can keep workers employed until the economy opens up again. The
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government has also introduced tax-related liquidity measures that have immedi-
ately increased companies’ liquidity and thereby resilience. Combined, the efforts
are estimated to support around 55.000 jobs in 2020, around 85.000 jobs in 2021
and around 40.000 jobs in 2022.
The support packages have saved jobs and helped to secure that no one is left be-
hind. Mitigating the consequences in a socially just and balanced way has been of
great importance, and will be a strength during the recovery, as it has avoided big
layoffs and job destruction. This leaves Denmark with a solid foundation when
the recovery begins.
More needs to be done – a unique opportunity to accelerate the green tran-
sition
Despite successful support packages, the Danish, European, and global econo-
mies enter a period of economic uncertainty as second and third waves of
COVID-19 hit during winter season in the northern hemisphere as well as new
mutations of the coronavirus. Economic forecasts are marked with a high level of
uncertainty and further state interventions in the economy are necessary to pull
countries out of the recession that the pandemic has caused.
This calls for further action and economic stimuli across the European Union.
Ensuring an immediate recovery is pivotal in national recovery and resilience
plans to avoid that the COVID-19 pandemic develops into a lasting economic cri-
sis. Hence, recovery and resilience plans should have a great emphasis on job cre-
ation. Furthermore, governments all over the EU have an exceptional opportunity
to use the crisis to invest in solving the issue of climate change. By investing in
green growth, it is possible to bring the EU out of the crisis stronger, greener,
more coherent and more resilient than ever before. These are the guiding princi-
ples of the Danish Recovery and Resilience Plan.
The recovery of the European economy provides a unique opportunity to invest
in a greener future. The focus must be to prioritise measures that will kick-start a
green and rapid recovery of the European economy. This includes underpinning
the objectives of agreement of The European Council in December 2020 on a
new binding EU reduction target of at least 55 per cent in greenhouse gas emis-
sions by 2030 compared to 1990. This will set the EU on track to become climate
neutral by 2050.
A broad variety of Danish and European companies possesses unique knowledge
and knowhow on green and digital technologies. Investing in new green and digi-
tal technologies will contribute to the EU being a world leader within green tech-
nology and future job creation. Because of the high level of knowledge and green
entrepreneurship amongst Danish and other European companies, investing in
new green and digital solutions will benefit all European citizens as new technolo-
gies and products will be broadened globally. This provides a great potential for
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the Danish and European economy to enter a period of significant green growth
providing a contribution of great importance to the mitigation of climate change.
The Danish economy was well balanced and resistant to crises before the pan-
demic hit. Combined with the funds from the Recovery and Resilience Facility,
Denmark is now making the necessary investments that will push the Danish
economy out of the recession and into a greener and more digital future.
Box 1.1
Examples of green reforms and investments in the Danish Recovery and Resilience Plan
Reforms
The first phase of The Green Tax Reform creates strong incentives for companies to immediate invest in green
and digital technology, which at the same time leaves a smaller carbon footprint. This is done by increasing
taxes on the industries' process fossil energy while easing companies’ transition to clean energy.
Initiatives in the Sustainable Road Transport include reforms such as the re-prioritization of registration taxes
that incentivises consumers to shift to zero- or low-emission vehicles. This is combined with a subsidy scheme to
increase incentives to change old cars into new, greener cars.
Less productive carbon rich soils are taken out of production in order to reform the agricultural sector because
growing crops on carbon rich soils entails larger emissions of greenhouse gasses and nitrogen compared to pro-
duction elsewhere. Furthermore, the agricultural sector is reformed to focus more on organic production than
today.
Investments
Initiatives in the component on Energy Efficiency, green heating and CCS concern for instance the replacement
of gas and oil furnaces with electric heat pumps and district heating. Furthermore, subsidy schemes are target-
ing green renovations of buildings with poor energy performance and private households.
Large investments are made in research and development of green technologies. This includes projects such as
brown bio-refining utilising pyrolysis technology that will be able to deliver large reductions in the future within
areas that have shown the greatest reduction potentials, e.g.1) Carbon Capture and Storage and use of CO2, 2)
Green fuels, 3) Climate friendly agriculture and 4) Circular economy.
1.2 General objectives/Executive summary
The Danish Recovery Plan consists of seven components. The main focus of the
recovery plan is the transition to a green and climate-neutral society, which is one
of the biggest structural challenges in Denmark. Massive investments are neces-
sary to underpin the green transition. Therefore, the plan entails fundamental re-
forms and investments in the green transition within the sectors with the largest
greenhouse gas emissions in Denmark and underpins potential significant green-
house gas reductions.
Furthermore, the plan includes a variety of initiatives supporting a more resilient,
cohesive and socially just society. This is done by stimulating growth and job crea-
tion as well as strengthening the resilience of the healthcare system, thereby miti-
gating the consequences of the COVID-19 pandemic. The plan also includes
wide-ranging reforms and investments that will promote a digital transformation
across sectors of society advancing welfare and equality, growth and employment,
the green transition and the recovery of the Danish economy.
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The composition of the Danish Recovery and Resilience Plan is described below.
Component 2.1: Strengthening the Resilience of the Healthcare System
Investments in new technology in the healthcare sector
in order to broaden the use of digital solutions is
needed. This will help vulnerable and elderly people
with safe medical consultations during a pandemic. Fur-
thermore, investments will ensure the management of
sufficient stocks of critical medical products to avoid
depletion during potential future rises in demand for
medical products. Monitoring and reporting of the sup-
ply of critical medical products will also be strength-
ened with recovery funds. In addition, a large-scale clin-
ical cohort study of the various COVID-19 vaccines is
conducted in order to increase the knowledge on the
effects and side effects of the vaccines. The study will
increase the resilience and sustainability of the
healthcare system by targeting the vaccines towards the
population groups where they are most efficient.
Table 1.5
Component 2.1: Strengthening the Resilience of the Healthcare System
M. DKK, 2021-prices
1.1 Measures to ensure stocks of critical drugs
1.2 Digital solutions in the healthcare sector
1.3 Clinical study on effect of Covid-19 vaccine
1.4 Emergency management & monitoring of criti-
cal medical products
In total
Total
52
14
102
76
244
2021
52
12
49
40
153
2022
-
2
29
36
66
2023
-
-
25
-
25
2024
-
-
-
-
-
2025
-
-
-
-
-
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Component: 2.2: Green transition of Agriculture and Environment
The agricultural sector is a key sector in the green tran-
sition. The Danish agricultural sector is responsible for
approximately one third of the Danish emission of
greenhouse gasses. By initiating a green transition in the
agricultural sector, investments will cut greenhouse gas
emissions immediately. Further, investments in con-
crete research and development projects such as brown
bio-refining will be able to potentially deliver large re-
ductions in the future. In total, the component will re-
duce the greenhouse gas emissions by estimated 0.1 Mt
by 2030 while minimising the reduction in production
output. Additionally, new technologies in the agricul-
tural sector – primarily brown bio-refining utilising py-
rolysis technology – are estimated to hold a technical
potential for further reductions of greenhouse gas emis-
sion by 2 Mt in 2030. Investments in research and de-
velopment will help these potentials to materialise. Fur-
thermore, the green transition of the agriculture indus-
try will lead to significant reductions of nitrogen emis-
sions. The transition is possible due to measures taking
carbon rich soils out of production and promoting
transition to organic farming. Additionally, funds are
provided to rehabilitate industrial sites and contami-
nated lands thereby removing dangerous substances
and hazardous waste from the nature.
Table 1.6
Component 2.2: Green transition of Agriculture and Environment
M. DKK, 2021-prices
2.1 Organic Farming
2.2 Organic transition of public kitchens
2.3 Organic Innovation Centre
2.4 Plant based organic projects
2.5 Climate technologies in agriculture
2.6 Carbon rich soils
2.7 Rehabilitation of industrial sites and contaminated land
In total
Total
80
40
40
20
200
660
280
1,320
2021
20
10
10
5
100
165
50
360
2022
20
10
10
5
100
165
50
360
2023
20
10
10
5
-
165
50
260
2024
20
10
10
5
-
165
55
265
2025
-
-
-
-
-
-
75
75
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Component 2.3: Energy Efficiency, Green Heating and Carbon Capture and Storage
This component follows up on the recommendations
from the 13 climate partnerships representing key ac-
tors from across the society on a financially sustainable
green transition. To this end, Denmark seeks to priori-
tise additional initiatives based on the recommenda-
tions by the Danish climate partnerships to generate so-
cial, environmental and economic benefits by stimulat-
ing job-creation and growth potentials, and at the same
time contribute to the green transition by reducing
greenhouse emissions with 0.1 Mt in 2030.
One of the initiatives in this component is the replacement of gas and oil furnaces
with electric heat pumps and district heating.
Many of the initiatives are targeted at green energy renovations of buildings with
poor energy performance. Several of the initiatives in this component include re-
placement of oil burners and gas furnaces with electric heat pumps and district
heating in order to reduce energy consumption and greenhouse gas emissions. As
also highlighted in the Commission’s
Renovation Wave,
investing in buildings will
inject a much-needed stimulus in the construction ecosystem and the broader
economy. These investments are in alignment with the EU Green Deal and
COVID-19 recovery and kick-start a green and rapid recovery of the European
economy.
Table 1.7
Component 2.3: Energy Efficiency, green heating and CCS
M. DKK, 2021-prices
3.1 Replacing oil burners and gas furnaces
3.2 Energy efficiency in industry
3.3 Energy renovations in public buildings
3.4 CCS-storage potential
3.5 Energy efficiency in households
In total
Total
645
315
315
200
565
2,040
2021
225
-
150
100
300
775
2022
170
100
150
100
80
600
2023
125
100
5
-
45
275
2024
65
105
5
-
115
290
2025
60
10
5
-
25
100
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Component 2.4: Green Tax Reform
The tax system is one of the most efficient instruments
in creating incentives for citizens and businesses to
lower greenhouse gas emissions. However, fundamen-
tally reforming the tax system is not done overnight.
That is why a broad parliamentary coalition, consisting
of three fourths of the Danish parliament, has made a
politically binding agreement to enact a Green Tax Re-
form in two phases. Phase 1 will take the initial steps of
redirecting current energy taxes towards CO
2
e-emis-
sions, while providing incentives for frontloading green
and digital investments. Phase 2 will fundamentally re-
write the tax code by introducing a broad tax on all
greenhouse gas emissions including the non-energy re-
lated emissions in the agricultural sector. The ambition
is that the second phase will be the determining factor
in delivering a 70 per cent reduction in Danish emis-
sions in 2030.
The subcomponents under the green tax reform should be seen in context: The
increased emissions tax on industry in first phase of the green tax reform, and the
broadly anchored political ambition to implement a uniform, economy-wide car-
bon tax in the second phase, sends a strong message to market participants that
now is the time to transition away from carbon emission activities.
To provide companies with the incentive and the opportunity to accelerate this
transition and prepare for such a carbon tax, the green tax reform includes tax de-
ductions for frontloading green investments. The strong incentives for companies
to immediately invest in green and digital technologies will simultaneously assist
Denmark in recovering from the COVID-19 recession. This will lead to an in-
creased demand and a rise in employment as well as a reduction of greenhouse gas
emissions and further digitalisation of the Danish society.
The first phase of the green tax reform will lower greenhouse gas emissions by 0.5
Mt by 2030. This is due to the increased taxes on the industries' process fossil en-
ergy. The intention is that this initial increase in fossil energy taxation will become
directly targeted at the CO
2
-content of the different fossil fuels before the Green
Tax Reform moves to the second phase.
To ease companies’ transition to clean energy and boost growth potentials, the tax
reform also implies an increased tax deduction for companies investing in capacity
costs, e.g. technology and software.
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The investment window will not include machinery running on fossil fuels to en-
sure a green transition of industry. This will boost the companies’ growth poten-
tial and job creation, while encouraging companies to invest in new hardware and
technology that can reduce emissions in the longer run.
For the second phase of the Green Tax Reform, an expert group has been estab-
lished, which will draw the road map for the next phase of CO
2
e taxation in a
manner consistent with protecting competitiveness, social balance and minimising
leakage. It is the ambition in the long term to make a comprehensive tax reform
with a high and uniform CO
2
e tax on all emissions, but it will require significant
development work, especially with regard to emissions that are not currently sub-
ject to taxation.
Table 1.8
Component 2.4: Green Tax Reform
M. DKK, 2021-prices
4.1 Investment window
4.2. Accelerated depreciation
4.3. Expert group to prepare proposals for a uni-
form CO
2
e-tax
4.4 Emission taxes on industries
In total
Total
3,029
1,280
6
-410
3,905
2021
626
410
3
-
1,039
2022
1,038
310
3
-
1,351
2023
608
240
-
-90
758
2024
439
180
-
-80
539
2025
318
140
-
-240
218
Component 2.5: Sustainable Road Transport
The transport sector is one of the largest emitters of
greenhouse gasses in Denmark. The sector alone is re-
sponsible for approximately 25 per cent of the Danish
emissions. In order to reach the ambitious target of re-
ducing greenhouse gas emissions by 70 per cent by
2030, reductions in the transport sector are essential.
Within road transportation, new technology allows for
a transition towards greener and more environmentally
sustainable solutions. With this component, new tech-
nologies are utilised to reach a reduction in greenhouse
gas emissions by 2.1 Mt in 2030 and sets forth the am-
bition of having 1 m. zero- and low-emission cars by
2030.
This is achieved by re-prioritising the registration tax to incentivise more consum-
ers to choose zero and low-emission cars. Furthermore, the tax on electricity for
zero and low-emission vehicles is lowered and a premium for scrapping old diesel
cars is introduced to ensure that older cars are rapidly changed into new and less
polluting cars.
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Significant investments and subsidies in green infrastructure and new technologies
further incentivises green mobility, supporting public health and reducing conges-
tion.
Table 1.9
Component 2.5: Sustainable Road Transport
M. DKK, 2021-prices
5.1. Incentives to choose green cars
5.2. Analyses, tests and campaigns for greener
transport
5.3. Green transportation and infrastructure
In total
Total
870
25
730
1,625
2021
254
5
330
589
2022
182
20
220
422
2023
163
-
170
333
2024
141
-
10
151
2025
132
-
-
132
Component 2.6: Digitalisation
Denmark is among the leading digital countries in the
world and therefore has a strong foundation to build
upon. This has resulted in the UN labelling Denmark as
the global leader in terms of digital government – cap-
turing the scope and quality of online services, status of
telecommunication infrastructure and existing human
capacity – among the 193 UN member states
4
. Through
a new digital strategy that will cover a set of wide-rang-
ing reforms and investments, the aim is to promote a
digital transformation across all sectors of society ad-
vancing welfare and equality, growth and employment,
the green transition and the restart of the Danish econ-
omy after the COVID-19 crisis.
As part of this process, the Danish government has established a digitalisation
partnership consisting of top managers and experts from the Danish business
community, municipalities and regions, academia, and social partners. The broad
anchoring and involvement of stakeholders across society can qualify digital as-
pects and needs broadly in society in relation to citizens, businesses and the wel-
fare state, and will contribute with recommendations for a new digital strategy.
Such a process involving all relevant actors is needed to ensure a consistent and
cross-sectoral digital strategy for Denmark.
In addition to the digital partnership leading to a new digital strategy, the Recov-
ery and Resilience Plan will support the digital transition through investments in
strengthened connectivity and increased digital export opportunities for SMEs.
4
https://publicadministration.un.org/egovkb/en-us/Reports/UN-E-Government-Survey-2020
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Table 1.10
Component 2.6: Digitalisation
M. DKK, 2021-prices
6.1. Digital strategy
6.2. Broadband pool
6.3. SME’s digital transition and export
In total
Total
500
100
65
665
2021
-
100
25
125
2022
125
-
20
145
2023
125
-
20
145
2024
125
-
-
125
2025
125
-
-
125
Component 2.7: Green Research and Development
In order to realise Denmark’s high climate ambitions,
new technologies and tools to reduce emissions of
greenhouse gasses have to be developed. Therefore, a
component on investing in the development of new
green technologies is a crucial part of the Danish Re-
covery and Resilience Plan. The funding will be tar-
geted towards four research and development mis-
sions and support for private R&D. The four mis-
sions focus on 1) CCS and use of CO
2
, 2) Green
fuels, 3) Climate friendly agriculture and 4) Circular
economy. These areas have shown big potential in re-
ducing greenhouse gas emissions and the Danish cli-
mate partnerships’ have recommended targeting re-
search, development and demonstration efforts within
these four missions. The intention with the missions
is to build green public-private partnerships of re-
search institutions, private businesses, public institu-
tions and innovation actors. The green partnerships is
a new instrument in the Danish research and innova-
tion system, where private and public institutions will
cooperate by sharing knowledge and best practice to
focus and accelerate innovations targeted specific
challenges of the green transition.
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Table 1.11
Component 2.7: Green Research and Development
M. DKK, 2021-prices
7.1. Research in green solutions
7.2. Incentives to boost R&D in companies
In total
Total
700
1,100
1,800
2021
700
-
700
2022
-
1,100
1,100
2023
-
-
-
2024
-
-
-
2025
-
-
-
1.3 Comprehensive and adequately balanced response to the economic and
social situation
The Danish recovery and resilience plan has a clear and strong focus on initiatives
that support the green transition. That includes both reforms and investments
that deliver immediate reductions in greenhouse gas emissions as well as initiatives
that will provide the basis for significant further reductions in the future. As men-
tioned, Denmark has committed to the world’s most ambitious climate target of
reducing greenhouse gas emissions by 70 per cent by 2030, and the Danish recov-
ery plan contributes significantly to the achievement of that target. The Danish re-
covery plan therefore provides a sustainable recovery of the Danish economy fac-
ing the largest challenge.
It is estimated that the components in the Danish recovery plan contribute to
CO
2
e reductions of 1.7 Mt in 2025 and 2.8 Mt in 2030 and thus make a significant
contribution to the Danish and European climate reduction target in 2030,
cf. table
1.12.
Table 1.12
CO
2
e-reductions in the Danish Recovery and Resilience Plan
Reductions
Mt CO
2
Components
Agriculture and Environment
Energy Efficiency, Green heating and CCS
Green Tax Reform
Sustainable Road Transport
Reductions, in total
2025
0.04
0.1
0.5
1.0
1.7
2030
0.1
0.1
0.5
2.1
2.8
Note: CO
2
e-reduction effects are the total effects of the combined national stimulus funds and the
funds from the Recovery and Resilience Facility. The reduction effects are estimated partially
and the estimated effects may thus be overlapping. Total reductions may diverge from the sum
of individual reductions due to roundings of decimals.
In addition, significant future reduction contributions from the green research and
development programs must be expected
cf. table 1.13.
For instance, development
of brown and green refinery can potentially deliver a reduction of 2 Mt CO
2
by
2030 if the preliminary results hold true.
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Furthermore, the four green research missions might lead to significant potential
greenhouse gas reductions in the near future, e.g. new Power-to-X solutions have
the potential of reducing the Danish greenhouse gas emission with somewhere
between 0.5 and 3.5 Mt CO
2
per year in 2030.
Table 1.13
Technical reduction potentials in key technologies
Research and development programs
CCUS
PtX
Brown bio-refinement
Agriculture
Reduction of plastic and textile waste
Total
1)
Mt CO
2
e in 2030
4-9
0.5-3.5
2
2
0.2
8.7-16.7
Note:
1)
Total does not reflect the aggregate technical reduction potential. The technical potentials for CO
2
e-reductions
are estimated separately and the potentials may overlap. This is especially pertinant for PtX and CCUS. The
estimates signal the theorically possible reductions and are subject to a very high degree of uncertainty.
Greenhouse gas emissions is not the only target of the recovery plan. The envi-
ronment will benefit from the plan as well, as the plan consists of initiatives,
which also lowers the amount of harmful substances and particles emitted to the
atmosphere and the aquatic environment. The reforms and investments in the
transition of the car-stock from conventional cars to zero- or low-emission vehi-
cles are examples hereof due to the mitigation of particulate matter and NOx.
Hence, the recovery plan targets emission of particles to the atmosphere and ni-
trogen to the aquatic environment.
The Danish Recovery and Resilience Plan will prove that economic growth and
green transition are not opposites. The solution to both climate change and the
restoration of the economy following the COVID-19 pandemic is to invest in the
creation of green jobs and growth. For the economy to recover, it is crucial that
the Danish government contributes to bring back the lost jobs by restoring de-
mand. The Danish recovery plan contains measures that will contribute to job cre-
ation in 2021 and 2022 as well as investments in technologies that will potentially
create many more jobs in the future. Job creation will contribute to maintaining a
high degree of social cohesion and making sure that no one will be left behind as
the economy recovers from the pandemic. The macroeconomic effects of the re-
covery plan are set out in
Part 4: Overall impact.
The plan addresses the green transition by spreading out initiatives to different
sectors and industries as well as securing a good regional and social balance. Fur-
thermore, investments are made in initiatives that have the potential to become
important contributors to the green transition on the EU-level and globally. For
instance, research and innovation in the partnership of the mission regarding car-
bon capture and storage or use of CO
2
will strengthen research in the geological
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preconditions for storing CO
2
in Denmark. It will also contribute to the reduction
of the general price of carbon capture, utilisation and storage, which is a necessity
in order to implement cost-effective solutions that can be carried out on a larger
scale.
Hence, while this plan is time limited and geographically targeted to Denmark
specifically, the impact of the plan on the green transition will be both lasting and
global. Thereby, the plan aims at responding to the great challenges of the next
decades, and making sure that Denmark will deliver on the promise and common
obligation to transition the economy to being greener and more sustainable.
The green transition has beneficial effects on the quality of life of all Danish citi-
zens as it supports public health and reduces congestion. At the same time, it en-
sures new opportunities in the form of Danish jobs with equal opportunities for
all. With the Budget Bill for 2021, the Danish government has decided to set aside
a pool for upskilling and education in climate transition and green transition in a
broad sense. This ensures that everyone has equal access to participate in the em-
ployment opportunities that will arise with the green transition.
The COVID-19 pandemic has shown how important a broad and resistant digital
infrastructure is. Denmark is among the leading digital countries in the world with
almost all contact between citizens, businesses, and the public sector being digital-
ised. This plan strengthens Denmark’s position as a pioneering digital country, as
it contains ambitious initiatives to further promote digitalisation and improve ex-
isting digital solutions. The initiatives on digitalisation are aimed at both the public
and the private sector with a strong focus on incentivising private businesses to
invest directly in digital solutions already from this year. This will contribute to job
creation and an even more digitalised and productive economy.
Finally, the plan comprises initiatives aimed at strengthening the resilience of the
healthcare system, which has been challenged by the large numbers of hospitalisa-
tions during the COVID-19 pandemic. It is important that the healthcare system
has the necessary resources to handle the aftermaths of the COVID-19 pandemic
as well as being ready to handle future pandemics or other large disease outbreaks.
1.4 Links with the European Semester
As part of the European Semester, Denmark received the Council´s opinion on
Denmark’s economic policy on 20 July 2020. The opinion was based on Den-
mark´s 2020 Convergence Programme and Denmark´s 2020 National Reform
Programme. Denmark received three recommendations
cf. Box 1.2.
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Box 1.2
The Country Specific Recommendations for Denmark 2020
The Council recommends that Denmark take action in 2020 and 2021 to:
1. Take all necessary measures, in line with the general escape clause of the Stability and Growth Pact, to effec-
tively address the COVID-19 pandemic, sustain the economy and support the ensuing recovery. When eco-
nomic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and en-
suring debt sustainability, while enhancing investment. Enhance the resilience of the health system, including by
ensuring sufficient critical medical products and addressing the shortage of health workers.
2. Front-load mature public investment projects and promote private investment to foster the economic recovery.
Focus investment on the green and digital transition, in particular on clean and efficient production and use of
energy, sustainable transport as well as research and innovation. Support an integrated innovation strategy with
a broader investment base.
3. Improve the effectiveness of anti-money laundering supervision and effectively enforce the anti-money launder-
ing framework.
The Country Specific Recommendations addressed to Denmark generally reflects
the priorities of the Danish government and its efforts to ensure the recovery of
the Danish economy with great emphasis on the green transition.
The Country Specific Recommendations addressed to Denmark in 2019 cover the
same policy areas as for 2020, including research and innovation, sustainable
transport and anti-money laundering. However, in 2019, Denmark also received a
recommendation to focus investment-related economic policy on education and
skills.
Below is a description of how Denmark addresses the Country Specific Recom-
mendations with the Danish Recovery and Resilience Plan, but also other efforts
to address the Country Specific Recommendations that have been implemented.
1.4.1 Addressing of the CSRs in the Danish Recovery and Resilience Plan
The Danish Recovery and Resilience Plan seeks to respond to the recommenda-
tions that Denmark has received through the European Semester. The most im-
portant Country Specific Recommendation for Denmark is to support and imple-
ment the necessary reforms and investments in relation to the green transition.
The Danish government has a clear ambition to be a pioneering country and lead
the way in this process for the rest of the world.
Box 1.3
gives and overview of how the different components of the recovery and
resilience plan addresses the Country Specific Recommendations for Denmark.
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Box 1.3
Compliance with Country Specific Recommendations in the Danish recovery plan
The reforms and investments in the Danish recovery plan contribute to the compliance with the Country Specific
Recommendations addressed to Denmark. Below, the recommendations are listed together with the components
that address the recommendations:
Recommendation to effectively address the pandemic, sustain the economy, support the ensuing recov-
ery, and enhance resilience of the health system:
Since the COVID-19 crisis hit Denmark in the spring of 2020, a pronounced expansive fiscal policy strategy has
been implemented to support the economy and the labour market through the crisis. Fiscal policy efforts include
a wide range of policy agreements that contribute to a green, fair and socially just recovery of the Danish econ-
omy. Political agreements have been made ensuring more than 160 bn. DKK in compensation and relief pack-
ages for businesses and employees. In addition, the initiatives in the component on
Strengthening the Resili-
ence of the Healthcare System
comply with the Country Specific Recommendations by investing in the Danish
healthcare system. The investments have a focus on ensuring availability of critical medical products, strength-
ening the digitisation, and utilising telemedicine in order to ensure a more resilient health system that are pre-
pared to handle this and future epidemics.
Recommendation to front-load mature public investment projects and promote private investments to
foster the economic recovery. Focus investment of the green and digital transition. Support an inte-
grated green innovation strategy with a broader investment base:
The initiatives in components
Green Transition of Agricultural and Environment; Energy Efficiency, green heating
and CCS; Green Tax Reform; Sustainable Road Transport; Digitalisation; Green Research and Development
all
comply with the Country Specific Recommendations. This is by investing and introducing reforms that support
the green and digital transition through various efficient measures that contribute to reducing CO
2
e emissions in
all the most emitting sectors in Denmark and in a cost-effective and socially just way. This includes green and
digital investments supported by the Danish government through various subsidy schemes as well as tax deduc-
tions for citizens and enterprises investing in new green and digital technology, research and development.
Recommendation to improve the effectiveness of anti-money laundering supervision and effectively en-
force the anti-money laundering framework:
Denmark has made significant progress in its efforts against money laundering and financing of terrorism. The
Danish government, together with a broad majority in the Danish Parliament, has significantly strengthened the
Danish Financial Supervisory Agency by increasing staff by 60 per cent. This has led to an increase in inspec-
tions from 35 in 2019 to 45 in 2020 and the inspections have been targeted at areas with increased risk of
money laundering. Furthermore, the Danish Financial Intelligence unit has doubled its number of employees
between 2017 and 2020 and fines have been raised by up to 700 per cent.
Denmark was recommended to frontload public and private investments in green
and digital transition. The Danish Recovery and Resilience Plan has a great em-
phasis on both elements, and with the funds from the Recovery and Resilience
Facility it has been possible to further accelerate the accomplishment of Den-
mark’s extremely high green ambitions. With the green transition of agriculture
and the environment (component 2.2) and the Green Tax Reform (component
2.4), the plan includes incentivising businesses to frontload their investments in
green and digital technologies and thereby supporting efficient production and use
of energy. At the same time, the investments in the green transition will ensure
growth potentials and job creation both now and in the coming years.
Furthermore, the plan addresses recommendations on sustainable transport (com-
ponent 2.5) as well as an integrated innovation strategy with a broader investment
base in research and innovation within the four green research and development
missions (component 2.7). In addition, the Danish government has initiated 13
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climate partnerships with representatives from civil society that have contributed
with ideas and suggestions on how to accelerate the green transition while making
the acceleration economically sustainable. The initiatives on energy efficiency
(component 2.3) follow from these recommendations, among other things.
Moreover, The European Semester recommended Denmark to address the pan-
demic including securing sufficient critical medical equipment to prevent short-
ages (component 2.1). With the Danish Recovery and Resilience Plan, measures
are taken to ensure availability of critical medical equipment and free up extra
hands in the healthcare sector, which may be used and allocated for the handling
of COVID-19 patients etc.
The components in the Danish recovery plan regarding the green transition and
digitalisation also reflect the recommendations Denmark have received in the Na-
tional Energy and Climate Plans and the Digital Economy and Society Index. This
applies, for example, to measures to promote energy efficiency through building
renovation and sustainable heating sources (component 2.3) as well as measures
to promote a green tax reform while ensuring a just transition for the most af-
fected households and companies. In addition, measures to promote a continued
expansion of high-speed internet throughout the country and funds to support
the digital transformation of SMEs. Finally, the funds from the Recovery and Re-
silience Facility contribute to a new digital strategy (component 2.6) that will pave
the way for new advanced digital technologies for businesses and digital public
services.
Recommendation on anti-money laundering
Combatting money laundering and terrorist financing is of high priority to the
Danish government. In recent years, Denmark has made significant progress in
the efforts against money laundering and financing of terrorism. The Danish gov-
ernment, together with a broad majority in the Danish Parliament, has adopted
several measures to strengthen the Anti-Money Laundering and Counter-Terror
Financing framework and intensify supervision.
The initiatives include, among others, that:
From January 2020, the Danish Financial Supervisory Authority has broad ac-
cess to issuing administrative fine notices in cases of violation of the Anti-
Money Laundering legislation.
Fines for not being compliant with anti-money laundering and terrorist financ-
ing regulations was significantly increased in 2019.
For large banks, fines can be increased by up to 700 per cent compared to the
previous level.
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The Danish Financial Supervisory Authority has in January 2020 been given
the option of appointing a qualified person who may monitor the daily opera-
tions of the banks where it is necessary, in order to monitor a company in risk
of being used to commit a financial crime.
In February 2021, the Danish Financial Supervisory Authority has made a de-
cision to insert independent experts in Danske Bank in relation to the supervi-
sion of the execution of the bank’s financial crime plan.
The staff in the Anti-Money Laundering/Counter-Terror Financing Division
in the Danish Financial Supervisory Authority has increased by 60 per cent
since 2019. In 2020, the Danish Financial Supervisory employed three addi-
tional full-time equivalents to conduct administrative sanctions.
The number of inspections has increased from 35 in 2019 to 45 in 2020. In
2010, the number of inspections was 0-5 per year.
The Danish Financial Intelligence Unit has since 2018 been granted additional
resources. The number of staff has increased from 28 in 2019 to 35 full-time
equivalents by the end of 2020. Since 2017, the number of employees has
more than doubled.
The number of suspicious transaction reports, suspicious activity reports and ter-
ror financing reports disseminated from the Danish Financial Intelligence Unit to
the police and the State Prosecutor of Serious Economic and International Crime
has increased significantly, from 5,234 in 2019 to 8,499 in 2020. In comparison,
the number of reports disseminated to the police and the State Prosecutor of Seri-
ous Economic and International Crime was 1,588 in 2017
5
.
In November 2019, the Danish government set up the Operational Government
Forum as part of the national strategy for combatting money laundering and ter-
ror financing. The forum was set up in an effort to strengthen the operative coop-
eration and coordination between Danish police authorities, tax authorities and
other authorities involved in combatting money laundering and terror financing.
The members of the forum convene on a monthly basis to share multilateral and
bilateral information, subjects, trends and coordination of specific cases.
With regard to the risk-based supervision, the Danish Financial Supervisory Au-
thority has built a new risk assessment model that strengthens the risk-based ap-
proach by allowing the Anti-Money Laundering /Counter-Terror Financing Divi-
sion of the Danish Financial Supervisory Authority to target its activities toward
high-risk areas. Based on data submitted by obliged entities, the scoreboard model
estimates the inherent risk on a variety of data points. In addition, it makes an es-
5
A single report may have been disseminated in multiple years.
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timation of the residual risk, using various indicators as proxies for control effec-
tiveness. The risk assessment is based on quarterly/annual reports from all 1,900
obliged financial entities. They will report on 26 parameters. The new databased
risk assessment will start with the first dataset in May 2021, and the model will be
used in the Danish Financial Supervisory Authority’s inspection plan from 2021.
In addition, the Danish Financial Supervisory Authority is just about to implement
a new supervisory strategy, which will encounter a more flexible use of supervisory
tools, including increased use of “deep dive” inspections and off-site investigations,
thereby giving a more efficient use of the resources.
The Anti-Money Laundering/Counter-Terror Financing supervision has only to a
very limited degree been affected by the COVID-19 situation. Hence, all inspec-
tions and other supervisory activities have been carried out. Some inspections have
been made on a virtual basis but with the normal scope in all respects.
In 2020, the Danish government put forward a draft bill containing a proposal to
include exchange services providers regarding virtual currencies, transfer of virtual
assets and providers of administration services related to virtual asset activity un-
der the scope of the Anti-Money Laundering act, in full compliance with the Fi-
nancial Action Task Force definition of virtual asset service providers. The draft
bill also includes a proposal to lower the legal limit on the size of cash transactions
from 50,000 DKK to 20,000 DKK.
In February 2021, the Danish government has set up a public-private project
group, which will examine the possibilities for the development of an effective
joint system for monitoring of cash flows across banks in the fight against money
laundering, terror financing and value added tax fraud. An initial study completed
in 2020 has shown that, by correlating banks’ transaction data with value added
tax, business and reporting data, the authorities can better identify suspicious be-
haviour, take more proactive action against criminals and discard non-relevant
cases. The project group is expected to report their findings to the Danish gov-
ernment during the summer of 2021.
By initiating all of the above-mentioned measures, Denmark has made large ef-
forts to accommodate the country specific recommendation on anti-money laun-
dering. Therefore, the Danish Recovery and Resilience plan does not contain spe-
cific measure targeted money laundering.
However, he Danish government will continue the efforts against money launder-
ing and terror financing. The government will continue to take the necessary
measures to further improve the effectiveness of the anti-money laundering su-
pervision and effectively enforce the anti-money laundering framework.
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Recommendation on investments in education and skills
The Danish government has continuously invested in new policies targeted at ed-
ucation and skills, increasing funding for these areas significantly.
Public investment in tertiary education amounted to 14 bn. DKK in 2019 (exclud-
ing SU grants and research). This is in an increase of approximately 23 per cent
since 2008. During the same period, the admission to tertiary education in Den-
mark has increased by 42 per cent.
From 2020 and onwards, the existing ”re-prioritisation contribution”(Ompri-
oriteringsbidraget) has been cancelled, increasing funding for educational institu-
tions by approximately 678 m. DKK per year. In 2020, Denmark made a law on
the minimum amount of preschool teachers per child. With this law, Denmark
will be investing an additional 1.8 bn. DKK yearly in extra preschool teachers
from 2024. From 2020, the funding for basic education increased, adding 275 m.
DKK in 2020 and an additional 807 m. DKK from 2023 and onwards.
Furthermore, the Danish government and the Danish employee and labour or-
ganisations reached a number of tripartite agreements in 2020 aimed at vocational
education and training. With these agreements, a total of 6.1 bn. DKK have been
invested in vocational education in 2020, with an additional 500 m. DKK yearly
earmarked to new initiatives from 2021 and onwards. The Danish government
and the parties in the Danish Parliament have allocated 18.2 bn. DKK on research
and development, where 2.7 bn. DKK will be targeted at research areas within the
green transition and climate change. This corresponds to an increase of 420 m.
DKK from 2020.
Further measures taken to address the pandemic, sustain the economy, and support the recovery
Since the beginning of the COVID-19 crisis, Denmark has pursued a very expan-
sive fiscal policy to support the economy. The Danish government has imple-
mented both comprehensive temporary compensation schemes and a number of
expansionary fiscal policy measures in order to stimulate the Danish economy.
In August 2020, the Danish government presented an updated framework for the
fiscal policy towards 2025. This updated framework consists of expansionary fis-
cal policy, including a boost of public investments, in the coming years, which will
support economic recovery. In 2021, the structural budget balance reaches the
limit, set by the Danish Budget Law, with a structural deficit of 0.5 per cent of
GDP (large one-offs primarily related to COVID-19 handling and disbursement
of previously saved holiday pay are not included in this measure). Towards 2025,
fiscal policy is planned based on an adjusted profile for the structural budget bal-
ance, which supports the recovery of the economy. The updated framework in-
cludes an unchanged target of the structural fiscal balance in 2025, which contrib-
utes to stabilise the development of public debt and to support the credibility of
public finances.
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Furthermore, the 2021 Budget Bill and related agreements include several
measures, which further support the recovery of economic activity. These
measures include the distribution of the remaining frozen holiday pay, support for
the experience industry, Danish exports etc.
The fiscal policy approach described above, consisting of the updated financial
framework towards 2025, the Budget Bill and related agreements, is assessed to
substantially support economic activity in the coming years. The planned fiscal
policy is considered appropriate and in line with the economic outlook.
The Danish approach to control COVID-19 has been to act timely and decisive
with actions taken both on a national level and on a local level depending on the
specific situation and severity of outbreaks. The aim is to ensure that the spread of
COVID-19 is limited and well within the available healthcare capacity. A combi-
nation of testing, tracking and isolation is the first line of defence against the
spread of the coronavirus. Funding for new measures is allocated on an ongoing
basis.
Additional measures in relation to investment actions
The expansive fiscal policy to support the economy though 2020-21 also entails
efforts to frontload public investment projects in order to stimulate the economy.
In choosing projects to frontload, there is a particular focus on investments in
municipalities and regions. In March of 2020, the Danish government made an
agreement with the Local Government Denmark and Danish Regions, which re-
leases municipalities and regions from the construction ceiling in 2020. This pro-
vides municipalities and regions the opportunity to invest in projects immediately
that would otherwise have been carried out later. Furthermore, the government
prioritized 15 bn. DKK to raise the ceiling for public investments in 2021-2025,
which will increase public investments.
During 2020, the Danish government made several agreements with a strong
green focus. This includes the Agreement on Green Renovation of Social Hous-
ing that earmarks 30.2 bn. DKK from the National Building Foundation for so-
cial housing sector renovation in 2020-2026. Furthermore, the Climate Agreement
for Energy and Industry prioritises 22.5 bn. DKK to the green transition towards
2030.
Investment in research is also a priority for Denmark. The public research and de-
velopment budget has been approximately 1 per cent of GDP since 2009, and the
public research and development budget amount to approximately 24.2 bn. DKK
in 2021. This corresponds to more than 1.03 per cent of GDP and makes Den-
mark one of the European countries that spends the most on research and inno-
vation measured in per cent of GDP.
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1.4.2 European flagship areas
The seven European flagship areas are reflected in all of the components in the
Danish Recovery and Resilience Plan. It is important to deliver a common Euro-
pean response to future challenges, and the flagships act as way to align policies
across the EU.
Box 1.4
provides an overview of how the contents of the Danish Recovery Plan
are in line with the aims of the flagship areas.
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Box 1.4
European flagships the Danish Recovery and Resilience Plan contribute to
The Danish Recovery and Resilience Plan accommodates several of the European flagships. Below, selected initia-
tives are highlighted:
Power up:
Large investments are made in increasing support schemes for replacing oil burners and gas fur-
naces with electric heat pumps. This initiative will support an electrification of society and thereby increase the
use of green power. Furthermore, an investment window will incentivise companies to frontload their invest-
ments in green and digital technologies. Deductions for R&D-expenses in 2022 will additionally promote espe-
cially SME’s to invest in the development of new green technologies.
Renovate:
The recovery plan includes subsidy schemes for energy renovations in private and public buildings in
municipalities and regions. Moreover, a subsidy scheme for energy efficiency in industry will increase the reno-
vation rate and fostering of deep renovation.
Recharge and refuel:
Re-prioritising the registration taxes and lowering the electricity tax to charging of zero-
and low emission cars will increase the demand for green cars and future construction of more charging points.
Connect:
The broadband pool will promote high-speed internet access for citizens, households, and companies
across the country, including promoted access in some less densely populated areas.
Modernise:
A strategic digitalisation effort will ensure that the new technologies and digital solutions discovered
during the COVID-19 pandemics are used to create a more resilient and sustainable healthcare system, which is
more coherent and closer to the citizen.
Scale-up:
The Danish government’s new digital strategy – funded by the Recovery and Resilience Facility – will
aim to address administrative and bureaucratic barriers, increase efficiency and growth, stimulate the competi-
tiveness and digital transition of businesses, and simultaneously strengthen the quality of the public digital ser-
vices that citizens and businesses meet.
Reskill and upskill:
The measures in the digitalisation plan aims to promote accessible and interoperable digital
public services, e.g. supporting digital skills and training.
1.5 Gender equality and equal opportunities for all
Successive Danish governments have continuously improved legislation and other
legally binding regulations in order to achieve gender equality and equal opportu-
nities for all. As a result, women share the same formal rights, obligations and op-
portunities in society as men.
The advancement of gender equality as well as equal opportunities for all is re-
garded as a prerequisite for economic growth, democracy and welfare. Women’s
full enjoyment of their human rights, their sexual and reproductive health and
rights, and gender equality is regarded as fundamental for the Danish society. To-
day, Danish women participate in the labour market almost on an equal footing
with men. The early childhood education and care system allows women – and
men – to balance their work and private life. Women generally enjoy equal oppor-
tunities in political, economic, social, cultural and civil spheres of life.
As a result, Denmark has been rated among the top of gender equal societies in
several ratings.
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However, the Danish government fully acknowledges that women still lag behind
men in a range of areas, and there is still a lot of work to be done when aiming to
achieve full equality for all women in society and to secure de facto gender equal-
ity.
Within the last 12 months, the Danish parliament has adopted legislation and
funds for combatting violence against women including widening the scope of
criminal law and allocating funds for expanding support services and raising
awareness. This includes:
New rape legislation criminalising intercourse without consent. The legislation
includes a hotline for victims of rape.
Funds for strengthening support services for female victims of domestic
abuse, including the establishment of additional permanent shelters for bat-
tered women and increased funding for NGOs providing ambulatory counsel-
ling services for victims.
Further funding to increase the capacity of ambulatory counselling and treat-
ment programs. Moreover, shelters for victims of domestic abuse will receive
funding to establish additional temporary rooms across the country in order to
mitigate the challenges caused by the crisis. This is pertinent, as the COVID-
19 pandemic has had a serious impact on victims of domestic violence.
In November 2020, the Danish government launched 14 new initiatives to com-
bat sexual harassment in the workplace and in education. The measures are broad
and cover subjects like raising awareness, prevention and monitoring of sexual
harassment. For example, Denmark has established a tripartite dialogue with so-
cial partners on how to improve the prevention of sexual harassment and
strengthen the sanctions for sexual harassment in the workplace. An alliance be-
tween relevant NGOs, organisations and social partners is also being established
to promote broad cooperation and sharing of knowledge on how to change the
culture in the workplace.
Specific initiatives to comply with recommendations
Women’s participation in the labour market is key for their economic empower-
ment and for their access to decision-making. In Denmark, women have a high
participation rate and they are breadwinners in one third of the families. However,
Denmark is committed to promote women in decision-making, the continued
problems with the segregation on the labour market and in academia, and the gen-
der pay gap, as recommended by the Commission.
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For these reasons, Denmark has initiated a range of activities such as
A commitment to promote equality in parents’ share of their parental leave.
This will ben-
efit children, fathers, and the family as a whole as well as allow women to re-
turn to the labour market and to pursue the career they want. Likewise, shar-
ing the parental leave equally between parents can help reduce the gender pay
gap.
Promotion of female entrepreneurship.
Denmark has established a Maternity Equali-
zation Scheme for self-employed persons to increase their financial compensa-
tion during maternity, paternity and parental leave.
Promotion of women in academia.
In 2021, the Danish government has allocated
110 m. DKK to strengthen the talent program ‘Inge Lehmann’ in order to
promote a more equal gender balance in academia.
Promotion of women in STEM
and combating the gender segregated education
system. Examples of this are the yearly national campaign "Girls’ Day in Sci-
ence" and the Danish government’s Strategy for Natural Sciences from 2018.
The latter includes exploring how ‘technological comprehension’ can be
taught in ways that motivates all students, regardless of gender, age and family
background, thereby making technological studies more attractive for all – in-
cluding especially girls in primary and lower secondary school.
In sum, Denmark strives to be a frontrunner on gender equality, and the Danish
government is fully committed to continue to improve women’s empowerment
and equal opportunity for all. Therefore, the focus on gender and equality is main-
streamed across policy areas and is seen as a precondition to growth and welfare.
Furthermore, initiatives countering COVID-19 induced gender inequalities such
as increased violence against women have been funded by the state. The initiatives
in the recovery plan complement these efforts and have a positive impact on gen-
der equality. Studies show that women are more vulnerable to COVID-19 related
economic effects, as the virus inter alia increases the burden of unpaid care, which
disproportionately falls on women
6
. Furthermore, Danish women are more often
than men employed in the service sector, which has been severely hit by the lock-
down. By combining the ongoing Danish efforts to counter structural inequality
with the recovery plan’s investments in health and stimulus of the economy, the
COVID-19 induced economic inequalities are mitigated and will be prevented in
future health crises.
In addition to promoting equality between genders, the Danish recovery plan also
seeks to promote equal opportunities for all. To illustrate, the terms of reference
for the Danish government’s
digitalisation partnership
state, that the partnership
McKinsey Global Institute (2020): COVID-19 and gender equality: Countering the regressive effects.
https://www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-
regressive-effects
6
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must provide recommendations on how the new digital strategy can ensure that
the digital transformation happens in a way, which ensures equal opportunities
and cohesion. Furthermore, the
health component
will improve equality within
healthcare by creating better conditions for vulnerable patients. The initiatives in
the Recovery and Resilience Plan also contribute to equal access to e.g. green
heating and broadband, as these initiatives are mostly relevant for households in
rural areas, where low-income households are overrepresented. Finally, by having
a very strong green component and accelerating the green transition, the Danish
Recovery and Resilience Plan also contributes to equality between generations. It
is thus in line with the core purpose of
Next Generation EU,
as it contributes to en-
suring, that younger generations will inherit a healthy, green society.
1.6 Cohesion
The initiatives in the Danish Recovery and Resilience Plan are assessed to broadly
support employment both across industries and geographically. This includes sev-
eral measures aimed at strengthening cohesion, e.g. a broadband initiative, which
promotes high-speed internet access for citizens, households and companies
across the country (i.e. including in some less densely populated and rural areas) as
well as support for organic farming.
The focus on cohesion also applies in investments in energy efficiency regarding
renovation and measures to ensure energy efficiency for households, private en-
terprises and public sector buildings, which are expected to temporarily increase
the number of local jobs and investments but also reduce energy bills. The effect
of the recovery plan on cohesion is set out in
Part 4: Overall impact.
Box 1.5
provides examples on how the initiatives in the Danish Recovery and Re-
silience Plan contributes to social and territorial cohesion.
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Box 1.5
Social and territorial cohesion and convergence in the Danish Recovery and Resilience Plan
Several components in the Danish Recovery and Resilience Plan support the social and territorial cohesion and
convergence:
Strengthening the Resilience of the Healthcare System:
A strategic digitalisation effort ensures that the new
technologies and digital solutions discovered during the COVID-19 pandemic are used to create a more resilient
and sustainable healthcare system, which is more coherent and closer to the citizen. This includes telemedicine,
which has potential to benefit especially people living in less densely populated areas, as the distance to medical
treatments often is longer.
Green Transition of Agriculture and Environment:
The Danish agricultural sector faces structural challenges,
which makes the sector vulnerable to increases in costs as a result of the green transition and declines in earn-
ings. The employment and social cohesion in especially rural areas is dependent on a continued competitive
agricultural sector. Therefore, the initiatives aim to provide economic incentives to farmers, in order to reduce
greenhouse gas emissions with respect to the farmers’ situation, and to ensure the social and territorial cohesion
and convergence. The agricultural reform also contains investments in research and development that promotes
sustainable growth in the agricultural sector and fosters high quality employment creation.
Energy Efficiency, Green Heating and CCS:
The additional funds provided by the Recovery and Resilience
Facility will promote improvement of essential welfare institutions, and are expected to be allocated to renovation
of e.g. day-care institutions, schools, and hospitals. This will support the coherence and resilience in society by
maintaining and ensuring the right facilities can deliver a high quality of public services. Moreover, the renova-
tions will temporarily increase the number of local jobs and investments, and reduce energy bills, which consti-
tute a larger share of less wealthy household’s income. Improving energy efficiency contributes to a cost efficient
way of realising the target of climate neutrality by 2050.
Digitalisation:
The initiatives create the digital public sector of the future by a continuous modernisation of the
digital infrastructure meeting the needs of all citizens and businesses, and strengthening connectivity. Espe-
cially, the broadband pool will promote high-speed internet access for citizens, households, and companies
across the country located in less densely populated areas, which will enable all citizens in Denmark to take part
in the upward social and economic convergence driven by the digitalisation. This is in particular the case, as the
distribution of funds and the draft digitalisation plan will be done in close collaboration with a broad range of ac-
tors in the civil society.
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Component 2.1
Strengthening the Resilience of the
Healthcare System
Healthcare systems around Europe are facing a wide variety of
unforeseen challenges in the wake of the COVID-19 pandemic.
The capacity in primary and secondary care is under pressure,
supply-chains for critical medical products are breaking, and
isolation and social distancing brings new challenges in treating
patients in risk groups.
It is therefore crucial to strengthen the resilience of the healthcare
systems. The Danish recovery plan provides funding to strengthen
the resilience and preparedness of the Danish healthcare system
e.g. by analysing the effects of COVID-19 vaccines, implementing
digital solutions, improving monitoring systems for stocks and
ensuring sufficient stocks of strategic medical supplies. The funds
will not be used for procurement of medicine.
.
.
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Description of the component
Box 2.1.1
Strengthening the resilience of the healthcare system
Policy area/domain:
Healthcare, care for the elderly, vulnerable groups, public health, primary care, secondary care, digital healthcare,
telemedicine, patient engagement, preparation plans, supply chains of critical medical products, surveillance of side
effects of vaccines.
Objective:
The overall objective of this component is to strengthen the resilience of the healthcare system through the following
measures:
Clinical study on effect of COVID-19 vaccines:
With the RRP Denmark will invest in a large-scale clinical
cohort study of the various COVID-19 vaccines in order to increase the knowledge on the effects and side
effects of the vaccines. The study will be conducted in order to examine the degree and the duration of the
immunity, as well as establishing whether the efficiency of the vaccines differs between different population
groups. Furthermore, the study will increase the expertise on the new technologies utilised in some of the
vaccines. Results from the study can help increase the resilience and sustainability of the healthcare system if
the results suggest e.g. that it will be more efficient to target the various vaccines towards specific population
groups. Hereby, the side effects are minimised for the individual and the overall strain on the healthcare system
can be reduced. Furthermore, knowledge is improved of whether re-vaccination is needed. The increased
knowledge might further improve the confidence regarding the vaccines.
Measures to ensure stocs of critical drugs:
In order to avoid critical situations with shortages of important
drugs, Denmark has established, and now extends measures to maintain and ensure strategic stocks of critical
drugs in the secondary health sector. This will help enhance the resilience of the healthcare system by ensuring
a sufficient amount of critical medical products will be at disposal.
Digital solutions in the healthcare sector:
During the COVID-19 pandemic new digital solutions have been
used to make citizens and the healthcare system more connected. That has helped to protect vulnarable patient
groups. A strategic digitalisation effort would ensure that new technologies and digital solutions developed
during the COVID-19 pandemic are used to create a more resilient and sustainable healthcare system, which is
more coherent and closer to the citizen.
Emergency management & monitoring of critical medical products:
COVID-19 has introduced a crucial
need for acute planning and monitoring both concerning shortages and supply problems and potential side
effects of the COVID-19 vaccines. A strengthening of the emergency management in the Danish Medicines
Agency can ensure sufficient monitoring of shortages and supply problems, improve overall planning, and create
robust foundation for efficient monitoring of potential side effects to the COVID-19 vaccines.
Examples of reforms and/or investments:
I. Clinical study on effect of COVID-19 vaccines: 102 m. DKK
II. Measures to ensure stocks of critical drugs: 52 m. DKK
III. Digital solutions in the healthcare sector: 14 m. DKK
IV. Emergency management & monitoring of critical medical products: 76 m. DKK
Estimated cost:
244 m. DKK, of which 100 per cent is covered by the Recovery and Resilience Facility.
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Main challenges and objectives
2.1.1 Main challenges
A pillar of the Danish healthcare sector is the delivery of efficient, and high qual-
ity care. The Danish healthcare sector has proven to be extremely adaptable in
dealing with COVID-19. However, the COVID-19 pandemic has increased the
need for digital solutions in healthcare, as in-person-care has suddenly become a
potentially lethal risk for vulnerable groups. One of the most extensive vaccina-
tion programmes in Danish history has been launched, whilst knowledge on espe-
cially the effects but also side effects of the COVID-19 vaccines are still being
elaborated. Lastly, the COVID-19 crisis increases the demand for emergency
management coordination and monitoring. To sum up, the main challenges are:
Need for further knowledge concerning effects and side effects of the
COVID-19 vaccines
The effect of the COVID-19 vaccines and their potential side effects have been
studied during the European Medicines Agency’s approval of the vaccines. How-
ever, these studies have been conducted over a relatively short period of two
months. The main areas still in need of further research are:
The long-term effects of the vaccines are unknown:
The duration of the im-
munity granted by the vaccines and the potential long-term side effects are un-
known. The currently approved vaccines have shown evidence for granting im-
munity for two months, corresponding to the duration of the previously con-
ducted clinical trials. For this reason, it is also uncertain if more than two injec-
tions with the vaccine are required to obtain enduring immunity. A clinical study
with a longer time perspective can provide knowledge of the duration of the im-
munity granted by the vaccines.
The vaccines have not yet been tested on all population groups:
It has not
yet been established for whom the different vaccines have the largest efficacy. No
study has compared the effects and side effects of the different vaccines within
different population groups. Doctors can thus not prescribe a specific vaccine
based on solid comparative clinical evidence.
Uncertainty concerning new technologies:
Some of the approved vaccines use
new technologies that have not been approved or used before. Thus, there is a
need for solid evidence of the overall efficacy and usability of these technologies.
Ensure availability of critical medical products
COVID-19 has demonstrated that the market for medicine is very dependent on
the situation and level of production in countries outside the EU. The sensitivity
stems from the fact that most active substances for medicine are produced out-
side of the EU. The supply of critical medical products is therefore extremely sus-
ceptible to new COVID-19 closures or export restrictions. Furthermore, Den-
mark is a small market for pharmaceutical companies in a global context. In order
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to avoid critical situations with a shortage of important drugs under COVID-19,
Denmark has decided to extend and maintain measures to ensure strategic stocks
of critical drugs in the secondary sector until the end of 2021.
Strategic focus on digital solutions and protection of fragile and vulner-
able patient groups
The healthcare service must continue to make efforts to adapt to the conditions
of the COVID-19 pandemic, including providing treatment and care to citizens
and patients, where physical encounters should be limited as much as possible.
We must continue to seize the opportunities that technology holds for the mitiga-
tion of the consequences of the pandemic.
When selecting new digital solutions in dealing with COVID-19 it is, however,
important to strike a balance between the need for developing new solutions and
further developing existing solutions, in order to ensure that authorities’ need for
an effective management of the pandemic is met. When implementing new tech-
nologies, it is furthermore crucial to make sure that implementation will not dis-
rupt the core resources of the healthcare system. The main challenges are:
Digital slow-down and risk of ad hoc digitalisation:
The widespread use of
technology in the healthcare sector has slowed down during the pandemic be-
cause of lacking strategic focus and political prioritisation of digital solutions.
COVID-19 has led to a higher degree of ad hoc digitalisation, which brings about
a need for a strategic direction and anchoring to ensure the sustainability of the in-
itiatives, and to ensure that they support the right long-term priorities (e.g. a co-
herent infrastructure and sustainable digital solutions in the Danish healthcare ser-
vice).
Protecting fragile and vulnerable patient groups:
It is important to protect
fragile and vulnerable patient groups with digital solutions. This is especially the
case in situations with an increasing infection rate, where vulnerable citizens have
to self-isolate, and physical consultations at the hospital and general practitioners
happen at a high risk for the patient. There is a need for further development of
video consultation solutions as many elderly and fragile patients in nursing homes
are not able to access video consultations because they do not have NemID (Na-
tional electronic identification). Furthermore, a recent analysis from the organisa-
tion Danish Patients shows that the vast majority of patients, who have experi-
ence with video consultations and other digital contact with the healthcare system,
would like to see an increased use of these types of digital solutions even after the
pandemic has ended.
Unused potential for increased patient engagement:
Digitalisation and new
channels for communication provides the possibility for a healthcare system in-
creasingly based on the needs of the individual patient. The way in which patients
interact with the health system is changing concurrent with digitalisation and the
development of new digital channels for communication. This gives patients a
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more flexible interaction with the health system that can cater to individual needs
to a greater extent. For example, there are indications of an increasing amount of
patients suffering from unease triggered by COVID-19, which could be relieved
by adapting certain digital solutions.
Emergency management of critical medical products and monitoring on
side effects of COVID-19 vaccines
The spread of COVID-19 has put a strain on critical supply chains. At the mo-
ment, the infrastructure for monitoring of shortages and supply chain problems of
critical medical products needs a re-examination. There is a need to strengthen the
monitoring supply chains, coordinate between the primary and secondary sector,
and secure a balanced national distribution of critical medical products in times of
crisis.
Furthermore, mass-vaccination of the population creates a need for efficient and
high quality reporting, monitoring and processing of side effects of the COVID-
19 vaccines.
2.1.2 Objectives
To resolve the outlined challenges, Denmark will work towards four goals. The
four goals all contribute fulfilling the Country Specific Recommendation for Den-
mark regarding a more resilient health system. This is done by extending and
maintaining measures to ensure availability of critical medical products, implemen-
tation of digital solutions to shield elderly and vulnerable patient groups, increas-
ing the knowledge of the effects and side effects of the COVID-19 vaccines and
by strengthening of the emergency management of critical medical products:
Increase knowledge of the effects and side effects of the COVID-19
vaccines
In order to fill the gap of knowledge concerning the long term effects of the
COVID-19 vaccines and side effects Denmark will initiate a large-scale cohort
study of 10.000 patients. The study will run from 2021-2023 and will focus on the
following objectives:
Measuring the long-term effect of the vaccines:
The suggested clinical cohort
study enables the possibility of clarifying the duration of the immunity granted by
the different vaccines, and thus whether there is a need to re-vaccinate in order to
maintain the effects of the vaccine. This knowledge is instrumental in preserving
the health of the public, and especially elderly and vulnerable patient groups.
Knowledge on the long-term effects of the vaccines can furthermore qualify deci-
sions regarding how long the period between the first and second injection should
be, as decisions are currently being made on a limited amount of data.
Additionally, the study will enable systematic data collection of long-term side ef-
fects of the vaccines. The data will be compared to a control group in order to de-
termine if the vaccines cause the side effects or not. The study can thus be used to
refute some of the false information regarding the vaccines, which will improve
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the confidence in the vaccines and commitment to the continuous use of vaccines
to battle COVID-19. If a vaccine shows signs of significant side effects, the spe-
cific vaccine could be quickly removed from active use.
Determine which vaccines are most effective for different population
groups:
The clinical study enables head-to-head comparisons of the different vac-
cines in order to determine which vaccines are most effective for different popula-
tion groups. Adjustments of which groups get which vaccine can be made concur-
rent with the preliminary results of the study on a more enlightened basis.
Obtain knowledge on the effect of the new technologies:
There is a very lim-
ited amount of evidence of the effect of the new technologies utilised in some of
the COVID-19 vaccines. By examining the long-term effects it is possible to ob-
tain more knowledge on these technologies and if they could prove useful in dif-
ferent settings and in combating other viruses or diseases.
Ensure availability of critical medical products
In order to maintain and secure the Danish supply of medicines, and thus avoid
critical situations with a shortage of important medicine and drugs during the
COVID-19 pandemic, Denmark has decided to extend and maintain measures to
ensure strategic stocks of critical medicines in the secondary sectors until the end
of 2021.
Ensure availability of critical medical products in the secondary sector:
In
the secondary sector, the Danish regions' procurement organisation, Amgros, pro-
cures medicine for the hospitals. Amgros has taken on the task of purchasing
medicine for a stock that covers three, six and nine months' normal consumption
of all medicine. The size of stocks depends on the criticality of the drugs as well as
signals of international supply difficulties. The list of critical medicine has been
prepared based on input from the clinical pharmacologists in the regions and in-
cludes, among other things, medicine for use in anaesthesia, in intensive care
units, antibiotics and medicine for the treatment of COVID-19. Only the indirect
costs of the measures to ensure the stocks will be funded. This includes costs for
administration and logistics expenses in relation with procurement and operating
expenses regarding stocks as well as the associated risk that the extraordinary
stocks of critical medicines will lead to increased disposal, e.g. as a result of several
damaged packages or medicine exceeding the expiration date and falling prices in
relation to the purchase price. The medicine will still be sold at market rate to the
hospitals and the specific cost of the medicine is not subsidised.
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Strengthen the digitalisation of the Danish healthcare system
Digital solutions in the healthcare sector can shield vulnerable patients and ensure
effective monitoring and triage of patients. COVID-19 has demonstrated that
there is a need for strategic efforts to provide tools for healthcare professionals
and patients that support virtual treatment.
Support digital solutions:
New technologies are developing rapidly and they
promise great benefits for the healthcare sector, e.g. by enabling a more individu-
ally tailored process and increased digital communication. The technology package
will build on the already initiated measures as well as additional initiatives for digi-
tal solutions that can strengthen the healthcare system during COVID-19 with a
special focus on supporting efforts to shield vulnerable patient groups.
Video consultations:
The use of video consultations can reduce the risks associ-
ated with patients having physical contact with the healthcare system and
healthcare providers; this includes reducing the risk of contracting an infection in
the waiting room and on the way to the doctor. This is especially important for el-
derly and vulnerable patient groups. Furthermore, if doctors and healthcare pro-
fessionals become subject to home quarantine, they can continue to see patients
through video consultations.
There is a need to increase the use of video consultations with general practition-
ers, when and where it makes sense for patients. By increasing the use of video
consultations, the risks associated with physical visits to the doctor or home visits
to nursing homes, accommodation and hostels, etc. decreases.
Patient engagement and increased use of telemedicine:
Patient engagement
can be increased by further involvement of the patient in their treatment i.e.
through questionnaires and increased flexibility in the communication before and
after treatment. Furthermore, initiatives will target more widespread use of tele-
medicine, i.e. for internet-based treatment of unease caused by COVID-19.
Strengthen the infrastructure for monitoring of shortages and supply prob-
lems of medicines and side effects of COVID-19 vaccines
The objective is to strengthen the infrastructure for the monitoring of shortages
and supply problems regarding medicines and side effects of the COVID-19 vac-
cines. The initiatives concerning shortages and supply problems of medicines
would complement those initiated on EU-level. The initiatives fall into three dif-
ferent categories:
Infrastructure for monitoring supply chains:
The Danish Medicines Agency
will develop and initiate a wide variety of initiatives to create a robust infrastruc-
ture for the monitoring of shortages and supply problems of medicines. Among
other things, they will operate and further develop an IT-system that provides in-
sight in the pharmacists and wholesalers’ stocks of critical medicine. The system
will allow the Danish Medicines Agency to contact wholesalers preventively when
supply of specific medical products is low which can lower the cases of supply
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failure. Furthermore, the Danish Medicines Agency will establish a national coun-
sel for security of supply. The Counsel will be sharing knowledge between primary
and secondary sector regarding potential shortages and supply problems. The
Danish Medicines Agency will also secure a balanced distribution of critical medi-
cal products between different parts of Denmark to avert hoarding.
Monitoring of the COVID-19 vaccines:
The Danish Medicines Agency is re-
sponsible for monitoring and evaluating the new vaccines as well as processing
the many reports of potential side effects from the vaccines. As the COVID-19
vaccination program is a mass-vaccination program in a scale and pace never seen
before, there is a need to strengthen the overall monitoring of both national and
European reports of side effects of the vaccines to ensure public support for and
trust in the vaccines. Adjacently, there is a need to increase the resources going to
knowledge sharing with other European countries and EMA. There is also a need
for increasing the resources going to inspection of the vaccines. Furthermore, The
Danish Medicines Agency expect, and have already experienced, an extraordinary
amount of reports, and it is of the outmost importance that the reports can be
used swiftly to detect significant side effects. Thus, the Danish Medicines Agency
have extended the use of the IT-system “The side effect web service” to general
practitioners. The IT-system provides automation of reports of side effects, which
will support quicker and better quality reports from general practitioners. Lastly,
the Danish Medicines Agency will invest in real time monitoring of vaccines and
potential side effects through thorough data analysis, which will ensure early iden-
tification of side effects.
Strengthening general emergency planning:
An actual emergency plan con-
cerning medical products was not established until COVID-19. Thus, there is a
need to strengthen the overall emergency planning. This will be done by monitor-
ing crucial incidents, which can affect the general supply of medical products, fa-
cilitating a more flexible emergency management with possibilities of quick reac-
tions to issues, and provide guidance to municipalities and regions concerning
their emergency management plans.
Summary description of the reforms and investments of the
component
2.1.3 Clinical study on effect of COVID-19 vaccines
Addressing challenges:
To further increase the knowledge regarding the effec-
tiveness and side effects of the COVID-19 vaccines. This by examining long-term
effects of the different types of COVID-19 vaccines and improving knowledge on
whether their efficiency depend on population group.
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Objectives:
To measure long-term effects concerning immunity and side effects
of the vaccines. This information can be used to improve the COVID-19 vaccina-
tion program. Furthermore, by examining the effect within different population
groups, the study will grant insight into which vaccines are most efficient for dif-
ferent groups. The study will also result in increased knowledge on the new tech-
nologies utilised in some of the vaccines.
The conduction and the final results of the clinical study will not available until
earliest 2023. The study will be parallel to the pharmacovigilance and will not af-
fect Denmark’s other obligations regarding pharmacovigilance. Important find-
ings from the study could be shared.
Implementation:
The study is designed as an open-labelled, non-randomized,
parallel phase 4 study with a control group based on historical data. The study will
be based on approximately 10,000 trial participants and include a follow-up for
two years after vaccination. The operational components of the study will primar-
ily be undertaken by the two largest hospitals in Denmark (Rigshospitalet and
Aarhus Universitshospital). The hospitals will in association recruit, coordinate
and establish the infrastructure of the study. The collection, storage and analysis
of blood samples will also be conducted by the two hospitals. The hospitals are
supported by an operational steering group consisting of representatives from the
five Danish regions and infectious disease medicines network and a scientific
steering group consisting of several governmental bodies.
Target group:
Recipients of one of the COVID-19 vaccines. Selection will be
based on group characteristics in order to increase the external validity of the
study.
Timeline:
The study will be conducted from 2021 until 2023.
State aid:
It is the assessment, that the initiative is conform with state aid rules.
The funds from the Recovery and Resilience Facility is given to the researchers
conducting the study.
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Do no significant harm:
Table 2.1.1
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected to
lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X None of the measures are expected to lead to significant greenhouse
gas emissions. The clinical study of the effects and side effects of the
COVID-19 vaccines will be undertaken by the two largest hospitals in
Denmark. The study is likely to increase operations and transport of
e.g. clinical trial subjects, but it is not expected to lead to significant
greenhouse gas emissions.
X None of the measures are expected to lead to an increased adverse
impact of the current climate or on people, nature or assets. As men-
tioned above, the study is likely to increase operations and transport
of e.g. clinical trial subjects, but it is not expected to lead to significant
adverse impact of the current climate and the expected future climate,
on the measure itself or on people, nature or assets.
X None of the measures are expected to have a direct or indirect impli-
cation for the use and protection of water services.
Climate change adaptation: Is the measure expected to
lead to an increased adverse impact of the current cli-
mate and the expected future climate, on the measure
itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste
prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control: Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
The protection and restoration of biodiversity and eco-
systems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X This measure is not expected to harm the transition to a circular econ-
omy, including waste prevention and recycling. Due to the efficiency of
the Danish waste management system, it is not expected that the clini-
cal study will have implications for the circular economy.
X None of the measures are expected to lead to a significant increase
in the emissions of pollutants into air, water or land.
X Pollutants are strictly regulated in Danish environmental laws and this
does not change with the initiatives concerned strengthening the resili-
ence of the healthcare system.
2.1.4 Measures to ensure stocks of critical drugs
Addressing challenges:
To address the challenge of a volatile and erratic global
pharmaceutical market and the uncertainty surrounding the Danish supply of
medicines. Furthermore, to ensure a supply of critical medical products in Den-
mark.
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Objectives:
In order to strengthen the Danish security of supply of medicines,
and thus avoid critical situations with a shortage of important medicine during the
COVID-19 pandemic, Denmark has decided to extend and maintain measures to
ensure strategic stocks of critical medicines in the secondary sector until the end
of 2021.
Implementation:
Amgros (the Danish Regions' procurement organisation) will
ensure a stock that covers three, six and nine months of normal consumption of
all medicine within the secondary sector. The size of stocks depends on the criti-
cality of the drugs as well as signals of international supply difficulties. The list of
critical medicines has been prepared on the basis of input from the clinical phar-
macologists in the regions and includes, although not limited to; medicines for use
in anaesthesia, in intensive care units, antibiotics and medicines for the treatment
of COVID-19.
The funds from the Recovery and Resilience Facility cover the indirect costs of
ensuring the strategic stocks. This includes the costs related to administration and
logistics expenses in relation to procurement, operating expenses regarding the
strategic stocks, as well as the associated risk that the extraordinary purchases of
medicines will lead to increased disposal. The funds will not be used for procure-
ment of medicine.
The Danish Medicines Agency will monitor the stock level. In addition, the Dan-
ish Medicine Agency will follow the development in the world market in relation
to the general security of supply. The Danish Medicines Agency will quarterly as-
sess and report to the Ministry of Health whether there is a need to scale up or
the possibility to scale down inventories. This prevents unnecessarily large stocks
of medicine and ensures that the general supply situation is considered. When de-
ciding the size of the stocks The Danish Medicines Agency will receive infor-
mation from Amgros, the Regions' procurement organisation, which re-distributes
medicine to hospitals, and data regarding the consumption of drugs in hospitals.
Target group:
The stocks will reduce risks of low supply of critical medicines e.g.
patients admitted to intensive care units or treatment of COVID-19.
Timeline:
The initiative covers a temporary setup to manage and ensure strategic
stocks of critical drugs in 2021.
State aid:
It is the assessment that ensuring stocks of critical medicine in the sec-
ondary sector conforms to the state aid rules as Amgros, the regions' purchasing
organisation, is responsible for the initiative. Amgros is already in charge of sup-
plying the Danish hospitals with sufficient medicines via procurement. The funds
from the Recovery and Resilience Facility cover the indirect costs of ensuring the
strategic stocks, e.g. the costs related to administration and logistics expenses in
relation to procurement, operating expenses regarding the strategic stocks, as well
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as the associated risk that the extraordinary purchases of medicines will lead to in-
creased disposal. The funds will not be used for procurement of medicine.
Do no significant harm:
Table 2.1.2
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected to lead to
significant greenhouse gas emissions?
Yes
No Significant negative impact?
X None of the measures are expected to lead to significant
greenhouse gas emissions. The measures to ensure strategic
stocks of medicines will to a limited extent increase transport,
but it is not expected to lead to significant greenhouse gas
emissions.
X None of the measures are expected to lead to an increased
adverse impact of the current climate or on people, nature or
assets.
The measures to ensure strategic stocks of medicines will to a
limited extent increase the risk of waste as of damaged or ex-
pired medicines, but the investments in strengthening the man-
agement and monitoring of critical drugs and medicines is as-
sessed to address this issue efficiently.
The sustainable use and protection of water and marine re-
sources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies
of water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste preven-
tion and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or
disposal of waste, with the exception of the incineration of non-
recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of
any natural resource at any stage of its life cycle which are not
minimised by adequate measures; or
(iii) cause significant and long-term harm to the environment in
respect to the circular economy?
Pollution prevention and control: Is the measure expected to
lead to a significant increase in the emissions of pollutants into
air, water or land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience
of ecosystems; or
(ii) detrimental to the conservation status of habitats and spe-
cies, including those of Union interest?
X Certain initiatives, e.g. the measures to ensure strategic stocks
of critical drugs are expected to raise the risk of waste of dam-
aged medicines packages. However, due to the efficiency of the
Danish waste management system and the strengthened man-
agement and monitoring of critical medicines and drugs, it is not
expected that the initiative will have any implications for the cir-
cular economy.
X None of the measures are expected to have a direct or indirect
implication for the use and protection of water services.
Climate change adaptation: Is the measure expected to lead to
an increased adverse impact of the current climate and the ex-
pected future climate, on the measure itself or on people, na-
ture or assets?
X None of the measures are expected to lead to a significant in-
crease in the emissions of pollutants into air, water or land.
X Pollutants are strictly regulated in Danish environmental laws
and this does not change with the initiatives concerned
strengthening the resilience of the healthcare system.
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2.1.5 Digital solutions in the healthcare sector
Addressing challenges:
A)
Slowdown of widespread use of technology because of lack of strategic focus
and political prioritisation of the digital solutions. Risk of COVID-19 leading to a
higher degree of fragmentized ad hoc digitalisation.
B)
Citizens not being able to
participate in video consultations.
C)
Patients should be more involved in their
own treatment, so that the health system interacts with the patient on their own
terms. It is important to put the needs of the patient first in the treatment situa-
tion, as well as to provide more flexible interaction before and after treatment.
Objectives:
Digital solutions in the healthcare sector can shield vulnerable patients and ensure
effective monitoring and triage of patients. COVID-19 has demonstrated that
there is a need for strategic efforts to provide tools for healthcare professionals
and patients that support virtual treatment. The Ministry of Health will further de-
velop and increase the use of these new digital solutions as listed below:
A) Widespread use of digital solutions:
Across the Danish health system, there has been
an extended use of already developed digital solutions and a number of digital so-
lutions, which have been developed due to the COVID-19 pandemic. The success
of this digital transformation is critically dependent on the increasingly widespread
use of digital solutions in the health sector and the resulting development of new
forms of cooperation and models for how health services can be provided.
New technology will also make it easier for patients to take part in their own treat-
ment. Providing the patient with easier access to information enhances the possi-
bility of cooperating on more equal terms with health professionals regarding their
own treatment.
There is a need to ensure progress in and prioritisation of common digital solu-
tions to support treatment and care across the health system. In addition, the ex-
pected acceleration of both pace of treatment and the development of new tech-
nology will foster a growing need to control, prioritise, and coordinate these de-
velopments to maintain a common focus on achieving goals of proximity, higher
quality, and coherence for patients and employees throughout the Danish health
system.
There is also a need for strategic direction and anchoring to ensure the sustainabil-
ity of the initiatives, and to ensure that they support the right long-term priorities
(e.g. overall and coherent infrastructure, the most relevant focus areas etc.).
Therefore, digital efforts must be implemented so that they do not disrupt core
resources in the healthcare system. The Ministry of Health will work to ensure
that the right digital solutions are selected and implemented in collaboration with
relevant actors in the health field.
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B) Video consultations:
During the COVID-19 pandemic, a number of hospitals,
general practitioners, psychologists etc. have made the change from physical con-
sultations to video consultations. In the primary sector, the use of video consulta-
tions has risen. By now, all citizens in Denmark can be offered video consulta-
tions with their general practitioner and private practicing specialist via the app
“MinLæge”.
By expanding existing solutions for video consultations and developing and im-
plementing new solutions, the conversion of physical consultations to video con-
sultations is made possible. In the primary sector (general practice), there has been
an accelerated development of a ”virtual waiting room”, which is a prerequisite
for the primary sector to offer video consultations through the app ”MinLæge”
(MyDoctor). In 2020, 479,649 consultations have been held on the video infra-
structure VDX.
A number of citizens do not have NemID (National electronic identification) and
they can therefore not participate in video consultations with their doctor. This is
especially true of elderly and frail citizens in nursing homes and in home care, as
well as socially vulnerable citizens, etc. Therefore, the Municipality of Copenhagen
has developed a customized version of “MinLæge”, known as “KontaktLæge”.
Through this app, selected municipality workers on e.g. nursing homes can login
with their employee signature on behalf of citizens without NemID so the citizen
can have video consultations with the general practitioner.
It is a prerequisite for the desired change in the healthcare system that employees
and citizens master digital competencies that match their new roles in the
healthcare system. Authorities will therefore work to strengthen the competences
of both citizens and employees to ensure that everyone can benefit from the digi-
tal opportunities.
It is a prerequisite for the increased number of video consultations in the
healthcare system that the video infrastructure, VDX, has sufficient capacity.
Therefore, MedCom is expanding capacity through new server purchases and new
licenses. MedCom is a Non-profit organization financed and owned by The Min-
istry of Health, Danish Regions and Local Government Denmark to facilitate co-
operation between authorities, organisations and private firms linked to the Dan-
ish healthcare sector.
C) Patient involvements and widespread use of telemedicine:
The way in which patients in-
teract with the health system is changing concurrent with digitalisation and the de-
velopment of new digital channels for communication. This paves the way for a
more flexible interaction with the health system, which can consider individual
needs to a greater extent.
For example, telemedicine makes treatment and care of patients possible in or
close to the citizen's own home in a safe environment. Especially due to the
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COVID-19 situation, there is an even greater need for telemedicine solutions that
ensure effective monitoring of citizens' health in their own homes. Citizens must
have more health services closer to home, including via telemedicine solutions and
video solutions, so that citizens' physical contacts and visits to the hospital can be
reduced. Solutions with telemedicine support the need to keep as much distance
as possible and limit physical contact and it can help free up time for the neces-
sary specialised treatment that requires visits. The solutions help to shield vulnera-
ble citizens.
Another example of the many possibilities of telemedicine is the use of electronic
questionnaires in apps, where the patients before or as part of a course of treat-
ment answers questions about their health. The health professionals can use the
patient-reported data (PRO) as part of their assessment of the right treatment.
Hereby, the patient can avoid unnecessary consultations and consultations at hos-
pitals and general practitioners are more efficient.
These types of patient-reported data (PRO) are being integrated into the
”MinLæge” app. All citizens in Denmark can be offered video consultations with
their general practitioner and private practicing specialist via the app “MinLæge”.
The questionnaires can be initiated automatically by the app, e.g. based on age cri-
teria, or initiated manually by the clinic. Based on the patient’s response, the clinic
can ultimately decide whether to book an appointment for the patient to be vac-
cinated against pneumococcus, influenza, etc. The pneumococcus questionnaire is
currently being implemented and tested, while the influenza, as well as a preg-
nancy questionnaire, will be developed and implemented in Q3 and Q4 of 2021
respectively. The PRO-functionality will be further developed, making it possible
to conceptualise and implement new questionnaires as the need arises.
The COVID-19 pandemic has triggered health anxiety in some patients, who may
be isolated in their own homes due to the fear of infection. This greatly affects the
patients' handling of daily chores such as shopping, work and socialising. Funds
are used by the Central Denmark Region in collaboration with Danish Ministry of
Health and Danish Regions. The funds must be used to adapt existing internet-
based treatment program to also include anxiety about COVID-19 and health
anxiety triggered by COVID-19.
Implementation:
The Ministry of Health will organise a dialogue with relevant
actors in the field of health to ensure the implementation and dissemination of
digital initiatives. This involves both the Danish Regions, Local Government
Denmark, The Danish organisation of general practitioners, etc. A roundtable will
be set up to discuss the steps of setting up the relevant stakeholders.
Concerning the extended use of video consultations, the implementation, includ-
ing in particular the spread of KontaktLægen, will take place in close collaboration
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in a small steering group with MedCom and municipalities. MedCom provides im-
plementation support to all municipalities. In addition, a user group will be set up,
which will consist of municipal representatives, data consultants and MedCom.
Concerning the use of PRO regarding pneumococcus, influenza and pregnancy
questionnaire, the implementation are rooted in the steering committee digital
general practice. The steering group involves The Danish Health Data Authority
Danish Regions, MedCom, and the Danish Organisation of General Practitioners.
Their purpose is to strengthen the coherence and quality of treatment in general
practice and to strengthen the digital cooperation between the sectors in the
healthcare system.
Target Group:
Generally citizens who are in contact with the health service, and
particularly vulnerable patient groups.
Timeline:
The initiatives covers 2021-2022 with ongoing implementation.
State aid:
The funds will be allocated by the state directly to regions and munici-
palities, including Danish Organization of General Practitioners. The funds are
held internally within public companies. The funds support a free accessibility of-
fer for citizens in the public health service. The overall assessment is therefore
that the initiative complies with the state aid rules.
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Do no significant harm:
Table 2.1.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure ex-
pected to lead to significant greenhouse gas
emissions?
Yes
No Significant negative impact?
X None of the measures are expected to lead to significant greenhouse gas
emissions. With the digital solutions in the healthcare sector, the digital CO2
footprint will not be increased in Denmark. A new calculation from Danish
Chamber of Commerce and Copenhagen Economics also shows that if
every fifth consultation with a general practitioner is handled digitally, it will
save almost 8,000 tonnes of CO
2
annually in addition to other effects such
as time savings, better service for the user and potential for efficient use of
scarce medical resources. Therefore, telemedicine is a source to lower the
CO
2
footprint.
X None of the measures are expected to lead to an increased adverse impact
of the current climate or on people, nature or assets.
Climate change adaptation: Is the measure ex-
pected to lead to an increased adverse impact of
the current climate and the expected future cli-
mate, on the measure itself or on people, nature
or assets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological po-
tential of bodies of water, including surface water
and groundwater; or
(ii) to the good environmental status of marine wa-
ters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation,
incineration or disposal of waste, with the excep-
tion of the incineration of non-recyclable hazard-
ous waste; or
(ii) lead to significant inefficiencies in the direct or
indirect use of any natural resource at any stage
of its life cycle which are not minimised by ade-
quate measures; or
(iii) cause significant and long-term harm to the
environment in respect to the circular economy?
Pollution prevention and control: Is the measure
expected to lead to a significant increase in the
emissions of pollutants into air, water or land?
X None of the measures are expected to have a direct or indirect implication for
the use and protection of water services.
X This measure is not expected to harm the transition to a circular economy, in-
cluding waste prevention and recycling. Due to the efficiency of the Danish
waste management system, it is not expected that the initiative will have any
implications for the circular economy.
X None of the measures are expected to lead to a significant increase in the
emissions of pollutants into air, water or land. On the contrary, increased
digital consultations and telemedicine are expected to have positive side ef-
fects as time savings, less transport to general practitioners, better service
for the user and potential for efficient use of scarce medical resources.
X Pollutants are strictly regulated in Danish environmental laws and this does
not change with the initiatives concerned strengthening the resilience of the
healthcare system.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition5
and resilience of ecosystems; or
(ii) detrimental to the conservation status of habi-
tats and species, including those of Union inter-
est?
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2.1.6 Emergency management & monitoring of critical medical products
Addressing challenges:
The COVID-19 crisis has proved that the infrastructure
of Danish emergency management of critical medical products needs a going over
to tackle the vast challenges presented. The emergency management is particularly
characterised by a lack of coordination and inflexible planning across governmen-
tal bodies, unstable supply of critical medical products and uncertainty of side ef-
fects of COVID-19 vaccines.
Objectives:
The objective is to improve the infrastructure for monitoring short-
ages and supply problems and for monitoring and acting upon potential side ef-
fects of the COVID-19 vaccines, and to strengthen the overall emergency plan-
ning.
Infrastructure for monitoring supply chains:
The Danish Medicines Agency will de-
velop and initiate a wide variety of initiatives to create a robust infrastructure
for the monitoring of shortages and supply problems of medicines. Among
other things, they will operate and further develop an IT-system that provides
insight in the pharmacists’ and wholesalers’ stocks of critical medicine. Fur-
thermore, the Danish Medicines Agency will establish a national counsel for
security of supply. The Danish Medicines Agency will also secure that the dis-
tribution of critical medical products is balanced between different parts of
Denmark to avert hoarding.
Monitoring of the COVID-19 vaccines:
There is a need to strengthen the overall
monitoring of both national and European reports of side effects of the vac-
cines to ensure public support for and trust in the vaccines. Furthermore, the
Danish Medicines Agency have extended the use of the IT-system “The side
effect web service” to general practitioners to detect significant side effects.
Lastly, the Danish Medicines Agency will invest in real time monitoring of
vaccines and potential side effects through thorough data analysis, which will
ensure early identification of side effects. The Danish Medicines Agency will
on a weekly basis provide overviews and a status on how many of the Danish
population have been vaccinated and reports of suspected side effects related
to the COVID-19 vaccines that have been assessed and reviewed.
Strengthening general emergency planning:
There is a need to strengthen the overall
emergency planning. This will be done by monitoring crucial incidents, which
can affect the general supply of medical products, facilitating a more flexible
emergency management with possibilities of quick reactions to issues, and
provide guidance to municipalities and regions concerning their emergency
management plans.
Implementation:
Most of the initiatives will be implemented within the Danish
Medicines Agency. However, the IT-system concerning efficient reporting of side
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effects of the COVID-19 vaccines have been implemented in collaboration with
the Danish General Practitioners Organisation (PLO).
Timeline:
The initiative covers 2021 and 2022.
State aid:
It is the assessment, that the initiative is conform with state aid rules.
The initiatives will be implemented by the Danish Medicines Agency, as such
funds are given from one governmental organisation to another, and covers ad-
ministration, IT-systems and operation expenses.
Do no significant harm:
Table 2.1.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure ex-
pected to lead to significant greenhouse gas
emissions?
Climate change adaptation: Is the measure ex-
pected to lead to an increased adverse impact
of the current climate and the expected future
climate, on the measure itself or on people, na-
ture or assets?
The sustainable use and protection of water
and marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological po-
tential of bodies of water, including surface wa-
ter and groundwater; or
(ii) to the good environmental status of marine
waters?
Yes
No Significant negative impact?
X None of the measures are expected to lead to significant greenhouse gas
emissions
X None of the measures are expected to lead to an increased adverse impact of
the current climate or on people, nature or assets. On the contrary, the invest-
ments in strengthening the management and monitoring of critical drugs and
medicines is expected to increase the efficient use of medicines.
X None of the measures are expected to have a direct or indirect implication for
the use and protection of water services.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the genera-
tion, incineration or disposal of waste, with the
exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct
or indirect use of any natural resource at any
stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the
environment in respect to the circular econ-
omy?
Pollution prevention and control: Is the meas-
ure expected to lead to a significant increase in
the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity
and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condi-
tion5 and resilience of ecosystems; or
(ii) detrimental to the conservation status of
habitats and species, including those of Union
interest?
X This measure is not expected to harm the transition to a circular economy, in-
cluding waste prevention and recycling. Due to the efficiency of the Danish
waste management system and the strengthened management and monitoring
of medicines, it is not expected the initiative will have any implications for the
circular economy.
X None of the measures are expected to lead to a significant increase in the
emissions of pollutants into air, water or land.
X Pollutants are strictly regulated in Danish environmental laws and this does not
change with the initiatives concerned strengthening the resilience of the
healthcare system.
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Green and digital dimensions of the component
Digital transition
The Danish health service is among the most digitalised in the world, and work-
flows at hospitals, GPs and municipal health services are already digitally sup-
ported throughout Denmark. This has improved patient treatment and safety, re-
duced paper-based workflows for employees and made better utilization of the
health systems’ resources possible.
The health system is already undergoing large-scale reorganisations to address the
demographic challenge that Denmark faces. Treatment is being centralised at
fewer, bigger and increasingly specialised hospitals, and more tasks will be per-
formed close to or in the patient’s own home. For example when home care nurse
visits the homes of elderly patients, the nurses can perform an increasingly
amount of more specialised tasks while in with a specialist at the hospital.
During the COVID-19 crisis, the healthcare system has experienced a digital shift.
The crisis has proven that digital technologies are a "driver" in transforming the
healthcare system towards more homebased treatment and care, and with patient
engagement as a key component. A great example of this is the fact that video
consultations were implemented rapidly in general practice through the MinLæge
app in the beginning of the COVID-19 pandemic to make sure that citizens had
access to a video consultation with their own doctor.
The initiatives presented in this component focus on improving conditions for
and extending use of video as a tool for providing care, increase use of PRO-data
and digitalised treatment solutions. The presented initiatives in this component
will not only strengthen the resilience of the Danish healthcare sector, it will also
most importantly pave the way for even further digitalisation of the Danish
healthcare sector, and perhaps in the long term challenge the foundations of how
care is delivered.
Open strategic autonomy and security issues
The initiatives concerning measures to ensure strategic stocks of critical medicine
and strengthening the infrastructure for monitoring supply chains of critical medi-
cine will support the strategic autonomy of the Union as the Danish medicine
supply, and thereby also the EUs medicine supply, will be less sensitive to frail
supply chains caused by COVID-19.
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It should be noted that Denmark can donate a possible surplus of medicines, in-
cluding vaccines, to countries that need help. This is stated in the Act on epidem-
ics
1
. The act was passed by the Danish parliament on 23 February 2021. In addi-
tion hereto, it is important that the EU legal rules on the distribution of medicines
are complied with, which i.e. includes requirements for the necessary authoriza-
tions under the Medicines Directive (Directive 2001/83).
Do no significant harm
None of the initiatives in this component will do significant harm to the ongoing
efforts concerning climate and sustainable development.
Financing and costs
The costs of the initiatives in the component regarding strengthening of the Dan-
ish healthcare system are listed in
Table 2.1.5:
Table 2.1.5
Cost of initiatives in Component 1: Strenghtening the Resilience of the Healthcare system
M. DKK, 2021-prices
Investment/
reform
Total
102
52
14
76
244
2021
49
52
12
40
153
2022
29
-
2
36
66
2023
25
-
-
-
25
2024
-
-
-
-
-
2025 Funding from
other sources
-
-
-
-
-
-
120
-
-
-
I. Clinical study on effect of COVID-19 vaccines Investment
II. Measures to ensure stocks of critical drugs
III. Digital solutions in the healthcare sector
IV. Emergency management & monitoring of
critical medical products
In total
Investment
Reform
Investment
Clinical study on effect of COVID-19 vaccines
The total cost of 102 m. DKK in 2021-2023 is comprised of costs to recruitment
of participants, coordination of the study, storage of plasma, serum and living
cells, analysis of antibodies ect. The higher costs in 2021 compared to the
following years are due to initial expenses concerning recruitment and
coordination.
Measures to ensure stocks of critical drugs
The estimated costs are based on the Danish Medicines Agency's dialogue,
regarding estimated costs, with Amgros. The costs for measures to ensure the
stocks in the secondary sector cover administration and logistics expenses in
relation with procurement and operating expenses regarding stocks as well as the
Lov om epidemier m.v. (epidemiloven) - https://www.ft.dk/ripdf/samling/20201/lov-
forslag/l134/20201_l134_som_vedtaget.pdf )
1
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associated risk that the extraordinary purchases of medicines will lead to increased
disposal, e.g. as a result of several damaged packages or medicine exceeding the
expiration date and falling prices in relation to the purchase price. The drugs will
still be sold at market rate or the hospitals and the costs do not cover
procurement of medice.
Digital solutions in the healthcare sector
The cost of the digital solutions in the healthcare sector is based on the ministry's
many years of experience working with work breakdown structure in digital
initiatives. Early in the COVID-19 phase, for example, the Ministry of Health had
expenses for video consultation, complete development of digital initiatives,
licenses, infrastructure, etc. This also applies to telemedicine solutions. These
experiences are included in the budget for the digital solutions. All the projects
have submitted clear budgets, so it is easy and clear to follow the finances.
The estimated cost to increase the spread of video consultation (KontaktLæge)
are based on the shared experience of the Danish Ministry of Health and
MedCom. The costst cover payroll for employees, activities targeted at the
municipalities so that they can use the app, information material, IT-working on
that the app should be available on at least 2 platforms etc. Furthermore
integrations, development, web app and backend support and general interfaces
are part of the budget on MinLæge.
The estimated costs on patient involvements and widespread use of telemedicine
are based on the shared experience of Central Denmark Region in collaboration
with Danish Ministry of Health and Danish Regions. The costs cover payroll for
employees, especially staff for video diagnostic assessment and 12-week treatment
with psychologist / doctor and service agreements, support, integration, mainte-
nance etc.
Emergency management & monitoring of critical medical products
The Ministry of Health are responsible for ensuring that the granted funds in
2021-2022 are used according to the plan of strengthening the emergency man-
agement of critical medical products. The estimated costs are based on the shared
experience of the Ministry of Health and the Danish Medicines Agency. The costs
cover a temporary increase in the number of staffing, as well as costs for the IT-
system for monitoring stock of critical medical products and IT-consultants.
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Component 2.2
Green Transition of Agriculture and
Environment
Without additional measures to curb emissions, the Danish
agricultural sector will be responsible for more than one third of
the greenhouse gas emissions in Denmark by 2030. Reducing
emissions in the agricultural sector is thus essential to reach the
ambitious target of reducing greenhouse gas emissions by 70 per
cent by 2030.
The initiatives in this component utilise known and effective
instruments to lower greenhouse gas emissions in the agricultural
sector by estimated 0.1 Mt CO
2
e while minimising the reduction in
production output.
Additionally, significant investments are made in demonstration of
new promising technologies in the agricultural sector, such as so-
called brown biorefining, which has a technical potential for
reductions of greenhouse gas emission by 2 Mt in 2030.
Further, in line with the EU’s Farm to Fork Strategy, environment-
friendly organic farming is promoted in this component. The
initiatives combined will reduce nitrogen emissions by an
estimated 198 tonnes. The RRF funds thus deliver an important
impetus to the green transition of Danish agriculture.
Finally, major investments are made in rehabilitation of the largest
soil- and groundwater polluted hot spots of national concern from
former industrial production. The investments will rehabilitate
industrial sites and land that were contaminated due to
unsustainable production in the past and thereby eliminate the
current environmental risk posed by these sites.
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Description of the component
Box 2.2.1
Green transition of agriculture and environment lowering the emission of greenhouse gasses and
nitrogen
Policy area/domain:
Climate, green transition, agriculture, environment, large-scale contaminations.
Objective:
The objective of this component is threefold:
1)
Green transition:
The proposed initiatives will utilise known and effective instruments to lower greenhouse gas
emissions in the Danish agriculture while minimising the reduction in production output. This aims to reduce
greenhouse gas emissions by estimated 0.1 Mt CO
2
e by 2030. Further, emissions of nitrogen to coastal waters
will be reduced by an estimated 198 tonnes by 2030. By doing so, the Danish agricultural sector will contribute
to the achievement of Denmark’s climate target, which is to lower greenhouse gas emissions by 70 percent by
2030, as well as to improve environmental conditions. Increased organic farming serves as both a mean to
achieve this target as well as a goal in the green transition of the Danish agriculture sector.
Research and development:
As a supplement to the Danish government’s green research strategy,
significant funds in research and development towards promising tehcnologies in the agricultural sector is
introduced. The aim is to document and demonstrate the greenhouse gas effects of the so-called brown
biorefinement technology. The technology has an estimated technical potential of reductions by 2 Mt CO
2
e in
2030. That equals around 1/8 of the greenhouse gas emission of the agricultural sector. Hence, research and
development of such new solutions and technologies are key to the green transition of the Danish agriculture
sector – both in reducing national emissions and in showcasing the rest of the world a way for reducing
agricultural emissions without lowering the production output of the sector.
Improving environment:
Production in the past has caused severe pollutions of the environment and
contamination of soil. In some instances chemicals and harmful substances have been emitted directly into
nature. These pollutions are a result of a lack of knowledge about the harmful effect of dumping chemicals into
nature, and the harm it would cause for future generations. In this component investments are made in
rehabilitating industrial sites and land that was contaminated due to unsustainable production in the past.
2)
3)
Examples of reforms and/or investments:
Reforms:
I. Carbon rich soils (660 m. DKK)
Investments:
II. Organic farming (180 m. DKK)
III. Climate technologies in agriculture (200 m. DKK)
IV. Rehabilitation of industrial sites and contaminated land (280 m. DKK)
The total expenses are 1,320 m. DKK.
Main challenges and objectives
2.2.1 Main challenges
The agricultural sector (incl. land use, land-use change and forestry (LULUCF)) is
expected to be responsible for more than 1/3 of the Danish greenhouse gas emis-
sions in 2030, unless additional measures to curb emissions are implemented. Ad-
ditionally, the sector is responsible for appx. 70 per cent of nitrogen emissions to
coastal waters - despite major reductions since the 1990’s. Thus, a central goal of
this component is to draft policies that enable the agricultural sector to contribute
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significantly to the green transition in Denmark. However, the agricultural sector
faces structural challenges and competition, which makes the sector vulnerable to
increases in costs and declines in earnings. This must be taken into account when
designing initiatives to lower greenhouse gas emissions from the agricultural sec-
tor. Therefore, the aim of initiatives targeting the agricultural sector is to reduce
both greenhouse gas and nitrogen emissions while sustaining the sector’s contri-
bution to the Danish economy, employment and social coherence.
This component also focuses on the environmental challenges that production
methods in the past have caused. During the 1950’s and 1960’s, several large com-
panies emitted harmful chemicals into the nature without knowing the conse-
quences. In total, 10 sites in Denmark have been marked as so-called “generation
contaminations” and many of them are not accessible to the public today due to
contamination and the risk of spreading harmful chemicals. Summing up, this
component addresses the following challenges:
Greenhouse gas emissions:
The Danish climate law commits Denmark to achieve a
national 70 per cent reduction in greenhouse gas emissions by 2030 compared
to the emissions in 1990. The agricultural sector is one of the key sectors in
achieving this ambition. Several agricultural sources contribute to the emission
of greenhouse gases, including e.g. production of crops, utilisation of residues
and tributaries from the agricultural production through biorefining, the diges-
tion systems of cattle and handling of manure.
Aquatic environment:
Excess emission of nitrogen to the aquatic environment is
harmful to plants and animals, as it leads to oxygen depletion. Therefore, it is
essential to lower the emission of nitrogen from the agricultural sector, espe-
cially to coastal waters.
Organic farming:
The Danish government has an ambition of doubling the or-
ganic farmland area, doubling the consumption of organic goods, and dou-
bling the export of organic goods by 2030. Research shows that organic farm-
ing reduces emission of greenhouse gas and nitrogen compared to conven-
tional farming. Doubling the organic farmland area in Denmark has the poten-
tial to reduce greenhouse gas emissions by 0.5 Mt CO
2
e in 2030.
Contaminated land and industrial sites:
Industrial production and disposal of haz-
ardous waste and poisonous substances in the nature during the 1950’s and
1960’s has caused pollution and contamination of soil. The chemicals are still
present in the nature, and a professional and specialised effort is needed to re-
habilitate the areas.
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2.2.2 Objectives
Reducing greenhouse gas emissions:
With the initiatives in this component, the emis-
sion of greenhouse gasses will be lowered by 0.1 Mt in 2030. Furthermore,
steps are taken to provide new technologies, e.g. brown bio refining, with sig-
nificant potentials for further greenhouse gas reductions in the future.
Supporting sustainable farming methods:
The agricultural sector makes up more
than 60 per cent of the Danish land area and will be responsible for 1/3 of the
Danish greenhouse gas emissions by 2030 if further action is not taken. Im-
proving the sustainability of farming therefore has a large potential. With this
plan, investments are made to support, improve and promote the transfor-
mation towards a more sustainable agricultural industry.
Improving environment by rehabilitating contaminated industrial sites:
The rehabilitation
of industrial sites and contaminated land includes removing substantial
amounts of harmful chemicals and hazardous substances from the nature. Re-
habilitation of large contaminated lands is a challenging task that requires spe-
cialised expertise, and the Recovery and Resilience Facility makes it possible to
make the necessary investments. The aim is to provide a significant and lasting
improvement of the environment.
Summary description of the reforms and investments of the
component
2.2.3 Carbon rich soils
Addressing challenges:
The initiative addresses the challenge of land use related
emissions linked to agricultural production. Agriculture plays an important role in
obtaining reductions in greenhouse gas emissions. There exists rather few meth-
ods to reduce emission of greenhouse gasses in the agriculture without lowering
the output of the industry. However, an effective way of reducing the emission of
greenhouse gasses is by taking carbon rich agricultural soils out of production and
restoring natural hydrology. Not only is it beneficial for the climate by lowering
greenhouse gas emissions, the carbon rich soils can also be less productive than
other soils, thereby minimising the loss by taking the soils out of production. In
sum, the measure contributes to a more optimal use of Danish land resources.
Objectives:
The aim of the initiative is to provide a significant reduction in the
emission of greenhouse gasses from the production on carbon rich soils. Further-
more, rewetting and taking carbon rich soils out of production will contribute to a
reduction of nitrogen emission as well. Taking carbon rich soils out of production
is estimated to reduce the emission of greenhouse gasses by 0.1 Mt CO
2
e by 2030.
Furthermore, the initiative will reduce the emission of nitrogen by 198 tonnes by
2030. The estimated cost of the initiative is 660 m. DKK from 2021 to 2024.
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Implementation:
The initiative will be implemented through existing subsidy
schemes providing support to farmers to rewet and take carbon rich soils out of
production. By doing so, the farmers will be compensated for taking the carbon
rich soils out of production. The Danish authorities will closely monitor the speed
and effects of the initiative. As an integral part of the initiative, land consolidation
will often be a necessity. Land consolidation involves the redistribution of land
parcels between multitudes of actors. In this way, a multitude of benefits can be
achieved (e.g. nature, biodiversity, water quality, land development), depending on
the specific priorities.
Link to reforms:
With the climate law, Denmark has committed itself to reduc-
ing greenhouse gas emissions by 70 per cent in 2030. Furthermore, EU directives
commit Denmark to lower the emissions from nitrogen. Taking carbon rich soils
out of production contributes to both.
Target group:
The target group of the initiative is Danish farmers and landown-
ers owning land containing areas of carbon rich soil.
Timeline:
The subsidy scheme is set to start by 2021 and run until 2024. No later
than 2023, the government will evaluate, whether the subsidy scheme leads to suf-
ficient reduction of the production on carbon rich soils. The evaluation will also
be based on the effect of the current scheme e.g. in 2021.
State aid:
The existing national schemes to take out carbon rich soils are currently
in the process of being state-aid approved (SA.58791 (2020/N)). The measure
funded by the recovery plan will supplement the existing national scheme.
Do no significant harm:
In general, Denmark imposes strict regulation regarding
land use and nature protection. This includes i.e. the Nature Protection Act aimed
at the protection of existing habitats, the Planning Act regulating land use and ac-
tivities. This legislation applies to initiatives such as rewetting of carbon rich soils
in which all projects are subject to an examination of impacts on existing habitats,
surrounding areas, infrastructure etc. This includes an obligation for all authorities
to specifically estimate any potential damage to adjacent Natura2000 areas in ac-
cordance with the obligations in the Bird Protection- and Habitats Directive. Pro-
jects that are assessed not to be in compliance with relevant acts are readjusted or
not executed.
Regarding the control of the funding of specific projects, it is expected that the in-
itiative will be implemented through existing subsidy schemes with existing con-
trol mechanisms. Restored wetlands are permanently secured against conversion.
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Table 1.2.1
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure ex-
pected to lead to significant greenhouse gas
emissions?
Yes
No Significant negative impact?
X Rewetting of carbon rich soils is expected to reduce emissions of green-
house gasses. Rewetting of carbon rich soils is expected to reduce annual
emissions by app. 15 tonnes CO
2
e pr. ha.
As such, the measure is considered compliant with DNSH for climate
change mitigation.
Climate change adaptation: Is the measure ex-
pected to lead to an increased adverse impact of
the current climate and the expected future cli-
mate, on the measure itself or on people, nature
or assets?
X Rewetting of carbon rich soils may enhance natural hydrological dynamics
allowing for improved water retention on an upland scale. The measure is
expected to reduce emissions of greenhouse gasses and therefore will not
increase adverse impact of the current climate and the expected future cli-
mate.
As such, the remediation of contaminated soil is considered compliant with
DNSH for climate change adaption.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological po-
tential of bodies of water, including surface water
and groundwater; or
(ii) to the good environmental status of marine wa-
ters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation,
incineration or disposal of waste, with the excep-
tion of the incineration of non-recyclable hazard-
ous waste; or
(ii) lead to significant inefficiencies in the direct or
indirect use of any natural resource at any stage
of its life cycle which are not minimised by ade-
quate measures; or
(iii) cause significant and long-term harm to the
environment in respect to the circular economy?
Pollution prevention and control: Is the measure
expected to lead to a significant increase in the
emissions of pollutants into air, water or land?
X Taking out lowland soils lowers emission of nitrogen to the marine waters.
Hence, the measure is considered to support the objective of pollution pre-
vention and control and is considered compliant with DNSH for the preven-
tion and control of pollution to air, water or land.
X In general, the rewetting of carbon rich soils and restoration of peatlands
will have a positive impact on biodiversity. Positive effects are i.a. linked to
the extensification of intensive agricultural activities including fertilisation,
drainage, tillage and the use of pesticides. The reestablishment of natural
hydrological conditions may improve the variation and dynamics between
habitats.
There may be certain situations where habitats such as rich fens may be
subject to an increased exposure to nutrient rich surface water due to in-
creased flood frequency following the reestablishment of natural hydrology.
Project involving the rewetting of carbon rich soils are required to undergo
an examination of consequences including any impacts on existing habi-
tats i.e. in connection to Natura 2000-habitats and KBAs. If negative im-
pacts are identified a project may be subject to a rejection or modification.
The measure is considered compliant with DNSH for the protection and
restoration of biodiversity and ecosystems.
X Taking carbon rich soils out of production reduces emissions of nitrogen to
the marine waters.
The measure therefore supports the improvement of the good environmen-
tal status of marine waters.
The measure is considered compliant with DNSH for sustainable use and
protection of water and marine resources.
X The measure is expected to have no or an insignificant foreseeable impact
on circular economy, including waste prevention and recycling.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition5
and resilience of ecosystems; or
(ii) detrimental to the conservation status of habi-
tats and species, including those of Union inter-
est?
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2.2.4 Organic Farming
This component includes four separate initiatives aimed at promoting organic
farming. Promotion of organic farming is ensured by reforming the way in which
public kitchens buy food and, in general, by supporting sustainable organic food
production in Denmark through various initiatives. The initiatives also include
pools for funding of e.g. marketing of organic products, promotion of export, and
development & innovation projects regarding organic products.
Addressing challenges:
Farming of organic produce is often more environmen-
tally friendly than conventional farming. Experience shows that professional
kitchens with a clear aim of serving organic meals often serve more plant-based
meals and, as such, promote a more healthy and sustainable diet. Thus, these initi-
atives address environmental as well as climate change concerns. However, the
awareness of the benefits of organic food production has to be improved, both in
Denmark and globally, in order to make organic food the primary choice of more
consumers, thereby raising demand for organic produce compared to convention-
ally farmed agricultural products. Promotion and marketing of organic food call
for innovative solutions, which are therefore included in this initiative.
Objectives:
The aim of the measure is to incentivise more farmers to make the
transition from conventional to organic farming. The government has an ambition
of doubling the consumption of organic products in Denmark by 2030. The
achievement of that ambition relies on an expected demand-driven rise in con-
sumption of organic products. Promoting organic food and farming helps this
process underway. Moreover, the initiatives will help increase Danish export of
organic agricultural goods. Reaching the target has the potential to reduce green-
house gas emissions in Denmark by up to 0.5 Mt CO
2
e by 2030.
Implementation:
With the initiatives, investments in transitioning to organic
farming will be increased by investing a further 45 m. DKK per year in 2021-
2024. 10 m. DKK per year will go to an ‘organic innovation centre’, 20 m. DKK
per year will go to ‘The Foundation for Organic Farming’, 10 m. DKK per year
will go to transitioning public kitchens, and 5 m. DKK per year will fund develop-
ment of the plant-based organic sector. The initiatives regarding public kitchens
and the plant-based sector will be implemented as distinct pools of funding within
‘The Foundation for Organic Farming’.
Link to reforms:
In the long term, the reform on transitioning to organic farming
will contribute to the overall target of reducing the emission of greenhouse gasses,
nitrogen, and ammonia. The investments are consistent with the intent set out in
the EU-Commission Farm to Fork and Biodiversity Strategies that target reaching
25 per cent of agricultural land under organic farming by 2030.
Target group:
The target group will be public kitchens transitioning to organic
food, but also farmers and consumers. Through the initiatives initiated by The
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Foundation for Organic Farming, the target group will be households who are ex-
pected to demand more organic food due to the initiatives.
Timeline:
As outlined in the “implementation” section, the initiatives will lead to
an increase in the funding for organic transition by a further investment of 45 m.
DKK per year in 2021-2024. The ambition is that the land area with organic pro-
duction doubles by 2030, and the four initiatives described in this component
contributes to realising that ambition.
State aid:
The proposed initiatives complies with State Aid rules by belonging un-
der the existing aid scheme, which has already been notified (cf. SA.57228
(2020/N)).
Do no significant harm:
In 2007, the EU Council agreed Council Regulation
834/2007 setting out the principles, aims and overarching rules of organic pro-
duction and defining how organic products should be labelled. This Regulation,
still in force, is also complemented by several Commission implementing acts on
the production, distribution and marketing of organic goods. New organic legisla-
tion will enter into force on 1 January 2022. The rules will reflect the changing na-
ture of this rapidly growing sector. The new regulation is designed to ensure fair
competition for farmers whilst preventing fraud and maintaining consumer trust
through strengthening the control system with tighter precautionary measures and
robust checks along the entire supply chain. The regulation for organic agriculture
insures at least one annual inspection of each organic farm is carried out by the
Danish Agricultural Agency.
Organic production is an overall system of farm management and food produc-
tion that combines best environmental and climate action practices, a higher level
of biodiversity, the preservation of natural resources and the application of high
animal welfare standards and high production standards. This is in line with the
demand of a growing number of consumers for products produced using natural
substances and processes. Organic production thus plays a dual societal role,
where, on the one hand, it provides for a specific market responding to consumer
demand for organic products and, on the other hand, it delivers public goods con-
tributing to the protection of the environment and animal welfare, as well as to ru-
ral development.
The Foundation of Organic Farming is a public body which is run by a board of
directors appointed by the minister for food, agriculture and fisheries. The foun-
dation is funded by the Danish government and aims to support the development
and competiveness of the organic agricultural sector. The board is responsible for
the management and for distributing the subsidies in accordance with the law.
The Danish Agricultural Agency performs five accounts of supervision with the
administration of the foundation. This includes account and budget supervision in
addition to the general supervision with the administration, the effects of the
work of the foundation and an annually thematic supervision.
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Given the nature of organic farming, the measure either is contributing substan-
tially or have no or an insignificant foreseeable impact on the relevant environ-
mental objectives. This measure is considered compliant with Do No Significant
Harm for the environmental objectives, and a simplified approach to the Do No
Significant Harm assessment has been taken for the measure.
Table 2.2.2
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected to
lead to significant greenhouse gas emissions?
Climate change adaptation: Is the measure expected to
lead to an increased adverse impact of the current cli-
mate and the expected future climate, on the measure
itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
Yes
No Significant negative impact?
X Organic farming have decreased greenhouse gas emissions per
hectare field compared to conventional farming.
X Organic farming maintain or increase soil organic matter through
multiannual crop rotation including mandatory leguminous crops as
the main or cover crop for rotating crops and other green manure
crops.
X Nitrate leaching is lower from organic fields than conventional
agricultural fields and far less chemicals are allowed and used for
plant protection. Also organic aquaculture must comply with the rules
set out in the organic EU-regulation.
The transition to a circular economy, including waste
prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control: Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
The protection and restoration of biodiversity and eco-
systems.
Is the measure expected to be:
(i) significantly detrimental to the good condition5 and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X The measure is expected to have no or an insignificant foreseeable
impact on circular economy, including waste prevention and
recycling.
X Nitrate leaching is lower from organic fields than conventional
agricultural fields and far less chemicals are allowed and used for
plant protection.
X When converting conventional farms to organic farms the
biodiversity in the margins of the fields increases with around 30%.
Far less chemicals are allowed and used for plant protection.
Because it is existing non-organic farmland that is convertet into
organic farmland the activities do not lead to the conversion,
fragmentation or unsustainable intensification of high-nature-value
land, wetlands, forests, or other lands of high-biodiversity value.
Should the non-organic farms be located in or near to biodiversity-
sensitive areas (including the Natura 2000 network of protected
areas, UNESCO World Heritage sites and Key Biodiversity Areas
(‘KBAs’), as well as other protected areas): their conversion to
organic farming practices do not lead to the deterioration of natural
habitats and the habitats of species and to disturbance of the
species for which the protected area has been designated.
2.2.5 Climate technologies in agriculture
Addressing challenges:
There are few cost-efficient instruments to reduce
greenhouse gas emissions in the agricultural sector without lowering production
output and thereby put farmers under financial strain. In order to sustain a strong,
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modern and green agricultural sector that contributes to the Danish economy,
employment and social coherence, significant funds are allocated to research and
development of new cost-efficient solutions and technologies such as brown bio
refining through the utilisation of pyrolysis technology.
Objectives:
The overall objective is to accelerate the development of new tech-
nologies and solutions that can lower greenhouse gas emissions and, subsequently,
can be included in the Danish National Inventory Report, thereby contributing to
the green transition of the Danish and potentially the European agricultural sec-
tor. With this component, Denmark will further invest in the upscaling of the
most promising technologies on the market, e.g. biorefining using pyrolysis, in-
cluding upstream and downstream technologies and products. The estimated
technical potential to reduce the greenhouse gas emissions in the Danish agricul-
tural sector is 2 Mt CO
2
e before 2030. The research in new technologies not only
benefits the climate and the environment. It also benefits job creation in Denmark
by contributing to Denmark and thus the EU remaining among the leaders in the
world when it comes to green technologies. Thus, investing in new green technol-
ogies is also an investment in the creation of green jobs in the future. The invest-
ments are additional to other green research and development initiatives that have
been initiated in component 2.7 in the Danish Recovery and Resilience Plan.
The initiative can be categorised as follow-up research of a specific new technol-
ogy to reduce greenhouse gas emissions in the agriculture sector, specifically from
the production of livestock.
Biorefining is a highly promising technology. It is possible to refine different
kinds of biomass into an array of different bio-based products with a sustainable
climate and environmental profile. The refinement of “brown” and “green” bio-
mass is of special interest, where “brown” refers to the utilisation of organic waste
and residue from the agricultural sector by converting it into products such as bio-
char and bio fuels. The Danish Climate Council has estimated that if the prelimi-
nary results hold true, the technology can reduce emissions by up to 2 Mt CO
2
e
by 2030. The refinement of “green” biomass refers to converting grass and clover
to proteins for humans and monogastric animals to eat as well as fibres and sugars
for bioenergy and feed for ruminants.
Implementation:
A 200 m. DKK grant financed by the Recovery and Resilience
Facility has been allocated to the initiative in 2021-2022. When implementing the
measure and assigning funds to projects, it will be ensured that there are no over-
laps to the projects on e.g. brown biorefining in component 2.7 of the Recovery
and Resilience Plan. This is to ensure that no projects will receive double funding.
Link to reforms:
The link from the research and development initiatives to the
reforms on green transition is clear. In order to be able to reduce greenhouse gas
emissions in the Danish agricultural sector without reducing production output, it
is necessary to research and test new technologies. At the same time, Denmark
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has developed a research strategy for green research focusing among other things
on agriculture. In order to reach the goal of reducing greenhouse gas emissions by
70 per cent by 2030 and realise the potential of new technologies, the research and
development effort is essential.
Target group:
The target group is Danish research institutions and other actors
doing research and development on green technologies, which also includes front-
runners from the private sector with regard to the development of brown biore-
finery.
Timeline:
The grant will open for applications in 2021.
State aid:
Investment in support of the development of brown bio refinement
will be implemented based on of existing state aid schemes under GBER with the
reference SA.60955, SA.40175 (GUDP) and SA.61789 (EUDP).
Do no significant harm:
Given the nature of brown bio refining the measure is
considered either as significantly supporting, or to have no or an insignificant
foreseeable impact the relevant environmental objectives. This measure is in gen-
eral considered compliant with Do No Significant Harm for the environmental
objectives, and a simplified approach to the Do No Significant Harm assessment
has been taken for the measure.
Further, the results of the R&D&I process in brown bio refining are considered
technologically neutral at the level of their application and the intended R&D&I
does not involve any form of “brown” R&D&I.
Denmark has implemented relevant directives in national legislation including the
Renewable Energy Directive 2018/2001/EU (REDII), the Air quality Directive
2008/50/EU and the Industrial Emissions Directive (Directive 2010/75/EU). All
applicants are obliged to comply with national regulations and project activities
are subject to inspection by the relevant national authority at local or national
level. Compliance is also accessed administratively by the granting authorities
(GUDP and EUDP) prior to commencement of project activities and upon pro-
ject completion.
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Table 2.2.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the
measure expected to lead to signif-
icant greenhouse gas emissions?
Yes
No Significant negative impact?
X The measure is expected to support climate change mitigation with a coefficient of 100%
given that the output of the refining process net contributes to sustainable renewable en-
ergy production and carbon sequestration in agricultural soils.
As such, the measure is considered compliant with DNSH for climate change mitigation.
Climate change adaptation: Is the
measure expected to lead to an in-
creased adverse impact of the cur-
rent climate and the expected fu-
ture climate, on the measure itself
or on people, nature or assets?
X The measure is expected to provide for a minor improvement in climate change adaption
given that the recycling of carbon in the form of biochar to the soils will improve agricultural
soils water retention capacity.
As such, the brown biorefining is considered compliant with DNSH for climate change
adaption.
X Today, the handling and utilisation of brown biomass including livestock manure is a sub-
stantial contributor to the emission of nitrate and phosphorus to water and marine re-
sources.
The measure is expected to improve the good status or the good ecological status of fresh
and ground water and to improve the good environmental status of marine waters.
The measure is considered compliant with DNSH for sustainable use and protection of wa-
ter and marine resources.
The sustainable use and protection
of water and marine resources.
Is the measure expected to be detri-
mental:
(i) to the good status or the good
ecological potential of bodies of wa-
ter, including surface water and
groundwater; or
(ii) to the good environmental status
of marine waters?
The transition to a circular econ-
omy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in
the generation, incineration or dis-
posal of waste, with the exception of
the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in
the direct or indirect use of any nat-
ural resource at any stage of its life
cycle which are not minimised by
adequate measures; or
(iii) cause significant and long-term
harm to the environment in respect
to the circular economy?
Pollution prevention and control: Is
the measure expected to lead to a
significant increase in the emis-
sions of pollutants into air, water or
land?
X The measure is expected to substantially support the circular economy within agriculture
given that the input used to a large extent consists of waste and crop residues origination
from agriculture and that a substantial part of the output is recycled as carbon to agricul-
tural soils.
As such, it is considered compliant with DNSH for circular economy, including waste pre-
vention and recycling.
X The measure is expected to reduce emissions of pollutants from agricultural residues and
livestock manures to air, water and land by refining these into usable products in the form
of renewable energy and carbon for sequestration in agricultural soils.
Hence, the measure is considered to support the objective of pollution prevention and con-
trol and is considered compliant with DNSH for the prevention and control of pollution to
air, water or land.
X The measure has no or an insignificant foreseeable impact on the protection and restora-
tion of biodiversity and ecosystems. In this respect, the measure will not lead to activities
involving the conversion, fragmentation or unsustainable intensification of high-nature-
value land, wetlands, forests, or other lands of high-biodiversity value, including highly bio-
diverse grassland.
The measure is considered compliant with DNSH for The protection and restoration of bi-
odiversity and ecosystems.
The protection and restoration of
biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the
good condition5 and resilience of
ecosystems; or
(ii) detrimental to the conservation
status of habitats and species, in-
cluding those of Union interest?
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2.2.6 Rehabilitation of industrial sites and contaminated land
Addressing challenges:
The initiative addresses the challenge of large-scale soil
contamination on ten former industrial sites in Denmark. Due to extensive pollu-
tion from previous production activities on the sites and disposal of waste from
these industries, the contaminated sites constitute a risk for the environment. The
government and parliament agreed that at least five sites, which have already un-
dergone extensive survey, have to be prioritised, cf. the Regional Councils prior-
ity-scheme for the ten sites. However, the Regional Council still needs to survey
the last five sites according to the priority scheme. Remediating the contaminated
soil will remove the risk for harmful effects on surface water, groundwater, hu-
man health and nature in the areas. Some of the ten contaminated sites, which are
located near coastal waters, constitute a risk for the marine environment near the
sites. Rehabilitation of the sites makes recreational use possible in rural areas. Fur-
thermore, rehabilitation of industrial sites and contaminated lands will contribute
to local economic activity and restore the environmental status around the sites.
Objectives:
The aim of the initiative is to initiate the removal of the risk that the
ten large-scale soil contaminations constitute and to rehabilitate the contaminated
lands. Furthermore, rehabilitation of the areas provide a permanent improvement
of the local environment while creating economic activity in rural areas.
Implementation:
The initiative will be implemented by granting a subsidy to the
Danish Regions (administrative entity on regional level) which holds the adminis-
trative responsibility for contaminated soil. The grant will be given on the condi-
tion that the Regions submit a project description in order to ensure cost effec-
tiveness and focus on prioritised areas. In this process, the Danish state and Dan-
ish Regions will examine the possibilities of private co-funding in order to in-
crease the speed of the effort. Furthermore, the government plans to evaluate the
effort in 2023 in cooperation with parliament.
Target Group:
The target group of the initiative is the Danish Regions, in which
the former industrial sites are located.
Timeline:
The Danish government plans to agree on a subsidy scheme with Dan-
ish Regions in May 2021. Immediately thereafter, the Regional Councils begin the
process of prioritising needed actions for the specific sites according to site-status
and characteristics, e.g. prepare tenders, agreeing on terms with contractors. In
2023, the government will evaluate the initiative with parliament and decide on
whether further governmental intervention is necessary in order to ensure the re-
mediation of the contaminated sites. The rehabilitation of the industrial sites and
contaminated land is completed in steps; the first area is expected to be remedi-
ated in 2024, three areas in 2026/27, while the remediation of the last area will be
completed in approximately 2033.
State aid:
The rehabilitation of contaminated land will not constitute state aid in
the sense of Article 107 (1) TFEU since no aid is given to any particular industry.
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Entrepreneurs and consultants are contracted to do part of the remediation. The
normal regulation of public procurement will cover these cases. The rehabilitation
process will take place under the Act of Contaminated Soil that has been in force
since 2000. The principle in this act is that the polluter should pay for the remedi-
ation process. Public financed remediation does only occur in the cases where is it
not possible to make the polluter pay. The remediation process will reduce the
risk of the soil contamination of ground water, surface water or the present use of
the land. The public financed remediation process is not expected to increase the
value of that particular site, since it does not change the functions that the site can
be used for. If the remediated industrial land is to be developed to a more sensi-
tive use in the future, the development and further remediation of the land for e.g.
housing will be the cost of the property developer.
Do no significant harm:
Table 2.2.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the
measure expected to lead to signif-
icant greenhouse gas emissions?
Yes
No Significant negative impact?
X The measure is expected to have no or an insignificant foreseeable impact on climate
change mitigation, since the remediation of soil contamination is expected to be conducted
with in-situ remediation methods.
Hence, a reduction of greenhouse gas emissions is foreseen due to less transport of exca-
vated soil than with ex-site methods and a reduction of heavily contaminated excavated
soil that needs to be treated ex-situ on existing thermic plants constructed for incinerating
non-recyclable hazardous waste/soil.
As such, the measure is considered compliant with DNSH for climate change mitigation
Climate change adaptation: Is the
measure expected to lead to an in-
creased adverse impact of the cur-
rent climate and the expected fu-
ture climate, on the measure itself
or on people, nature or assets?
X The measure is expected to have no or an insignificant foreseeable impact on climate
change adaption given the nature of the measure, which is to remediate contaminated
sites and prevent harmful effects from contaminated soil on e.g. people and nature. The
remediation only last for a limited time and is not expected to lead to an increased adverse
impact of the current climate and the expected future climate.
As such, the remediation of contaminated soil is considered compliant with DNSH for cli-
mate change adaption.
The sustainable use and protection
of water and marine resources.
Is the measure expected to be detri-
mental:
(i) to the good status or the good
ecological potential of bodies of wa-
ter, including surface water and
groundwater; or
(ii) to the good environmental status
of marine waters?
X Today the ten sites of contaminated soil considered in this measure constitute a risk to ei-
ther e.g. surface water, marine water or groundwater.
The remediation of the contaminated sites is expected to remove the harmful effects of the
polluting chemicals and harmful substances, and the measure is expected to support sus-
tainable protection of water and marine resources with a coefficient of 100 per cent.
The measure is expected to improve the good status or the good ecological potential of
bodies of water, including surface water and groundwater, and to improve the good envi-
ronmental status of marine waters. The measure is considered compliant with DNSH for
sustainable use and protection of water and marine resources.
The transition to a circular econ-
omy, including waste prevention
and recycling.
X The measure is expected to have no or an insignificant foreseeable impact on circular
economy, including waste prevention and recycling related to the direct and primary indi-
rect effects of the measure across its life cycle. The activity will be carried out in accord-
ance with Danish environmental legislation on disposal and use of contaminated soil.
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Is the measure expected to:
(i) lead to a significant increase in
the generation, incineration or dis-
posal of waste, with the exception of
the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in
the direct or indirect use of any nat-
ural resource at any stage of its life
cycle which are not minimised by
adequate measures; or
(iii) cause significant and long-term
harm to the environment in respect
to the circular economy?
Pollution prevention and control: Is
the measure expected to lead to a
significant increase in the emis-
sions of pollutants into air, water or
land?
The protection and restoration of
biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the
good condition5 and resilience of
ecosystems; or
(ii) detrimental to the conservation
status of habitats and species, in-
cluding those of Union interest?
The remediation of soil contamination is expected to be conducted with possible in-situ re-
mediation methods with on-site treatment of waste water. It is not expected to lead to a
significant increase in the generation, incineration or disposal of waste. Restoration and re-
establishment of remediated sites is expected to happen in accordance with the surround-
ing environment.
Given the nature of the measure, it is considered compliant with DNSH for circular econ-
omy, including waste prevention and recycling.
X The measure prevents emissions of pollutants from contaminated sites into air, water or
land by remedial measures. Hence, the measure is considered to support the environmen-
tal objective with a coefficient of 100 per cent, and as such is considered compliant with
DNSH for the prevention and control of pollution to air, water or land.
X The activity that is supported by the measure has no or an insignificant foreseeable impact
on this environmental objective, taking into account both the direct and primary indirect ef-
fects across the life cycle. The operation is intended to prevent e.g. harmful effects on na-
ture such as biodiversity-sensitive areas, including the Natura 2000 protected areas and
sustain a good ecological and chemical condition in surface waters. This is in accordance
with Directive 2000/60/EC of the European Parliament and of the Council of 23 October
2000 establishing a framework for Community action in the field of water policy.
The measure is considered compliant with DNSH for The protection and restoration of bi-
odiversity and ecosystems.
Green and digital dimensions of the component
Green transition
The initiatives in this component on promoting a greener agricultural sector and
improving the environment target the climate- and environment challenges from
several angles and perspectives. The initiatives lower the greenhouse gas emissions
from the agriculture sector, which is crucial in realising the Danish climate target
of a 70 per cent reduction. The plan utilises well-known and cost-efficient instru-
ments to lower greenhouse gas emissions without lowering production output.
Furthermore, organic farming is promoted, which targets both greenhouse gas
emissions as well as environmental issues. The initiatives targeted the agricultural
sector lowers the greenhouse gas emissions by 0.1 Mt CO
2
e in 2030.
The climate action plan also contributes to an improvement of the quality of the
aquatic environment by lowering the emission of nitrogen as carbon rich soils are
not only emitting greenhouse gases. By cultivation they are also more likely to
emit nitrogen into the aquatic environment. Thus, the reform on carbon rich soils
also contributes to improving the aquatic environment. Furthermore, the environ-
ment is improved by rehabilitating industrial sites and contaminated land. This
eliminates the risk of chemicals and hazardous waste being spread into forests or
the sea.
Furthermore, the climate action plan contributes to the green transition by re-
search and development of new technologies, which have the potential of reduc-
ing the emission of greenhouse gasses in the future. This includes documenting
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the effect of existing technologies and scaling up known technologies. Thus, the
investments in research and development contribute to the green transition on a
short-term basis as well as in the long term. The Recovery and Resilience Facility
funding makes it possible to advance investments in green research and develop-
ment and heavily boost investments in green transition promptly. The invest-
ments made possible by the Recovery and Resilience Facility funding will in time
pay off in the form of job creation and constitute a large economic growth poten-
tial. Furthermore, the advancement of research in green technologies will make a
lasting impact on the green transition, as new green technologies will be imple-
mented earlier than what would have been the case without the Recovery and Re-
silience Facility funding.
Digital transition
This component is primarily focused on the green transition. Thus, the digital
transition has been addressed in other components of the Recovery and Resili-
ence Plan. However, there will be focus on a smooth and digital implementation
of initiatives.
Financing and costs
Table 2.2.5
Overview of RRF-funding for the agriculture and environment component
M. DKK, 2021-prices
Carbon rich soils
Organic Farming
Organic transition of public kitchens
Organic Innovation Centre
Plant-based organic projects
Climate technologies in agriculture
Rehabilitation of industrial sites contami-
nated land
In total
Total
660
80
40
40
20
200
280
1,320
2021
165
20
10
10
5
100
50
360
2022
165
20
10
10
5
100
50
360
2023
165
20
10
10
5
-
50
260
2024
165
20
10
10
5
-
55
265
2025
-
-
-
-
-
-
75
75
The initiative consists of initiatives of 1,320 m. DKK of which all is financed by
Recovery and Resilience Facility.
Table 2.2.5
provides an overview of the funding.
The measures in this component are financed primarily by funds from the RRF
with the rehabilitation of contaminated land being an exemption as it is also partly
financed by government or private funding. The distribution of the CAP is by
April 30 2021 not yet decided upon politically, and therefore it is not included in
the financing of the measures in this component.
Carbon rich soils
The initiative will be implemented through existing subsidy schemes (carbon rich
soil) providing compensation to support farmers rewetting and taking carbon rich
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soils out of production and existing scheme to provide land consolidation
(MUFJO). The cost are based on experience with figures from existing low land
schemes incl. national schemes. Cost pr. hectare: 1) Feasibility studies (9,300
DKK) 2) Project establishment (32,500 DKK) 3) Compensation (86,200 DKK) 4)
Land distribution (5,000 DKK). Total cost on average pr. hectare: 133,000 DKK.
The estimated cost of land consolidation is based on figures from experience with
the existing MUFJO-scheme.
Organic Farming
Funds for the organic sector will be implemented through the Foundation for Or-
ganic Farming. Projects are supported on an annual basis through one-year grants.
An application round is carried out yearly, and the projects are prioritised after the
closing of the round. The Ministry for Food, Agriculture and Fisheries annually
performs account and budget supervision of The Foundation of Organic Farm-
ing. The overall aim is to support the development and competitiveness of the or-
ganic sector by strengthening The Foundation for Organic Farming.
The sales of organic food has risen steadily in Denmark during the past fifteen
years. This budget allocation is similar to the budgets of previous efforts to de-
velop the domestic market for organic food sales in Denmark in The Foundation
of Organic Farming. For this reason, it is expected to be a fitting and effective
budget in regards to the aim of the pool. 
 
Organic transition of public kitchens
Funds for transitioning of public kitchens will be implemented through the Foun-
dation for Organic Farming. The funds will be dedicated to a wide-ranging suite
of educational programmes and support curriculums facilitating the transition to
more organic, healthy and sustainable food in public kitchens.
Organic Innovation Centre
Funds for innovation projects will be transferred to a new Innovation Centre. The
purpose of the Innovation Centre is to conduct research, experiments and devel-
opment within organic agriculture and food and to collect and disseminate
knowledge about organic products to create development for the benefit of the
agricultural sector in a technically, economically and environmentally optimal way
in accordance with good research practice and independent of other interests. The
programs, including project descriptions and budgets, will be approved by the
Danish Agricultural Agency. The overall aim is to support organic innovation pro-
jects that include research, experiments and development of the organic sector.
Plant-based organic projects
Establishment of a yearly pool in 'The Foundation of Organic Farming' that aims
to support the development of a more organic, plant-based food system from
farm to fork.
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Climate technologies in agriculture
The possibility of co-financing from the EU Recovery and Resilience Facility has
contributed to the Danish Government and Parliament decision to increase in-
vestment in research and development in emerging technologies with large poten-
tials for synergy between CO
2
e reductions in the energy sector and carbon seques-
tration in agriculture and also improved circularity of carbon and nutrients from
agricultural residues and waste.
The measure has been developed in partnership and collaboration with stakehold-
ers, including the Government partnership with industry on climate and will pro-
vide for the establishment of 4-10 research and development facilities including
pilot plants and the associated research and development work.
It is expected that the measure will bring the technology to a stage ready for com-
mercial investment and implementation in 2023 and make a technical potential of
up to 2 Mt of CO
2
reductions feasible towards 2030.
Rehabilitation of industrial sites and contaminated land
Co-financing from the EU enables Denmarkto speed up the process of cleaning
the large-scale cases of soil pollution in Denmark.
Tabel 2.2.6
Measurable effects of the agricultural reform
Reduction
Mt CO
2
e per year
2030
Carbon rich soils
Organic farming
Climate technologies in agriculture
Rehabilitation of industrial sites and contaminated land
In total
0.1
-
-
-
0.1
Ton N per year
2030
198
-
-
-
198
The expected costs are estimated by the Danish Regions and are assessed based
on the present knowledge of the different large-scale soil contaminations. The
public clean-up of contaminated soil is the responsibility of the regions. The un-
certainty of costs and time plan is greater for the sites that are in the early stages
of investigation and clean up. Experience shows that costs and time plans will
change during the clean-up process.
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Component 2.3
Energy Efficiency, Green Heating and
Carbon Capture and Storage
To achieve the ambitious EU and Danish climate reduction targets
in the most cost-effective way, energy efficiency improvements
must be accelerated – especially in buildings. As highlighted in the
Commission’s
Renovation Wave,
investing in buildings can also
inject a much-needed stimulus in the construction ecosystem and
the broader economy in alignment with the EU Green Deal and
COVID-19 recovery.
The recovery of the European economy provides a unique oppor-
tunity to invest in a greener future. The Danish focus is to prioritise
measures that will kick-start a green and rapid recovery.
To this end, Denmark has prioritised additional actions, based on
the recommendations by the Danish climate partnerships on en-
ergy efficiency to generate social, environmental, and economic
benefits by stimulating job creation and growth potentials.
Simultaneously, these actions contribute to the green transition by
reducing greenhouse gas emissions by 0.1 Mt CO
2
e in 2025.
With technical reductions potential of 4-9 Mt. CO
2
by 2030, carbon
capture and storage (CCS) is a key tool to reach the carbon re-
ductions targets. The development and demonstrations of possi-
bilities to store CO
2
in depleted oil and gas fields under the North
Sea is a crucial element to secure the full CCS value chain and
holds a potential to store CO
2
from other EU Member States.
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Description of the component
Box 2.3.1
Energy efficiency, green heating and carbon capture and storage: Follow-up on recommendations
by the Danish Climate Partnerships
Policy area/domain:
Climate policy, energy efficiency, conversion of heat supply, building renovation, construction/housing.
Objective:
The initiatives in component 3 are aligned with the climate partnerships’ recommendations on the green transi-
tion. The initiatives in component 3 furthermore mitigate implications by COVID-19 by stimulating sustainable
growth potentials and job creation. Energy efficiency initiatives and initiatives to promote a green heating sector
will reduce greenhouse emissions by 0.1 Mt in 2025. Other initiatives such as CCS can help foster future poten-
tial reductions.
1)
Local job creation and growth by investing in renovation, energy efficiency and CCS sites:
The financial
impact of the COVID-19 pandemic is mitigated by new investments in renovation and measures to en-
sure energy efficiency in industry, private households and public buildings. The initiatives will increase
the number of local jobs, stimulate local investments, foster the adoption of digital technologies and im-
prove the resilience and energy efficiency of the building stock.
Coherence and resilience:
Energy efficiency measures and renovation of the existing building stock will
improve the indoor environment and reduce energy bills and consumption for consumers and busi-
nesses as well as the public sector. Furthermore, CCS is a prerequisite for reaching net zero emission
targets – national and European – in a cost efficient manner without jeopardizing standard of living and
social equality.
Green and digital transition:
Investments in clean and efficient use of energy, green heating, CCS and
establishment of new development and demonstration programs will contribute to reducing Danish
greenhouse gas emissions by 70 per cent by 2030, compared with 1990, and achieve climate neutrality
by 2050 at the latest. Investments in energy efficiency measures can also encompass investments in a
better digital control of energy consumption in housing and in industry.
2)
3)
Investments to support the objectives
I. Replacing Oil Burners and Gas Furnaces: 645 m. DKK
II. Energy Efficiency in Industry: 315 m. DKK
IIl. Energy Savings in Public Buildings: 315 m. DKK
IV. CCS Storage Potential: 200 m. DKK
V. Energy Efficiency in Households: 565 m. DKK
Estimated costs:
Approximately 2,040 m. DKK in total in the period 2021-2025, of which 100 per cent are covered by the Recov-
ery and Resilience Facility. All of the proposed initiatives are additional and require new funding.
Main challenges and objectives
2.3.1 Main challenges
The green transition requires better solutions, new technologies, and behavioural
changes in various aspects of and across sectors and industries. It also requires im-
plementation of new greenhouse gas mitigation technologies such as CCS. The
challenges mentioned below relate to a segment of these. E.g. conversion of heat
supply and renovation of the existing building stock to make them more energy
and resource efficient.
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Building stock with poor energy rating:
Some of the existing buildings in Den-
mark were built in a time period, where there was less of a focus on energy effi-
ciency. The vast majority of the current building stock will also be in use in 2050.
Therefore, implementation of energy efficiency measures and renovation in exist-
ing buildings can support the efforts to reach the Danish and European climate
targets by reducing energy consumption in buildings and phasing out fossil fuels
for heating purposes. Energy renovations can also reduce the need for new energy
infrastructure and create better buildings through improvements of the indoor cli-
mate.
Usage of fossil fuels for heating:
In Denmark there is a widespread use of dis-
trict heating, which is almost entirely based on renewable energy sources like
wood pellets, wood chips, etc. Some households and businesses use oil burners or
gas furnaces as the main heating source. Households with oil burners are typically
placed in rural areas and small towns with an overrepresentation of low-income
households. It is a challenge to phase out and convert oil burners and gas furnaces
to alternative and green energy sources like heating pumps etc., as it can require
rather large up-front investments.
Carbon Capture and Storage – need for development and demonstration of
storage sites in depleted oil and gas fields:
The Danish government foresees
the use of CCS as a crucial component of Danish climate policy. One current ob-
stacle to this objective is the need for demonstration of possible storage sites for
CO
2
in depleted oil- and gas fields. This requires further analyses, testing of injec-
tions wells and demonstration of storage possibilities.
2.3.2 Objective
The Danish Government has initiated 13 climate partnerships in cooperation with
key stakeholders from the Danish business community. The objective of the Cli-
mate Partnerships is to help Denmark reach the goal of reducing the greenhouse
gas emissions with 70 per cent by 2030 (compared to 1990). To fulfil this goal, key
stakeholders from a wide range of sectors across Denmark have taken responsibil-
ity and an active role in the partnerships.
The 13 climate partnerships each represent an industry and have presented more
than 400 recommendations to the Danish government altogether. The Danish
government has already implemented many of these recommendations in various
climate deals comprising the government’s climate action plan.
Furthermore, and as part of the ongoing collaboration with the business commu-
nity, the Danish Minister of Finance has asked the climate partnerships to select
the most urgent decisions and initiatives that would help stimulate the economy
by creating new growth potentials and jobs, and at the same time contribute to the
green transition.
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Jobs and growth:
Investing in energy efficient measures and the renovation of
buildings will support the construction sector and subcontractors. Renovation
works are labour-intensive and create jobs temporarily in supported businesses.
Because investments are often rooted in local supply chains, they can furthermore
generate demand for energy and resource-efficient equipment and bring long-term
value to properties. For these reasons, energy efficiency, including the renovation
of buildings, is a priority to support the economic recovery.
There has been great progress and development in heating and insulation technol-
ogies that are used as an integrated part of today’s construction projects that can
be integrated in older buildings, which do not comply with modern energy effi-
ciency standards.
Supporting CCS development and demonstration projects is an important step in
order to create a solid foundation for investments in cost-efficient, operational
storage sites. This holds a significant potential for creating new jobs in e.g. the
transport sector as well as for workers from the traditional oil and gas industry.
Coherence and resilience:
Subsidy schemes targeted at both public sector build-
ings with poor energy labels and energy efficiency measures in the industrial sec-
tor can support the economic recovery across Denmark. The additional funds
from the recovery fund will also promote improvement of welfare institutions and
are expected to be allocated to renovation of e.g. day care institutions, schools,
and hospitals. This will support societal coherence and resilience by ensuring facil-
ities to deliver high quality public services.
Renovation of buildings and conversion to sustainable heating sources will not
only reduce the emissions of greenhouse gases but also reduce energy bills for
households, private enterprises, and public sector building owners. A cost-effi-
cient and environmentally safe green transition is important to ensure civil sup-
port and social coherence.
Furthermore, the demographics of the expected job effects will also contribute to
national coherence and resilience, substituting jobs in the oil and gas sector.
Green transition:
Investments and subsidy schemes targeted energy efficiency
measures, conversion of oil and gas burners to sustainable heating sources and
renovation of households, industries, and public buildings will reduce energy con-
sumption and greenhouse gas emissions.
Preliminary investigation, research, and analyses exhibit promising results for stor-
age in depleted gas fields in the Danish part of the North Sea. This holds potential
for both Danish and European storage.
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In addition, there is a potential for increasing the use of digital tools in order to
ensure optimal operation of buildings and maintenance of building systems as well
as integration of renewables in buildings, which will support the digital transition.
Furthermore, the Danish government will initiate and extend different develop-
ment and demonstration programs that will address the twin transitions and con-
tribute to an even further reduction of greenhouse gases in the coming years
within some of the high-emission sectors and industries such as the transport and
maritime sector.
The policies presented below focus on clean energy supply across the economy
including measures targeted towards industry, production and consumption by:
(i) proposing more ambitious policies and measures;
(ii) substantially increasing the level of ambition for energy efficiency. Thus, the
initiatives are consistent across the different areas of the National Energy and
Climate Plan and lead to further reductions of greenhouse gas emissions.
Moreover, the initiatives delivers on the Country Specific Recommendations, as
Denmark will pursue fiscal policies aimed at achieving prudent medium-term fis-
cal positions and ensuring debt sustainability while also enhancing green invest-
ment. The initiatives will front-load new but mature and green public investment
projects and promote green private investment in order to foster the economic re-
covery. Investments are targeted the green and digital transition, in particular on
clean and efficient production and use of energy.
Summary description of the reforms and investments of the
component
Overall, the Danish government is proposing a subsidy of approximately 2.040 m.
DKK in total in 2021-2025 to increase energy efficiency in buildings and in indus-
try, green heating and CCS.
The subsidies will consist of a number of initiatives supporting a transition to-
wards green energy and an increased energy efficiency in buildings and in industry.
Among these are competitive subsidy schemes related to public sector buildings,
and increased support schemes for replacing oil burners and gas furnaces with
electric heat pumps and district heating to further this goal.
2.3.3 Replacing Oil Burners and Gas Furnaces
Addressing challenges:
Oil and natural gas are sought to be phased out of the
heating system and replaced with electric heat pumps and district heating from re-
newable sources. To speed up the phasing out of oil burners and gas furnaces and
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reduce the cost of consumers of the conversion to green heating, funds are allo-
cated to subsidies for conversions to green solutions. For instance, allocated funds
could be used to subsidize heat pumps.
The initiative follows the objectives of the European Green Deal, which also aims
to expand power production from renewable energy complemented by the rapid
phasing out of coal and by the deployment of an increasing amount of renewables
in the energy system. Moreover, the initiative supports the
Renovation Wave
recom-
mendation of addressing energy efficiency of private buildings.
Objectives:
The aim is to speed up the removal of oil burners and gas furnaces as
heat sources and support the transition to heating based on green and sustainable
sources while simultaneously promoting energy renovations.
The measure supports three subsidy schemes for replacement of oil burners and
gas furnaces. The schemes already exist in Denmark and contain 984 m. DKK
from national funds from 2021-2025 (excluding derived tax loss) with 900 m.
DKK stemming from the climate agreement for energy and industry. The total ef-
fort for phasing out oil and gas boilers in the climate agreement is estimated to re-
duce CO
2
e emissions by 0.5 Mt in 2025 and 0.7 Mt in 2030.
With the Recovery and Resilience Facility, these initiatives are increased by 645 m.
DKK in the period 2021-2025 (including derived tax loss) to further incentivize
the replacement of heating by oil burners and gas furnaces with renewable energy
sources in residential, commercial and public buildings. This is expected to reduce
CO
2
e emissions by a further 0.04 Mt by 2025. The complementary Recovery and
Resilience Facility funding will ensure the increased support and thus more green
house gas reductions. Scaling up already an existing scheme with additional funds
is regarded the most cost-efficient use of the funding.
The proposal is also expected to mitigate pollution, create labour-intensive reno-
vation jobs, support local supply chains, while generating demand for highly en-
ergy and resource-efficient equipment, and bring long-term value to properties.
This is achieved by potentially lowering energy bills while boosting the construc-
tion sector and support SMEs and local jobs.
Furthermore, the scaling up of this support scheme accommodates the recom-
mendations of the National Energy and Climate Plan and the Country Specific
Recommendation on particularly focusing investments on clean and efficient pro-
duction and use of energy.
Finally, an existing setup is considered optimal due to the existing state aid allow-
ance. The initial experiences from the introduction of the subsidy scheme for en-
ergy efficiency in buildings in October 2020 show that there has been great inter-
est in the scheme.
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It is expected that an increase of the funds will accelerate the conversion to sus-
tainable heating sources and support energy renovations.
The application of the support scheme for replacing oil burners and gas furnaces
are distributed into the following three sub-schemes:
I. Sub-scheme for district heating (“Fjernvarmepuljen”):
Provides a subsidy to expand dis-
trict heating grids into new areas. Each project earns a subsidy at 20.000 DKK per
converted oil burner or gas furnace that constitute “the minimum connection”.
“The minimum connection” is the number of converted oil and gas heated house-
holds that bring balance in the business economy of the project. The pledge for a
subsidy is given in advance of the physical establishment and the subsidy is paid
based on the actual number of converted households, though not above the
pledge. The subsidy is paid to the district heating companies that redistribute it to
the consumers. It is expected that the subsidy will be used to lower the costs for
those consumers who are connected to the district heating grid, because it can in-
duce a higher connection share to the district heating grid and provide a better
business case for district heating.
II. Sub-scheme for decoupling (“Afkoblingsordningen”):
When decoupling from the gas
network, the Danish state gas distribution company EVIDA charges a fee of ap-
prox. 8.000 DKK to cover the cost of decoupling. With this subsidy scheme, a fi-
nite group of households can be exempted from the fee.
III. Sub-scheme for scrapping (“Skrotningsordningen”):
Gives a subsidy for companies
that offer heat pumps on subscription for private year-round housing. The
scheme is designed to support citizens who wish to convert to a heat pump but
who have limited financing opportunities for example because of low property
values. The subsidy will amount to 25.000 DKK per heat pump.
The initiatives are expected to reduce greenhouse gas emissions by 0.04 Mt CO
2
e.
in 2025. The decommissioning of the remaining oil burners and gas furnaces must
be considered in the context of the fact that many gas furnaces will still be opera-
tional in 2030. Given the subsidy, more gas furnace owners will have a financial
incentive to convert to district heating or a heat pump when, or even before, the
gas furnace breaks down.
By 2030, there will be few oil burners left, which may be difficult to decommis-
sion. The difficulty arises due to the fact that for the oil burner owners in ques-
tion, there can be a great difficulty and large costs associated with changing the
type of heating, despite large average private economic benefits of replacing the
oil burners.
It is possible for all households to apply for the schemes and the schemes are tar-
geted various income groups. Most oil burners are located in rural areas and small
towns with an overrepresentation of low-income households and low property
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values. The subsidy scheme would make it financially viable for such households
to replace an oil burner, e.g. with a heat pump.
In their priority recommendations to the Danish government, the Climate Part-
nership of energy and supply, production companies, construction and the finan-
cial sector have emphasized that further measures should be taken aiming at indi-
vidual heating and energy efficiency. Increasing the existing pools will accommo-
date this. Moreover, it will comply with the National Energy and Climate Plan and
the Country Specific Recommendation providing clear policies and savings
through this measure to meet the potential for energy efficiency in the sector.
Implementation:
The support schemes will be managed by the Ministry of Cli-
mate, Energy and Utilities in coordination with other relevant ministries.
Funds have been allocated for replacing oil burners and gas furnaces with electric
heat pumps up until 2026, while the funds for district heating are allocated from
2021-2023. This distribution is due to an expectation of the demand for the differ-
ent sub-schemes. Furthermore, it is taken into consideration that it takes time to
expand the district heating network (typically between 1 to 5 years), which means
that it is advisable to focus on expanding this in the early 2020s.
State Aid compliance:
The support scheme for scrapping individual oil burners
or gas furnaces and replacing them with heat pumps is group-exempted from EU
state aid regulations under GBER article 41 regarding investment aid for the pro-
motion of energy from renewable sources (SA.59221).
The Danish Energy Agency has implemented and notified the support scheme for
aid to projects rolling out district heating schemes in accordance with Article 46
of the General Block Exemption Regulation regarding investment aid for energy
efficient district heating and cooling (SA.61697).
The temporary scheme, where households can be exempted from the fee related
to decoupling from the gas system does not constitute state aid within the mean-
ing of Treaty on the Functioning of the European Union, since it targets house-
holds without economic activity on the address in question. It is thus not covered
by EU state aid rules.
Target group:
Remaining households with gas furnaces or oil burners in opera-
tion and residential buildings in need of energy renovation. Households with oil
burners are typically located in rural areas and small towns with an overrepresen-
tation of low-income households.
Timeline:
The additional means will be allocated to eligible applicants from 2021.
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Do No Significant Harm:
Table 2.3.1
Substantive DNSH assessment
DNSHobjective
Climate change mitigation: Is the measure expected to lead
to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activities will not lead to significant greenhouse gas emissions.
The replacement of oil burners and gas furnaces with electric heat
pumps and district heating leads to a
reduction
in greenhouse gas
emissions. The measure thus supports this objective substantially.
It should be noted that the subsidy scheme for district heating sup-
ports deployment of district heating grids in new areas – not the
facility producing heat. Furthermore, only energy efficient district
heating grids are eligible meaning they have a heat production
based on at least 50% renewable energy, 50% waste energy or
75% cogenerated heat or 50% of a combination of such energy and
heat.
Climate change adaptation: Is the measure expected to lead
to an increased adverse impact of the current climate and
the expected future climate, on the measure itself or on peo-
ple, nature or assets?
The sustainable use and protection of water and marine re-
sources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bod-
ies of water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
X This initiative is not foreseen to lead to increased adverse impacts
requiring additional climate change adaptation.
X This initiative is not foreseen to affect the ecological state of wa-
terbodies and marine resources.
The transition to a circular economy, including waste preven-
tion and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration
or disposal of waste, with the exception of the incineration of
non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use
of any natural resource at any stage of its life cycle which are
not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environment
in respect to the circular economy?
Pollution prevention and control: Is the measure expected to
lead to a significant increase in the emissions of pollutants
into air, water or land?
The protection and restoration of biodiversity and ecosys-
tems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resili-
ence of ecosystems; or
(ii) detrimental to the conservation status of habitats and spe-
cies, including those of Union interest?
X This initiative is not expected to result in inefficiencies in use of
material or natural resources.
X Significant emissions of pollutants to the environment are not fore-
seen by any of the initiatives or by the activities supported by the
subsidy schemes.
X Adverse effects on biodiversity and ecosystems are not expected
as a result of any of the initiatives including the activities sup-
ported by the subsidy schemes.
2.3.4 Energy efficiency in industry
Addressing challenges:
Green transitioning and energy efficiency of the indus-
try’s fossil production are important elements in the green transition of society.
However, the current incentives for the industry to switch away from the use of
fossil energy and to improve energy efficiency in processes are not fully financially
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sufficient for all companies. Thus, the subsidies are targeted this transition in or-
der to incentivize businesses to convert to more energy efficient processes etc.
The initiative follows the objectives of the European Green Deal, which also aims
to expand power production from renewable energy complemented by the rapid
phasing out of coal.
Objectives:
The initiative will speed up energy efficiency measures and transition
to green energy in industry, and lead to a reduction in greenhouse gas emissions.
The measure supports a subsidy scheme for energy efficiency in industry. The
scheme already exists in Denmark and contains 2,400 m. DKK from national
funds from 2021-2025. It is estimated that these funds will have a CO
2
e reduction
effect of 0.1 Mt CO
2
e in 2025 and 0.2 Mt of CO
2
e in 2030.
The existing subsidy scheme for energy efficiency in industry is supplemented
with an additional 315 m. DKK from the Recovery and Resilience Facility. The
additional funds will help ensure that the full potential for the scheme is reached
in the period 2022-2024 and lead to a reduction of another 0.03 Mt CO
2
e in 2025
and in 2030. Scaling up an already existing scheme with additional funds is re-
garded as the most cost-efficient use of the Recovery and Resilience Facility fund-
ing.
Furthermore, the scaling up of this support scheme accommodates the recom-
mendations of the National Energy and Climate Plan and the Country Specific
Recommendations as focusing investment on clean and efficient production and
use of energy. In addition, the subsidy scheme for energy efficiency in industry is a
substantial part of the Danish contribution towards fulfilling the national energy
savings requirements of the Energy Efficiency Directive.
The initiative will enhance projects and programmes that ensure long-term value
production while creating labour-intensive jobs, support local supply chains, while
generating demand for highly energy- and resource-efficient equipment. In addi-
tion, it will result in lower energy bills, while boosting the construction sector and
supporting SMEs and local jobs.
In their priority recommendations to the Danish government, the Climate Part-
nership of production companies, construction and the financial sector have rec-
ommended that further measures should be taken to increase energy efficiency,
which is why Denmark is proposing this initiative. Moreover, it will comply with
the National Energy and Climate Plan and the Country Specific Recommenda-
tions, providing clear policies and savings through this measure to meet the po-
tential for energy efficiency in the sector.
Implementation:
The Energy Agency, under the Ministry of Climate, Energy
and Utilities, is managing the subsidy scheme for energy efficiency. The scheme
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targets energy savings in all private businesses and the funds are allocated to the
applicants after a competitive process based on a criterion of highest energy sav-
ings pr. received subsidy. With the Climate Agreement of 2020 projects with a
conversion of fossil fuels to electricity receive a competitive advantage in the allo-
cation process. The maximum level of subsidy is set at 0.07 DKK per saved kWh
over the additional lifetime of the individual savings achieved. In order to receive
the subsidy the applicant must carry out projects that result in energy savings in
the final energy consumption of the applicant company. There are five annual ap-
plication rounds. Businesses will have to apply for support under the scheme prior
to project implementation. Payments are granted subsequent to project implemen-
tation and depends on documented effects.
The Danish subsidy scheme for businesses fulfils the general state aid require-
ments as laid out in chapter III in the General Block Exemption Regulation and
more specifically is reported under Article 38 of the Regulation. The Scheme is
therefore considered compatible with the internal market in accordance with Arti-
cle 107(3) of the Treaty on the Functioning of the European Union and therefore
to be exempted from the notification requirement of Article 108(3) of the Treaty
on the Functioning of the European Union.
Target group:
Private-owned production, trade and service companies, including
agriculture, horticulture and fishery. Subsidies are distributed to projects that re-
duce the overall final energy consumption in Denmark.
Timeline:
The increased support schemes and additional means
will be allocated to eligible applicants from primo 2022.
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Do No Significant Harm:
Table 2.3.2
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected to lead to
significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activities are not foreseen to result in significant greenhouse
gas emissions.
The subsidy scheme for energy efficiency in industry is expected
to reduce greenhouse gas emissions by supporting the conver-
sion from fossil fuels to electricity and projects that reduce the
need for fossil fuels. It therefore supports this objective substan-
tially.
The subsidy scheme does not include subsidy to any invest-
ments that are related to district heating networks.
Climate change adaptation: Is the measure expected to lead to
an increased adverse impact of the current climate and the ex-
pected future climate, on the measure itself or on people, na-
ture or assets?
The sustainable use and protection of water and marine re-
sources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies
of water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
X This initiative is not foreseen to lead to increased adverse im-
pacts requiring additional climate change adaptation.
X This initiative is not foreseen to affect the ecological state of wa-
terbodies and marine resources.
The transition to a circular economy, including waste preven-
tion and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or
disposal of waste, with the exception of the incineration of non-
recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of
any natural resource at any stage of its life cycle which are not
minimised by adequate measures; or
(iii) cause significant and long-term harm to the environment in
respect to the circular economy?
Pollution prevention and control: Is the measure expected to
lead to a significant increase in the emissions of pollutants into
air, water or land?
X This initiative is not expected to result in inefficiencies in use of
material or natural resources.
X Significant emissions of pollutants to the environment are not
foreseen by the initiative or by the activities supported by the sub-
sidy schemes.
The subsidy scheme for energy efficiency in industry supports
the shift away from fossil fuels and will thus lead to lower air pol-
lution.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience
of ecosystems; or
(ii) detrimental to the conservation status of habitats and spe-
cies, including those of Union interest?
X Adverse effects on biodiversity and ecosystems are not ex-
pected as a result of any of the initiatives including the activities
supported by the subsidy scheme.
2.3.5 Energy savings in public buildings
Addressing challenges:
Many public buildings are not energy efficient and some
still rely on fossil fuels for heating purposes. Around two-thirds of municipal and
regional buildings have a poor energy performance. In order to strengthen energy
renovations in public sector buildings, the Danish government is investing in en-
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ergy savings in municipal and regional buildings by renovation of schools, retire-
ment homes, nurseries and hospitals etc. and phasing out of oil burners and gas
furnaces.
Thus, this is an initiative in line with the European Green Deal focusing on boost-
ing the efficient use of energy and other resources while also decarbonizing the
energy sector and ensuring energy efficient buildings. Moreover, the initiative sup-
ports the
Renovation Wave
by extending targeted energy efficiency measures in pub-
lic buildings on the municipal and regional level, which are not covered by the ob-
ligations in the Energy Efficiency Directive. This is done by incentivizing energy
renovations of public sector buildings while boosting the construction sector and
supporting SMEs and local jobs.
Objectives:
The measure supports a subsidy scheme of 315 m. DKK, which is
targeted energy savings in public buildings. The subsidy will focus on energy reno-
vations in regional and municipal buildings with the lowest energy performance
certificate standards (D-G) as well as buildings that are heated by oil burners and
gas furnaces. It is estimated that the effort can reduce greenhouse gas emissions
by 0.004 Mt CO
2
e in 2025 and 2030. The initiative will also help achieving addi-
tional energy savings by 2030 as recommended by the Commission based on the
review of the Danish National Energy and Climate Plan.
Strengthening the opportunities for energy renovations will create labour-inten-
sive building renovation jobs and support local supply chains while generating de-
mand for highly energy and resource-efficient equipment. Additionally, it will
bring long-term value to properties.
This measure is new and not an existing part of the current Danish support
schemes, and will thus depend on Recovery and Resilience Facility funding. It is
regarded as an efficient tool in order to accommodate the recommendations of
the National Energy and Climate Plan and the Country Specific Recommenda-
tions as focusing investment in particular on clean and efficient production and
use of energy.
It has been taken into consideration that buildings with a poor energy perfor-
mance and/or oil burners or natural gas furnaces are the buildings that will benefit
the most from an energy renovation and contribute the most to energy savings
and CO
2
reductions. Part of the funds will be targeted digital solutions and intelli-
gent control of energy consumption in buildings with energy management systems
based on data.
In their priority recommendations to the Danish government, the Climate Part-
nerships for production companies, construction and the financial sector have
recommended that further measures aimed at energy efficiency should be taken.
The initiative will thus accommodate the partnerships’ recommendation.
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Moreover, it will comply with the National Energy and Climate Plan and the
Country Specific Recommendations providing clear policies and savings through
this measure to meet the potential for increased energy efficiency in the sector.
In addition, a subsidy scheme for energy renovations in public buildings could
also contribute to the fulfilment of the Danish contribution to the energy effi-
ciency obligation in the Energy Efficiency Directive.
Implementation:
The Danish Energy Agency will be managing the subsidy
scheme for energy savings in collaboration with the relevant ministries. The sub-
sidy scheme will be available for all municipalities and regions. The design of the
subsidy scheme for energy savings in existing public buildings at local and regional
level is still under development, including features like the minimum and maxi-
mum grant size for each project. The minimum and maximum grant size will be
set in order to ensure that the renovations will at least be medium-depth level ren-
ovations. The objective for the subsidy scheme is to target, but not limited to,
public infrastructure such as hospitals, schools etc. Among other considerations, it
will be designed to comply with EU state-aid rules etc. As the scheme is limited to
municipally and regionally owned and used buildings, it is considered possible to
implement the scheme so that the subsidy not will constitute State aid within the
meaning of Article 107 (1) Treaty on the Functioning of the European Union.
The covered building stock will be delimited so that the subsidy can only be
granted to energy improvement projects in those of the municipalities and re-
gions' buildings that house activities of a non-economic nature (one of the cumu-
lative criteria in the state aid assessment). It is found possible under state aid law
to determine with sufficient clarity which of the municipalities and regions' activi-
ties that can be considered as economic and non-economic, respectively. As the
vast majority of the municipalities and regions activities are of a non-economic
nature, this is also considered a sustainable solution that should not significantly
reduce the range of the scheme. For the administration of the scheme there will
be developed a non-exhaustive list of activities that will not involve economic ac-
tivity and for which subsidies can be granted.
Target group:
Buildings owned and used by municipalities and regions.
Timeline:
It is expected that a first round of subsidies can be distributed in 2021
and two further rounds will follow in 2022 for the remaining subsidies.
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Do No Significant Harm:
Table 2.3.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure ex-
pected to lead to significant greenhouse gas emis-
sions?
Yes
No Significant negative impact?
X The activities are not foreseen to result in significant greenhouse gas emis-
sions.
The subsidy scheme for energy renovations in public buildings are ex-
pected to reduce greenhouse gas emissions and therefore supports this
objective substantially.
The replacement of oil burners and gas furnaces with electric heat pumps
and district heating lead to a reduction in greenhouse gas emissions.
Measures that taget energy efficiency, e.g. insulation of the climate screen
(e.g. new windows), will lower the amount of energy for heating purposes
that the building uses, which especially in the short term will reduce
greenhouse gas emissions.
Climate change adaptation: Is the measure ex-
pected to lead to an increased adverse impact of
the current climate and the expected future climate,
on the measure itself or on people, nature or as-
sets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential
of bodies of water, including surface water and
groundwater; or
(ii) to the good environmental status of marine wa-
ters?
X This initiative is not foreseen to lead to increased adverse impacts requiring
additional climate change adaptation.
X This initiative is not foreseen to affect the ecological state of waterbodies
and marine resources.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, in-
cineration or disposal of waste, with the exception of
the incineration of non-recyclable hazardous waste;
or
(ii) lead to significant inefficiencies in the direct or in-
direct use of any natural resource at any stage of its
life cycle which are not minimised by adequate
measures; or
(iii) cause significant and long-term harm to the envi-
ronment in respect to the circular economy?
Pollution prevention and control: Is the measure ex-
pected to lead to a significant increase in the emis-
sions of pollutants into air, water or land?
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats
and species, including those of Union interest?
X This initiative is not expected to result in inefficiencies in use of material or
natural resources.
X Significant emissions of pollutants to the environment are not foreseen by
any of the initiatives or by the activities supported by the subsidy schemes.
X Adverse effects on biodiversity and ecosystems are not expected due to
any of the initiatives including the activities supported by the subsidy
schemes.
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2.3.6 CCS Storage Potential
Addressing challenges:
Major CCS activities are essential for realising EU’s am-
bition to reach carbon neutrality by 2050.
A prerequisite to realise the mitigation potential of CCS is that the full value chain
capture-transport-storage is established and early use of CCS as a mitigation tech-
nology in Denmark and Europe is dependent on the implementation of capture
technology and the availability of operational storage sites.
This initiative targets development and demonstration of the technical and eco-
nomic feasibility of CO
2
storage in depleted oil and gas fields in the Danish part
of the North Sea.
The initiative is in line with the European Green Deal regarding mobilising re-
search and fostering innovation. New technologies, sustainable solutions, and dis-
ruptive innovation are critical to achieve the objectives of the European Green
Deal, and conventional approaches will not be sufficient.
Objectives:
200 m. DKK has been allocated for a subsidy scheme to support the
development and demonstration of CO
2
storage sites in depleted oil and gas fields
in the Danish part of the North Sea.
Description of initiative/subsidy scheme
While a growing number of countries in Europe realise the need for CCS in their
efforts to reduce greenhouse gas emissions, limited storage capacity may impede
the implementation of CCS for at least the coming decades.
Ongoing investigations and analyses in depleted gas fields in the Danish part of
the North Sea show promising results for storage of CO
2
and confirm that de-
pleted fields could be well suited for storage. However, further development, test-
ing, and demonstration of CO
2
storage need to be carried out in order to deter-
mine the technical and financial feasibility before any depleted gas and oil fields
will become operational.
The initiative will support the development and demonstration of CO
2
storage fa-
cilities in depleted oil and gas fields in the North Sea and its associated infrastruc-
ture development needs.
This is an important first step to secure sufficient long-term capacity for safe stor-
age of CO
2
from European sources and for the creation of a European infrastruc-
ture for CO
2
storage.
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Application and allocation
The initiative covers support to the development of one or more demonstration
projects for CO
2
storage facilities in suitable depleted oil and gas fields in the
Danish part of the North Sea.
The support will not cover investments needed to implement operational CO
2
storage facilities.
The measure is not an existing part of the CCS support scheme from the Action
Plan for Energy and Industry, and will depend on Recovery and Resilience Facility
funding. However, the use of capture and storage or usage is an essential element
of the Climate Action Plan for Energy and Industry and several Climate Partner-
ships entered by the Danish Government and relevant sectors recommend CCS
and carbon capture and usage (CCU) as important tools to mitigate emissions.
Thus, it is regarded as an efficient tool in order to accommodate the recommen-
dations of the National Energy and Climate Plan and the CSR as focusing invest-
ment in particular on clean and efficient production and use of energy, etc.
Implementation:
The Ministry of Climate, Energy and Utilities in collaboration
with relevant ministries will manage the scheme.
The support scheme for development and demonstration of CO
2
storage in de-
pleted oil and gas fields is group-exempted from EU state aid regulations under
article 25 regarding research, education and demonstrations.
Target group:
Private companies.
Timeline:
It is expected that subsidies can be allocated in 2021, and 2022 through
yearly allocations of 100 m. DKK each year.
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Do no significant harm:
Table 2.3.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activities are not foreseen to result in significant greenhouse gas
emissions.
The CCS-initiative will contribute to securing storage capacity for cap-
tured carbon and will not increase greenhouse gas emissions.
X This initiative is not foreseen to lead to increased adverse impacts requir-
ing additional climate change adaptation.
Climate change adaptation: Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and ma-
rine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential
of bodies of water, including surface water and
groundwater; or
(ii) to the good environmental status of marine waters?
X This initiative is not foreseen to affect the ecological state of waterbodies
and marine resources. The preparation and demonstration of CO
2
-stor-
age will happen in depleted gas and oil fields for which extensive EIAs
have been performed. Foreseen activities have a similar character to
those activities carried out today in these areas and will use existing
structures and new major construction is not foreseen.
The transition to a circular economy, including waste
prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, in-
cineration or disposal of waste, with the exception of
the incineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indi-
rect use of any natural resource at any stage of its life
cycle which are not minimised by adequate measures;
or
(iii) cause significant and long-term harm to the envi-
ronment in respect to the circular economy?
Pollution prevention and control: Is the measure ex-
pected to lead to a significant increase in the emis-
sions of pollutants into air, water or land?
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats
and species, including those of Union interest?
X This initiative is not expected to result in inefficiencies in use of material
or natural resources. CCS activities will use existing structures and po-
tentially open possibilities for the reuse of oil and gas platforms.
X Significant emissions of pollutants to the environment are not foreseen
by any of the initiatives or by the activities supported by the subsidy
schemes.
X Adverse effects on biodiversity and ecosystems are not expected due to
any of the initiatives including the activities supported by the subsidy
schemes.
2.3.7 Energy Efficiency in Households
Addressing challenges:
Many residential buildings are not energy-efficient.
The initiative follows the objectives of the European Green Deal which also aims
to expand power production from renewable energy complemented by the rapid
phasing out of coal and by the deployment of an increasing amount of renewables
in the energy system. Moreover, it engages in the
Renovation Wave
by increasing the
renovation rate of private buildings.
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Objectives:
To ensure that residential buildings are renovated and energy effi-
cient and to speed up transition from oil burners and gas furnaces to heat pumps.
The measure supports a subsidy scheme called “the Building Pool”. The scheme
already exists in Denmark and contains 1,623 m. DKK from national funds from
2021-2025 (excluding derived tax loss).
With the RRF the Building Pool is increased by 565 m. DKK to further incentiv-
ize energy renovation and the replacement of heating by oil burners and gas fur-
naces with heat pumps in residential buildings (including derived tax loss). The in-
itiative is expected to result in a reduction of CO
2
e in 2025 by further 0.05 Mt
CO2. The complementary RRF funding will further ensure the increased support.
Scaling up an already existing scheme with additional funds is regarded the most
cost-efficient use of RRF funding.
The initiative will mitigate pollution, create labour-intensive renovation jobs, sup-
port local supply chains, while generating demand for highly energy and resource-
efficient equipment, and bring long-term value to properties. This is done by po-
tentially lowering energy bills while boosting the construction sector and support
SMEs and local jobs.
The Building pool targets energy savings in private year-round housing. Among
others, the subsidy pool supports insulation of the climate screen and optimiza-
tion of the operation of the building. 60 per cent of the pool is targeted at pro-
jects, which include conversion to heat pumps under the condition that the build-
ing is located outside an area, where it has been decided to establish district heat-
ing. The subsidy rates of the pool are set according to estimated marked prices
and the pool's subsidy ceiling amounts to a maximum of 27.5 per cent of the esti-
mated market prices,
Implementation:
The support schemes will be managed by the Ministry of Cli-
mate, Energy and Utilities in coordination with other relevant ministries. The sub-
sidy scheme for energy savings in existing buildings is implemented in compliance
with the conditions set in the Commission Regulation regarding de minimis aid
(1407/2013).
Target group:
Year-round homeowners. This includes amongst others private
building owners, owner’s associations, cooperative housing associations, public
housing associations, colleges and landlords.
Timeline:
The additional means will be allocated to eligible applicants from
primo 2021 (April).
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Do No Significant Harm:
Table 2.3.5
Substantive DNSH assessment
DNSH objective
Climate change mitigation: Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The measure is not foreseen to result in significant greenhouse gas
emissions.
The replacement of oil burners and gas furnaces with electric heat
pumps and district heating lead to a reduction in greenhouse gas emis-
sions. Measures that alone targets energy efficiency, e.g. insulation of
the climate screen (e.g. new windows), will lower the amount of energy
for heating purposes that the building uses, which especially in the short
term will reduce greenhouse gas emissions.
By reducing greenhouse gas emissions the measure therefore supports
this objective substantially
Climate change adaptation: Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and ma-
rine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential
of bodies of water, including surface water and
groundwater; or
(ii) to the good environmental status of marine waters?
X This initiative is not foreseen to lead to increased adverse impacts requir-
ing additional climate change adaptation.
X This initiative is not foreseen to affect the ecological state of waterbodies
and marine resources.
The transition to a circular economy, including waste
prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, in-
cineration or disposal of waste, with the exception of
the incineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indi-
rect use of any natural resource at any stage of its life
cycle which are not minimised by adequate measures;
or
(iii) cause significant and long-term harm to the envi-
ronment in respect to the circular economy?
Pollution prevention and control: Is the measure ex-
pected to lead to a significant increase in the emis-
sions of pollutants into air, water or land?
X This initiative is not expected to result in inefficiencies in use of material
or natural resources.
X Significant emissions of pollutants to the environment are not foreseen
by any of the initiatives or by the activities supported by the subsidy
schemes.
The measure supports the shift away from fossil fuels, but also from
wood pellet stoves and other biomass boilers for individual heating to
electric heat pumps and will thus lead to lower air pollution.
X Adverse effects on biodiversity and ecosystems are not expected due to
any of the initiatives including the activities supported by the subsidy
schemes.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats
and species, including those of Union interest?
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Green and digital dimensions of the component
Green transition
The initiatives are a part of the Danish government’s climate action plan that aims
for a 70 per cent reduction in CO
2
e emissions (compared to 1990).
The energy efficiency initiatives contribute with a general reduction in greenhouse
gas emissions by approximately 0.1 Mt CO
2
eq. in 2025 and in 2030.
The CCS storage site development and demonstration initiative will facilitate early
implementation of CCS as a climate mitigation technology, which in a Danish
context has a technical CO
2
reduction potential of 4-9 m. tons CO
2
by 2030.
The initiatives supplement the already existing efforts focusing on a cost-effective
and market-oriented energy savings effort, a national CCS strategy and a national
CCS support scheme under preparation. Together with targeted efforts from busi-
ness, public institutions and private consumers, they have resulted in major sav-
ings in this area.
Energy efficiency efforts will continue to play a role in the overall energy system
although the reductions of greenhouse gas emissions due to energy efficiency ef-
forts will decrease as the share of renewable energy in the energy system is in-
creased. Energy efficiency contributes, among other things, to limiting the system
load associated with the increasing amount of renewable energy and changeable
energy production from, for example, wind turbines. In this way, energy efficiency
can reduce the need for investment in infrastructure and reduce the need for more
space to new wind turbines and solar cells.
Energy efficiency measures also reduces consumption of bio mass for energy pur-
poses, contributes to improved security of supply and supports a more flexible en-
ergy system where demand and supply are more easily matched. By lowering en-
ergy consumption, Denmark:
Reduces the impact on the climate and the environment
Reduces the costs of the green transition
Becomes less vulnerable to fluctuations in energy prices
Increase its security of energy supply
Reduces consumption of fossil fuels and bio mass for heating purposes
The development and demonstration of CO
2
storage facilities in depleted oil and
gas fields will contribute to the enabling of CCS as a cost effective CO
2
mitigation
tool. CCS is foreseen to contribute significantly to the achievement of Danish
greenhouse gas reduction targets of 70 per cent in 2030 and net-zero emissions by
2050.
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Further-more operating storage sites for CO
2
in depleted Danish oil and gas fields
could play an important role in storage of CO
2
from other EU member states.
Digital transition
The initiatives supports the digital transition. Better management of energy in in-
dustry and buildings through digital control systems can support reductions of
greenhouse gas emissions, while enhancing job creation.
Do no significant harm
The initiatives are in line with the do no significant harm principle. This assess-
ment accounts for the proposed initiatives in the energy efficiency component.
The proposed initiatives provides energy savings, will reduce CO
2
emissions, and
are not expected to lead to pollution, harm biodiversity etc.
Financing and costs
In many of the pools, the amount of the subsidy schemes are based on an analysis
of the energy savings potential. The amount applied for to the subsidy schemes to
phase out oil burners and gas furnaces is based on an assessment on a combina-
tion of the number of expected applications and the costs of the subsidy.
The assessment of the subsidy size is based on current market prices for the rele-
vant technologies and an assessment of the subsidy size needed to incentivize
possible applicants to e.g. convert from a gas furnace to a heat pump. The assess-
ment of subsidy sizes and criteria for the proposed initiatives for instance per heat
pump, retrofits of buildings etc. will be based on the knowledge and experience of
the Building Pool (“Bygningspuljen”) and the subsidy scheme for energy effi-
ciency in industry (“Erhvervspuljen”) which were both launched in October 2020.
Furthermore, the design of the subsidy scheme builds on the former agreements
on the energy companies’ energy savings effort between the minister for climate,
energy and utilities and the network of distribution companies within the fields of
electricity, natural gas, district heating and oil.
In deciding the size of the subsidy in the district heating pool it has been an im-
portant factor to approximately match the subsidy size for heating pumps so that
the customers will chose the most appropriate source of heating.
In regards to the subsidy scheme for energy savings in public buildings (munici-
palities and regions) the size of the subsidy scheme will fulfil a part of the poten-
tial for energy savings in public buildings. The projects will be prioritised accord-
ing to a principle of the most possible energy savings and a list of eligible energy
improvement measures is drawn up. The subsidy can cover up to 30 per cent of
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the eligible costs of a project in order to give the best incentives to redeem the
most possible energy savings.
The size of the subsidy scheme for development and demonstration of CO
2
stor-
age is based on the expected needs for support for the development and demon-
stration of at least one storage site.
There are no previous experiences of CO
2
storage in depleted oil- and gas field,
but current investigations supported by the Danish Technology Development and
Demonstrations Program indicate that an investigated reservoir is suitable. How-
ever, further pre final-investment-decision (FID) studies are needed. Such studies
include tests of possible reuse of infrastructure for on-site storage and proof of
concept for transport and transfer to storage site by ship. Based on results of the
ongoing study, pre-FID costs are estimated at 600 m. DKK. and it anticipated
that a grant scheme of 200 m. DKK will provide sufficient risk coverage for the
development of at least one operational of-shore storage site. Call, evaluation and
disbursement of subsidies shall be part of the Danish Technology Development
and Demonstration Program.
5-7 per cent of the subsidies has been reserved for administration by the Danish
Ministry of Climate, Energy and Utilities covering IT-systems, information and
guidance on the subsidy schemes for relevant applicants and target groups, evalua-
tions etc.
Table 2.3.6
Initiatives in Component 3: Energy efficiency, electric chargers, CCS etc.
M. DKK, 2021-prices
I. Replacing Oil Burners and Gas Furnaces
II. Energy Efficiency in Industry
III. Energy Renovations in Public Buildings
IV. CCS Storage Potential
V. Energy Efficiency in Households
Total
Investment/
reform
Investment
Investment
Investment
Investment
Investment
Total
645
315
315
200
565
2,040
2021
225
-
150
100
300
775
2022
170
100
150
100
80
600
2023
125
100
5
-
45
275
2024
65
105
5
-
115
290
2025
60
10
5
-
25
100
Funding from
other sources
981
2,400
-
-
1,623
5,004
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Component 2.4
Green Tax Reform
With the first phase of the Green Tax Reform, energy tax rates on
fossil fuel use are increased for industries to ensure a greenhouse
gas reduction by 0.5 Mt in 2025. The second phase is to introduce
a uniform carbon tax.
The Recovery and Resilience Facility funding ensures financing
for the first phase and a just transition for affected companies.
Tax deductions will provide a window of opportunity for increasing
investments in green and digital production capabilities, ensuring
that companies have the incentive and the opportunity to prepare
for increased and harmonised carbon taxation.
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Description of the component
Box 2.4.1
Green Tax Reform
Policy area/domain:
Tax reform, uniform tax on greenhouse gas emission, energy taxes, green and digital transition in production, climate
policy, investment in new technologies and job growth, avoid carbon leakage.
Objective:
The objective of this component is threefold:
1. Uniform tax on greenhouse gasses:
One of the most cost-efficient ways of regulating greenhouse gas
emissions is by imposing a uniform tax on emissions of CO
2
e. However, imposing a uniform tax on greenhouse
gas emissions is not technically possible in the short run. Thus, reforming the tax system to ensure the right
incentives to reduce greenhouse emissions will run in multiple steps. The green tax reform is the first step in the
making of a uniform tax on greenhouse gases, as it looks into leveling the differences in pollution taxes from
sector to sector.
2. Frontloading investments in the green and digital transition:
This component will promote the green and
digital transition by introducing stronger incentives for companies to reduce their emissions of greenhouse
gasses. Thereby, the Green Tax Reform is the first step towards a more even regulation of greenhouse gas
emissions across sectors. Furthermore, the reform aims at ensuring a just transition for the most affected
companies by creating strong incentives for frontloading investments in new and greener technologies. One of
the challenges of green and digital investments is that the up-front costs are high and the return on investment
comes in the future. The Green Tax Reform will address this issue by creating an investment window for
companies. This will provide a basis for green and digital growth in the future while avoiding carbon leakage.
3. Job creation:
The tax reform aims at immediate job creation, creating jobs related to the green transition as
companies are expected to invest in more green and digital production capabilities preparing them for the
increased carbon taxation. The first phase of the tax reform is estimated to create 2,400 jobs in 2021, 4,700 jobs
in 2022 and 1,000 in 2023, thereby providing a large contribution to driving unemployment rates down fast.
Examples of reforms and/or investments:
Reforms:
I. Emission taxes on industries: -410 m. DKK (2023-2025)
II. Expert group to prepare proposals for a CO
2
e-tax: 6 m. DKK
Investments:
III. Investment window: 3,029 m. DKK
IV. Accelerated depreciation: 1,280 m. DKK
Estimated cost:
Approximately 4 bn. DKK over the period 2021-2025, of which 96 per cent is covered by the Recovery and Resilience
Facility, as 6.5 per cent of the costs for the investment window initiative is not covered by the Recovery and Resilience
Facility (to ensure compliance with the DNSH-principle). The Green Tax Reform will generate fiscal losses in all years
until 2029 (due to the tail expenditures in the investment window and the depreciation allowance). However, Denmark
is only applying for the Recovery and Resilience Facility to cover the fiscal losses up until 2025. From 2029 the in-
creased taxes on emissions will be larger than the tax expenditures, but the political parties in Parliament have agreed
that any tax surplus will be redirected back to the firms most affected by the increased taxation on fossil fuels.
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Main challenges and objectives
2.4.1 Main challenges
The emissions from industry and services account for about 20 per cent of the to-
tal emissions in Denmark. Therefore, ensuring a green transition and reduction in
greenhouse gas emissions in industry is essential. One efficient tool to achieve that
is a tax reform making it more expensive to emit greenhouse gasses while sup-
porting businesses in making investments in new green technology. The main
challenges in this transition are highlighted below:
Reducing greenhouse gas emissions:
The Danish government has an ambitious target
of reducing greenhouse gas emissions by 70 per cent by 2030. One way of fur-
ther reducing greenhouse gas emissions is by creating incentives for compa-
nies and the industry sector through changes in the tax system. However, im-
posing taxes on companies potentially harms the competitiveness of the com-
panies and poses a risk of carbon leakage. Carbon leakage refers to a transfer
of production to other countries with fewer emission constraints. Thus, a tax
reform has to balance making a strong financial incentive to reduce emissions
and mitigating loss of competitiveness, carbon leakage and other interests.
Maintaining high competitiveness for Danish companies:
The current taxation of emis-
sions is rather unevenly distributed as emissions in some sectors/types of pro-
duction processes are taxed significantly harder than emissions in others.
However, a uniform CO
2
e-tax in all sectors is not technically feasible in the
short run. A uniform CO
2
e-tax will affect the competitiveness of especially the
CO
2
e- and energy-intensive companies. Thus, future steps in reforming the
tax system will need to provide measures that support the transition, while
maintaining the competitiveness of the Danish companies. In the first step,
this is achieved by phasing in the increased energy taxation while providing
large investment support in a transition period. A large share of this invest-
ment support is expected to be covered by the Recovery and Resilience Facil-
ity. The Danish government has committed to refunding all tax revenue from
the green tax reform to businesses.
Incentivizing businesses to increase green investments:
The green transition is a large
expenditure for businesses and investing in new green technologies has high
up-front costs. Currently, Danish businesses invest in the green transition, but
the large costs leads to a potential loss of competitiveness in the short run.
Therefore, this component aims at speeding up the green transition in prepa-
ration for a higher CO
2
e-tax by increasing green investments, resulting in an
immediately greener production with a lasting effect on the climate. Moreover,
green investments creates jobs in the short run and ensure a green recovery of
the economy.
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2.4.2 Objectives
The component is in line with the Country Specific Recommendations for Den-
mark, which recommend Denmark to invest in the green transition. The tax re-
form specifically aims at lowering greenhouse gas emissions from Danish busi-
nesses. This will be achieved through a variety of changes in the incentive struc-
ture for Danish businesses focusing on incentivizing businesses to emit fewer
greenhouse gasses as well as increasing investments in new green technologies.
Funding from the Recovery and Resilience Facility ensures frontloaded invest-
ments in green and digital production while maintaining companies’ competive-
ness.
Uniform tax on greenhouse gases will reduce emissions:
The current taxes on green-
house gasses differ widely across sectors and usage, and the most energy-in-
tensive companies are offered different rebates related to fossil energy con-
sumption/emissions of carbon dioxide. A sufficiently high and uniform tax on
greenhouse gas emissions will ensure that the climate target for national emis-
sions is met at the lowest costs. However, there will be both technical difficul-
ties and large consequences for business, if the phase-in is not gradual and
well thought out. Therefore, it will require multiple steps to phase in a new tax
system with a uniform tax on greenhouse gas emissions.
Being socially just and balanced:
A green tax reform will also have to consider so-
cial equality. As the government imposes a tax on companies that produce
goods or services, customers could potentially end up bearing the cost. The
first phase of the green tax reform is expected to have no negative distribu-
tional impacts and the Danish government is committed to ensure that this
will also be the case for the following phases.
Investment window will ease companies’ transition to clean energy and boost growth poten-
tials:
The tax reform implies temporarily increased tax deduction for compa-
nies investing in capacity costs, e.g. technology and software that can help in-
crease business operations, and at the same time reduce greenhouse gas emis-
sions. The investment window will not include machinery running on fossil
fuels to ensure a green transition of industry and compliance with the “do no
significant harm” principle. The investment window will boost the companies’
growth potential and job creation, while encouraging companies to invest in
new hardware and technology that can reduce emissions in the longer run.
The investment window will moreover help ease leakage problems.
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Summary description of the reforms and investments of the
component
The tax system is one of the most efficient instruments in creating incentives for
citizens and businesses to lower greenhouse gas emissions. However, fundamen-
tally reforming the tax system is not done overnight. That is why a broad parlia-
mentary coalition, consisting of three fourths of the Danish parliament, has made
a politically binding agreement to enact a Green Tax Reform in two phases. Phase
1 will take the initial steps of redirecting current energy taxes towards CO
2
-emis-
sions. Phase 2 will fundamentally rewrite the tax code by introducing a broad tax
on all greenhouse gas emissions including the non-energy related emissions in the
agricultural sector. The ambition is that the second phase will be the determining
factor in delivering a 70 per cent reduction in Danish emissions in 2030 compared
to 1990.
With the first phase of the Green Tax Reform, which will assist Denmark in re-
covering from the COVID-19 recession, strong incentives are created for compa-
nies to immediate invest in green and digital technology. This will lead to an in-
crease in demand and a rise in employment as well as a reduction of greenhouse
gas emissions and further the digitalization of the Danish society. The first phase
of the Green Tax Reform will lower greenhouse gas emissions by 0.5 Mt by 2030.
This is done by increasing the taxes on industry's process fossil energy. The inten-
tion is that this initial increase in fossil energy taxation will be directly targeted at
the CO
2
-content of the different fossil fuels before the Green Tax Reform moves
to the second phase. To ease companies’ transition to clean energy, boost growth
potentials, and prepare for a higher carbon tax, the reform also implies an in-
creased tax deduction for companies investing in capacity costs, e.g. technology.
This investment window will not include machinery running on fossil fuels to en-
sure a green transition of industry and compliance with the “Do No Significant
Harm” principle. The investment window will boost the companies’ growth po-
tential and job creation, while encouraging companies to invest in new hardware
and technology that can reduce emissions in the longer run.
The first phase of the Green Tax Reform is primarily financed by Recovery and
Resilience Facility funds making a fast, just, and green transition possible while
avoiding carbon leakage.
To prepare for the second phase of the Green Tax Reform, an expert group
1
has
been established. This expert group will draw the road map for the next phase of
CO
2
e taxation in a manner consistent with protecting Danish competitiveness, so-
cial balance, and minimizing leakage. The ambition is to make a comprehensive
See
https://www.skm.dk/media/8328/kommissorium-for-groen-skattereform.pdf
for the terms of refer-
ence and composition of the expert group.
1
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tax reform with a higher and harmonised CO
2
e-tax on all emissions. This will re-
quire significant development work, especially with regard to emissions that are
not currently subject to tax.
The funding from the Recovery and Resilience Facility primarily covers the costs
of Phase 1 of the Green Tax Reform, but also paves the way for Phase 2 by cov-
ering the expenses for the expert group that will draw up a road map for higher
and harmonised taxation of greenhouse gas emissions. The Recovery and Resili-
ence Facility has therefore made it possible to implement a green tax reform that
will lead to massive cost effective reductions of greenhouse gas emissions, but in a
socially just and balanced way, where Danish companies are able to maintain their
high competiveness and avoid carbon leakage. Funding from the Recovery and
Resilience Facility is thus instrumental in ensuring a green transition of the Danish
society in line with the Paris Agreement.
Reforms
2.4.3 Emission taxes on industries
Addressing challenges:
Denmark has an ambitious target of reducing green-
house gas emissions by 70 per cent in 2030 compared to 1990. Increasing the
taxes on emission will provide a financial incentive to reduce emissions. The in-
dustry energy taxes on fossils are relatively low, thus increasing these can provide
cost-efficient reductions of greenhouse gases. It is one of the recommendations in
the EU Green Deal that well-designed tax reforms can help boost economic
growth and resilience to climate shocks and providing the right incentives for sus-
tainable behaviour by producers.
Objectives:
Uniform tax rates on all CO
2
e emissions will be the most cost-effec-
tive way to reduce CO
2
e emissions. In the current tax system, the level of CO
2
taxation is uneven. The charges for emissions in transport are very high. There are
also high taxes on emissions from households and industry's heating, while the
taxes on emissions from production are relatively low. In addition, non-energy-re-
lated CO
2
emissions from, e.g. agriculture are not covered by taxes.
The Danish government and a broad coalition of parties have agreed on the
Green Tax Reform, which in the short term consists of an increase in taxes on in-
dustry' process fossil energy, which has comparatively low taxes currently. With
the first stage of the tax reform, the Danish government has increased the process
energy tax by DKK 6 / GJ/ app. 100 DKK/ton CO
2
. The model raises the fossil
energy taxation for all industries equally. Consequently, the existing differentia-
tions in the energy tax rates for companies will be maintained in 2025, but at a
higher level for all industries. The model is estimated to entail a CO
2
reduction of
0.5 Mt in 2025.
Moreover, the initiative complies with the recommendations for Denmark in the
National Energy and Climate Plan and the Country Specific Recommendations to
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promote a green tax reform while ensuring a just transition for the most affected
companies.
The second phase of the Green Tax Reform will entail a comprehensive tax re-
form with a high and harmonised CO
2
e tax on all emissions. This will require sig-
nificant development work, especially in regard to emissions that are not currently
subject to tax. This includes tax-exempt emissions such as oil extraction and refin-
ing, as well as agriculture's non-energy-related emissions. In addition, a high and
harmonised tax will have a number of consequences, including large shifts in the
business structure, carbon leakage in all sectors as well as distributional and fiscal
effects. These elements will need to be considered carefully, before it is possible
to implement a uniform CO
2
e tax on all emissions. Therefore, the full and com-
prehensive Green Tax Reform will be implemented in several stages and spread
over a number of years.
Implementation:
The tax increases are phased in gradually from 2023 to 2025.
The increase for mineralogical processes and agriculture is expected by 2025.
State aid:
The gradual increase of the taxes is to be implemented from 2023, and
the Danish tax authorities will ensure that the State aid rules and the Energy Taxa-
tion Directive are complied with. If relevant, it will be done on the basis of a dia-
logue with the Commission.
Target Group:
The first phase of the tax reform cover fossil energy emissions in
business used for processing. The next phase is targeted to cover all Danish com-
panies, uses and industries.
Timeline:
A politically binding agreement has been concluded on 8 December
2020. The tax increases will be phased in gradually from 2023.
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Do No Significant Harm:
Table 2.4.1
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
X
No – the first phase of the Green Tax Reform, of which
the increased emission tax on industry is a part, has no
implication for the waste handling or the circular econ-
omy.
Yes
No Significant negative impact?
X
X
On the contrary – Increasing the emission tax on indus-
try will lower carbon emissions.
On the contrary – Increasing the emission tax on indus-
try will lower carbon emissions.
X
No – increasing the emission tax on industry has no
negative implication for the use and protection of water
services.
X
No – pollutants are strictly regulated in Danish environ-
mental laws and this does not change with the Green
Tax Reform.
No – the measure has no implication for the protection
and restauration of biodiversity and ecosystems.
2.4.4 Expert group to prepare proposals for a CO2e-tax
Addressing challenges:
The Danish government has an ambitious target of re-
ducing greenhouse gas emissions by 70 per cent by 2030 compared to 1990. A
cost-effective way to ensure reductions of greenhouse gas emissions is by creating
incentives for companies, consumers, and the industry sector through changes in
the tax system. However, imposing taxes on companies potentially harms the
competitiveness of the companies and poses a risk of carbon leakage. To assist in
designing a reform that best address these challenges, an expert group
1
of leading
researchers and practitioners will help draw up proposals of a broad CO
2
e-taxa-
tion.
Objectives:
To draw up proposals for the development of a uniform CO
2
e regu-
lation. The expert group will therefore help draw the road map for the second
phase of CO
2
e taxation in a manner consistent with protecting Danish competi-
tiveness, social balance, and minimizing leakage.
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The expert group will assess the advantages and disadvantages of a regulatory so-
lution for the agricultural sector and a CO
2
e tax. The expert group will also pro-
pose possible ways to construct compensation mechanisms, including, for exam-
ple, deductions, but also other possible mechanisms. The expert group will also
describe possible phase-in profiles and compensation mechanisms, including for
the 2023-2025 period.
Implementation:
The expert group has been established in January 2021 and
consists of five members who are the leading experts within CO
2
e-regulation. The
group is supported by a secretariat of public officials.
State aid:
An expert group has been established to make recommendations for a
uniform CO
2
e tax. This expert group has no links to state aid compliance.
Target Group:
All Danish CO
2
e emitters.
Link to reforms:
The expert group will help deliver on the Danish target of re-
ducing greenhouse gas emissions by 70 per cent by 2030 compared to 1990 in a
manner consistent with protecting competitiveness, social balance, and minimis-
ing leakage.
Timeline:
The expert group will deliver their first report at the end of 2021 de-
tailing the suggested principles of an effective, efficient, and socially just CO
2
e-tax
model. The first report will furthermore give practical guidance on how to trans-
form current energy-taxation to a more CO
2
e-targeted model. The group will de-
liver their second and final report in the fall of 2022, which details different sce-
narios for CO
2
e-taxation, covering all emissions including non-energy emissions
from farming. The group will detail the trade-offs between minimising the eco-
nomic cost of CO
2
e reductions and minimising leakage, ensuring social balance
and keeping Danish firms competitive.
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Do No Significant Harm:
Table 2.4.2
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Yes
No Significant negative impact?
X
On the contrary – the establishment of an expert group
is an important part of the second phase of the Green
Tax Reform. The expert group is tasked with drawing up
a roadmap for a comprehensive tax reform with a high
and uniform CO
2
e tax on all emissions. Such a tax re-
form can be expected to be an important driver of emis-
sion reductions.
On the contrary – the establishment of an expert group
is an important part of the second phase of the Green
Tax Reform. The expert group is tasked with drawing up
a roadmap for a comprehensive tax reform with a high
and uniform CO
2
e tax on all emissions. Such a tax re-
form can be expected to be an important driver of emis-
sion reductions.
No – the establishment of an expert group as a part of
the Green Tax Refom has no negative implication for
the use and protection of water services.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
X
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
X
No – the first phase of the Green Tax Reform has no im-
plication for the waste handling or the circular economy.
The second phase – of which the establishment of an
expert group is a part - aims to lower all carbon emis-
sions.
X
X
No – pollutants are strictly regulated in Danish environ-
mental laws and this does not change with the establish-
ment of the Green Tax Reform.
No – the measure has no implication for the protection
and restauration of biodiversity and ecosystems.
Investments
2.4.5 Investment window
Addressing challenges:
The European economies have been highly affected by
the COVID-19 crisis. The economic situation continues to be challenging and
highly uncertain and will remain so for some time. To address these challenges
and underpin the green transition, the investment window will frontload and in-
centivise companies’ investments in a green and digital transition but also mitigate
the economic consequences and unemployment.
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Objectives:
The Danish government has together with other political parties,
forming a comfortable majority in the Danish parliament, agreed to increase the
depreciation basis for investments in fixed assets (machinery, equipment, software
etc.) by a further 16 per cent of the investment cost. This applies to investments
made from November 23 2020, and in 2021 and 2022. The initiative will entail an
additional cost of 3.2 bn. DKK over the period 2021-2025 of which 3.0 bn. DKK
is financed by the Recovery and Resilience Facility while 0.2 bn. DKK is financed
by national funds.
Investments in machines that are or can be powered by fossil fuels are not cov-
ered by the investment window. Fossil fuels includes coal, petrochemicals, natural
gas, and liquefied petroleum gas. In addition, cars for passenger transport and
ships are not included in the investment window. This means that when purchas-
ing these machines and cars, the company will not benefit from the additional de-
preciation right.
However, it is possible to use the investment window on fossil driven non-pas-
senger vehicles (trucks and vans). This is due to the fact that there are no or very
limited non-fossil alternatives to fossil vans and trucks etc. yet. At the same time,
changing an old truck to a new model will increase the energy efficiency as the
available new models are more energy efficient than the old ones.
It is estimated that 6.5 per cent of the investments through the investment win-
dow will be in non-passenger vehicles. In order to ensure full compliance with the
“Do No Significant Harm”-principle, the estimated costs for investments in fossil
driven trucks and vans are excluded from the funding from the Recovery and Re-
silience Facility. Therefore, the Recovery and Resilience Facility-funding for the
investment window is lowered and readjusted with 6.5 per cent from 3.2 bn.
DKK to 3.0 bn. DKK.
The initiative entails that a company within the investment window acquires, for
example, a 3D-printer worth 1,000,000 DKK, can increase its depreciation basis
by 160,000 DKK. Each year from the acquisition, the company can deduct 25 per
cent hereof from the basis of the company’s corporate tax.
The deduction will mean that the companies' capital costs for investments in fixed
assets will be temporarily lower, and therefore it is expected to lead to an increase
in investments in 2020, 2021, and 2022. In addition, companies are expected to
advance and frontload investments that are otherwise planned for 2023 and later.
A frontloading of investments can be expected to increase employment (demand
effect) to a certain extent in the coming years, especially in a situation where Den-
mark is hit by a significant downturn. Furthermore, a temporary increase in the
depreciation basis will improve the companies' liquidity in the short and medium
term.
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Thus, the initiative delivers on the recommendations for Denmark in the National
Energy and Climate Plan and the Country Specific Recommendations to frontload
investments in a green and digital transition, also by ensuring a just transition for
the most affected companies with the implementation of the Green Tax Reform.
Implementation:
The Danish Ministry of Taxation will be managing the invest-
ment window, including the applicable depreciation basis and tax deductions for
the companies.
State aid:
An assessment has been made of whether the initiative conform to
state aid rules. The initiative applies to all undertakings on equal terms and there-
fore does not constitute state aid.
Link to reforms:
The investment window will provide companies with liquidity
and incentives to invest in fixed assets that can lead to a reduction of greenhouse
gases in production, and ease carbon leakage problems when increasing taxes on
greenhouse gases. The investment window will further allow firms to enter into
the new industrial age with smarter and greener machinery.
Target group:
The initiative entails all companies and self-employed. It is noted
that it is only enterprises with a taxable profit, which will be able to take advantage
of the increase in the short term. Companies without taxable profits will however
in general be able to utilize the increased deductions to offset profits in recent
years.
Timeline:
A politically binding agreement has been concluded on 8 December
2020. New bills were submitted to Parliament on February 24, 2021. The bill has
passed the Parliament on 13. April 2021. The investment window has entered into
force on 23 November 2020.
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Do No Significant Harm:
Table 2.4.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to
lead to significant greenhouse gas emissions?
Yes No
X
Significant negative impact?
No – to ensure no negative impacts, the investment window will not
include machinery running on fossil fuels, ships or passenger cars.
This will boost the companies’ growth potential and job creation,
while encouraging companies to invest in new hardware and tech-
nology that can reduce emissions in the longer run.
The investment window should also be viewed in the broader con-
text of the Green Tax Reform, in which companies are being incen-
tivized to frontload green investments in preparation for a higher
CO
2
e-tax.
The investment window, increased R&D incentive and accelerated
depreciation will moreover help ease leakage problems since the ini-
tiatives will make a transition through green investments possible
and thus reduce the risk of production moving abroad.
Climate change adaptation:
Is the measure expected to
lead to an increased adverse impact of the current climate
and the expected future climate, on the measure itself or
on people, nature or assets?
X
To ensure no negative impacts, the investment window will not in-
clude machinery running on fossil fuels, ships or passenger cars to
ensure a green transition of industry. This will boost the companies’
growth potential and job creation, while encouraging companies to
invest in new hardware and technology that can reduce emissions in
the longer run.
The investment window should also be viewed in the broader con-
text of the green tax reform, in which companies are being incentiv-
ized to frontload green investments in preparation for a higher CO
2
e-
tax.
The investment window, increased R&D incentive and accelerated
depreciation will moreover help ease leakage problems since the ini-
tiatives will make a transition through green investments possible
and thus reduce the risk of production moving abroad.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwater;
or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste
prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incinera-
tion or disposal of waste, with the exception of the incinera-
tion of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions of
pollutants into air, water or land?
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resili-
ence of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
No – pollutants are strictly regulated in Danish environmental laws
and this does not change with the Green Tax Reform.
No – the measure has no implication for the protection and restaura-
tion of biodiversity and ecosystems.
X
X
No part of the Green Tax Refom has negative implications for the
use and protection of water services. The overall reduction in fossil
fuel usage as a result of the green tax reform can on the contrary
help protect pollutants from entering into marine resources.
No – the first phase of the Green Tax Reform, of which the invest-
ment window is a part, has no implications for the waste handling or
the circular economy.
X
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2.4.6 Accelerated depreciation
Addressing challenges:
The European economies have been highly affected by
the COVID-19 crisis. To address the challenges, the threshold for accelerated de-
preciation is increased to frontload and incentivize companies’ investments in a
green and digital transition and to mitigate the economic consequences and unem-
ployment.
Objectives:
According to current rules, companies' investments in fixed assets
(machinery, equipment, computer-hardware etc.) with an acquisition price below
14.100 DKK can be depreciated immediately. This lower limit is raised to DKK
30.000. This increased limit will be permanent. An increase in the threshold will
work as a short-term stimulus initiative, as it generates a lot of additional liquidity
for firms in the initial years (where all small investments are depreciated at 100 per
cent) but naturally declines over time as future depreciations are reduced (already
depreciated in year 1). After 2025, the increased limit will result in fiscal losses for
Denmark. These losses will be covered by reducing the overall budget for fiscal
expenditures.
An increase in the threshold will in particular strengthen the incentive to invest in
information and communications technology, and can help strengthen liquidity
among companies that earn profits. The increased threshold to 30.000 DKK is es-
timated, with some uncertainty, to increase the scope of investments that can be
depreciated immediately by approx. 3 bn. DKK.
Thus, the initiative delivers on the recommendations for Denmark in the National
Energy and Climate Plan and the Country Specific Recommendations to frontload
investments in a green and digital transition, and by ensuring a just transition for
the most affected companies with the implementation of a green tax reform.
Implementation:
The Danish Ministry of Taxation will be managing the initia-
tive.
State aid:
An assessment has been made of whether the initiative conforms with
state aid rules. The initiative applies to all undertakings on equal terms and there-
fore does not constitute state aid.
Link to reforms:
The investment window will provide companies with liquidity
and incentives to invest in fixed assets – In particular information and communi-
cations technology – that can bring Denmark closer to the new industrial age and
ease carbon leakage problems when introducing higher taxes on greenhouse gases.
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Target group:
The initiative entails all companies and self-employed. It is noted
that it is only enterprises with a taxable profit, which will be able to take advantage
of the increase in the short term. Companies without taxable profits will however
in general be able to utilize the increased deductions to offset profits in recent
years.
Timeline:
A politically binding agreement has been concluded on 8 December
2020. New bills have been submitted to parliament on February 24, 2021. The bill
has passed the Parliament on 13. April 2021. The increase in the threshold for ac-
celerated depreciation has entered into force on 23 November 2020.
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Do No Significant Harm:
Table 2.4.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Yes
No Significant negative impact?
X No. Investments which could violate the
“Do No Significant
Harm”-principle
such as internal combustion engines or
other fossil-fuel driven machinery etc., would have a much
higher costs than the threshold, and thus will not qualify for
the accelerated depreciation.
Further, the raised threshold for accelerated depreciation
must be viewed in the context of the Green Tax Reform, in
which companies are being incentivized to frontload green in-
vestments in preparation for a higher CO
2
e-tax. All Danish
companies thus have very clear incentives to use the accel-
erated depreciation to reduce their carbon emissions as a
preparation for the upcoming CO
2
e-tax.
The investment window, increased R&D incentive and accel-
erated depreciation will moreover help ease leakage prob-
lems since the initiatives will make a transition through green
investments possible and thus reduce the risk of production
moving abroad.
X No – the raised threshold for accelerated depreciation will
incentivize companies to frontload green investments in
preparation for a higher CO
2
e-tax.
The investment window, increased R&D incentive and ac-
celerated depreciation will moreover help ease leakage
problems since the initiatives will make a transition through
green investments possible and thus reduce the risk of pro-
duction moving abroad.
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
X
X
No part of the Green Tax Reform has negative implications
for the use and protection of water services. The overall re-
duction in fossil fuel usage as a result of the Green Tax Re-
form can on the contrary help protect pollutants from enter-
ing marine resources.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
No – the first phase of the Green Tax Reform, of which the
raised threshold for accelerated depreciation is a part, has
no implications for the waste handling or the circular econ-
omy. The second phase aims to lower all carbon emissions,
which includes better waste management and promoting
more free nature (to capture CO
2
).
X
No – pollutants are strictly regulated in Danish environmen-
tal laws and this does not change with the Green Tax Re-
form.
No – the measure has no implication for the protection and
restauration of biodiversity and ecosystems.
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Green and digital dimensions of the component
Green transition
The Danish government has an ambitious target of reducing greenhouse gas emis-
sions by 70 per cent by 2030 compared to 1990. The business sector is an essen-
tial partner in achieving that ambition. The green transition of businesses in Den-
mark is the focus of the Green Tax Reform. The tax reform promotes the green
transition by increasing taxes on greenhouse gas emissions in industry in the first
phase and sending a strong signal of higher carbon taxation in the second phase.
At the same time, the reform provides tax cuts on green and digital investments to
insure that companies have the incentive and the opportunity to prepare for in-
creased carbon taxation. This will incentivize companies to reduce greenhouse gas
emissions, and by moving in the direction of a uniform tax on greenhouse gas
emissions, the tax reform will make the reductions happen in areas where the cost
is the lowest. Thus, the Green Tax Reform makes the regulation of greenhouse
gas emissions more efficient.
The introducing an investment window will contribute significantly to create the
right incentives for the green transition and promote new growth potentials. The
investment window is a temporary measure that will instantly increase employ-
ment. However, at the same time, the initiative will create a lasting impact on the
companies’ production by letting companies invest in new and greener technology
and inventory, which will make the production greener and cleaner in the years to
come. The investment window will exclude fossil-fuel driven machinery to ensure
the investments made by firms are in fact green. Furthermore, the investments
will make a basis for green growth in the future with a potentially large job crea-
tion effect.
With the first phase of the green tax reform greenhouse gas emissions are lowered
by 0.5 Mt by 2030. For the second phase of the Green Tax Reform, an expert
group has been established, which will draw the road map for the next phase of
CO
2
e taxation in a manner consistent with protecting Danish competitiveness, so-
cial balance and minimizing leakage. It is the ambition in the long term to make a
comprehensive tax reform with a high and uniform CO
2
e tax on all emissions.
This will require significant development work, especially with regard to emissions
that are not currently subject to taxation.
Digital transition
Danish firms have historically proven to aim their investments in fixed assets to-
wards digitalization. This is true both for the large share of Danish private invest-
ments in ICT and in smart machinery (3D printers, robotics, AI etc.). That is why
Denmark consistently ranks in the very top of the EU-commissions digitalization
index
2
: Danish firms are ranked 4th in the EU business digitalization index, 3rd in
2
https://ec.europa.eu/digital-single-market/en/digital-economy-and-society-index-desi
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the e-commerce index and 1st on the share of business with “very high digitaliza-
tion”. These achievements are the result of Danish businesses’ commitment to in-
vesting in the future.
The initiatives under the green tax reform will contribute to furthering the digital
agenda. Specifically, a sizeable share of the investments supported through the in-
vestment window and the raised threshold for accelerated depreciation will drive
digitalisation. In 2017, the last year in which there is an effect from a similar in-
vestment window with additional depreciation allowance introduced in 2012-
2013, ICT and other digitalized equipment constituted an estimated 40 per cent of
Danish companies’ investments in fixed assets (excl. vehicles),
cf. table 2.4.5.
Table 2.4.5
Gross fixed capital formation in 2017
2017
M. DKK
ICT equipment
Other digital equipment
Other non-digital eq./machinery
Total
- hereof total digital investments
19.444
10.779
46.078
76.301
30.223
25 %
14 %
60 %
100 %
40 %
Share (per cent)
Source: Statistics Denmark and own calculations based on the definiton on digital tagging in annex VII under the
regulation establishing the Recovery and Resilience Facility.
Moving forward, Danish firms’ investments in smart machinery are expected to
be the key investment focus throughout 2020-2023, guided by the Danish digitali-
zation investment effort through a suite of public-private-partnerships,
see Box
2.4.2.
3
The key focus area going forward, will be to lift small enterprises to the
level of digitalization of larger enterprises.
The Danish digitalization investment effort, combined with the large fiscal incen-
tives to expand investments in ICT and machinery in the Green Tax Reform, will
expectantly drive a surge in digitalization. It is therefore the Danish government’s
expectation, that at least 40 per cent of the investments made through the invest-
ment window and the raised threshold for accelerated depreciation will be in digi-
talization efforts, i.e. ICT or intelligent production assets. The 40 per cent should
be seen as a conservative estimate, as it is based on data from 2017, and the digi-
talisation share is expected to continue from 2017-2022, as has been the case in
2015-2017. Further, many of the investments in categories, in which the digital
equipment part is estimated to be small, is counted as completely non-digital in-
vestments. Therefore the share of digital investments is under-estimated.
3
https://erhvervsfremmebestyrelsen.dk/sites/default/files/2020-03/Erhvervsfremme-i-Danmark-2020-
2023_Strategi.pdf
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Box 2.4.2
The Danish Business Promotion will support a coherent business promotion effort by coordinating
with other actors in the area, including:
Small and medium sized enterprises:
Digital,
which is a comprehensive program with several initiatives targeted
at the digitalization of small and medium sized enterprises. Among other things, support is provided for private
advice on digitalization including e-commerce, and digital sprints as well as competence development.
The Fund of Innovation,
which supports digital innovation, among other things, through the InnoBooster pro-
gram, just as companies are supported in finding solutions to major societal challenges through, among other
things, digital solutions.
The Growth Fund,
which invests in companies with digital business models and companies that use advanced
digital technologies.
Digital Hub Denmark,
which aims to make Denmark a European frontrunner in digital development and market
Danish digital strengths
The Approved Technological Service Institutes (GTS’er),
which support technological development in Danish
companies through research and development collaborations and provide access to test, demonstration and re-
search facilities.
The Technology Pact,
which has been established across the public sector, companies, educational institutions
and organizations with the aim of getting more people to work with, take an interest in and educate themselves
within STEM (science, technology, engineering and math).
The Council of Data Ethics,
which among other things, is to create a data ethics debate, continuously support
responsible data use in business and the public sector, as well as work to ensure that responsible data use can
become a competitive parameter.
The Danish innovation centers,
which help Danish companies to acquire knowledge about the latest technolo-
gies and business models in, among other things, the digital area. The municipalities and the local business ser-
vice are often the first entrance to the business promotion system. The inter-municipal business hubs provide spe-
cialized business services and function partly as entrances and partly as hubs in business promotion system,
which refers to relevant business promotion schemes and actors as well as private advisers, investors, etc.
Source:
https://erhvervsfremmebestyrelsen.dk/sites/default/files/2020-03/Erhvervsfremme-i-Danmark-2020-
2023_Strategi.pdf
Cross-border and multi-country projects
All investment incentives in the Green Tax Reform will be available for foreign
firms doing business in Denmark. The Green Tax Reform is therefore expected
to attract foreign investment, expertise and labour by promoting investment
through the investment window, accelerated depreciation and R&D incentives
(R&D incentives are described under component 7). This will spur growth and in-
vestment in Denmark, but at the same time increase cohesion and cross-border
activity throughout the EU.
Do No Significant Harm
It is the expectation that no aspects of the Green Tax Reform will harm the cli-
mate, environment or sustainable development. To the contrary, the reform will
reduce CO
2
-emmissions by 0.5 Mt by raising the price on carbon emissions and
fostering green investments.
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To ensure no negative impacts the investment window will not include machinery
running on fossil fuels to ensure a green transition of industry. This will boost the
companies’ growth potential and job creation, while encouraging companies to in-
vest in new hardware and technology that can reduce emissions in the longer run.
The investment, window, increased R&D incentive and accelerated depreciation
will moreover help ease leakage problems since the investment window will make
a transition through green investments possible and thus not lead to moving pro-
duction out of the country.
It is estimated that 6.5 per cent of the investments through the investment win-
dow will be in non-passenger vehicles. In order to ensure full compliance with the
DNSH-principle, the estimated costs for investments in fossil driven trucks and
vans are exempted from the funding from the RRF. Therefore, the RRF-funding
for the investment window is lowered and readjusted with 6.5 per cent from 3.2
bn. DKK to 3.0 bn. DKK.
Financing and costs
The costs of the Green Tax Reform (after accounting for dynamic behaviour) are
listed in
Table 2.4.2.
The methodology for estimating the tax consequences follows
the standard methodology of the Danish Ministry of Taxation. Concretely:
I.
The mechanical effect of increased taxes of fossil energy usage is computed
using the forecast of Danish Energy Authority. The behavioural effect is es-
timated based on the elasticities described in the official Danish excise, tariff
and subsidy analysis
4
The establishment of the expert group will have a total budget of 6 m. to be
spent from 2021-2022
The mechanical effect of extended deductions for the Investment window
is based on data from Denmark Statistics on firm investments. The behav-
ioural effect is based on the empirical observed response from the Danish
investment window in 2012/2013.
5
II.
III.
4
5
https://www.skm.dk/media/6046/afgifts-og-tilskudsanalysen-delanalyse-3.pdf
https://fm.dk/nyheder/nyhedsarkiv/2012/juni/investeringsvindue-skaffer-job-og-ny-vaekst/
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IV.
The mechanical effect of extended deductions for raising the threshold for
accelerated depreciation is based on data from Denmark Statistics on firm
investments. The behavioural effect on investment, profits, employment
and wages is based on the standard calculation of corporate tax changes by
the Ministry of Finance/Taxation documented
here.
Table 2.4.6
Cost of Initiatives in Component 3: Green Tax Reform
M. DKK, 2021-prices
I. Emission taxes on industries
II. Expert group to prepare proposals for a
CO
2
e-tax
III. Investment window
IV. Accelerated depreciation
Total
Investment/
reform
Reform
Reform
Investment
Investment
Total
-410
6
3,029
1,280
3,905
2021
-
3
626
410
1,039
2022
-
3
1,038
310
1,351
2023
-90
-
608
240
758
2024
-80
-
439
180
539
2025
-240
-
318
140
218
210
-
Funding from
other sources
-
Table 2.4.7
Measurable effects of the Green Tax Reform
CO
2
-reduction
in 2030
2021
I. Emission taxes on industries
III. Investment window
IV. Accelerated depreciation
Total
0.5 Mt
-
-
0.5 Mt
0.0
2.3
0.1
2.4
Employment effects
(1.000)
2022
0.0
4.5
0.2
4.7
2023
0.0
0.7
0.2
1.0
2024
-0.1
-1.0
0.3
-0.7
2025
-0.1
-0.7
0.3
-0.5
2021
0.00
0.15
0.00
0.15
2022
0.00
0.25
0.00
0.25
GDP effects
(%)
2023
0.00
0.00
0.00
0.00
2024
0.00
-0.10
0.00
-0.05
2025
0.00
-0.05
0.00
-0.05
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Component 2.5
Sustainable road transport
The transport sector is one of the largest emitters of greenhouse
gasses in Denmark. In order to reach the ambitious target of re-
ducing greenhouse gas emissions by 70 per cent by 2030, reduc-
tions in the transport sector is essential.
Increasing the sustainability of the road transport sector, which ac-
counts for about 90 per cent of the greenhouse gas emissions in
the transport sector in Denmark, is especially crucial.
The initiatives in this component on the green transition of road
transport sets out strong measures and contributes to lower
greenhouse gas emissions in the road transport sector by 2.1 Mt
in 2030 and set forth the ambition of having 1 m. zero- or low-
emission cars on the roads by 2030.
Re-prioritisation of the registration tax, reducing GHG intensity of
fuels, significant investments, subsidies for green infrastructure
and new technologies further incentivises green mobility.
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Description of the component
Box 2.5.1
Sustainable road transport
Climate policy, sustainable consumer behaviour, pollution mitigation, protection of health and well-being of cit-
izens, just and inclusive transition, competitiveness between conventional and low emission cars.
Objective:
Better environment and health:
Reducing the greenhouse gas intensity of fuels on a well-to-wheel basis will
reduce GHG-emissions from conventional cars in the transition towards zero-emission cars. The subsidy pool
targeted the scrapping of old diesel cars will further support clean air in the cities and the general health of citi-
zens by reducing emissions of particles and NOx. Furthermore, owners of old diesel cars are incentivised to sub-
stitute to greener alternatives, due to the re-prioritisation of the registration tax and low electricity tax on charging
electric vehicles that are also introduced.
Smart and sustainable mobility:
Re-prioritising registration taxes of vehicles and low electricity tax on charging
electric vehicles support the consumers and incentivises users to choose transportation options to mitigate
greenhouse gas emissions and air pollution, while limiting the effects of congestion and promoting public health.
The re-prioritisation of registration taxes will ensure it is more robust to technological development and solely
dependent on the car’s value and CO
2
emissions.
Green transition:
Re-prioritisation of the registration tax, increasing the obligation to reduce GHG will improve
the use of sustainable energy sources and reduce greenhouse gas emissions. By incentivising electric and plug-
in hybrid cars, decreasing the stock of conventional cars and reflecting the impact emissions and pollution have
on the environment, the initiatives support the ambition of reducing greenhouse gas emissions by 70 % by 2030
compared to 1990, and achieve climate neutrality by 2050 at the latest.
Reforms/investments to underpin the objectives
I. Incentives to choose green cars (870 mill. DKK)
a. Re-prioritisation of the registration tax of vehicles and low electricity tax on charging electric vehicles
b. Temporary increase in the scrapping premium for old diesel cars
II. Analyses, tests and campaigns for greener transport (25 mill. DKK)
c. Development test of road-pricing
d. Car sharing and carpooling (awareness)
e. Analysis of test scheme with double trailers
f.
Analysis of the regulation on weight and dimensions to optimise heavy haulage
III. Green transportation and infrastructure (730 mill. DKK)
g. Scheme to infrastructure for electric bicycles
h. Investments in bike paths in state roads and bicycle subsidy scheme for municipalities
i.
Subsidy scheme to green ferries
Estimated Cost:
Approximately 1.6 bn. DKK in total from 2021-2025 covered by the RFF. The total cost of the reforms and invest-
ments on green road transportation is 1.2 bn. DKK in 2021 increasing to 2.9 bn. DKK in 2030. The residual costs
are covered by increasing taxes on conventional cars, existing reserves and a new road-pricing toll for heavy vehi-
cles based on CO
2
-emissions from 2025.
Main challenges and objectives
2.5.1 Main challenges
The green transition requires better solutions, new technologies and behavioural
change across sectors and industries. The challenges mentioned below relate to a
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segment of these e.g. shifting from the use of conventional to low- and zero-emis-
sion cars:
Lack of sufficient market competition between conventional vs. low- and zero-emission cars:
Low- and zero-emission cars are relatively new technologies and thus not
competitively priced compared to conventional cars. The conversion of the
car fleet to zero- and low-emission cars is a long process, as the average life-
time of a new car is approximately 15 years, so it is important to take the nec-
essary steps early. Therefore, a re-prioritisation of the registration tax and low
electricity tax on charging will support Danish efforts to reach our climate tar-
gets and increase the stock of zero- and low-emission cars in the short- and
long-term.
Requirements to reduce CO2 emissions from fossil fuel cars:
Conventional cars will
constitute a majority of the general car stock over the coming decades, neces-
sitating initiatives to reduce the CO
2
-emissions stemming from conventional
cars. This could e.g. include campaigns about car-sharing and carpooling, anal-
ysis of heavy haulage and investments in infrastructure for bicycles.
2.5.2 Objective
The Danish Government along with several parties of parliament have agreed on
a number of reforms and investments that sets out strong measures to lower
greenhouse gas emissions in the road transport sector. It is estimated that this will
lead to a substantial reduction in greenhouse gas emissions of 1.0 m. tonnes in
2025 increasing to 2.1 m. tonnes in 2030. The parties have an ambition of having
1 m. zero- and low-emissions cars on Danish roads by 2030. Moreover, this will
ensure long-term regulation of green fuels to fossil-driven cars, and from 2025,
the heavy haulage industry will be covered by a new, CO
2
-differentiated road-pric-
ing toll. This is an important step towards reaching the 2030 climate target of re-
ducing greenhouse gas emissions by 70 per cent. The initiatives in the agreement
will support the objectives below and is possible due to the funds from the recov-
ery and resilience fund.
Better environment and health:
Enhancing and increasing the obligation to reduce
the greenhouse gas intensity of fuels on a well-to-wheel basis will reduce
greenhouse gas emissions from conventional cars in the transition towards
zero-emission cars. The subsidy pool targeted at the scrapping of old diesel
cars will, combined with the other initiatives, support clean air in the cities and
the general health of citizens by reducing emissions of particles and NOx.
Smart and sustainable mobility:
Re-prioritising the registration tax of vehicles sup-
ports the consumers and incentivises users to choose transportation options
to mitigate greenhouse gas emissions and air pollution, while simultaneously
promoting public health. The re-prioritisation entails that the registration tax
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for low- and zero-emissions cars is reduced significantly until 2035. Further,
the re-prioritisation of the registration tax simplifies the tax, making it solely
dependent on the car’s value and CO
2
emissions.
Green transition:
Re-prioritisation of the registration tax, obligation to reduce
greenhouse gas emissions from fuel will improve the use of sustainable energy
sources and reduce greenhouse gas emissions. By enhancing the incentive to
buy low- and zero-emission cars, decreasing the stock of conventional cars
and reflecting the impact emissions have on environment, the initiatives sup-
port the ambition of reducing greenhouse gas emissions by 70 per cent by
2030 compared to 1990 and achieve climate neutrality by 2050 at the latest.
The measures and initiatives are coherent and compliant with the European
Green Deal. The measures presented below focus on accelerating the shift to sus-
tainable and smart mobility, sustainable consumer behaviour, just and inclusive
transition. In general, the initiatives will ensure that the price of transport more
accurately reflects the impact it has on the environment and on public health. At
the same time, the initiatives comply with the National Energy and Climate Plan
(NECP). In general, the initiatives are supporting measures aimed at ensuring
more efficient transport and vehicles. In addition, they put forward trajectories in
the transport sector to meet the emission targets. Moreover, the initiatives are in
line with the CSR, where Denmark will invest in sustainable fuels industry in or-
der to take action and address initiatives in one of the country’s largest sources of
greenhouse gas emission.
Summary description of the reforms and investments of the
component
Overall, the Danish government is proposing a package of initiatives regarding
green road transport of approximately 1.2 bn. DKK in 2021 increasing to 2.9 bn.
DKK in 2030.
The package contains reforms and investments in supporting the transition to-
wards the use of sustainable energy sources in the road transport sector. Among
these are measures that increases the incentive to choose green cars. These include
a re-prioritisation of the registration tax and a low electricity tax to electric charg-
ing of zero- and low-emission cars. In addition, the component contains analyses,
tests and campaigns that can support a further reduction in greenhouse gas emis-
sions from road transport in the long term. Finally, the component contains initia-
tives that promote and support green transportation and infrastructure, including
for example investments in bike paths. Thus, there is devoted means targeted at
road transport, supporting green infrastructure, including milestones of low- and
zero-emission vehicles.
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Reforms
2.5.3 Incentives to choose green cars
A) Re-prioritisation of the registration tax and low electricity tax on charging electric vehicles
Addressing challenges:
Currently, the purchase of low- and zero-emission cars
is less favourable compared to conventional cars, as the purchasing prices of these
low- and zero-emission cars are higher. In order to enable an affordable transition
from conventional cars to low- and zero-emission cars it is important to support
sustainable cars and provide better terms for these.
Achieving sustainable transport means putting users first and providing them with
more affordable, accessible, and cleaner alternatives to their current mobility hab-
its. Consequently, the initiative is in line with the European Green Deal, as it ac-
celerates the shift towards sustainable and smart mobility.
Objectives:
The Danish government and several parties of the parliament are de-
termined to implement a re-prioritisation of the registration tax of vehicles in or-
der to enhance and strengthen the market competition of low- and zero-emission
cars. The re-prioritisation entails that the registration tax for low- and zero-emis-
sion cars is reduced significantly until 2035. Furthermore, the re-prioritisation of
the registration tax simplifies the tax, making it solely dependent on the car’s value
and CO
2
emissions. In addition, the special scheme with low electricity tax to
charging of zero- and low-emission cars will be extended to 2030. The scheme
was already in place through 2021. By extending the scheme, reduced costs for
charging an electrical vehicle are ensured until 2030, further incentivising the up-
take of low- and zero-emission cars.
The registration tax will be based on CO
2
emissions and is thus independent of
used technology, promoting zero- and low-emission cars, as they will be subject to
lower registration taxes. Zero-emission cars (typically electric cars) are defined as
emitting 0 gram of CO
2
per kilometre, while low-emission cars are defined as
emitting less than 50 grams of CO
2
per kilometre. Cars that emit at least 50 grams
of CO
2
per kilometre are in the taxation scheme defined as conventional.
The model proposed is estimated to result in 1) a stock of approx. 775,000 green
cars in 2030, of which 715,000 are passenger cars and 60,000 are vans, 2) a CO
2
reduction of approx. 0.5 m. tonnes in 2030, and 3) a shadow price of CO
2
-reduc-
tions of approx. 2,600 DKK per tonnes of CO
2
.
The re-prioritisation of the registration tax is estimated to include a substantial fi-
nancial allocation,
cf. table 2.5.1.
The green transportation deal is fully financed
from 2026-2030. Hence, the re-prioritisation of the registration taxes requires
complementary RRF funding in 2021-2025 in order to be achieved and rein-
forced. This use of RRF funding reinforces the recommendations of the NECP
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and the CSR, as they focus on the clean and efficient use of energy and sustaina-
ble transport.
Table 2.5.1
Total costs of the re-prioritisation of the registration tax 2021-2030
2021
M. DKK
Costs
500
600
800
1,000
1,100
1,000
900
800
700
500
2022
2023
2024
2025
2026
2027
2028
2029
2030
In addition, a financing element through an increase in the existing ownership tax
is included by an increase of 3 % in 2022, 6.5 % annually in 2023-2025 and 10 %
in 2026. The model also entails a re-prioritisation of registration tax for vans,
which is estimated to result in additional revenue after reflux and behaviour of
100 m. DKK annually from 2021 to 2030, a CO
2
reduction of approx. 0.05 m.
tonnes in 2030 and a stock of 60.000 green vans in 2030.
The special scheme with low electricity tax to charging of electric cars has been in
place since 2012 and was set to expire at the end of 2021. The scheme has previ-
ously been discussed with the Commission, who recognised that it did not consti-
tute a State aid problem.
Estimates of the financial allocation for the extension of the special scheme are il-
lustrated in
table 2.5.2.
Table 2.5.2
Total costs of the extension of the special scheme with low electricity tax for charging 2022-2030
2022
M. DKK
Costs
100
200
200
300
400
500
700
800
900
2023
2024
2025
2026
2027
2028
2029
2030
Implementation:
The re-prioritisation of the registration tax has been in place
since December 18th 2020. The extension of the scheme from 2022 through 2030
was formally adopted by the Danish parliament on February 9
th
2021.
Target group:
Households and companies.
Timeline:
The initiatives are implemented.
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Do no significant harm:
Table 2.5.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Yes No
X
Significant negative impact?
No - on the contrary, the measure is expected to lead to
significant reductions in the greenhouse gas emissions
as a consequence of incentivising the transition from
polluting cars to low- or zero-emission vehicles. The
government and the parties behind the agreement has
an ambition of having 1 million low- and zero emission
vehicles on danish roads by 2030.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
X
The measure is interlinked with the objective to transform
the car-stock from gas and diesel to sustainable and
electrical cars. The re-prioritisation of the registration tax
and lowering the electricity tax for charging are expected
to significantly raise the incentive for consumers to buy
zero- or low emission cars.
The measure encourages the usage of sustainable road
transport, and limits the consumption of polluting and
emitting vehicles. The measure is not expected to have
an implication for the use and protection of water ser-
vices.
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of wa-
ter, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy3?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
The measure has no implication for the waste handling
or the circular economy.
X
The measure is directly and indirectly expected to reduce
emissions of pollutants into air, water and land. This
especially concerns GHG emissions and the support of
clean air in the cities by reducing emissions of particles
and NOx.
No – the measure will not conflict with the protection and
restoration of biodiversity and ecosystems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the re-prioritisation
of the registration tax and low electricity tax on charging
electric vehicles.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition5 and resilience of eco-
systems; or
(ii) detrimental to the conservation status of habitats and species, in-
cluding those of Union interest?
X
B) Temporary increase in the scrapping premium for old diesel cars
Addressing challenges:
Older diesel cars are a source of harmful particulate
matter and NOx gases, especially in the larger cities, and generally emit more CO2
than newer (diesel) cars. There are incentives to discard older and polluting diesel
cars, but the process of scrapping is currently too slow in order to reinforce the
green transition of the car-stock.
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Objectives:
In order to support the transition from old conventional cars to
zero- or low-emission cars (particulate matter, NOx and CO2) the scrapping pre-
mium for old diesel cars is increased, increasing the incentive for households to
scrap their old diesel cars in favour of newer, less emitting cars, including zero-
and low-emission cars. The re-prioritisation of the registration tax in initiative I.a.
incentivises consumers to choose cars with lower emissions by making greener
cars relatively cheaper. Combined with the temporary increase in the scrapping
premium for old diesel cars, consumers are provided with incentives to scrap their
older, polluting car and replace it with a zero- or low-emission car. Thus, the initi-
atives are intertwined and will reform the incentive structure in order to reinforce
the green transition of the car-stock.
Implementation:
A subsidy scheme will be initiated to increase the scrapping
premium in 2021, so owners of diesel cars from before 2006 will receive a scrap-
ping premium of 5.000 DKK, if they scrap their old diesel car, and their applica-
tion is approved. The administration set up will be digital. The digital set up will
be developed as a part of the costs of the administration scheme.
There will be allocated 100 m. DKK to the initiative in 2021. Moreover, there is
allocated 5 m. DKK in 2021, 10 m. DKK in 2022 and 5 m. DKK in 2023 to fi-
nance the derivative consequences of the initiative.
In total, the initiative is expected to reduce the emission of PM2.5 by 17 tonnes
and the emission of CO2 by approximately 7.000 tonnes.
Target group:
Households.
Timeline:
The Ministry of Environment will manage the initiative, which is to be
carried out from early 2021.
State aid:
The scrapping premium does not constitute state aid within the mean-
ing of TEUF art. 107(1), as the premium is not selective, and as any effect on
trade or distortion of competition is merely hypothetical.
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Do no significant harm:
Table 2.5.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes
No Significant negative impact?
X
Conventional cars will constitute a majority of the general
car stock over the coming decades, necessitating
initiatives to reduce the CO2-emissions stemming from
conventional cars. The scrapping scheme for old diesel
cars is expected to lead to reductions in the GHG
emissions. The premium is not tied up in the purchase of
new cars or anything else, but merely the scrapping of old
diesel cars to discard them from the existing car stock.
The re-prioritisation of registration taxes and lowering the
electricity tax for charging significantly raises the incentive
for consumers to buy zero- or low emission cars. The
scrapping scheme is thereby mutual supportive to the
other measures in the component. As a whole, these aim
at speeding up the green transition in transport, either by
incentivizing the up-take of low- and zero emission
vehicles, accelaterating the transition away from polluting
cars or into alternative green means of transport.
The scrapping scheme for old diesel cars is expected to
lead to reductions in the GHG emissions.
The measures are associated and interlinked with the
objective to transform the car-stock from gas and diesel to
sustainable and electrical cars. Thus, the initiatives work
together by increasing the incentive to discard emitting
and polluting cars and replace them with sustainable
ones. Moreover, the investments in infrastructure for
bicycles also raises the incentive to use types of
sustainable transportation.
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of wa-
ter, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
X
The measure encourages the usage of less polluting road
transport, and reduces the stock of the most polluting and
emitting vehicles.The measure is not expected to have an
implication for the use and protection of water services.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
X
Since the scrapping premium provides incentive to hand
in old diesel cars to authorized car wreckers, it is
expected to increase the amount of cars handed in for
scrapping, and therefore increase the amount of waste for
a temporary period. However, the cars will be scrapped
sustainably and the recyclable materials will be part of the
ordinary recycling streams as for other scrapped cars due
to the efficiency of the Danish waste management
system. Therefore it is not expected that this initiative will
have harmful implications for the circular economy.
The scrapping scheme for old diesel cars are expected to
lead to reductions in pollutants especially particular matter
(PM) into air, water and land. This support clean air in the
cities by reducing emissions of particles and NOx.
The initiative will not conflict with the protection and
restoration of biodiversity and ecosystems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the initiative.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of eco-
systems; or
(ii) detrimental to the conservation status of habitats and species, in-
cluding those of Union interest?
X
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Investments
2.5.4 Analyses, tests and campaigns for greener transport
A) Development test of road-pricing
Addressing challenges:
A road-pricing scheme can, among other things, con-
tribute to decrease congestion, mitigate CO
2
emissions and reduce air pollutions.
However, the technical solutions need further development and a development
test can contribute to valuable knowledge about e.g. the associated costs and ben-
efits related to a road-pricing scheme.
Objectives:
There is a clear theoretical potential of creating socio-economic ben-
efits from road pricing in Denmark, with key benefits stemming from decreased
congestion. Other expected benefits will be a mitigation of CO
2
emissions from
road transport, lower levels of air pollution, noise and accidents. A number of the-
oretical studies have been carried out on road-pricing in the last two decades – the
most recent was published by a government expert commission (Bilkommissio-
nen) in September 2020 (national scheme), and February 2021 (scheme for Co-
penhagen). However, the technical solutions that can implement road pricing
schemes needs further development and the associated costs are key to under-
standing the expected return of a project that holds many risks and uncertainties.
Therefore, the parties of the transportation agreement are committed to initiate
development tests of road pricing in order to explore efficient ways of taxing con-
gestion and the damage and health costs associated with driving.
Implementation:
The parties agreed to allocate 20 m. DKK in 2022 to a public-
private development partnership that can investigate the technological and admin-
istrative challenges related to road-pricing of cars. The project management and
dissemination of results is expected to be assigned to a University with scientific
knowledge in the area of transport economics.
Target group:
Households and companies.
Timeline:
The public-private development partnership will be initiated in 2022.
EU state aid rules:
It will not be regarded as state aid as long as it is ensured that
there will not be an economic advantage given when awarding the funds to a
Danish university. It has to be ensured that it is a purchase of a service at a market
price.
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Do no significant harm:
Table 2.5.5
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes No
X
Significant negative impact?
No. A road-pricing scheme can among other things con-
tribute to decrease congestion, mitigate CO
2
emissions
and reduce air pollutions. However, the technical solu-
tions need further development and a development test
can contribute to valuable knowledge about e.g. the as-
sociated costs and benefits related to a road-pricing
scheme.
No. As mentioned before, a road-pricing scheme can
among other things contribute to decrease congestion,
mitigate CO
2
emissions and reduce air pollutions. How-
ever, the technical solutions need further development
and a development test can contribute to valuable
knowledge about e.g. the associated costs and benefits
related to a road-pricing scheme.
No. A road-pricing scheme will contribute to knowledge
about how to implement a large-scale roadpricing
scheme that among other things contribute to decrease
congestion, mitigate CO2 emissions and reduce air
pollutions.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
X
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of wa-
ter, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
No. A test scheme could help quantifying potential re-
ductions in emissions.
X
No. A test scheme could help quantifying potential re-
ductions in emissions and the measure is expected to
indirectly reduce emissions of pollutants into air, water
and land, if there is results that shows that there will be
benefits in implementing a large scale roadopricing
scheme that among other things contribute to decrease
congestion, mitigate CO
2
emissions and reduce air pol-
lutions.
No – the analysis will not conflict with the protection and
restoration of biodiversity and ecosystems. Pollutants
are strictly regulated in Danish environmental laws and
this does not change with the initiatives of the sustaina-
ble road transport.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of eco-
systems; or
(ii) detrimental to the conservation status of habitats and species, in-
cluding those of Union interest?
X
B) Car sharing and carpooling (awareness)
Addressing challenges:
The initiative aims at addressing challenges related to
the use of cars, where the capacity is not fully used and time is wasted due to con-
gestion. These challenges are termed ‘transport waste’.
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Objectives:
With 1.05 persons per car and commuters spending up to 30 percent
of the travel time in queues, there are challenges with ‘transport waste’. Addition-
ally, there is an increasing pressure on parking in the bigger cities.
On this basis, there is potential for making the transport sector more efficient and
limit the number of cars in the cities by increasing car sharing and carpooling.
However, most citizens are unaware of the benefits, carpooling and sharing vehi-
cles offers for the individual and for society as a whole. Carpooling can help re-
duce transportation time, congestion, the emission of particles and CO
2
-emissions
while simultaneously offering economic and social benefits for companies and cit-
izens alike e.g. lower fuel costs. Additionally, car sharing can help reduce the in-
creasing pressure on parking spots in the bigger cities. The campaigns can also be
an inspiration for Danish cities to integrate shared mobility forms in their urban
mobility planning such as the sustainable urban mobility plans (SUMPs).
Implementation:
The parties of the green transportation deal have allocated 3 m.
DKK in 2021 to initiate information- and behavioural campaigns aimed at in-
forming about the challenges related to ‘transport waste’ as well as highlighting
the benefits for citizens, companies and society at large associated with car sharing
and carpooling.
Target group:
The target groups of the campaigns will be based on an initial
analysis conducted in 2021 by the Danish Ministry of Transport and the Danish
Road Directorate. The current expectation is that the target group will be com-
muters and companies.
Timeline:
The campaigns will be initiated during 2021-2022.
EU state aid rules:
As the aid will be provided by the EU to the Danish Ministry
of Transport, the aid will not be considered as state aid in the sense of Article
107(1) TFEU.
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Do no significant harm:
Table 2.5.6
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes
No Significant negative impact?
X
No – on the contrary, the measure is expected to lead to
reductions in the greenhouse gas emissions by informing
about the potentials by car sharing and carpooling.
No – the measure has the objective to create awareness
about the positive and aspects of sustainable ways of us-
ing cars.
The measure encourages the usage of sustainable road
transport, and limits the consumption of polluting and
emitting vehicles. The measure is not expected to have
an implication for the use and protection of water ser-
vices.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected
future climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
X
X
No – on the contrary, the measure aims at preventing
‘transport waste’ by sharing cars and car seats.
X
No – the measure is expected to lead to minor indirect
reductions in emissions of pollutants into air, water and
land.
No – the measure will not conflict with the protection and
restoration of biodiversity and ecosystems. Pollutants are
strictly regulated in Danish environmental laws and this
does not change with the initiatives of the sustainable
road transport.
X
C) Analysis of test scheme with double trailers
Addressing challenges:
In achieving the government's goal of reducing CO
2
emissions across all sectors by 70 percent by 2030, solutions that support the
green transition must be found. This also applies to the transport sector, which in
2030 is expected to emit almost 14 m. tonnes of CO
2
, corresponding to approx.
32 percent of Denmark's total greenhouse gas emissions. The analysis will disclose
whether the permit of double trailers will contribute to reducing road transport's
CO
2
emissions.
Objectives:
Double trailers can potentially contribute to make freight transport
more efficient and correspondingly reducing CO
2
-emission while offering eco-
nomic benefits as more freight can be carried by fewer lorries. However, there is
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uncertainty surrounding whether the Danish infrastructure network can accom-
modate longer lorries, potentially leading to accidents, economic externalities and
congestion, if the use of double trailers is allowed haphazardly.
Optimal capacity utilisation of trucks requires efficient logistics, route optimisa-
tion, etc. Experiences with the ongoing adjustment of the weight and dimension
regulations, including increased total weights for ordinary lorries and experiments
with modular lorries, are positive - also in relation to fuel consumption relative to
the amount of transported goods.
If double trailers are to be able and allowed to drive on the Danish road network,
it is necessary that the road network is modified to support this. As the overall
road network is state-owned, it is a state task to examine the existing road condi-
tions in relation to a number of traffic safety conditions, such as driving curves.
Implementation:
An analysis will be carried out by the Danish Road Directorate
and the Danish Road Traffic Authority covering the efficiency of the road design,
planning and test rides etc. Based on the analysis it will be possible to decide
which reconstructions can and should be carried out in order to ensure both traf-
fic safety and traffic flow on the certain road network. There is allocated 1 m.
DKK in 2021 to the analysis.
Target group:
Heavy haulage.
Timeline:
The analysis will be carried out in 2021.
EU state aid rules:
Infrastructure investments are tasks for the public authori-
ties, as roads are owned by either the state or municipalities. The initiative does
not involve user-financing. Thus, it is not economic activity. Accordingly, the cost
for the analysis are not covered by EU state aid rules.
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Do no significant harm:
Table 2.5.7
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes
No Significant negative impact?
X
No. A report on the findings of the analysis of test scheme
with double trailers could help quantifying potential reduc-
tions in emissions.
No. A report on the findings of the analysis of test
scheme with double trailers could help quantifying poten-
tial reductions in emissions.
No. The measure encourages the usage of sustainable
road transport, and limits the consumption of polluting
and emitting vehicles. The measure is not expected to
have an implication for the use and protection of water
services.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine re-
sources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of wa-
ter, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
X
No. A report on the findings of the analysis of test
scheme with double trailers could help quantifying poten-
tial reductions in emissions.
X
No. A report on the findings of the analysis of test
scheme with double trailers could help quantifying poten-
tial reductions in emissions and the measure is expected
to indirectly reduce emissions of pollutants into air, water
and land, if the analysis showes positive results on
reducing reductions in emmissions from lorries.
No – the analysis will not conflict with the protection and
restoration of biodiversity and ecosystems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the initiatives of the
sustainable road transport.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of eco-
systems; or
(ii) detrimental to the conservation status of habitats and species, in-
cluding those of Union interest?
X
D) Analysis of the regulation on weight and dimensions to optimise heavy
haulage
Addressing challenges:
There is an unused potential of optimising the national
regulation on weight and dimensions, which, if used, can improve the efficiency
and reduce emissions related to the transportation of goods.
Objectives:
The Danish Road Traffic Authority has assessed that there is a po-
tential in improving the efficiency and reduce emissions from heavy haulage by
optimising the regulation on weight and dimensions. A thorough analysis of fur-
ther reduction potentials in the regulation is assumed to lead to a further reduc-
tion of emissions and optimisation of the transportation of goods.
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Implementation:
An analysis concerning the potential of lower emissions
through further adjustments of the current regulation on weight and dimensions
will be carried out. Besides estimating the potential reduction in emissions, the
analysis will also estimate financial consequences for the transport sector and the
society - such as increased wear and tear on roads. The Danish Ministry of
Transport will perform the analysis.
1 m. DKK in 2021 is allocated to carry out the analysis.
Target group:
Companies in the transport sector and derived sectors.
Timeline:
The analysis will be carried out in 2021.
EU state aid rules:
The EU funding provided to the Danish Ministry of
Transport in respect of performing the analysis of the regulation on weight and
dimensions to optimise heavy haulage does not fall within the concept of state aid
in Article 107 TFEU since the EU funding does not involve state resources and
since the funding will not be passed on to undertakings.
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Do no significant harm:
Table 2.5.8
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Yes
No Significant negative impact?
X
No. A report on the findings of the regulation on weight and
dimensions to optimise heave haulage could help quantify-
ing potential reductions in emissions.
No. A report on the findings of the regulation on weight
and dimensions to optimise heave haulage could help
quantifying potential reductions in emissions.
No. The measure encourages the usage of sustainable
road transport, and limits the consumption and usage of
polluting and emitting vehicles. The measure is not
expected to have an implication for the use and protec-
tion of water services.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected
future climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
X
No. A report on the findings of the regulation on weight
and dimensions to optimise heave haulage could help
quantifying potential reductions in emissions.
X
No. A report on the findings of the regulation on weight
and dimensions to optimise heave haulage could help
quantifying potential reductions in emissions. The
measure is expected to indirectly reduce emissions of
pollutants into air, water and land if the analysis showes
positive results on how to reduce reductions in
emmissions from lorries by optimising the national
regulation on weight and dimensions.
No – the analysis will not conflict with the protection and
restoration of biodiversity and ecosystems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the initiatives of
optimising the national regulation on weight and
dimensions.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
2.5.5 Green transportation and infrastructure
A) Scheme to infrastructure for electric bicycles
Addressing challenges:
With electric bicycles, longer distances can be covered
by bike. This new mode of transportation requires the possibility to charge the
bike along the way, so that the battery's range does not limit the length of the bike
ride. Therefore, it is necessary to invest in publicly available charging to electric bi-
cycles to make it more attractive to choose the bike for longer distances.
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Objectives:
Cycling combines mobility with exercise and contributes to improv-
ing public health, while at the same time being a very environmentally and cli-
mate-friendly form of transport. Denmark is among the world's best cycling na-
tions. However, continued focus on cycling and investments in bicycle infrastruc-
ture is necessary, if this leading position is to be maintained and more people are
to choose the bicycle.
The bicycle can be used as an alternative to other modes of transport both in the
cities and in the rural areas to a much greater extent than today. Especially electric
bicycles can expand the bikeable distances while also improving public health.
Whether the funds will be targeted at cycling commuters or for recreational cy-
cling, has not yet been decided, as the funds will not be allocated until 2024. In
that light, the decision of which area to invest in will depend on the speed and di-
rection of the development of battery technology.
As it is not decided whether the funds will be targeted cycling commuters or rec-
reational cycling, it is not possible to estimate exactly how many e.g. bike charging
stations the investment will be able to finance. If the funds are targeted cycling
commuters it will be easier to install the bike charging station compared to in-
stalling a station where there are no existing power outlets.
The Danish Road Directorate estimates that a pool of 10 million DKK is able to
finance approx. 200 locations, assuming that dedicated electric bike chargers are
installed where there are no existing power outlets. On the other hand, the Danish
Road Directorate points out that an additional socket in addition to an already ex-
isting electrical installation has very limited installation costs compared to bike
charging stations where there are no existing power outlets.
Implementation:
The parties of the transportation agreement have allocated 10
m. DKK in 2024 to public accessible charging stations of electric bicycles.
The investment in infrastructure for bicycles will integrate the EU Commissions
Sustainable and Smart Mobility Strategy by contributing to urban planning, and on
connectivity with rural and suburban areas, so that commuters are given sustaina-
ble mobility options by public accessible charging stations of electric bicycles. The
electric bicycles enables the commuter to choose the bike for longer distances. At
the same time, the investment will contribute to clean and climate friendly tourism
as the public charging stations will make it possible and more attractive for tour-
ists to choose cycling tourism.
Target group:
Households and companies.
Timeline:
The scheme is supposed to be initiated in 2024.
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EU state aid rules:
The investments are tasks for the public authorities, as the
state and the municipalities respectively own the roads. The initiative does not in-
volve user-financing. Thus, it is not economic activity. Accordingly, the invest-
ments are not covered by EU state aid rules.
Do no significant harm:
Table 2.5.9
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected
future climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
X
No. the investments in infrastructure for bicycles raises
the incentive to use types of sustainable transportation.
The measure is not expected to lead to an increase in
disposal of waste, lead to significant inefficiencies in the
direct or indirect use of any natural resource at any
stage or cause significant and long-term harm to the en-
vironment.
Yes No
X
Significant negative impact?
No – the measure promotes green transporation and
infrastructure.
No – the investments in infrastructure for bicycles raises
the incentive to use types of sustainable transportation.
X
X
The initiative encourages the usage of sustainable road
transport. The initiative is not expected to have an impli-
cation for the use and protection of water services.
The measure is expected to reduce emissions of
pollutants into air. This especially concerns the support
of clean air in the cities by promoting green transporta-
tion and infrastructure through the subsidy schemes to
infrastructure for electric bicycles and investments in bike
paths in state roads and municipalities.
No – the initiatives in this component will not conflict with
the protection and restoration of biodiversity and ecosys-
tems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the initiatives of the
sustainable road transport.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
B) Investments in bike paths in state roads and bicycle subsidy scheme for mu-
nicipalities
Addressing challenges:
In Denmark, the bicycle traffic has been stagnant or
even declining for a number of years. Only in the larger cities, where cycling is a
faster and easier choice than other modes of transport, bicycle traffic has been in-
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creasing. Outside the urban areas, the bicycle is not a natural first choice in every-
day life. Therefore, it is necessary to make it more attractive to choose the healthy
and CO
2
neutral bike instead of the car.
Objectives:
To incentivize citizens to choose bicycles rather than cars it is im-
portant to prioritize and support the development of green mobility. This is ad-
vantageous for public health, and it can limit congestion and reduce CO
2
emis-
sions. The investments are tasks for the public authorities, as the state and the
municipalities respectively own the roads.
Implementation:
The parties of the transportation agreement have allocated 30
m. DKK in 2021 and 170 m. DKK annually in 2022-2023 to the construction of
bicycle infrastructure. This will support access to a more coherent bicycle road
network for citizens and thereby better opportunities to choose the bicycle rather
than other modes of transport.
In addition, 150 m. DKK will be allocated to a scheme targeting municipal bicycle
construction projects. This presupposes municipal co-financing of 50 % of the
costs, meaning that in total 300 m. DKK worth of municipal bicycle paths will be
constructed. The municipal contribution will have to be prioritised within the mu-
nicipalities’ construction budget. In total this means an allocation of 180 m. DKK
in 2021 and 170 m. DKK annually in 2022-2023.
The investments in cycling infrastructure will integrate the EU Commissions Sus-
tainable and Smart Mobility Strategy by contributing to urban planning, and on
connectivity with rural and suburban areas, so that commuters are given sustaina-
ble mobility options. Studies show that urban planning has an impact on the use
of the bicycle, which is why municipal urban planning, transformation of existing
urban spaces and urban policy are also tools that can contribute to bicycle promo-
tion locally and nationally. Pools targeted at municipalities can therefore help to
promote cycling locally.
The Bicycle subsidy scheme to the state roads will integrate the EU Commissions
Sustainable and Smart Mobility Strategy by investing in safer cycling infrastructure
on state roads. The investment consists primarily of the construction of new cycle
paths, especially for the benefit of commuting to work and school, as well as im-
proved crossing options on sections where the state road is a barrier.
Target group:
Households and companies.
Timeline:
The subsidy scheme will be initiated at the beginning of 2021 and the
investments in bike paths on state roads will be carried out in the period 2021-
2023. The construction of the bike paths on state roads is expected to be com-
pleted in Q4 2025.
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EU state aid rules:
The investments are tasks for the public authorities, as the
state and the municipalities respectively own the roads. The initiative does not in-
volve user-financing. Thus, it is not economic activity. Accordingly, the invest-
ments are not covered by EU state aid rules.
Do no significant harm:
Table 2.5.10
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes No
X
Significant negative impact?
No – the measure promote green transporation and
infrastructure.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine re-
sources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of wa-
ter, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
X
No – the investments in infrastructure for bicycles
raises the incentive to use types of sustainable trans-
portation.
The initiative encourages the usage of sustainable road
transport. The initiative is not expected to have an im-
plication for the use and protection of water services.
X
X
No. the investments in infrastructure for bicycles raises
the incentive to use types of sustainable transportation.
The measure is not expected to lead to an increase in
disposal of waste, lead to significant inefficiencies in
the direct or indirect use of any natural resource at any
stage or cause significant and long-term harm to the
environment.
X
The measure is expected to reduce emissions of
pollutants into air. This especially concerns the support
of clean air in the cities by promoting green transportation
and infrastructure through the subsidy schemes to infra-
structure for electric bicycles and investments in bike
paths in state roads and municipalities.
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of eco-
systems; or
(ii) detrimental to the conservation status of habitats and species, in-
cluding those of Union interest?
X
No – the initiatives in this component will not conflict
with the protection and restoration of biodiversity and
ecosystems.
Pollutants are strictly regulated in Danish environmental
laws and this does not change with the initiatives of the
sustainable road transport.
C) Subsidy scheme to green ferries
Addressing challenges:
The transport sector constitutes a substantial share of
the emission of greenhouse gasses. The transition to green transportation requires
significant public investments as private agents might not take the benefits from
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reduced greenhouse gas emissions properly into account in their own investment
decisions.
Objectives:
To promote the green transition of the transportation sector it is im-
portant to strengthen schemes that support initiatives contributing to this. The
support scheme covers co-financing of a green transition of municipal ferries.
The initiative follows up on the recommendations from relevant business organi-
sations across the transport sector and contributes to a green boost of the econ-
omy. The support scheme is part of a larger agreement with additional funds to
those covered by RRF. At present, there are ongoing political negotiations about
the scale of the additional funds.
Co-financing of a green transition of municipal ferries:
In December 2020,
an analysis documenting the total societal benefits and the potential of a green
transition of Danish ferries, most of them run by municipalities, was completed.
Denmark has many islands, and most ferry routes are the primary connection be-
tween the islands and the rest of Denmark, so the ferries are an important mode
of transport in Denmark. Most of the current ferries are conventional ferries,
which sail on diesel fuel. Alternatives to conventional propulsion can thus reduce
the greenhouse gas emissions significantly.
1
The magnitude of the investments re-
quired to make the transition is too costly for the municipals to conduct on their
own. In addition, as the monetary payoff of the investment is negative when
greenhouse gas reductions are not included, central government support is neces-
sary for the green transition of municipal ferries. In total, DKK 200 million from
RRF are allocated to the green transition of municipal ferries (DKK 150 million in
2021 and DKK 50 million in 2022). With a subsidy percentage of 15-25, the DKK
200 million DKK will enable a green transition of approximately 23 ferries.
The following overall criteria will be used for the subsidy for green transition of
ferries: The CO
2
effect and environmental effect per invested DKK. The funds
will only be used for investments in e.g. new green ferries, retrofit or other neces-
sary infrastructure such as charging stations for the ferries. In total, RFF’s contri-
bution to the scheme consists of 150 m. DKK in 2021 and 50 m. DKK in 2022.
Target group:
Municipals.
Timeline:
The allocated funds will go to a support scheme together with poten-
tial additional funds, where municipalities can apply for co-financing. It is ex-
pected, that the application deadline will be sometime in the autumn of 2021, so
that an announcement of commitment to support/not support can be given to
applicants in 2021 and 2022.
1
”Grøn omstilling af danske indenrigsfærger”, COWI (2020).
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EU state aid rules:
The investments are tasks for the public authorities, as the
municipalities respectively operates the ferries included. The ferries in question
can generally be considered as services of general economic interest to the public,
because they are important to the citizens and would not be supplied without
public intervention. The municipalities will take the RRF support into account in
the compensation mechanism to the operator, and if the co-financed ferry is not
owned by the municipality, the operator will have to pay back its residual value at
the end of the contract.
Do no significant harm:
Table 2.5.11
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to
significant greenhouse gas emissions?
Yes No
X
Significant negative impact?
No – on the contrary, the measure is expected to lead to
reductions in the greenhouse gas emissions by
exchanging ferries from dieselferries to ferries with
reduced emissions such as electric ferries or ferries that
sail on biofuels.
No – the measure has the objective to reduce emissions
from ferries and thereby improving the climate.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
X
X
No - the measure encourages the usage of sustainable
ferries and limits the number of polluting and emitting
ferries. The measure is expected to have positive impli-
cations for the use and protection of water and marine
resources because it limits the emission of CO2 and
particles.
X
No – the measure aims at preventing ‘transport waste’
by getting more sustainable ferries, and it will therefore
not cause significant and longtime harm to the environ-
ment. The exchanging of ferries can lead to an earlier
replacement of some ferries and thereby create some
waste at an earlier state than without the subsidy. How-
ever, because the subsidy will apply to both retrofit of
existing ferries, when this is possible, as well as re-
newal of ferries, when this is optimal, it will not lead to
a significant increase in the disposal of waste. In addi-
tion, the co-financing will not go to propellants, and will
therefore not lead to significant ineffeciencies in the di-
rect or indirect use of any natural resources.
No – the measure is expected to lead to reductions in
emissions of pollutants into air, water and land.
Pollution prevention and control: Is
the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
X
No – the measure is not expected to conflict with the
protection and restoration of biodiversity and ecosys-
tems. Pollutants are regulated in Danish environmental
laws and this does not change with the initiatives of ex-
changing ferries to sustainable ferries.
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Green and digital dimensions of the component
Green transition
Ensuring a green and sustainable future is one of the Danish Government's main
priorities. The Danish government has set an ambitious reduction target for
greenhouse gas emissions of 70 per cent in 2030 compared to 1990. The transport
sector will play an important role in reaching this target as it will require a compre-
hensive green transformation of the transport sector. As such, it is necessary to
explore the potential of all transport modes to ensure that the transport sector
also contributes to reaching the 70 per cent target.
However, given that road transport’s share of the transport emissions are 90 per
cent, initiatives must focus especially on delivering emissions reductions from this
sub-sector. Therefore, the Danish government and its supporting parties have
agreed on a deal of green transition of the road transport sector initiating
measures that will reduce emissions from passenger cars and heavy road freight
transport by a total of 2,1 m. tonnes CO
2
e. Some of these measures are presented
in this component and will contribute to ensure a green transition of the road
transport sector in Denmark.
The green transition requires better solutions, new technologies and behavioural
change across sectors and industries and the measures presented in this compo-
nent contribute to this development.
Do no significant harm
The initiatives presented in this component will contribute to ensure a green tran-
sition of the road transport sector. The aim of the initiatives is to ensure a transi-
tion to green cars and reduce the use of fossil fuel cars.
At the same time it acknowledges that conventional cars will constitute a majority
of the general car stock over the coming decades, necessitating initiatives to re-
duce the CO
2
-emissions stemming from conventional cars, which is why this
component also include measures to ensure this, e.g. the campaign about car-shar-
ing and carpooling, analysis of heavy haulage and investments in infrastructure for
bicycles.
The initiatives in this component will not conflict with the protection and restora-
tion of biodiversity and ecosystems.
Financing and costs
The recovery funds will partly finance the initiatives below with 1.6 bn. DKK in
total in 2021-25. The remaining costs are covered by increasing the ownership tax
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on cars, existing reserves and a new road-pricing toll for heavy vehicles based on
CO
2
-emissions from 2025.
The effects on the sale of green cars and the financial cost of the initiative regard-
ing a re-prioritisation of the registration tax and the low electricity charge are esti-
mated by the Ministry of Taxations CES-model for car selection and ministry’s car
choice model. Using this model, it is estimated that the costs of the initiative in
2021-2025 amounts to 4.9 bn. DKK, cf.
Table 2.5.4,
of which 750 m. DKK is
funded from the RRF.
The CES-model was developed during the work with
Commission for the green conver-
sion of passenger cars
in 2019-2020 and is thus documented in their first report on
taxation on cars from September 20
th
. The model evaluates the effects on chances
in the car taxation on the choice of purchasing a new car based on its total cost of
ownership.
The loss (or gain) of revenue due to the changes on the sale of cars is then calcu-
lated in the ministry’s car choice model. The model is based on a large dataset of
the total car sales in one year and thus includes both mechanical effects and ef-
fects from changes in behaviour.
Regarding the investments in bike paths along state roads, it is expected that 370
m. DKK for investments in bicycle projects along state roads will be able to fi-
nance approx. 50 km bicycle path in total and ensure improvement of five safe
road crossings for bicycles. This is based on the specific projects calculations from
the Danish Road Directorate, which estimates the cost of 1 km of bicycle path to
be in the range of 3-12 m. DKK depending on local conditions expropriation
costs etc. The average cost is approximately 7.4 m. DKK per km bicycle path.
It is expected that a subsidy scheme of 150 m. DKK for co-financing (50 %) mu-
nicipal bicycle projects will encourage the municipalities to prioritise the construc-
tion of bicycle paths and thereby green mobility. Studies show that urban planning
has an impact on the use of the bicycle, which is why municipal urban planning,
transformation of existing urban spaces and urban policy are tools that can con-
tribute to bicycle promotion locally and nationally. Pools targeted municipalities
can therefore help to promote cycling locally in the municipalities through e.g. in-
vestments in new bicycle infrastructure, such as super cycle trail. Furthermore,
Denmark has good experience with pools for co-financing of municipal bicycle
projects in Denmark, with high application levels. In the period 2009-2020, ap-
prox. 1.1 bn. DKK was given as a subsidy for bicycle projects in the municipalities
from the Danish state.
Regarding the analyses and campaign in this component, the costs are estimated
from experiences with earlier work from similar projects. The Danish Road Direc-
torate has estimated the cost of the analyses on double trailers to 1 m. DKK,
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which corresponds to the expected use of one full-time employee including over-
head to carry out, e.g. analyses of road safety, vehicle technical, road technical and
environmental conditions etc.
The road-pricing test can be considered a complex research project, and the fund-
ing thus covers investments in equipment, IT support and external assistance in-
cluding project management and dissemination of results. There has not been
made a political decision yet on how the test will be conducted. This is expected
in the fall of 2021. However, computationally it can likely be assumed that the test
will be a smaller version of a project description from the so-called “Trængs-
elskommission” which in 2013 suggested a large road-pricing-test-scheme of 100
m. DKK. Since there is allocated 20 m. DKK for this project, it will not be possi-
ble to do the same test-scheme, but it is expected that a lot of inspiration can be
found in the material from 2013
2
.
A national campaign to the promotion of carpooling and car sharing needs to tar-
get the culture, habits and prejudices regarding carpooling and car sharing among
the Danish road users. These aspects are difficult to change, therefore, the cam-
paign will need a substantial amount of advertising funds during a long period of
time and a well working concept to have a real effect. The expenses for the cam-
paign are estimated to 3 m. DKK. In January 2021, the anti-litter campaign
'Thank you for nothing … on the road' (Tak for ingenting … i vejkanten.) was
launched with a budget on 1.2 m. DKK. The campaign was primary centred on
the capital of Denmark, Copenhagen. While the expenses to developing campaign
material in the two campaigns are similar, it will require extra funding to run a na-
tional campaign on social media compared to a campaign centred on Copenhagen.
Regarding the green transition on ferries, the Danish Ministry of Transport esti-
mates that the 200 m. DKK will enable a green transition of approximately 23 fer-
ries with a support percentage of 15-25. This is based on an analysis by COWI
3
of
all Danish inland ferries assessing the societal economy in transforming the routes
into a greener profile e.g. electrified ferries or other alternative zero-emission
fuels. The 23 ferries are identified by calculating the routes, which have the most
potential in terms of societal economy. This is done by including parameters like
age of the current, length of route, current emissions (CO2, SO2, NOx and parti-
cles).
22
3
https://www.trm.dk/publikationer/2013/traengselskommissionens-betaenkning-og-sammenfatning/
COWI (2020): Grøn omstilling af danske indenrigsfærger.
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Tabel 2.5.12
Overview of RRF-funding for the initiatives in component of sutainable road transport
M. DKK, 2021-prices
I) Incentives to choose green cars
a. Re-prioritisation of the registration tax and the low electricity
charge
b. Temporary increase in the scrapping premium for old diesel
cars
Total
870
750
120
2021
254
149
105
2022
182
172
10
2023
163
158
5
2024
141
141
-
2025
132
132
-
II) Analysis, tests and campaigns for greener transport
a. Development test of road-pricing
b. Sharing cars and car-pooling (awareness)
c. Analysis of test scheme with double trailers
d. Analysis of the regulation on weight and dimensions to
optimise heavy haulage
25
20
3
1
1
5
-
3
1
1
20
20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
III) Green transportation and infrastructure
a. Scheme to infrastructure for electric bicycles
b. Bicycle subsidy scheme to the state and municipalities
c. Subsidy scheme for green ferries
730
10
520
200
330
-
180
150
220
-
170
50
170
-
170
-
10
10
-
-
-
-
-
-
In total
1,625
589
422
333
151
132
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Table 2.5.13
Financial consequences in total of the full reform on green road transportation
Bn. DKK (2021-level)
Initiatives
Re-prioritisation of the registration
tax and the low electricity charge
1
Obligation to reduce GHG intensity
of fuels on a well-to-wheel basis:
Kilometre-based toll for heavy duty
vehicles based on CO
2
-differentia-
tion
Financing the lack of missing index-
ing of the registration tax
Analysis of test scheme with double
trailers
Analysis of the regulation on weight
and dimensions to optimise heavy
haulage
Temporary increase in the scrap-
ping premium for old diesel cars
Development test of road-pricing
Sharing cars and carpooling
Scheme to infrastructure for electric
bicycles
Subsidy scheme for green ferries
Bicycle subsidy scheme to the state
and municipalities
Adjustment of the taxation of com-
pany cars
Increased economic deduction for
shared green cars
Increase of the countervailing
charge
Increase of the ownership tax
Financing from previous political
agreement from 2017
0,0
-0,15
-0,18
0,00
-0,001
0,5
-0,05
-0,17
0,00
-0,001
0,5
0,1
0,0
-0,17
0,00
-0,001
0,4
0,4
0,0
0,01
-0,001
0,4
0,7
0,0
0,00
-0,001
0,4
1,0
0,0
0,01
-0,002
0,4
1,4
0,1
0,00
-0,002
0,3
1,3
0,1
0,00
-0,003
0,3
1,2
0,2
-0,01
-0,004
0,3
1,2
0,2
-0,02
-0,005
0,3
1,1
0,3
-0,003
-0,01
2021
-0,8
-0,5
-
2022
-0,8
-0,8
0,0
2023
-0,7
-1,0
0,0
2024
-0,6
-1,2
0,0
2025
-0,5
-1,4
-0,3
0,5
-0,3
-0,001
-0,001
-0,11
-0,01
-0,02
-0,01
-0,4
-0,5
-0,5
-0,6
2026
0,0
-1,4
-0,3
0,5
-0,6
2027
0,0
-1,4
-0,3
0,5
-0,6
2028
0,1
-1,4
-0,7
1,0
-0,5
2029
0,1
-1,5
-0,7
1,0
-0,5
2030
-0,2
-1,4
-1,0
1,0
-0,4
1)
The revenue includes a change in the registration and ownership tax for new registrations and the decrese profit from a low
electricity charge to electrical charging until 2030. 2) The obligation to reduce GHG intensity of fuels is phased in from 3,4 %
in 2022-2024 increasing currently to 5,2 % in 2025, 6 % in 2028 and 7 % in 2030 and beyond.
Resources: Own calculations.
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Tabel 2.5.14
Measureable effects of the full reform of green road transportation
CO
2
e-reduction
2025
Transportation
Re-prioritisation of the registration tax and the low electricity charge
Obligation to reduce GHG intensity of fuels on a well-to-wheel basis:
Increasing and improving requirements of sustainability criteria
2
Kilometer-based toll for heavy duty vehicles based on CO
2
-differentiation
Analysis of test scheme with double trailers
Analysis of the regulation on weight and dimensions to optimise heavy haulage
Temporary increase in the scrapping premium for old diesel cars
Development test of road-pricing
Sharing cars and car-pooling
Scheme to infrastructure for bicycles
Subsidy scheme for green ferries
Bicycle subsidy scheme to the state and municipalities
Mt CO
2
e
0,2
0,7
0,1
not relevant
not relevant
-
not relevant
-
-
0,018
-
0,5
1,4
0,2
not relevant
not relevant
-
not relevant
-
-
0,018
-
2030
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Component 2.6
Digitalisation
As a part of the Danish government’s reform agenda, digitalisation
will be a flagship in leading Denmark stronger through the COVID-
19 crisis and accelerate the transition to a more modern and
digital welfare society.
Through a reform push consisting of a new digital strategy, the
aim is to promote a digital transformation across all sectors of
society advancing welfare and equality, growth and employment,
the green transition and the restart of the Danish economy after
the COVID-19 crisis.
Denmark is one of the leading digital countries in the world and
therefore further reformation requires well-thought solutions. As
part of the process, the government has established a digitalisa-
tion partnership that will qualify and contribute with recommenda-
tions for the new strategy. By doing so, Denmark will build its very
strong digital foundation in cooperation with a broad variety of
stakeholders.
In addition, Denmark is proposing investments supporting the
digital transition through strengthened broadband connectivity
enabling more citizens to connect to and utilise digital solutions.
Furthermore, investments in increasing digital export opportunities
for SME’s are included.
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Description of the component
Box 2.6.1
Digitalisation
Digitalisation, New digital strategy, Digitalisation partnership, Digital Business Transformation, Digital Transition,
Public Sector Efficiency, Adoption of new technologies
Objective:
Overall, the aim is to promote a just and inclusive digital transition that will support the development of better wel-
fare services, job creation and growth, as well as the green transition. To promote this digital reform agenda, Den-
mark will formulate and implement a new digital strategy covering all sectors of society. The digital strategy will con-
sist of five sub-reforms.
The objectives of the new digital strategy are:
Sub-reform 1 – Strategy for the digital public sector and services of the future:
Creating the digital public sec-
tor of the future. This is done by a continuous modernisation of the digital infrastructure meeting the needs of all
citizens and businesses and strengthening connectivity.
Sub-reform 2 – Strategy for the digital professions and jobs of the future:
Securing the digital professions and
jobs of the future and supporting growth and export of goods and services by strengthening digitalisation within
business and industry.
Sub-reform 3 – Framework for innovation, public-private partnerships and use of new technology:
Creating
better opportunities for co-creation and innovation. This is done by using new technologies and public-private part-
nerships to streamline and improve public digital services, accelerate digital transition of businesses, and support
climate change mitigation.
Sub-reform 4 – Framework for a data-driven society:
Creating a data-driven society and improving the digitalisa-
tion of SMEs, health systems and digital services by promoting better access to data, secure and interoperable data
infrastructures, and a digital-ready regulatory framework.
Sub-reform 5 – Framework for Denmark fit for a digital future:
Creating a framework for Denmark fit for a digital
future whilst preserving the best of our society by e.g. enhancing the cyber- and information security, digital skills
and competencies benefitting all citizens, businesses and employees.
The Danish government has established a digitalisation partnership consisting of top managers and experts who
will qualify and contribute with recommendations for each of the sub-reforms, cf. the terms of reference for the digi-
talisation partnership. This approach ensures that the digital reform will include the most demanded and effective
solutions in the further digital transformation of the Danish society. Building upon the recommendations of the part-
nership, the underlying initiatives of the digital strategy will be subject to political negotiations before the govern-
ment initiates the specific actions in public authorities within the five sub-reforms. The Danish government has an-
nounced the publication of the new digital strategy by the end of 2021, cf. the terms of reference for the digitalisa-
tion partnership.
In addition to the digital strategy, the component also consists of measures concerning the strengthening of the
SME-digitalisation programme and continuation of the broadband pool. The objectives of these measures are to
support especially SME’s in overcoming barriers to invest in and use new and advanced technology and e-com-
merce solutions as well as to promote connectivity by means of high-speed internet access in rural areas across
the country.
Reforms and investments:
The digital strategy will consist of five sub-reforms building on the partnership’s recommendations:
I. Digital strategy: 500 m. DKK.
a) Strategy for the digital public sector and services of the future
b) Strategy for the digital professions and jobs of the future
c) Framework for innovation, public-private partnerships and use of new technology
d) Framework for a data-driven society
e) Framework for Denmark fit for a digital future
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In addition, the promotion of digital transition in Denmark will consist of two investments that are reinforcements of
existing initiatives:
II. SME’s digital transition and export: 65 m. DKK.
III. Broadband pool: 100 m. DKK.
Estimated cost:
665 m. DKK of which 100 per cent is covered by Recovery and Resilience Facility. Additional national funds may
be granted to support and reinforce the realisation and implementation of the digital strategy.
Main challenges and objectives
2.6.1 Main challenges
Continuous digital transition of the public and private sector is a prerequisite for a
modernised economy and public sector reaping the benefits of digitalisation and
new technology. In promoting the digital transformation, the Danish govern-
ment’s digital strategy will seek to address key challenges within the following ar-
eas:
Modern digital infrastructure and closing the digital divide.
In Denmark, a common
digital infrastructure and national digital solutions are well known, used and
trusted by almost all citizens and businesses across the public and private sec-
tor. Although the general user satisfaction is high, some users still experience
that the digital world can be too complex and difficult to navigate. As an ex-
ample, 23 per cent of citizens indicate that they needed help when they most
recently used a digital self-service solution. This highlights the importance of
promoting digital inclusion and online digital services accessible to all as well
as continued investments in and modernisation of our national digital infra-
structure and solutions. Therefore, it is crucial to ensure a modern digital in-
frastructure and strong digital connectivity across the country in order to ad-
dress the needs of all citizens and businesses.
Digitising businesses.
Digitisation is a driving force for increased productivity.
Denmark is digitally well established and suited for seizing the digital opportu-
nities. Danish companies continue to be among the most digital in the EU.
The progress in the digital transition in Denmark is slightly below the EU av-
erage. These include companies' use of new and advanced digital technologies
for data analysis and artificial intelligence. Especially the small and medium-
sized enterprises’ use of newer technologies lags behind comparable countries,
e.g. in relation to Big Data. Furthermore, the Danish financial sector uses
enormous amounts of resources to counteract financial crime. While signifi-
cant resources are invested in the fight against financial crime, the system has
weaknesses that are not solvable in the current setup.
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Innovation and new technologies.
Even though Denmark is among the digital front-
runners in the world, the upscale and dissemination of successful new tech-
nologies and digital solutions across the public sector – typically in close col-
laboration with businesses – are often slow and fragmented. This is despite
the fact that emerging technologies and digital welfare solutions, such as artifi-
cial intelligence (AI), cloud services and robotics, offer opportunities to link
the various parts of the public sector closer together and create better and
more secure services. Therefore, the utilisation and dissemination of emerging
technologies and innovative solutions from the private sector remain an im-
portant area of development. As an example, while 33 per cent of Danish
public authorities apply AI or machine learning today, 91 per cent expect to
apply the technologies in 2023.
Better utilisation of data.
The global climate crisis requires that we find new ways
to reduce the climate footprint of citizens, businesses and the public sector. At
the same time, the COVID-19 crisis has highlighted the importance of im-
proving the effectiveness of our health and care systems. The utilisation of
data holds great potentials in these respects, but today the accessibility, quality,
and interoperability of data are often a challenge. Coupled with complex regu-
lation that often are difficult to administer digitally, these barriers inhibit bet-
ter exchange and access to different types of data in order to support
healthcare delivery, research and the green transition of society, e.g. by reduc-
ing the energy consumption of buildings, which accounts for almost 40 per
cent of the total energy consumption in Denmark.
Strong digital skills and competences.
Due to the continuous digital development of
society and our need to be able to support e.g. the green transition by devel-
oping and using new technology, Denmark faces a need for reskilling and up-
skilling the Danish workforce across the private and public sector. It remains
crucial for the digital transformation of the Danish economy to address the
shortage of digital technology experts and specialists, especially women. Fur-
thermore, the technological and digital development puts great demands on
citizens’, businesses’ and public employees’ general digital knowledge and
competencies. This includes abilities to use digital technologies in a meaning-
ful way for working, studying and for everyday life in general as well as in-
creased awareness among citizens, businesses and public employees on how to
critically evaluate digital technologies and navigate in the digital culture of so-
ciety.
Enhanced cyber security.
Denmark is one of the leading digital countries in the
world, and our digital solutions are crucial to a functioning society. As such,
we are also constantly at risk of cyber-attacks, and it is considered one of the
main threats to our society, critical infrastructure, businesses and public au-
thorities. Technological development and digitisation provides a number of
positive gains, but it also provides new areas of attack and potential vulnera-
bilities. According to the Danish Centre for Cyber Security, a very high cyber
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threat has become a basic condition. The development necessitates that the
level of ambition and focus in the national efforts are continuously adjusted.
2.6.2 Objectives
E-government, digital business transformation, digital public services, and com-
mon digital ecosystems have been a Danish political priority the last 20 years.
Therefore, Denmark has a strong digital foundation to stand and build upon. For
example, Denmark was in 2020 ranked as the most digital country in the world by
the UN E-Government Survey and was furthermore ranked 3
rd
by the European
Commission in their 2020 Digital Economy and Society Index (DESI).
However, we need to use this favourable position to support that Denmark also
in the future remains fit for the digital age. Lately, the COVID-19 pandemic has
also underlined how digital capabilities are paramount in supporting sustainable
economic recovery and the everyday work of employees – both in Danish busi-
nesses and within the public sector.
Collectively, the reforms and investments of the component will aim to address
administrative and bureaucratic barriers, increase efficiency and growth, stimulate
the competitiveness and digital transition of businesses, and, at the same time,
strengthen green transition as well as the quality of the public digital services that
citizens and businesses meet.
Furthermore, the ambition is to ensure resilient, secure and user-friendly digital
services, including e-health services, by supporting the modernisation of the na-
tional digital infrastructure and the utilisation of new technology across the public
and private sector. This will also enhance national resilience, crisis preparedness
and Denmark’s capacity to initiate effective government measures in the future
and to address challenges like those witnessed during the COVID-19 crisis.
The ambitions of these reforms and investments are also in line with the country
specific recommendations from the European Semester, emphasizing that Den-
mark would need to invest in digital infrastructure as well in education, training
and upskilling in order to maintain our strong position in the long term and to en-
sure our competitiveness and benefit from the digital transformation. The
measures will also improve Denmark’s digital performance as measured in the
Digital Economy and Society Index, e.g. by continuing the digitisation of public
services; raising awareness and improving knowledge of citizens, businesses and
authorities; and helping non-digital citizens to use digital public services.
In particular, measures of this component are expected to contribute to the Euro-
pean Flagship initiatives “Modernise” and “Reskill and upskill” by promoting ac-
cessible and interoperable digital public services, ensuring cross-border electronic
identification and authentication, as well as supporting digital skills, education and
training. Moreover, the component will contribute to the flagship “Connect” by
enhancing connectivity in rural areas across the country.
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However, the Danish ambitions in the digital requires a thorough process where it
is carefully considered how to spend the funds wisely. Therefore, the Danish gov-
ernment has established a digitalisation partnership. The broad anchoring and in-
volvement of stakeholders across society can qualify digital aspects and will con-
tribute with recommendations for the digital strategy and which efforts need to be
prioritsed. Such a process involving all relevant actors is needed to ensure a con-
sistent and cross-sectoral digitalisation strategy for Denmark.
Summary description of the reforms and investments of the
component
As a part of the Danish government’s reform agenda, the Danish government will
promote a digital transformation through a new digital strategy that consists of
five sub-reforms covering all sectors of society. The strategy will aim to address
administrative and bureaucratic barriers, increase efficiency and growth, stimulate
the competitiveness and digital transition of businesses, and, at the same time,
strengthen the green transition as well as the quality of the public digital services
that citizens and businesses meet.
In addition to the new digital strategy, the component will consist of measures
concerning the strengthening of the SME-digitalisation programme and continua-
tion of the broadband pool. The objectives of these measures are to support
SMEs in overcoming barriers to invest in and use new and advanced technology
and e-commerce solutions as well as to promote connectivity by means of high-
speed internet access in rural areas across the country.
Together, these reforms and investments in digitalisation will be a flagship in lead-
ing Denmark and Danish companies stronger through the COVID-19 crisis by
advancing welfare and equality, growth and employment, the green transition and
the restart of the Danish economy.
Denmark will provide more detailed descriptions on concrete initiatives, benefi-
ciaries, target groups, financing and costs etc. before the end of 2021 once the dig-
ital partnership has submitted its recommendations and the government has
launched the new digital strategy. Denmark will receive no RRF-funding for the
digital strategy before these detailed descriptions has been submitted to the Com-
mission. This approach will ensure that Denmark will not receive RRF-funding
for initiatives that could be in conflict with the criteria within the regulation for
the Recovery and Resilience Facility.
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Reforms
2.6.3 Digital strategy
To promote this digital reform agenda in Denmark, the Danish government will
establish a new digital strategy covering all sectors of society. The strategy will
consist of five new sub-reforms:
Sub-reform 1:
Creating the digital public sector of the future by continuous
modernisation of our digital infrastructure meeting the needs of all citizens
and businesses and strengthening connectivity.
Sub-reform 2:
Securing the digital professions and jobs of the future by
strengthening digitisation within business and industry supporting growth and
export of goods and services.
Sub-reform 3:
Creating better opportunities for co-creation and innovation by
using new technologies and public-private partnerships to streamline and im-
prove public digital services, accelerate digital transition of businesses, and
support climate change mitigation.
Sub-reform 4:
Creating a data-driven society by promoting better access to data,
secure and interoperable data infrastructures, and digital-ready regulatory
framework to improve the digitalisation of SMEs, health systems and digital
services.
Sub-reform 5:
Creating a framework for Denmark fit for a digital future whilst
preserving the best of our society by e.g. enhancing our cyber- and infor-
mation security, digital skills and competencies benefitting all citizens, busi-
nesses and employees.
As part of the process to formulate and elaborate the five sub-reforms, the Dan-
ish government has established a digitalisation partnership that will deliver recom-
mendations for the five sub-reforms. The partnership consists of top managers
and experts from the Danish business community, including SMEs, representa-
tives of municipalities and regions, academia, civil society and labour market par-
ties. The broad anchoring and involvement of stakeholders across society, govern-
ment levels and the public and private sector will qualify the digital aspects and
needs in relation to citizens, businesses, the green transition and the welfare soci-
ety and thereby creating a better foundation for the five new sub-reforms.
Considering the recommendations of the partnership, the specific initiatives of the
new digital strategy and its five sub-reforms will then be subject to political nego-
tiations and approval. The elaboration of the digital strategy’s five sub-reforms
will therefore rely on the partnership’s recommendations, which are delivered
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through 2021. Following political negotiations, the government will initiate spe-
cific initiatives and actions in public authorities as part of the five sub-reforms.
Thus, the Danish government has announced the publication of a new digital
strategy by the end of 2021.
In connection with the partnership, a digitalisation unit will be established with
the responsibility of providing secretarial assistance for the partnership, including
the preparation of the partnership's discussions and the integration of its recom-
mendations in the new digital strategy for Denmark. The unit consists of the Min-
istry of Finance (chair); the Ministry of Industry, Business and Financial Affairs;
the Ministry of Climate, Energy and Utilities; the Ministry of Health; the Ministry
of Foreign Affairs as well as Local Government Denmark (representing munici-
palities), Danish Regions (representing regions) and representatives of the social
partners (trade unions).
1a. Sub-reform: Creating the digital public sector and services of the future
Addressing challenges:
The measure will address the bridging of the digital di-
vide by modernising digital infrastructure, digital public services and public ad-
ministrations. Moreover, the measure will address the interoperability between
central, regional and local administrations, the acceleration of administrative pro-
cesses, and the improvement of the digital interaction between administrations,
citizens, and businesses.
Objectives:
Since 2001, local, regional and central governments have collaborated
on joint-public digital strategies setting the course for public sector digitisation in
Denmark, including the public interaction with businesses and industry. The cur-
rent joint-public digital
strategy
expires in 2021. The objective of this sub-reform
will be on improving the digital infrastructure and solutions that citizens, busi-
nesses and authorities use across the public administration on the central, regional
and municipal government level.
The modernisation of the national digital infrastructure in Denmark will also sup-
port the development and implementation of cross-border and interoperable digi-
tal services, e.g. eID gateway and Single Digital Gateway.
The terms of reference for the digitalisation partnership states that it must prepare
recommendations and initiatives for the work on a new joint public digitalisation
strategy and for the ongoing development and adaptation of the strategy through-
out the strategy period.
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Example of possible measure creating the digital public sector and services of the
future:
A new joint-public digital strategy could set the framework for how digitisa-
tion, data and new technologies can be used actively to promote welfare,
strengthen coherence across the public sector, strengthen digital inclusion ef-
forts, contribute to the growth conditions of companies, and support the
green transition.
Implementation:
The digitalisation partnership is expected to deliver its recom-
mendations for sub-reform 1 by the end of September 2021 with a launch of the
governments new digital strategy by the end October 2021. The Ministry of Fi-
nance (Agency for Digitisation) will be responsible for the general implementation
and follow-up on the digital strategy. The Agency for Digitisation will be responsi-
ble for the implementation and follow-up on initiatives within this sub-reform.
Target group:
Citizens, public authorities (including digital solutions and infra-
structure used by central government as well as local and regional administrations)
and the private sector (businesses).
Compliance with State Aid Rules:
Prior to the agreement, it will be ensured
that all initiatives in the sub-reform for creating the digital public sector and ser-
vices of the future will comply with State Aid rules. Possible private providers of
goods or services will be selected on the basis of competitive, transparent, non-
discriminatory and unconditional tenders in line with the principles of the TFEU
in public procurement.
Timeline:
2022-2025.
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Do no significant harm:
Table 2.6.1
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. By improving the digital infrastructure and solutions that citi-
zens, businesses and authorities use across the public administration
on the central, regional and municipal government level, the sub-reform
supports the objective of improved climate change mitigation and adap-
tation through more energy efficient solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change mitigation will be
addressed in the analysis.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. By improving the digital infrastructure and solutions that citi-
zens, businesses and authorities use across the public administration
on the central, regional and municipal government level, the sub-reform
supports the objective of improved climate change mitigation and adap-
tation through more energy efficient solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change adaption will be
addressed in the analysis.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. No degradation risks related to sustainable use and protec-
tion of water and marine resources are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of the sustainable use and protec-
tion of water and marine resources will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. The sub-reform is consistent with the national waste man-
agement plan.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk against the transition to a circular
economy will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. No degradation risks related to pollution prevention and con-
trol to air, water or land are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to pollution prevention and control
will be addressed in the analysis.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and primary indirect effects across the life cycle of the
measure. No degradation risks related to protection and restoration of
biodiversity and ecosystems are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to the protection and restoration of
biodiversity and ecosystems will be addressed in the analysis.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
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1b. Sub-reform: Securing digital professions and the digital jobs of the future
Addressing challenges:
If we are to create the digital foundation to support our
ambitions for the data-driven society in the future, we need to initiate a large-scale
digital transformation for all small and medium-sized enterprises in Denmark e.g.
in order to automate the processes handling of economic and financial data trans-
actions.
Objectives:
The measure aims
to strengthen the digitalisation and digital readi-
ness of Danish companies, in particular SMEs, as well as to support the compa-
nies’ access to employees with adequate digital and technological skills as well as
use of advanced technologies. This will help ensure that the digital transition is
used to support good and well-paid jobs, increase Danish companies' productivity
and competitiveness and ensure a readiness for change and robust business.
This is in line with the terms of reference for the Digitalisation Partnership. The
partnership will prepare recommendations and initiatives to strengthen the digiti-
sation readiness of SMEs and companies, the use of advanced technologies,
productivity and competitiveness etc.
Examples of possible measures securing digital professions and the digital
jobs of the future:
Strengthening the standardization and automation of key bookkeeping and ac-
counting processes in SME’s. For example, by using a digital standard chart of
accounts, electronic invoicing and automatic bookkeeping. Electronic invoic-
ing using the European format, Peppol, will enable automation of the SME'
bookkeeping, thus reducing administrative costs and errors associated with
bookkeeping.
Development and implementation of a national electronic platform for public
procurement to be used by all contracting authorities when tendering out pub-
lic contracts. The system would handle all electronic communication in rela-
tion to public procurement and thus the digitisation in SMEs without regular
participation in public procurement processes.
Focusing on getting more people in the workforce with STEM competencies,
including IT competencies. This could cover initiatives with both a short- and
long-term focus and a broad target group, from relatively small schoolchildren
to experienced workers.
Implementation:
The digitalisation partnership is expected to deliver its recom-
mendations for sub-reform 2 by the end of September 2021 with a launch of the
governments new digital strategy by the end October 2021. The Ministry of Fi-
nance (Agency for Digitisation) will be responsible for the general implementation
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and follow-up on the digital strategy. The Ministry of Business, Industry and Fi-
nancial Affairs will be responsible for the implementation and follow-up on initia-
tives within this sub-reform.
Target Group:
The private sector, businesses and SME’s.
Compliance with State Aid Rules:
Prior to the agreement, it will be ensured
that all initiatives in the proposed sub-reform for securing digital professions and
the digital jobs of the future will comply with State Aid rules. Possible private pro-
viders of goods or services will be selected on the basis of competitive, transpar-
ent, non-discriminatory and unconditional tenders in line with the principles of
the TFEU in public procurement.
Timeline:
2022-2025.
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Do no significant harm:
Table 2.6.2
Substantive DNSH assessment
DNSH objective
Yes No Significant negative impact?
Climate change mitigation:
Is the measure expected to
X The activity that is supported by this sub-reform has an insignificant fore-
lead to significant greenhouse gas emissions?
seeable impact on this climate related objective, taking into account both
the direct and indirect effects across the life cycle of the measure. By
strengthening the digitalisation and digital readiness of Danish companies,
in particular SMEs, as well as to support the companies’ access to em-
ployees with adequate digital and technological skills as well as use of ad-
vanced technologies,
the sub-reform supports the objective of improved
climate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk of climate change mitigation will be ad-
dressed in the analysis.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current cli-
mate and the expected future climate, on the measure it-
self or on people, nature or assets?
X
The activity that is supported by this sub-reform has an insignificant fore-
seeable impact on this climate related objective, taking into account both
the direct and indirect effects across the life cycle of the measure. By
strengthening the digitalisation and digital readiness of Danish companies,
in particular SMEs, as well as to support the companies’ access to em-
ployees with adequate digital and technological skills as well as use of ad-
vanced technologies,
the sub-reform supports the objective of improved
climate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk of climate change adaption will be addressed
in the analysis.
The sustainable use and protection of water and ma-
rine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by this sub-reform has an insignificant fore-
seeable impact on this environmental objective, taking into account both
the direct and indirect effects across the life cycle. No degradation risks re-
lated to sustainable use and protection of water and marine resources are
identified.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk of the sustainable use and protection of wa-
ter and marine resources will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant fore-
seeable impact on this environmental objective, taking into account both
the direct and indirect effects across the life cycle of the measure. The
sub-reform is consistent with the national waste management plan.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk against the transition to a circular economy
will be addressed in the analysis.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
The activity that is supported by this sub-reform has an insignificant fore-
seeable impact on this environmental objective, taking into account both
the direct and indirect effects across the life cycle. No degradation risks re-
lated to pollution prevention and control to air, water or land are identified.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk to pollution prevention and control will be ad-
dressed in the analysis.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resil-
ience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
The activity that is supported by this sub-reform has an insignificant fore-
seeable impact on this environmental objective, taking into account both
the direct and indirect effects across the life cycle. No degradation risks re-
lated to protection and restoration of biodiversity and ecosystems are iden-
tified.
The digitalisation partnership has not yet delivered its final recommenda-
tions, but the reoccurring and including dialogue between different stake-
holders ensures that any risk to the protection and restoration of biodiver-
sity and ecosystems will be addressed in the analysis.
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1c. Sub-reform: Better opportunities for co-creation, public-private
partnerships and innovation
Addressing challenges:
New technologies, such as artificial intelligence, have
the potential to improve and optimize e.g. the public service. However, there is
currently limited experience with systematic development, implementation and
up-scale of advanced technology among businesses and public entities.
Moreover, untapped potentials exist in advancing innovation through stronger
public-private partnerships and cross-sectoral collaboration. This is among other
things due to lack of access to investments, uncertainty about the benefits, chal-
lenging data availability and quality as well as the need for legal clarity.
Objectives:
By investing in innovation, development and up-scale new technolo-
gies and solutions, including artificial intelligence deployed in the public and pri-
vate sector, the aim of this measure is to contribute to the modernisation of the
economy, digital infrastructure, digital public services and public administrations.
Among other things, this could help improve public services, the competitiveness
of businesses and contribute to the green transition using advanced digital tech-
nologies to address problems in e.g. public health, climate (e.g. CO2-emission)
and public administration efficiency for the benefit of citizens and businesses.
1
The terms of reference for the digitalisation partnership thus states that recom-
mendations must be made to strengthen coordination and cooperation across sec-
tors of society, so that experience, competencies and solutions from the business
community, the public sector and the research world, respectively, are utilized in
the best possible way create innovation in the public sector.
Example of possible measure creating better opportunities for public-private part-
nerships and innovation:
The establishment of an investment fund with a particular focus on the
implementation and upscaling of promising AI solutions in the state,
municipalities and regions (i.e. hospitals) in collaboration with the private
sector. The fund, which would build upon experiences from an existing
fund established as part of Denmark’s National Strategy for Artificial In-
telligence, will provide grants to signature projects using artificial intelli-
gence within climate, health, social and employment as well as public ad-
ministration and case processing.
Implementation:
The digitalisation partnership is expected to deliver its recom-
mendations for sub-reform 3 by the end of September 2021 with a launch of the
governments new digital strategy by the end October 2021. The Ministry of Fi-
nance (Agency for Digitisation) will be responsible for the general implementation
In their report ”An AI Nation – Harnessing the opportunity of artificial intelligence in Denmark (2019)”, McKinsey estimates
that AI has the potential to significantly improve the welfare of Danish citizens by up to 0.4 per cent annually in GDP equiva-
lents (corresponding to around 9 billion DKK annually in economic value).
1
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and follow-up on the digital strategy. Depending on the content of this sub-re-
form, other ministries and authorities can be responsible for the implementation
of underlying initiatives.
Target group:
Public authorities (state, municipal and regional level), private ac-
tors and citizens.
Compliance with State Aid Rules:
Prior to the agreement, it will be ensured
that all initiatives in the proposed sub-reform for better opportunities for co-crea-
tion, public-private partnerships and innovation will comply with State Aid. Possi-
ble private providers of goods or services will be selected on the basis of competi-
tive, transparent, non-discriminatory and unconditional tenders in line with the
principles of the TFEU in public procurement.
Timeline:
2022-2025.
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Do no significant harm:
Table 2.6.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By investing in innovation, development and up-scale of new technolo-
gies and solutions, including artificial intelligence deployed in the public
and private sector, the sub-reform supports the objective of improved
climate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change mitigation will be
addressed in the analysis.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By investing in innovation, development and up-scale of new technolo-
gies and solutions, including artificial intelligence deployed in the public
and private sector, the sub-reform supports the objective of improved
climate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change adaption will be
addressed in the analysis.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to sustainable use and protection of water
and marine resources are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of the sustainable use and protec-
tion of water and marine resources will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
The sub-reform is consistent with the national waste management plan.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk against the transition to a circular
economy will be addressed in the analysis.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to pollution prevention and control to air,
water or land are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to pollution prevention and control
will be addressed in the analysis.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to protection and restoration of biodiversity
and ecosystems are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to the protection and restoration of
biodiversity and ecosystems will be addressed in the analysis.
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1d. Sub-reform: Creating a data-driven society
Addressing challenges:
Access to and utilization of high-quality data are a pre-
requisite for digital development and for realizing the potentials of digitalisation.
Moreover, the measure will address the need for cutting red tape by creating a
simpler regulatory framework that is easy to administer.
Objectives:
The measure aims to provide better overview of data, including pub-
lic data, as well as to improve the accessibility of data on climate, environment, ge-
ography, and health in order to support businesses and researchers in the develop-
ment of new, better and/or citizen-centred solutions.
The terms of reference for the digitalisation partnership states that it must prepare
recommendations and initiatives that will contribute with recommendations re-
garding how Denmark can benefit even more from the use of data in the future,
e.g. climate data, by promoting responsible use of data and taking into account
privacy protection across the public and private sectors. The partnership will also
give recommendations on optimised use of e.g. health data and intelligent data-
driven control as well as on how data can support the green transition.
Examples of possible measures creating a data-driven society:
Making data available as a basis for the development of new business
models or further reductions greenhouse gas emissions in a digital and
data-driven green transition. As well as by strengthen digital collabora-
tion on health and contribute to citizens experiencing processes that are
more coherent across sectoral boundaries and actors.
Strengthening coherence between IT and legislation in order to secure
translation of legislation into the public digital administration.
Implementation:
The digitalisation partnership is expected to deliver its recom-
mendations for sub-reform 4 by the end of September 2021 with a launch of the
governments new digital strategy by the end October 2021. The Ministry of Fi-
nance (Agency for Digitisation) will be responsible for the general implementation
and follow-up on the digital strategy. Depending on the content of this sub-re-
form, other ministries and authorities can be responsible for the implementation
of underlying initiatives.
Target group:
Public authorities, private actors and citizens.
Compliance with State Aid Rules:
Prior to the agreement, it will be ensured
that all initiatives in the proposed sub-reform for creating a data-driven society
will comply with State Aid rules. Possible private providers of goods or services
will be selected on the basis of competitive, transparent, non-discriminatory and
unconditional tenders in line with the principles of the TFEU in public procure-
ment.
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Timeline:
2022-2025.
Do no significant harm:
Table 2.6.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By providing better overview of data, including public data, as well as
improving the accessibility of data on climate, environment, geography,
and health in order to support businesses and researchers in the devel-
opment of new, better and/or citizen-centred solutions, the sub-reform
supports the objective of improved climate change mitigation and adap-
tation through more energy efficient solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change mitigation will be
addressed in the analysis
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By providing better overview of data, including public data, as well as
improving the accessibility of data on climate, environment, geography,
and health in order to support businesses and researchers in the devel-
opment of new, better and/or citizen-centred solutions, the sub-reform
supports the objective of improved climate change mitigation and adap-
tation through more energy efficient solutions and reduced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change adaption will be
addressed in the analysis.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to sustainable use and protection of water
and marine resources are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of the sustainable use and protec-
tion of water and marine resources will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
The sub-reform is consistent with the national waste management plan.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk against the transition to a circular
economy will be addressed in the analysis.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to pollution prevention and control to air,
water or land are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to pollution prevention and control
will be addressed in the analysis.
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The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to protection and restoration of biodiversity
and ecosystems are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to the protection and restoration of
biodiversity and ecosystems will be addressed in the analysis.
1e. Sub-reform: Denmark fit for a digital future
Addressing challenges:
Securing the direction for the digitalisation of Denmark
in the future and the good, responsible digital society.
Objectives:
The digitalisation partnership will contribute with recommendations
on how to create a digital framework for Denmark in the future. Therefore, the
terms of reference for the digitalisation partnership states that it must prepare rec-
ommendations and initiatives for the future direction of Denmark’s digitalisation.
This includes recommendations for the good, responsible digital society, as well as
how we can continue to benefit from the technological development and digitali-
sation of society in accordance with our democratic core values of coherence,
transparency, trust, equal opportunities.
Examples of possible measures supporting the ambition of Denmark fit for
a digital future:
New strategy for cyber and information security that will raise awareness and
help citizens, businesses and authorities protect themselves digitally; address
the security and resilience of critical sectors of society; and strengthen national
coordination and cooperation on cyber and information security.
Efforts related to digital and technological skills as well as increased awareness
among citizens, businesses and public employees on how to critically evaluate
digital technologies and navigate our digital world. For example, continued fo-
cus on promotion of teaching in digital skills in schools, enrolment in higher
specialized IT education as well as enhanced digital skills among public em-
ployees in central government, regions and municipalities.
Implementation:
The digitalisation partnership is expected to deliver its recom-
mendations for sub-reform 5 by the end of September 2021 with a launch of the
governments new digital strategy by the end October 2021. The Ministry of Fi-
nance (Agency for Digitisation) will be responsible for the general implementation
and follow-up on the digital strategy. Depending on the content of this sub-re-
form, other ministries and authorities can be responsible for the implementation
of underlying initiatives.
Target group:
Public authorities, private actors and citizens.
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Compliance with State Aid Rules:
Prior to the agreement, it will be ensured
that all initiatives in the proposed sub-reform for Denmark fit for a digital future
will comply with State Aid rules. Possible private providers of goods or services
will be selected on the basis of competitive, transparent, non-discriminatory and
unconditional tenders in line with the principles of the TFEU in public procure-
ment.
Timeline:
2022-2025.
Do no significant harm:
Table 2.6.5
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By providing recommendations for the good, responsible digital society,
as well as how we can continue to benefit from the technological devel-
opment and digitalisation of society in accordance with our democratic
core values of coherence, transparency, trust, equal opportunities, the
sub-reform supports the objective of improved climate change mitiga-
tion and adaptation through more energy efficient solutions and re-
duced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change mitigation will be
addressed in the analysis.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this climate related objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
By providing recommendations for the good, responsible digital society,
as well as how we can continue to benefit from the technological devel-
opment and digitalisation of society in accordance with our democratic
core values of coherence, transparency, trust, equal opportunities, the
sub-reform supports the objective of improved climate change mitiga-
tion and adaptation through more energy efficient solutions and re-
duced emissions.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of climate change adaption will be
addressed in the analysis.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to sustainable use and protection of water
and marine resources are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk of the sustainable use and protec-
tion of water and marine resources will be addressed in the analysis.
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
The sub-reform is consistent with the national waste management plan.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk against the transition to a circular
economy will be addressed in the analysis.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
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Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to pollution prevention and control to air,
water or land are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to pollution prevention and control
will be addressed in the analysis.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
The activity that is supported by this sub-reform has an insignificant
foreseeable impact on this environmental objective, taking into account
both the direct and indirect effects across the life cycle of the measure.
No degradation risks related to protection and restoration of biodiversity
and ecosystems are identified.
The digitalisation partnership has not yet delivered its final recommen-
dations, but the reoccurring and including dialogue between different
stakeholders ensures that any risk to the protection and restoration of
biodiversity and ecosystems will be addressed in the analysis.
Investments
2.6.4 SME’s digital transition and export
Addressing challenges:
Digitisation is a driver for productivity and growth in
businesses and has proven to be a way to maintain production and sales under
COVID-19. Small and medium-sized enterprises (SME’s) do not invest as much
as the larger enterprises in digitalisation and therefore risk losing competitiveness
with the risk of job losses.
Objectives:
It is important that Danish companies take advantage of the business
opportunities within digital transition and e-commerce. This applies both to the
current COVID-19 crisis and in the longer term as more and more of trade and
retailing move online. However, SMEs in particular need help to overcome barri-
ers to invest in and use new and advanced technology and e-commerce solutions
in their business models that can help strengthen e-business and export.
Therefore, the existing efforts in the program SME:Digital need to be strength-
ened. Hence, more SMEs will have the opportunity to apply for grants for co-fi-
nancing purchases of counselling on for example the development of the compa-
nies’ e-export capacity, implementation of new e-commerce solutions and tech-
nical support for upstart, development and integration of digital sales for new in-
ternational markets. Furthermore, companies will also be able to apply for grants
for the purchase of new technologies and digital solutions, as for example auto-
mation technology and software.
SME:Digital is an application pool for SMEs to apply for a subsidy to purchase
private consulting on digital transformation and development of the company.
The scheme is run by the Danish Business Authority (Erhvervssytrelsen). The
scheme aims in particular to support the digital transformation of SMEs. In the
period, 2018-2020 143m DKK has been allocated to the program. In this period,
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the program has ensured grants for approx. 1.600 SMEs. Companies have either
received grants of 25.000 DKK or 100.000 DKK depending on the size of the
company and complexity of the digital project. The mean size of the grants has
been 90.000 DKK. The majority of the funds were allocated in 2020 in the light
of the COVID-19 crisis. In 2020, 920 grants were given amounting to approx.
91m. DKK. The fund received 1.820 applications in 2020, amounting to 172m
DKK, which exceeded the funds available. Information on the recipients of the
funds is not publicly available.
Due to the high demand and the importance of supporting SMEs in the digital
transition, especially in a time of the COVID-19 pandemic, it is therefore essential
to increase the pool for SMEs further with recovery funds, so that even more
SMEs can benefit from the programme.
The grant scheme is open for applications multiple times each year, where applica-
tions are assessed on a first-come, first-served basis. In order to receive a grant,
SMEs will have to make probable that their grants and associated digital projects
will raise their technology levels and help them realise their growth ambitions.
Implementation:
The SME:Digital programme under the Ministry of Business,
Industry and Financial Affairs will be responsible for the implementation. The in-
vestment will be carried out over three years. Approximately 550 SMEs will ex-
pectedly benefit from the investment of 65 m. DKK. 59.4 m. DKK will be spent
on subsidies to companies, while 5.6 m. DKK will be spent on administration of
the SME:Digital program. It is assumed that only grants of 100.000 will be given,
due to uncertainty about the future grant size, which varies from application
rounds.
The expenditure implications for the SME:Digital export fund will be approxi-
mately 65 m. DKK.
Target Group:
SME’s.
Compliance with State Aid Rules:
The investment will follow the de minimis
regulation, as applicants are only eligible for funding from the initiative if the total
support for the company does not exceed 200,000 EUR in three consecutive
years. Applicants are informed about this, and they are required to sign a de mini-
mis declaration in order to receive funds.
Timeline:
2021-2023.
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Do no significant harm:
Table 2.6.6
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this climate re-
lated objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing pro-
gramme in national legislation and is not assessed with any risk to this
objective. By promoting better and increased use of modern technol-
ogy, the SME:Digital programme supports the objective of improved cli-
mate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this climate re-
lated objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing
programme in national legislation and is not assessed with any risk to
this objective. By promoting better and increased use of modern tech-
nology, the SME:Digital programme supports the objective of improved
climate change mitigation and adaptation through more energy efficient
solutions and reduced emissions.
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing
programme in national legislation and is not assessed with any risk to
this objective. No degradation risks related to sustainable use and pro-
tection of water and marine resources are identified
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
X
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing
programme in national legislation and is not assessed with any risk to
this objective. The initiative is consistent with the national waste man-
agement plan.
X
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing pro-
gramme in national legislation and is not assessed with any risk to this
objective. No degradation risks related to pollution prevention and con-
trol to air, water or land are identified.
The activity that is supported by strengthening the programme
SME:Digital has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The programme is an existing pro-
gramme in national legislation and is not assessed with any risk to this
objective. No degradation risks related to protection and restoration of
biodiversity and ecosystems are identified.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
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2.6.5 Broadband pool
Addressing challenges:
There is a great need for high-speed internet access for
all households and companies across the country. This is crucial for the digital
transition of society, productivity of companies and connectivity of households.
This has also become very evident in the light of the COVID-19 crisis, where
many have worked from home. However, 6 per cent of the Danish addresses, cor-
responding to 100.000 households and/or companies still do not have access to
very high-speed internet access through broadband.
Objectives:
The goal of the investment is to promote very high-speed (min. 100
Mbps coverage) internet access for citizens, households and companies in rural ar-
eas across the country.
The Broadband pool is a demand-oriented (applicant-based) funding scheme that
provides grants for broadband projects in rural areas with poor coverage where
there is no prospect that the market itself will provide fast broadband. The pool
has existed since 2016, and it contributes to the political objective that all house-
holds and businesses have access to broadband connections with a minimum of
100 Mbps download and 30 Mbps upload by 2020. Alongside the market driven
rollout of broadband, the continuation of the pool in 2021 has the objective of ex-
panding the connectivity to these last addresses.
It is a prerequisite that the funded broadband projects roll out broadband technol-
ogies within the Very High Capacity Networks (VHCN) category, and are thus in
line with the 2025 Gigabit society targets (at least 100 Mbps upgradeable to Giga-
bit speeds). Further, the Broadband pool addresses the European Green Deal ob-
jective of 100 per cent fast broadband coverage by 2025 for all households.
Besides the above investments, the Danish Energy Agency is continuously work-
ing to facilitate deployment of wireless networks. Lastly through the timely imple-
mentation of the EU directive 2018/1972/EU (establishing the European Elec-
tronic Communications Code) which eases deployment. Further, the Agency is
working on new guidelines for public landowners regarding the financial aspects
of contracts to make it easier for industry.
In the period, 2016-2020 485m DKK has been allocated to the broadband pool.
In this period, the pool has secured high-speed internet access to more than
21.000 households. The yearly mean grant per address has been between approxi-
mately 22.000 DKK and 29.000 DKK. In 2020, 342 applications for the broad-
band pool were received, corresponding to around 9.000 addresses and an
amount of 220m DKK, which is more than double the amount that was allocated
to the pool in 2020. Therefore, a continuation the broadband pool in 2021 pro-
vides an opportunity for more households to gain access to high-speed internet
connectivity – besides from the opportunities already provided by market rollout.
Information about the recipients of the grants can be found at:
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https://ens.dk/ansvarsomraader/bredbaand/bredbaandspuljen/resultatet-af-
bredbaandspuljerne.
In 2019, the broadband providers contributed 13.500 DKK in subsidies per ad-
dress, while in 2020 they contributed 14.500 DKK per address. In addition, the
citizens must pay a minimum of 4.000 in self-payment, preferably more. In the
years 2018-2020, the average self-payment from citizens was between 4.300 and
4.500 DKK. This is in addition to the broadband pool subsidy. Based on experi-
ence, private funding is leveraged close to 1:1.
Implementation:
The Ministry of Climate, Energy and Utilities will be responsi-
ble for the roll-out of the broadband pool in close collaboration with the broad-
band providers. A one-year time frame is sufficient to carry out the investment.
Approx. 3.500-5.000 households and/or companies will benefit from the invest-
ment. This investment will not ensure full coverage of very high-speed internet
for all the remaining households and companies. The Danish Energy Authority
projects that up to 99 per cent of Danish households and businesses to be cov-
ered with very high-speed internet around 2025 due to the market driven rollout.
Hence, this investment is to complement the market rollout in rural areas where
the business case is weak.
The expenditure implications for the broadband pool will be approximately 100m
DKK in 2021. The broadband pool was established in 2016, and was initially set
to last for four years. It was prolonged in 2020 and now again in 2021. The funds
for the Broadband pool will be a continuation of the existing pool, and will not be
additional.
Target Group:
Citizens, households and businesses in rural areas and with poor
internet connection.
Compliance with State Aid Rules:
The proposed investment complies with
State Aid rules by being a continuation of the existing broadband pool, which is
already notified (cf. SA.57862 Bredbaandspuljen 2020). The Danish Energy Au-
thority will notify the new measure to the Commission by July 2021 the latest ac-
cording the General Block Exemption Regulation
Timeline:
2021.
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Do no significant harm:
Table 2.6.7
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this climate
related objective, taking into account both the direct and indirect effects
across the life cycle of the measure.
Establishing further broadband connections potentially increases trans-
portation and construction of additional cables. However, the fund is an
existing fund in national legislation and is not assessed with any risk to
this objective. By promoting very high-speed (min. 100 Mbps coverage)
internet access for citizens, households and companies in rural areas
across the country, the broadband pool supports the objective of im-
proved climate change mitigation and adaptation through more energy
efficient solutions and reduced emissions. Furthermore, it should be
noted, that potential effects due to more energy efficient solutions are
permanent positive effects, whereas the possible negative effects from
eg. transportation are one-off effects.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
X
The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this climate
related objective, taking into account both the direct and indirect effects
across the life cycle of the measure.
Establishing further broadband connections potentially increases trans-
portation and construction of additional cables. However, the fund is an
existing fund in national legislation and is not assessed with any risk to
this objective. By promoting very high-speed (min. 100 Mbps coverage)
internet access for citizens, households and companies in rural areas
across the country, the broadband pool supports the objective of im-
proved climate change mitigation and adaptation through more energy
efficient solutions and reduced emissions. Furthermore, it should be
noted, that potential effects due to more energy efficient solutions are
permanent positive effects, whereas the possible negative effects from
e.g. transportation are one-off effects.
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
X
The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure.
The fund is an existing fund in national legislation and is not assessed
with any risk to this objective. No degradation risks related to sustaina-
ble use and protection of water and marine resources are identified.
Erection of mobile masts or laying of cables may not commence until
the appropriate authorities have issued a building permit or a digging
permit. A permit cannot be issued unless they are in accordance with
regulation concerning the environment, protection of valuable land-
scapes, coast line regulation, cultural heritage regulation etc.
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X
The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The fund is an existing fund in na-
tional legislation and is not assessed with any risk to this objective. The
broadband pool is consistent with the national waste management
plan.
X
The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The fund is an existing fund in na-
tional legislation and is not assessed with any risk to this objective. No
degradation risks related to pollution prevention and control to air, wa-
ter or land are identified.
When building digital infrastructure (e.g. mobile masts or laying of ca-
bles) regulation concerning Natura2000 sites or other sensitive areas
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The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X
must be observed. The relevant authorities must consider this before
issuing building and digging permits.
The activity that is supported by allocating additional funds for the
broadband pool has an insignificant foreseeable impact on this environ-
mental objective, taking into account both the direct and indirect effects
across the life cycle of the measure. The fund is an existing fund in na-
tional legislation and is not assessed with any risk to this objective. No
degradation risks related to protection and restoration of biodiversity
and ecosystems are identified.
Green and digital dimensions of the component
Green transition
The regulation establishing a Recovery and Resilience Facility sets a binding target
that at least 37 per cent of each national recovery and resilience plan includes ex-
penditures related to climate. The Commission has set a target to achieve EU cli-
mate-neutrality in 2050. At the same time, Denmark has adopted a climate law,
committing to reach 70 per cent below its 1990 emissions in 2030.
Overall, the green and digital transitions are complementary goals. Digital solu-
tions have a critical role to play in helping Europe transition to a more sustainable
economy and society. By investing in the modernisation of digital infrastructure as
well as in the development, implementation and upscale of the new technology,
the measures will boost the development of digital solutions that support the re-
duction greenhouse gas emissions in all sectors.
Specifically, the digitalisation partnership’s recommendations concerning the
framework for innovation, public-private partnerships and use of new technology
(sub-reform 1c) as well as better access to data and digital-ready legislation (sub-
reform 1d) are expected to contribute to the green transition.
Digital transition
The regulation establishing a Recovery and Resilience Facility sets a binding target
that at least 20 per cent of each national recovery and resilience plan includes ex-
penditures related to the digital transition and or to challenges resulting from it.
The reforms and investments of this component will contribute to a coherent and
coordinated digital transition across all levels of society. The measures proposed
will benefit public administrations, citizens and businesses, support economic re-
covery and competitiveness and contribute to better, more inclusive, secure, inno-
vative, cross-border and interoperable digital public services to citizens and busi-
nesses.
Measures described in this component, including investments in digital infrastruc-
ture, digital skills, and the digital transition of businesses and new technologies,
have important effects on the growth and competitiveness of the digital sector as
well as across sectors of the economy, such as health, transport, education, mobil-
ity and public administration.
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On this background, this component contributes to the flagship initiatives “Mod-
ernise”, “Reskill and upskill”, and “Scale-up” by promoting accessible and in-
teroperable digital public services; ensuring cross-border electronic identification
and authentication; as well as building and fostering the uptake of AI solutions.
By comprising 100 per cent digital expenditures, this component contributes prin-
cipally to the 20 per cent digital target.
Open strategic autonomy and security issues
The proposed initiatives are expected to positively influence the resilience of Un-
ion supply chains in primarily two ways. Firstly, investments in SME’s digital tran-
sition and exports will increase SME's digital capabilities and enhance competition
on the Unions internal market. Secondly, an increased focus on public sector in-
vestments in new technology such as AI in collaboration with the private sector
could help develop a part of the technology market that is increasingly important
to our national and EU wide the strategic autonomy.
Furthermore, a new cyber- and information security strategy would strengthen
digital security across the public and private sector. Moreover, the Broadband
pool will increase internet connectivity in remote and rural areas.
Cross-border and multi-country projects
The modernisation of the national digital infrastructure in Denmark will also sup-
port the development and implementation of cross-border and interoperable digi-
tal services, e.g. eID gateway and Single Digital Gateway.
Financing and costs
The Recovery and Resilience Fund will provide funding for a total of 665m DKK
to this component of which 500m DKK will be for the digital strategy and its
sub-reforms, and 165m DKK will be for the two investments, which are continu-
ations and reinforcements of existing initiatives that would otherwise have ended.
The 500 m. DKK for the five sub-reforms is based on the levels of expenditure
for previous and existing digital strategies that soon expire, e.g. the current joint-
public strategy and the national cyber and information security strategy, and are
expected to be replaced by the digital strategy. Each of the five sub-reforms
within the digital strategy will be allocated around [50 to 150] m. DKK from the
RRF depending on the specific recommendations and political ambitions. The
RFF-funding will support specific initiatives within the five sub-reforms and not
the strategy preparation as such. Furthermore, due to the high ambitions for the
new digital strategy, it is expected that further funding from other resources than
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the RRF are needed. This will depend on the political negotiations. In that case, it
will be ensured that no double funding takes place.
The 165m DKK for the two investments is a continuation of the expenditure
level on the existing two initiatives. As regard to the investment ‘SME’s digital
transition and export’ 20m DKK in 2021 is already funded and the investment is
thus additional. Based on previous years' experience with the two programs, it's
expected that approx. 590 companies will benefit from the ‘SME’s digital transi-
tion and export’ and approx. 3.500-5.000 households and/or companies will bene-
fit from the 'Broadband pool’.
Table 2.6.8
Initiatives in Component 5: Digitalisation Plan
M. DKK, 2021-prices
1. Digital strategy
1a. Digital public sector and services of the
future
1b. Securing digital professions and the dig-
ital jobs of the future
1c. Better opportunities for co-creation, pub-
lic-private partnerships and innovation
1d. Creating a data-driven society
1e. Denmark fit for a digital future
Investment/
reform
-
Reform
Reform
Reform
Reform
Reform
Total
500
[50-150]
[50-150]
[50-150]
[50-150]
[50-150]
2021
-
-
-
-
-
-
2022
125
-
-
-
-
-
2023
125
-
-
-
-
-
2024
125
-
-
-
-
-
2025
125
-
-
-
-
-
-
-
-
-
-
Funding from
other sources
Further digitalisation measures
2. SME’s digital transition and export
3. Broadband pool
In total
-
Investment
Investment
165
65
100
665
125
25
100
125
20
20
-
145
20
20
-
145
-
-
-
125
-
-
-
125
20
20
0
0
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Component 2.7
Investing in Green Research and
Development
The Danish recovery plan contains funding for investments in
green research and innovation. The investments focuses on
incentives to boost R&D in companies and four specific missions:
I) Carbon capture and storage or use of CO2,
II) Green fuels for transport and industry,
III) Climate- and environmental friendly agriculture and food
production and
IV) Reuse and reduction of plastic waste through circular
economy.
Each mission aims at contributing to long-term growth, supporting
the green and digital transition and diversifying research in
Denmark.
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Description of the component
Box 2.7.1
Reforms and initiatives for investing in green research and innovation
Policy area/domain:
Research and development, green transition, carbon capture and storage or use of CO
2
(CCUS), energy efficiency,
development and demonstration programs within transportation and industry, climate and environment friendly agri-
culture, circular economy.
Objective:
The initiatives are aligned with the focused research program concerning the green transition, which the Danish gov-
ernment has initiated and will implement in 2021. The research program focuses mainly on four specific missions
that each aim at contributing to long-term growth, supporting the green and digital transition and diversifying re-
search in Denmark. Further, private green research and development is stimulated through the extension of a tax
deduction for private expenses on R&D through 2022. The missions and initiatives seek the following objectives:
1)
Create long-term growth potential by increasing investment in new green technologies:
Denmark will
mitigate the potential costs of switching to a decarbonized society by frontloading investment projects regard-
ing new technologies that can mitigate greenhouse gas emissions. In the future, economic growth has to be
based on a sustainable use of the world’s resources. Investments in new green solutions and providing alter-
natives to current solutions will support stimulus within especially the transport, industry, agricultural and food
sector. This is expected to create jobs and create demand for Danish businesses’ innovative solutions in the
long term.
Make progress in the green and digital transition:
Investing in green, low- or negative-emission alterna-
tives will positively contribute to the Danish 2030 target of 70 per cent reduction of greenhouse gases. Digitali-
zation is an important driver of the green transition, as digitalization enables more efficient use of energy, cre-
ates new opportunities for existing solutions and provides consumers with measures to adapt to a sustainable
behaviour. The green and digital transition are thus interconnected.
Diversify research in Denmark:
The outcomes of investment efforts in research and demonstration projects
are the most optimal when adapted to a diverse research strategy. Large-scale greenhouse gas reductions
demand multiple solutions in multiple sectors from multiple actors. A fruitful way forward in this regard is to
broaden the scope of research efforts and rely on more than one solution.
2)
3)
Investments to underpin the objectives
The Danish government will create a number of new public-private partnerships of research institutions, private busi-
nesses, public authorities, and innovation actors contributing with solutions to four mission-based challenges in ena-
bling the green transition.
Further, as a part of the green tax reform, green research and development is subsidised through an extension of a
tax deduction for private sector expenses on research and development through 2022.
I. Carbon capture and storage or use of CO
2
(CCUS)
II. Green fuels for transport and industry (i.e. Power-to-X)
III. Climate- and environment friendly agriculture and food production
IV. Circular economy focusing on reuse and reduction of plastic and textile waste
V. Incentives to boost R&D in companies
Estimated cost:
Research in green solutions:
700 m. DKK in 2021. The means will be allocated to Innovation Fund Denmark. To receive funding from the pro-
gram, private and public institutions must join together to form a partnership and file an application within the four
mission-based challenges. The selection of green research and innovation partnerships will be the result of a two
phased call process: 1) Development and decision on mission roadmaps and 2) Call for partnerships. Innovation
Fund Denmark will choose which partnerships to receive funding based on the best applications.
Incentives to boost R&D in companies:
1,100 m. DKK in 2022. To qualify for the deduction, R&D undertakings will have to satisfy criteria relating to innova-
tiveness, creativity and uncertainty.
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Main challenges and objectives
2.7.1 Main challenges
The global pollution of air, soil and water, the increasing use of the Earth’s re-
sources and global climate changes pose great challenges for nature, the environ-
ment and human health. At the same time, biodiversity is under great pressure.
Both in Denmark and internationally, there is an urgent need for increased know-
ledge and environmental technological solutions to combat these challenges and
ensure a more efficient and sustainable use of the earth’s resources. The main
challenges are set out below:
Net-zero greenhouse gas emissions:
Denmark will not be able to meet the 70 per
cent reduction greenhouse gas emissions target in 2030 or climate-neutrality in
2050 by only reducing current greenhouse gas emissions. Thus, there is a need
to develop new technologies focusing on negative emissions.
Emissions in the transport and industry sector:
In order for Denmark to have an en-
ergy system fully reliant on renewable energy in 2050, greenhouse gas emis-
sions from the transport and industry sector must be reduced. The transporta-
tion sector is expected to account for about a third of the greenhouse gas
emissions in 2030, in which road transport will account for about 90 per cent.
Thus, there is an urgent need to develop solutions to create new and green
fuels.
1
Emissions from the agriculture and food sector:
The total food system in Denmark,
including land and forests, must reduce its net climate impact significantly in
order to contribute to the national target of 70 per cent greenhouse gas reduc-
tion in 2030 and climate-neutrality by 2050. Currently, a number of existing
measures will be able to deliver an effect, but there is a need to invest in new
technologies to maintain sustainable production and earnings in the long term.
Emissions from waste incineration:
Both internationally and in the EU, Denmark is
one of the countries with the highest production of waste per capita. Thus,
there is a need for a circular economy in Denmark with a focus on waste re-
duction and recycling.
2.7.2 Objective
The Danish government has initiated a focused program, where a number of
green research and innovation partnerships consisting of research institutions,
companies, and innovation actors will perform mission-driven research and devel-
opment towards a societal green transition. Further, as a part of the green tax re-
form, private sector research and development is subsidised through 2022.
1
Basisfremskrivningen, 2020.
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The research will contribute to reach the objectives of the Danish Climate Act of
70 per cent reduction of greenhouse gas emission in 2030 compared to 1990, cli-
mate neutrality by 2050 as well as to reach international goals of the Paris Agree-
ment.
The research program focuses on four specific missions:
1) carbon capture and storage
or use of CO
2
, 2) green fuels for transport and industry, 3) climate- and environmental friendly
agriculture and food production
and
4) reuse and reduction of plastic waste through circular econ-
omy.
Each mission aims at contributing to long-term growth, supporting the green
and digital transition and diversifying research in Denmark. In addition, the gov-
ernment’s climate partnerships in the business community have recommended
targeting research, development and demonstration efforts within specific areas of
these four missions. The objectives of the missions and the R&D subsidies are ex-
plained further below.
Create long-term growth potential by investing in new green technologies:
Long-term eco-
nomic growth must be based on a more effective use of the world’s resources.
This demands investments in initiatives that will bring forth the green transi-
tion – not only in Denmark but also globally. Investing in energy efficient so-
lutions as well as finding cost-effective technologies to reduce greenhouse gas
emissions will support stimulus within multiple sectors, including the
transport, industry, agricultural and food sector.
There is great potential for reducing CO
2
-emissions through energy efficiency,
where Danish research and business strengths can contribute to competitive
solutions for other countries. Expanded research on energy efficiency can
thus lead to new production jobs, generate further demand for highly energy
and resource-efficient equipment and bring long-term value to energy efficient
alternatives. The same applies for development of new environmental tech-
nologies and solutions within the agricultural and food sector and in regards
to reuse and reduction of plastic waste through circular economy. Finally, a
targeted research effort that supports the development of new green solutions
within the transport, industry and production sector implies a great potential
for growth, new production jobs and strengthened competitiveness in multi-
ple Danish business sectors, as it can strengthen companies’ opportunities to
seek new areas for growth.
Make progress in the green and digital transition:
Denmark is a pioneer when it
comes to research and development of green initiatives, and we can expect
that the green research and innovation partner companies will contribute to
the green transition both inside and outside of Denmark. Focus on digitaliza-
tion is a great vehicle for progressing the green transition. Public availability of
data and implementation of digital technologies are important components for
developing flexible energy systems and providing consumers with incentives
for a sustainable behaviour.
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Scientists from the Geological Survey of Denmark and Greenland estimate
that there is a storage potential of 22 bn. tonnes CO
2
in Denmark. This is
2,000 times the estimated Danish CO
2
-emissions from large CO
2
-sources in
2030 to 2040
2
, suggesting that Denmark cannot only store its own CO
2
-emis-
sions, but some of the emissions from other countries as well. Furthermore,
Denmark has multiple comparative advantages in regards to reducing green-
house gas emissions from the parts of the transport and industry sector that
cannot be directly electrified with power from a renewable energy source.
Denmark also has an internationally competitive agricultural and food sector
that focuses on sustainability and climate efficiency. Finally, within the busi-
ness sector, Denmark has a significant position and global potential when it
comes to developing new environmental technology concerning circular econ-
omy. In addition, the Danish public sector is a key collaboration partner in
this area.
Diversify research in Denmark:
A key element in both the European Green Deal
and the Energy Union is to diversify Europe’s energy sources and making use
of energy produced within the EU more efficient. An important component
of this is to diversify the research initiatives and funding projects. Europe
needs to develop new technologies to be competitive in the future; hence, Eu-
rope needs a diverse research strategy with a broader focus on multiple sectors
and technologies instead of just some. A mission-based approach as this will
make it possible for small and medium-sized Danish enterprises to get a share
of the funds as public-private research and innovation partnerships are ex-
pected to include large companies, SMEs as well as start ups to broaden the
innovation base and, thus, enabling research efforts from multiple fronts. The
degree of innovation, including the composition of partnerships, will be im-
portant criteria in the selection of partnerships.
This catalogue is a good example of such a diverse strategy, as the individual
initiatives all solve different tasks and rely on different knowledge and tech-
nology. Carbon capture and storage is an important component in many of
the initiatives, but CCS alone cannot solve the issue of developing new green
fuels or transitioning agriculture into a sustainable state. This diverse research
strategy is an innovative way of working with the green transition.
Summary description of the reforms and investments of the
component
In September 2020 the Danish government published a new national green re-
search and innovation strategy
Green solutions of the future – Strategy for investments in
green research, technology, and innovation.
The strategy sets a clear direction for the
2
GEUS: https://www.geus.dk/udforsk-geologien/fangst-og-lagring-af-co2-ccs
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Danish green research and innovation effort in order to accelerate the develop-
ment of technologies and solutions, which can help protect our climate, nature
and environment. The mission-oriented research program described above is a
key part of the national green research strategy focusing on challenges where the
need for new solutions and the potential for meeting the green objectives are the
largest in Denmark as well as on a global scale. The missions are to be accom-
plished by green partnerships in which knowledge institutions, businesses, public
authorities, and private players join forces in a strategic research and innovation
effort over several years.
On the basis of the strategy, the Danish government, along with the Danish par-
liament, has decided to set aside 700 m. DKK in 2021 for the above-mentioned
green research and innovation program to accelerate the development of new
green technologies and solutions. The funding of the program is part of an ex-
traordinary priority of research in green innovation and solutions. This is both an
addition to the Danish national research means already allocated, as well as an ad-
dition to the research means allocated from the EU such as from Horizon Eu-
rope.
The intention with the program is to build green public-private partnerships of re-
search institutions (universities, etc.), private businesses, public institutions and in-
novation actors. The green partnerships are a new instrument in the Danish re-
search and innovation system, where private and public institutions will cooperate
by sharing knowledge and best practice to focus and accelerate innovations tar-
geted specific challenges of the green transition. This is the best way to reach last-
ing and sustainable solutions. This approach will allow research institutions, pri-
vate businesses, SMEs, public institutions, etc. to apply for funding for research,
demonstration and development projects. This will create positive incentives for
businesses to develop and use these innovative green solutions. The research,
demonstration and development projects must support the green transition in
Denmark, and hopefully also in the rest of Europe. The partnerships will cover
the whole value chain, from basic science to large-scale demonstration projects.
The mission-oriented partnerships complement broader green thematically calls
and existing instruments in the Danish research and innovation system. The crea-
tion of the new green partnerships also addresses the Country Specific Recom-
mendation for Denmark by promoting and investing in research and innovation.
With the new green partnerships, the innovation base will be expanded and tar-
geted essential areas for the green transition in the coming years. The partnerships
will be accessible to both established and new players specializing in the green
transition, thus creating opportunities for both SMEs and companies of tomor-
row.
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To receive funding from the program, private and public institutions must join to-
gether to form a partnership. The selection of green research and innovation part-
nerships will be the result of a two phased call process:
Phase 1: Development and decision on mission roadmaps
All relevant players in the Danish innovation system are called upon to develop a
socio-technical roadmap, back-tracking from 2050 describing challenges and gaps
within the mission, strongholds and potentials and sketch key activities and rele-
vant work stream themes for future partnerships. An international panel of ex-
perts is expected to assist the Innovation Fund Denmark board of directors in se-
lecting one or more roadmaps under each mission to form the backbone of the
activities in the future mission-driven partnerships.
Phase 2: Call for partnerships
The call for partnerships will be announced following the selection of roadmaps.
The selection of partnerships will be based on a thorough evaluation and selection
process, including international peer reviewers, on the actions within the scope of
the selected roadmaps. There can be one or more partnerships within each mis-
sion.
The total cost of the program amounts to 700 m. DKK in 2021 from the RRF
and Innovation Fund Denmark will decide the split between the four missions.
Each mission is expected to receive around 100 to 400 m. DKK from the pro-
gram. The split of the 700 m. DKK and the number of partnerships within the
four missions will depend on which applications that have the highest quality and
potential. Hence, it is now not possible to tell the exact means allocated to each
mission.
Innovation Fund Denmark will, in its choice of partnership, seek co-funding from
other public research and innovation programs. Furthermore, the partners in the
partnership must also contribute with funding to the partnership so that each
partnership has seed capital of at least 200 m. DKK. The seed capital is intended
for 5 years of research. After 2021, the partnerships’ additional funding will de-
pend on their results and ability to attract funding from private businesses, na-
tional and international research funds, e.g. Horizon Europe.
By letting Innovation Fund Denmark be in charge of choosing which partnerships
to receive funding, the arm’s length principle and a competitive approach to se-
lecting the best partnerships is ensured. Innovation Fund Denmark has since it
was established in 2014 had expertise regarding selecting innovative and sustaina-
ble projects with large returns and societal value. The fund evaluates projects
based on research quality and societal impact in the light of the two main pur-
poses of the fund: To contribute to solving societal challenges and create growth
and employment. The fund invests in projects with high risk but also high poten-
tial. E.g. earlier in 2020, the fund invested around 20 m. DKK in a camera based
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machine for sorting plastic waste, an innovation with large potential to improve
the abilities of recycling plastic waste.
Innovation Fund Denmark regularly tracks the gender balance in its research and
innovation grants and gender balance and diversity of research teams will be taken
into account as part of the overall assessment of partnership applications.
The partnerships must deal with one of four green
missions.
The four missions are:
I.
II.
III.
IV.
Carbon capture and storage or use of CO
2
Green fuels for transport and industry (i.e. Power-to-X)
Climate- and environment friendly agriculture and food production
Circular economy focusing on reuse and reduction of plastic and textile
waste
The missions are all targeted green challenges that we need innovative solutions
for in order to meet the 70 per cent reduction of greenhouse gas emissions target
in 2030 and climate-neutrality in 2050. The missions are chosen based on their 1)
green potential, 2) commercial strengths and potentials, 3) research-related
strengths and 4) partnership potentials.
The extended tax deductions to boost R&D in companies was agreed by the gov-
ernment and a broad coalition in the Danish parliament in December 2020 as a
part of the green tax reform. As such, the increased incentives for green R&D
should also be viewed in the broader context of the green tax reform, in which
companies are being incentivized to frontload green R&D and investments in
preparation for a higher CO2e-tax.
The following section reviews the addressed challenges and objectives of the four
missions and the extended tax deduction to boost R&D in companies.
2.7.3 Carbon capture and storage or use of CO
2
(CCUS)
Addressing challenges:
The UN’s IPCC points to the necessity of negative
emissions if we are to reach the goals of the Paris Agreement. Reducing Europe’s
current emissions is not enough to meet these targets. A condition for success is
to develop new technologies that can reduce the greenhouse gases already emit-
ted. If we are to succeed, we have to promote negative emissions. An innovative
vehicle for driving this new agenda is by investing in technologies and research in
carbon capture and storage or use of CO
2
(CCUS).
Objectives:
The goal is to develop cost-effective solutions to capture CO
2
from
the largest emitters or directly from the atmosphere and permanently store or use
the carbon in new climate neutral energy sources, such as airplane fuel, textiles
and plastic.
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The International Energy Agency (IEA) expects that multiple international energy
companies will demand and invest in CCUS infrastructure and technology in the
near future. Scientists from the Geological Survey of Denmark and Greenland es-
timate that in Denmark alone, areas below the surface have a storage potential of
22 bn. tonnes CO
2
. This is 2,000 times the estimated Danish CO
2
-emissions from
large CO
2
-sources in 2030 to 2040. This large storage potential suggests that Den-
mark could not only store its own CO
2
-emissions, but some of the emissions
from other countries as well.
Next step on the path towards implementing CCUS is to create economic incen-
tives to use the technology, including developing cheaper and more efficient cap-
turing-technologies. This is the main obstacle for a broader prevalence and distri-
bution of the technology. A second need is to strengthen research in the geologi-
cal preconditions for storing CO
2
in Denmark, for development and optimization
of the materials used in CO
2
-capturing, and for the development of robust meth-
ods of analysis that can monitor and prevent the emission of greenhouse gases
from the storages. Research and innovation in the partnerships will contribute to
reducing the price of CCUS, which is a necessity to implement cost-effective solu-
tions that can be carried out on a larger scale. It should be noted that CCUS is
only one element of the Danish climate effort that complements other measures
to reduce green house gas emissions from industry, transport, agriculture etc.
It is estimated that new CCUS solutions have the potential of reducing the Danish
greenhouse gas emission with somewhere between 4 and 9 Mt CO
2
e per year in
2030 in addition to the greenhouse gas reductions, that has already been resolved.
3
Implementation:
Private-public partnerships with projects within CCUS tech-
nologies can apply for funding through Innovation Fund Denmark. Innovation
Fund Denmark will fund the partnership with the greatest potential. The review
of applications is expected to take into account the relation with the development
and demonstration project of CO2 storage sites in depleted oil and gas fields in
the Danish sector of North Sea that are initiated in component 2.3 on Energy ef-
ficiency, green heating and Carbon Capture and Storage to avoid overlap.
Target group:
Well-established research environments working with CCUS in
multiple research institutes already exist in Denmark, however the use of CCS in
Denmark is still at the demonstration stage. CCUS is expected to be a growing in-
dustry. Furthermore, Denmark has substantial commercial potentials and a good
basis for storing CO
2
from other countries. Potential partners in a partnership
working with CCUS come from industries such as the present oil industry, the ce-
ment industry, waste incineration plants and other energy heavy manufacturing in-
dustries. The research and innovation activities in the partnership are expected to
include an international perspective, e.g. collaboration with relevant international
3
https://kefm.dk/Media/6/4/Klimaprogram_2020%20(2).pdf
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research groups/partners, and take into account relevant strategies such as the
European Hydrogen Strategy, including the European Clean Hydrogen Alliance.
Timeline:
Call for mission roadmaps are expected to open primo 2021 and the
selection of roadmaps takes place mid 2021. Call for partnership applications are
expected to open mid 2021. Selection of partnerships and awarding of grants are
expected to be completed ultimo 2021.
State aid:
In the application, the partnership will propose a budget based on part-
ners/activities and that will be subject to evaluation and approval of appliance
with thresholds in GBER.
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Do no significant harm:
Table 2.7.1
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X No, the aim of the CCUS-mission is to develop cost-effective solutions
to capture CO
2
from the largest emitters or directly from the atmosphere
and permanently store or use the carbon in new climate neutral energy
sources, such as airplane fuel, textiles and plastic. This mission will not
contribute to fossil fuel projects.
X No, the CCUS-mission is not expected to be detrimental to climate
change adaptation. Climate change adaption is one of the main aspects
which will be relevant for the mission partnerships to take into account in
their research and innovation acitivites.
X No, the CCUS-mission is not expected to be detrimental to the
sustainable use and protection of water and marine resources.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards and relevant law so the
mission does not put into risk the sustainable use and protection of wa-
ter and marine resources.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X No, the CCUS-mission is not expected to be detrimental to the transition
to a circular economy.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the transition to a circular economy.
X No, the aim of the CCUS-mission is to develop cost-effective solutions
to capture CO
2
from the largest emitters or directly from the atmosphere
and permanently store or use the carbon in new climate neutral energy
sources, such as airplane fuel, textiles and plastic.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk pollution prevention and control.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X No, the CCUS-mission is not expected to be detrimental to the protection
and restoration of biodiversity and ecosystems.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the protection and restoration of biodiversity and ecosys-
tems.
2.7.4 Green fuels for transport and industry (i.e. Power-to-X)
Addressing challenges:
There is an urgent need to reduce greenhouse gas emissions
from the parts of the transport and industry sector that cannot be directly electri-
fied with power from a renewable energy source. Heavy transport, airplanes and
ships make up the largest concerns in the transport sector, while the production
of steel and cement is a concern in the industry sector. Both in Denmark and
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globally, there is a growing demand for transportation and in Denmark, the trans-
portation sector is expected to account for around a third of the combined green-
house gas emissions, in which road transport will account for around 90 per cent.
Without a targeted effort to reduce emissions from these sectors, Denmark is not
expected to have an energy system fully reliant on renewable energy in 2050.
Objectives:
The goal of this mission is to develop new solutions to create new
green fuels, i.e. developmentt of solutions to convert electricity from renewable
energy to products that can be used to reduce emissions from parts of the
transport and energy sectors where there are no existing cost-effective alternatives
to fossil energy. One way of making green fuels is by converting electricity from a
renewable energy source to products that can be used to reduce emissions from
parts of the transport- and industry sector with no cost-efficient alternative to fos-
sil fuels. In order to develop green fuels, we need to develop large-scale power
storage solutions from renewable energy sources in chemical form of hydrogen by
using electrolysis. Hydrogen can in itself be used directly as a fuel in heat produc-
tion or as a fuel in cars. However, hydrogen is also the first substance used in the
development of a collection of other carbonaceous fuels that would be able to re-
place conventional fossil fuels in airplanes and ships. Use of captured CO
2
is a
precondition for producing these carbonaceous Power-to-X-products.
The current demand for green hydrogen and other Power-to-X products such as
renewable fuels is not sufficient for a market driven expansion. One explanation is
high production costs, which makes the price for hydrogen-based products rela-
tively high compared to fossil alternatives. Renewable fuels will only become via-
ble if they become competitive. There is a need for a targeted research-, develop-
ment-, and demonstration effort to bring these technologies to a level of techno-
logical maturity that can facilitate commercial use. There is furthermore a need to
demonstrate how Power-to-X-systems can be integrated in the whole energy sys-
tem, such as the heating sector.
The potential for CO
2
-reduction from Power-to-X is vast as it in theory can re-
place all fossil fuel if there is enough electricity from renewables. Countries pro-
ducing excess electricity from renewable sources will especially profit from devel-
oping Power-to-X technologies. Furthermore, there are several positive externali-
ties associated with increased research in Power-to-X because finding new ways
for sector coupling optimization and interconnecting national and international
energy systems facilitates greater diversification of energy sources. The Danish
framework suits the European Green Deal perfectly, as diversification of energy
sources, decarbonizing the energy sector as well as promoting sustainable mobility
are all key components of the plan.
It is estimated that new Power-to-X solutions have the potential of reducing the
Danish greenhouse gas emission with somewhere between 0.5 and 3.5 Mt CO
2
e
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per year in 2030 in addition to the greenhouse gas reductions, that has already
been resolved
4
.
Implementation:
Private-public partnerships with projects within Power-to-X
technologies can apply for funding through Innovation Fund Denmark. Innova-
tion Fund Denmark will fund the partnership with the greatest potential.
Target group:
Due to its advanced energy sector and placement, Denmark has
multiple comparative advantages, such as competitive electricity prices, a large re-
newable energy potential and a district heating system that can utilize excess heat
in energy conversion. There are strong traditions for working with hydrogen and
electrolysis at multiple well-established research environments at the Danish uni-
versities. There is furthermore a large commercial potential of Power-to-X. Poten-
tial private partners in the partnerships include industries such as maritime indus-
try, transport industry, chemical industry etc. The research and innovation activi-
ties in the partnership are expected to include an international perspective, e.g.
collaboration with relevant international research groups/partners, and take into
account relevant strategies such as the European Hydrogen Strategy, including the
European Clean Hydrogen Alliance.
Timeline:
Call for mission roadmaps are expected to open primo 2021 and the
selection of roadmaps takes place mid 2021. Call for partnership applications are
expected to open mid 2021. Selection of partnerships and awarding of grants are
expected to be completed ultimo 2021.
State aid:
In the application, the partnership will propose a budget based on part-
ners/activities and that will be subject to evaluation and approval of appliance
with thresholds in GBER.
4
https://kefm.dk/Media/6/4/Klimaprogram_2020%20(2).pdf
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Do no significant harm:
Table 2.7.2
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X No, the aim of this mission is to reduce greenhouse gas emissions by
developing new solutions to create new green fuels. This mission will
not contribute to fossil fuel projects, as the objective of the mission is the
development of solutions to convert electricity from renewable energy to
products that can be used to reduce emissions from parts of the
transport and energy sectors where there are no existing cost-effective
alternatives to fossil energy.
X No, the mission concerning green fuels for transport and industry is not
expected to be detrimental to climate change adaptation. Climate
change adaption is one of the main aspects which will be relevant for
the mission partnerships to take into account in their research and
innovation acitivites.
X No, this mission is not expected to be detrimental to the sustainable use
and protection of water and marine resources.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the sustainable use and protection of water and marine re-
sources.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X No, this mission is not expected to be detrimental to the transition to a
circular economy.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the transition to a circular economy.
X No, the aim of this mission is to reduce greenhouse gas emissions by
developing new solutions to create new green fuels.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk pollution prevention and control.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X No, this mission is not expected to be detrimental to the protection and
restoration of biodiversity and ecosystems.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the protection and restoration of biodiversity and ecosys-
tems.
2.7.5 Climate- and environment friendly agriculture and food production
Addressing challenges:
Greenhouse gas emissions from agriculture and food
production constitute a significant and growing share of Denmark’s and the
world’s climate impact. Specifically, the agricultural and forestry sector is expected
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to account for approximately 37 per cent of Denmark’s total greenhouse emis-
sions in 2030.
5
The most important greenhouse gases in agriculture are nitrous ox-
ide and methane, which make up approximately 43 per cent and 55 per cent of the
sector’s total greenhouse gas emissions.
6
Currently, a number of existing measures
will be able to deliver a great effect as described in the component of
Climate action
plan for agriculture,
but there is a need for more investments in new technology and
partnerships to reduce the emissions even further and maintain sustainable pro-
duction and earnings in the long term.
Objectives:
A number of new solutions on cost-effective technologies and
measures to reduce greenhouse gas emissions and increase CO
2
-uptake within the
field of agriculture and food are already under development in Denmark. The goal
of the mission is to accelerate the development of cost-effective solutions that can
reduce the emission of greenhouse gases and increase the capture and store of
CO
2
from the agriculture, increase the focus on circular and sustainable solutions
and increase the knowledge about existing agriculture activities and emissions.
There is a need for development of a more climate-friendly plant production, in-
cluding research and innovation in new breeding techniques, further development
of precision agriculture and the establishment of new cultivation and fertilization
systems that are more efficient and ensure increased uptake of excipients. The re-
search must support the development of productive agricultural systems and con-
tribute positively to biodiversity in the cultivated fields and landscapes.
Existing research projects within feed additives, slurry additives and bio refining
appear to have great prospects. One of the most promising feed additives has
shown potential to reduce methane emissions from dairy cattle by approximately
35-40 per cent
7
. In addition, a new additive for manure could potentially reduce
methane emissions from stables and warehouses by up to 50 per cent
8
. Finally,
there is great potential for reductions in bio refining, including the pyrolysis pro-
cess, which converts biomass into bio char as well as oil and gas. It should be
noted that the mentioned technical reduction potentials are currently subject to
some uncertainty in terms of effect, documentation and distribution.
It is estimated that new solutions within climate- and environment friendly agri-
culture and food production have the potential of reducing the Danish green-
house gas emission with somewhere around 4 m. CO
2
e tonnes per year in 2030 in
addition to the greenhouse gas reductions, that has already been resolved.
9
Basisfremskrivningen, 2020.
Miljøstyrelsen: https://mst.dk/erhverv/groen-virksomhed/groent-udviklings-og-de-
monstrationsprogram-gudp/gudp-s-klimaprojekter/
7
Klima-, Energi- og Forsyningsministeriet: https://kefm.dk/Media/6/E/Borgerting_TG.pdf
8
Aarhus Universitet: https://pure.au.dk/portal/files/192003968/Opdatering_af_klimatabel-
len_08072020.pdf
9
https://kefm.dk/Media/6/4/Klimaprogram_2020%20(2).pdf
5
6
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Implementation:
Private-public partnerships with projects within Climate- and
environment friendly agriculture and food production technologies can apply for
funding through Innovation Fund Denmark. Innovation Fund Denmark will fund
the partnership with the greatest potential. The review of applications is expected
to take into account the relation with the research, development, and demonstra-
tion projects that are initiated in the
component on Green transition of Agriculture and the
Environment
to avoid overlap.
Target group:
Denmark has an internationally competitive agricultural and food
sector that focuses on sustainability and climate efficiency. Within the industry,
there is also a clear recognition of the need for a targeted focus on research and
innovation in the use of new technologies that can reduce greenhouse gas emis-
sions and promote the development of new sustainable foods, production meth-
ods, feed types and ingredients.
High quality research environments working with agriculture and food science at
the Danish universities already exist, however the capacity at these research envi-
ronments is limited. Thus, it is crucial that the capacity is strengthened, such that
we can meet future research needs.
Thus, Denmark is one of the pioneers of research and development within the
field of agriculture and food, hence it makes sense to place funds intended this
area in Denmark. Potential private partners for the partnerships include e.g. the
agriculture and food industry.
Timeline:
Call for mission roadmaps are expected to open primo 2021 and the
selection of roadmaps takes place medio 2021. Call for partnership applications
are expected to open medio 2021. Selection of partnerships and awarding of
grants are expected to be completed ultimo 2021.
State aid:
In the application, the partnership will propose a budget based on part-
ners/activities and that will be subject to evaluation and approval of appliance
with thresholds in GBER.
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Do no significant harm:
Table 2.7.3
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X No, the aim of this mission is to accelerate the development of cost-ef-
fective solutions that can reduce the emission of greenhouse gases
from agriculture, increase the focus on circular and sustainable solutions
and increase the knowledge about existing agriculture activities and
emissions. This mission will not contribute to fossil fuel projects.
X No, this mission is not expected to be detrimental to climate change
adaptation. Climate change adaption is one of the main aspects which
will be relevant for the mission partnerships to take into account in their
research and innovation acitivites, e.g. in relation to the development of
future solutions for more sustainable agriculture and food production.
X No, this mission is not expected to be detrimental to the sustainable use
and protection of water and marine resources. On the contrary, one of
the targets of this mission is to reduce the negative effects on nature and
environment. For instance, the development of more sustainable
solutions within agriculture and food production is expected to benefit the
status of surface water, goundwater, and marine waters.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the in-
cineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X No, the aim of this mission is to accelerate the development of cost-ef-
fective solutions that can reduce the emission of greenhouse gases
from the agriculture, increase the focus on circular and sustainable solu-
tions and increase the knowledge about existing agriculture activities
and emissions.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the transition to a circular economy.
X No, the aim of this mission is to accelerate the development of cost-ef-
fective solutions that can reduce the emission of greenhouse gases
from the agriculture, reduce negative environmental impact, increase
the focus on circular and sustainable solutions, and increase the
knowledge about existing agriculture activities and emissions.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk pollution prevention and control.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and re-
silience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X No, this mission is not expected to be detrimental to the protection and
restoration of biodiversity and ecosystems.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the protection and restoration of biodiversity and ecosys-
tems.
2.7.6 Circular economy focusing on reuse and reduction of plastic and textile
waste
Addressing challenges:
Denmark is both internationally and in the EU one of
the countries with the highest production of waste per capita. Plastic waste is the
largest of Denmark’s CO
2
-emissions from waste incineration. Moreover, textile
waste often include plastic, and thereby emits CO
2
when burnt. Thus, there is a
need for Denmark to reduce plastic and textile waste and recycle such waste, such
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that new products are produced largely from renewable resources instead of fossil
raw materials.
Objectives:
The goal of this mission is to develop solutions to increase the re-
source productivity, decrease plastic and textile waste, increase the quantity and
quality of reusable materials, and reduce the products’ climate and environmental
impact. This is necessary in order to reach the targets of the Danish Climate Act
and to support the effort planned in the Danish Agreement on a green waste sec-
tor and circular economy.
In relation to better use and reuse of the earth’s resources, there is a need for
more knowledge and research on the use of circular economy in Denmark. Fur-
thermore, circular economy can help reduce the combustion of plastics and tex-
tiles. This requires new design solutions that both minimize plastic consumption
and prolong the life of plastic products and textiles. There is also a need for re-
search into how the use of problematic chemical substances in plastics is phased
out.
There is a special need for solutions that can ensure tracking, sorting and recycling
of plastic as well as reduction of plastic waste. Technologies and solutions that
provide a high quality in recycling and a low loss of materials are estimated to re-
duce the Danish amount of plastic and fossil textile waste by approximately
53.000 ton.
10
This is an addition to the planned reduction in
the Danish Agreement on
a green waste sector and circular economy
and, thus, the mission supplements the effort
planned in the agreement. Both actions will make sure that Denmark accom-
plishes the goal of removing 80 per cent of the plastic waste from incineration in
2030.
11
The mission-driven effort may at the same time contribute to promote circular
economy in broader terms through the development of solutions to improve re-
source productivity, reduce the amount of waste, increase the amount and quality
of reuse, and reduce negative effects on the climate and environment from prod-
ucts, e.g. through a changes in design, production, and consumer behaviour.
There is a need to focus on all steps of the value chain from product design and
production processes to consumption, maintenance, recycling, and reuse. In that
way the research and innovation effort can promote the development of new
business and consumption models so that products and materials are used in the
best way and as long as possible – and are suitable for repair and reuse.
10
11
Aftale om fordeling af forskningsreserven 2021.
The potential is subject to very high uncertainty both in terms of effect, documentation and distribution.
A significant reservation must therefore be made in relation to the realization of the potential. Estimates for
the four missions cannot be combined due to multiple possible overlaps. No equation can thus be drawn
between the initiation of the research missions and the realization of the reduction potentials.
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It is estimated that new solutions within reuse and reduction of plastic and textile
waste have potential of reducing the Danish greenhouse gas emission with about
0.2 Mt CO
2
e per year in 2030 in addition to the greenhouse gas reductions, that
has already been resolved.
12
Implementation:
Private-public partnerships with projects within circular econ-
omy and technologies that can help reuse and reduce plastic and textile waste can
apply for funding through Innovation Fund Denmark. Innovation Fund Denmark
will fund the partnership with the greatest potential.
Target group:
Well-establish research environments at the Danish universities
working with circular economy and the related scientific fields already exist. This
research has a high scientific impact – both in relation to the world average and to
Danish research in general. Thus, there are many competencies within life cycle
assessments, environmental considerations in product development, consumer
behaviour, waste and recycling, etc. at Danish universities and at GTS-institutions
today.
Within the business sector, Denmark has a significant position and global poten-
tial when it comes to environmental technology solutions that ensure clean air,
clean water, clean soil and optimal resource utilization. Denmark has several large
companies in the area as well as strong research and development departments. At
the same time, there are experiments among Danish companies with the organiza-
tion of circular economic solutions, and there is already a large sector within tradi-
tionally linear design, production and sale of plastic and textile products. In addi-
tion, the Danish public sector is a significant player – both as a knowledge and
collaboration partner in relation to the development and use of environmental
technology and the development of the circular economy.
Thus, there is a large potential to create a well-established industry around recy-
cling plastic waste in Denmark and a variety of potential partners for the partner-
ships.
Timeline:
Call for mission roadmaps are expected to open primo 2021 and the
selection of roadmaps takes place mid 2021. Call for partnership applications are
expected to open mid 2021. Selection of partnerships and awarding of grants are
expected to be completed in ultimo 2021.
State aid:
In the application, the partnership will propose a budget based on part-
ners/activities and that will be subject to evaluation and approval of appliance
with thresholds in GBER.
Do no significant harm:
12
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Table 2.7.4
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected
to lead to significant greenhouse gas emissions?
Yes
No Significant negative impact?
X No, the aim of this mission is to develop solutions to increase the re-
source productivity, decrease plastic and textile waste, increase the
quantity and quality of reusable materials, and reduce the products’ cli-
mate and environmental impact. The mission will not contribute to fossil
fuel projects.
X No, the mission concerning circular economy is not expected to be
detrimental to climate change adaptation.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
lead to climate change adaption.
X No, this mission is not expected to be detrimental to the sustainable use
and protection of water and marine resources. On the contrary, the aim
of the mission on circular economy is to reduce the amount of plastic
waste and thereby reduce the negative impacts of micro- and macro
plastic waste ending up in groundwater and marine waters.
Climate change adaptation:
Is the measure expected
to lead to an increased adverse impact of the current
climate and the expected future climate, on the meas-
ure itself or on people, nature or assets?
The sustainable use and protection of water and
marine resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of
bodies of water, including surface water and groundwa-
ter; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including
waste prevention and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incin-
eration or disposal of waste, with the exception of the
incineration of non-recyclable hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect
use of any natural resource at any stage of its life cycle
which are not minimised by adequate measures; or
(iii) cause significant and long-term harm to the environ-
ment in respect to the circular economy?
Pollution prevention and control:
Is the measure ex-
pected to lead to a significant increase in the emissions
of pollutants into air, water or land?
X No, on the contrary this mission on circular economy focusing on reuse
and reduction of plastic and textile waste aims at developing solutions to
increase resource productivity, decrease plastic and textile waste,
increase the quantity and quality of reusable materials, and reduce
products’ climate and environmental impact.
X No, the aim of this mission is to develop solutions to increase the re-
source productivity, decrease plastic and textile waste, increase the
quantity and quality of reusable materials, and reduce the products’ cli-
mate and environmental impact.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk pollution prevention and control.
The protection and restoration of biodiversity and
ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and
resilience of ecosystems; or
(ii) detrimental to the conservation status of habitats and
species, including those of Union interest?
X No, this mission concerning circular economy is not expected to be
detrimental to the protection and restoration of biodiversity and
ecosystems.
Innovation Fund Denmark will review applications, select partnerships
and award grants in line with general standards so the mission does not
put into risk the protection and restoration of biodiversity and ecosys-
tems.
2.7.7 Incentives to boost R&D in companies
Addressing challenges:
The European economies have been highly affected by
the COVID-19 crisis. To address the challenges, the incentives for companies to
invest in R&D are increased to ensure a green and digital transition and to miti-
gate the economic consequences and unemployment.
Objectives:
The basis for depreciation and the basis for deduction will be ex-
tended to include the financial year 2022 by 130 per cent of all R&D expenses in-
cluding equipment, rental of property, labour force (salary expenses) etc.
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The initiative will incentivize companies to increase their overall R&D spending
and at the same time encourage smaller firms to engage in R&D. Furthermore,
the Danish government anticipates that more than 40 per cent of firms’ expendi-
tures on R&D will be in digitalization efforts based on the historical R&D ex-
penditure. Thus, the initiative delivers on the recommendations for Denmark in
the CSR to frontload investments in research and innovation.
Implementation:
The temporary scheme will be extended to include the financial
year 2022.
State aid:
An assessment has been made of whether the initiative is conform with
state aid rules. The initiative applies to all undertakings on equal terms and there-
fore does not constitute state aid.
Link to reforms:
The R&D incentive will provide companies with liquidity and
incentives to invest in R&D that can bring Denmark closer to the new industrial
age.
Target Group:
All enterprises including companies and self-employed will be
able to benefit from the additional depreciation and deduction right.
Timeline:
A politically binding agreement has been concluded on 8 December
2020. A proposal has been submitted to the Danish Parliament in February 2021.
The bill has passed the Parliament on 13. April 2021. The initiative is effective as
from January 1, 2022.
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Do no significant harm
Table 2.7.5
Substantive DNSH assessment
DNSH objective
Climate change mitigation:
Is the measure expected to lead to sig-
nificant greenhouse gas emissions?
Yes
No Significant negative impact?
X
No. R&D related to exploration and extraction of fossil
fuels and raw materials does not qualify for the deduc-
tion. Further, historical data on private R&D expendi-
tures in Denmark underline that no R&D is conducted in
areas inconsistent with the DNSH-principle.
This projection is based detailed historical data on pri-
vate sector R&D spending provided by Statistics Den-
mark (the central authority on Danish statistics) for the
period 2015-2019.
The vast majority (>99 percent) of Danish private sector
R&D is undertaken in Industry, Trade, ICT, Finance &
Insurance and Business service. For the ICT, Trade,
and Finance & Insurance sectors, the majority of R&D is
conducted within the fields of computer science, elec-
tronics, communication and other technical sciences, as
shown. As such, these cannot be expected to signifi-
cantly harm any of any of the six environmental objec-
tives.
The business service sector refers to various companies
offering a broad range of services to other companies,
e.g. cleaning, accounting assistance, consulting ser-
vices, security services etc. R&D in this sector is unre-
lated to the six environmental objectives.
The largest sector in terms of private sector R&D is In-
dustry, which is a broad category covering a multitude of
different R&D purposes. The main R&D subsectors
within the industry relates to pharmaceuticals, measur-
ing equipment, medical equipment etc. These are by na-
ture unrelated to the six environmental objectives set out
by the technical guidance on the application of “do no
significant harm”.
Further, national regulation and EU-regulation ensures
that strong economic incentives to transition to greener
production, transportation, heating, energy production
exits etc. As a consequence of increasingly ambitious
climate and environmental goals, these green economic
incentives have been increasing.
The green initiatives in the Danish RRP further in-
creases these incentives significantly, and the Green
Tax Reform includes a commitment to implementing an
economy-wide uniform carbon tax, sending a clear sig-
nal to market participants. As such, there is no reason to
expect private sector R&D to become less aligned with
the “do no significant harm”-principle for the duration of
the tax deduction (2020-2022) or beyond than what has
been the case for 2015-2019
The investment window, increased R&D incentive and
accelerated depreciation will moreover help ease leak-
age problems since the initiatives will make a transition
through green investments possible and thus not lead to
moving production out of the country.
Climate change adaptation:
Is the measure expected to lead to an
increased adverse impact of the current climate and the expected fu-
ture climate, on the measure itself or on people, nature or assets?
X
No. R&D related to exploration and extraction of fossil
fuels and raw materials does not qualify for the deduc-
tion. Further, historical data on private R&D expendi-
tures in Denmark underline that no R&D is conducted in
areas inconsistent with the DNSH-principle.
The investment window, increased R&D incentive and
accelerated depreciation will moreover help ease leak-
age problems since the initiatives will make a transition
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through green investments possible and thus not lead to
moving production out of the country.
The sustainable use and protection of water and marine
resources.
Is the measure expected to be detrimental:
(i) to the good status or the good ecological potential of bodies of
water, including surface water and groundwater; or
(ii) to the good environmental status of marine waters?
The transition to a circular economy, including waste prevention
and recycling.
Is the measure expected to:
(i) lead to a significant increase in the generation, incineration or dis-
posal of waste, with the exception of the incineration of non-recyclable
hazardous waste; or
(ii) lead to significant inefficiencies in the direct or indirect use of any
natural resource at any stage of its life cycle which are not minimised
by adequate measures; or
(iii) cause significant and long-term harm to the environment in respect
to the circular economy?
Pollution prevention and control:
Is the measure expected to lead
to a significant increase in the emissions of pollutants into air, water or
land?
The protection and restoration of biodiversity and ecosystems.
Is the measure expected to be:
(i) significantly detrimental to the good condition and resilience of
ecosystems; or
(ii) detrimental to the conservation status of habitats and species,
including those of Union interest?
X
No – pollutants are strictly regulated in Danish environ-
mental laws and this is unaffected by the measure.
No – the measure has no implication for the protection
and restauration of biodiversity and ecosystems.
X
No – the extended deductions for R&D expenditures
have no implication for the waste handling or the circular
economy.
X
No – the extended deductions for R&D expenditures
have no negative implication for the use and protection
of water services.
X
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Green and digital dimensions of the component
Green transition
The aim of the initiatives is to help drive the green transition and for Denmark to
reach its goal of 70 per cent reduction of greenhouse gas emissions in 2030 com-
pared to 1990. However, the initiatives can also be considered a part of the Euro-
pean Green Deal framework, as the initiatives fit well into policy areas such as bi-
odiversity, the farm to fork strategy, sustainable agriculture, clean energy, sustaina-
ble mobility and climate action.
Denmark is an internationally recognized green frontrunner with expertise in
green energy technology after decades of working towards a climate-neutral en-
ergy system. The initiatives mentioned here fit into this larger framework. Some
of the initiatives contributes with general reductions in greenhouse gas emissions,
while others provide support for the development of innovative technologies that
will help incentivize green solutions.
The initiatives complement the already existing efforts in the Danish Green Re-
search Strategy of 2020. The purpose of such a cohesive strategy is to accelerate
the development of new green solutions. Hopefully, the strategy can lower the
costs of a green transition and make actual reductions possible towards 2030 and
2050. A core element of the strategy is to expand Danish businesses’ leading posi-
tion in green solutions and create jobs in both Denmark and the EU. The strategy
has been developed in close cooperation with private businesses. Such a cohesive
strategy was requested by the Commission in its recommendations for the Danish
NECP.
As an initiative in the green research strategy, the government proposed an adjust-
ment of the legal basis of Innovation Fund Denmark. On 23 November 2020 a
broad majority of parties in the Danish parliament entered into a political agree-
ment which renews the political mandate of Innovation Fund Denmark. The
agreement emphasizes that Innovation Fund Denmark, among other things,
should focus on long-term capacity-building and on developing strategic instru-
ments in order to create long term growth and jobs in Denmark and to contribute
to solving significant societal challenges, e.g. the green transition.
Both the green research strategy and the political agreement on Innovation Fund
Denmark follow up on the recommendations made by an international expert
panel which reviewed the Danish innovation system in 2019. The European Com-
mission’s Horizon 2020 Policy Support Facility facilitated the review and provided
secretariat support to the panel together with the Danish Ministry of Higher Edu-
cation and Science and with contribution from other ministries.
As part of the green research strategy, The Ministry of Higher Education and Sci-
ence and the Ministry of Industry, Business and Financial Affairs will also jointly
launch an initiative concerning the framework for cooperation between
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knowledge institutions and companies in the field of innovation. The aim is to
even more turn Denmark’s strong knowledge and research position into innova-
tion, growth in companies, attractive investment options, and more high-produc-
tive jobs all over the country. This work will also build on the recommendations
from the international panel that evaluated the Danish innovation system in 2019.
It will, among other things, look at the framework for commercialisation of re-
search results and the strengthening of an entrepreneurial culture among research-
ers and students. The work will support the government’s climate action plan and
green research strategy by supporting the conversion of green research into new
green solutions that are brought into real life.
Digital transition
In the Commission’s recommendation to Denmark, the Commission stated that
Denmark performed well in the field of digitalization, but that Denmark would
need to invest further in digital infrastructure and focus on the green transition.
Consumer behavior and intelligent design are important pillars for sustainability,
and are equally important if the outcomes from the research programs are to
reach their full potential. Digitalization, use and public availability of data as well
as implementation of new technologies are all important components. We need to
develop flexible energy systems where energy consumption is constantly adapted
to the energy production.
The tax deduction to boost R&D in companies will contribute to furthering the
digital agenda and the digitalisation of Denmark. Based on recent private R&D
expenditure patterns, it is expected that at least 40 per cent of private R&D will be
related to digitalisation,
cf. table 2.7.6.
This estimate of the digital share includes
only research and development that are strictly within the interdisciplinary fields
of Software, Hardware and Robotics & Drone technology. These fields alone ac-
count for 40 per cent of the total private R&D expenditures in 2019, while other
research fields (e.g health, defense etc.) will also have ICT-related R&D expendi-
tures that are not captured by this definition.
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Table 2.7.6
Private R&D expenditures in digital interdisciplinary research areas (2019)
Total R&D
expenditure
M. DKK
Industry
Construction
Trade
Transport
Hotel, restauration
ICT
Finance and Insurance
Business service
Other
Total
21.147
30
1.980
39
10
3.912
6.346
8.853
228
42.545
3.157
5
635
2
0
3.211
5.947
822
60
13.838
1.719
1
427
21
0
145
3
396
12
2.723
226
1
15
5
0
28
77
107
5
463
24%
23%
54%
71%
0%
87%
95%
15%
33%
40%
Software Hardware
Robotics and
Digital share of
drone technology R&D expenditure
Source: Statistics Denmark.
Further, in connection with the initiative ‘Green
fuels for transport and industry (i.e.
Power-to-X)’,
it is important that we use the transportation capacity and the infra-
structure as efficiently as possible. This can be done through innovative digital
technologies. Denmark is a frontrunner in technology regarding geographic posi-
tioning and availability of geo data.
Digitalization in agriculture is important as well. Research in digital agriculture is
needed in order to collect, analyse and share data to optimize and improve the use
of resources. Farmers are increasingly using more sophisticated digital technology
to monitor, collect, and analyse data about the condition of the landmass. Preci-
sion farming has the potential to tell the farmer the exact amount of fertilizer or
water to use, thereby optimizing resource use. The Danish Agricultural Agency
has already set up a pilot project in precision agriculture in 2018, and other sus-
tainable projects are planned to integrate the agricultural sector in the green transi-
tion
.
Open strategic autonomy and security issues
The green research and development partnerships are intended to develop new
green solutions that can support Denmark and the Member States of the Euro-
pean Union reach the goals to reduce carbon emissions by at least 55 per cent rel-
ative to 1990 levels in 2030 and climate neutrality in 2050. The research and devel-
opment projects will cover the whole value chain, from basic science to large-scale
demonstration projects. The partnerships can thereby make the Union more resili-
ent by diversifying key supply chains of the innovation of new green solutions and
thereby strengthening the strategic autonomy of the Union.
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Cross-border and multi-country projects
The research and innovation activities in the partnership are expected to include
an international perspective, e.g. collaboration with relevant international research
groups/partners, and take into account relevant strategies such as the European
Hydrogen Strategy, including the European Clean Hydrogen Alliance. This may
help to bring together the leading research and innovation institutions, which can
cooperate by sharing knowledge and best practice to focus and accelerate innova-
tions targeted specific challenges of the green transition. Also, an international
panel of experts is expected to assist the Innovation Fund Denmark in the selec-
tion and scoping process for the roadmaps under each mission.
Do no significant harm
As outlined for each initiative above, the initiatives on green research and devel-
opment will not do any harm to the environment, as the project are specifically
aimed at reducing green house gas emissions and protect the environment. For
the partnerships, projects that are in conflict with the ‘Do no significant harm’-
principle will be screened out in the application process. For the R&D tax deduc-
tion, R&D related to exploration and extraction of fossil fuels and raw materials
does not qualify for the deduction, while historical data on private R&D expendi-
tures in Denmark underline that no R&D is conducted in areas inconsistent with
the DNSH-principle.
Financing and costs
The proposed initiatives regarding the four missions are all a part of the Danish
government’s research program. The means for the four missions are an extraor-
dinary green innovation and research priority and in addition to other Danish na-
tional research means, as well as an addition to the research means allocated from
the EU such as from Horizon Europe.
The total cost of the program amounts to 700 m. DKK in 2021 from the Recov-
ery and Resilience Facility. Innovation Fund Denmark will be in charge of choos-
ing which projects are funded. Innovation Fund Denmark will also decide the
split between the four missions. The split between the four missions will depend
which applications that has the highest quality and potential. Hence, it is now not
possible to tell the exact means allocated to each mission. However, it is expected
that each of the four missions should be covered by one or more partnerships.
The mission-partnerships will be very broad with partners that span the whole
value chain from basic research to experimental development. The partnerships
will set a long-term vision (2050) and back-track their activities and milestones to
the partnership where the initial investment will be committed for a 5 year period.
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Covering both research and development will be a vital selection criteria. In the
application the partnership will propose a budget based on partners/activities and
that will be subject to evaluation and approval of appliance with thresholds in
GBER.
Means from the Innovation Fund Denmark are thought to be geared towards co-
financing from the participating stakeholders and companies with an amount of
roughly the same magnitude. It is also expected that the partnerships should at-
tempt to attract additional funding in the coming years from private companies,
national public or private funds as well as from international sources such as EU’s
Horizon Europe. The Ministry of Higher Education and Science will ensure that
additional funds in addition to the recovery funds will not lead to double funding
but increase the overall support for the partnerships. In the application process,
applicants are specially required by Innovation Fund Denmark to declare applica-
tion or funding from other sources (public and private) on activities similar to
what is proposed in the partnership application. During the partnership period,
mission-partnerships will be evaluated on a yearly basis based on a yearly progress
report and a revised financial account report. Innovation Fund Denmark can hold
back payouts in case of double funding of activities.
Estimating the costs of the extended R&D tax deductions (after accounting for
dynamic behaviour) follows the standard methodology of the Danish Ministry of
Taxation for estimating the tax consequences. Concretely, the mechanical effect
of extended deductions for R&D is based on data from
Statistics Denmark
on firm
expenditures on R&D. The behavioural effect on investment, profits, employ-
ment and wages is based on the standard calculation of corporate tax changes by
the Ministry of Finance/Taxation documented
here.
Table 2.7.7
Funding of the project
M. DKK, 2021-prices
I. Carbon capture and storage or use
of CO2*
II. Green fuels for transport and
industry (i.e. Power-to-X)*
III. Climate- and environment friendly
agriculture and food production*
IV. Circular economy focusing on
reuse and reduction of plastic and
textile waste*
V. Incentives to boost R&D in
companies
In total
Investment/
reform
Investment
Investment
Investment
Investment
Investment
Total
[175]
[175]
[175]
[175]
1.100
1.800
2021
[175]
[175]
[175]
[175]
-
700
2022
-
-
-
-
1.100
1.100
2023 2024 2025 Funding from
other sources
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
[175]
[175]
[175]
[175]
-
Note: *175 m. DKK is the expected average allocated to each mission. The split of the 700 m. DKK and number of
partnerships within the four missions will depend on the applications with the highest quality and potential.
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3. Complementarity and Implementation
Part 3 of the Danish Recovery and Resilience Plan (RRP)
describes how the initiatives in the RRP are consistent with
national policy targets. This includes a description of the links
between the RRP and the Danish Energy and Climate Plan.
Furthermore, this part contains descriptions of the rigorous and
comprehensive Danish control and audit system that is in place to
prevent fraud with RRP funds.
Finally, part 3 explains how the Danish RRP is based on input
from civil society, enterprises and social partners and how the
implementation of the plan will be communicated.
3.1 Pre-financing request
Denmark files for 13 per cent pre-financing of the RRP in order to frontload the
investments in the green and digital transition and ensure financial support in the
initial years after the crisis.
3.2 Consistency with other initiatives
National Energy and Climate Plan
The Danish RRP contributes significantly to the realization of the targets outlined
in the Danish National Energy and Climate Plan. This section describes the links
between the RRP and these national policy targets.
On December 6 2019, 8 of the 10 parties in the Danish Parliament and the gov-
ernment reached an agreement on a new Climate Act
1
. The act includes a legally
binding target to reduce greenhouse gas emissions by 70 per cent by 2030 (relative
to 1990 level), to reach net zero emissions by 2050 at the latest, and to set mile-
stone targets based on a five-year cycle.
The climate target of reducing greenhouse gas emissions by 70 per cent by 2030
require widespread action in all parts of society. Thus, one of the main goals of
the National Energy and Climate Plan is decarbonisation.
The Danish RRP contributes to this objective by providing investments that will
lower greenhouse gas emissions by 2.8 Mt CO
2
e by 2030. The Danish RRP also
provides funding for potential further reductions of greenhouse gas emissions by
https://kefm.dk/Media/1/D/aftale-om-klimalov-af-6-december-2019%20FINAL-a-webtilg%C3%A6nge-
lig.pdf
1
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8.7-16.7 Mt CO
2
e by 2030 via development and research projects. Furthermore,
the Danish RRP provides funding for the first phase of the Green Tax Reform,
which will pave the way for the introduction of a uniform carbon tax in Denmark
by 2023.
Road transport
A central part of the decarbonisation is a green transi-
tion of the transport sector. With the RRP, road trans-
portation in Denmark will become greener. The initia-
tives financed by the Recovery and Resilience Facility
contributes to an agreement that reduces greenhouse
gas emissions from road transport by 2.1 Mt CO
2
e by
2030. The revised registration tax for vehicles is making
green cars cheaper to buy, thereby incentivizing con-
sumers to buy green cars. This is combined with a tem-
porary increase of an existing scrapping premium for
old diesel cars, thereby incentivizing owners of some of
the most polluting cars in the Danish car fleet, to scrap
them. Furthermore, an analysis of a test-scheme for
large trucks is initiated, providing knowledge on initia-
tives, which can potentially lower greenhouse gas emis-
sions from freight transport.
Environment and agriculture
The National Energy and Climate Plan also includes an
ambition of ensuring reduced greenhouse gas emissions
from the agricultural sector. This is a challenge, as the
farmers’ finances are generally vulnerable, and it is diffi-
cult to lower greenhouse gas emissions with existing
technologies without lowering production output as
well. The RRP targets this in several ways. Firstly, it in-
cludes an initiative on restoring wetlands, thereby tak-
ing carbon rich soils out of agricultural production.
This lowers the greenhouse gas emissions by 0.1 Mt
CO
2
e by 2030 as well as emissions of nitrogen to the
aquatic environment. Secondly, the Danish RRP con-
tains research and demonstration projects particularly
aimed at demonstrating and scaling up existing technol-
ogies within the agriculture industry that allows farmers
to lower greenhouse gas emissions with 2 Mt CO
2
e by
2030
without
lowering production output.
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Renewable energy
Renewable energy is central in reaching Denmark’s cli-
mate targets. Therefore, one of the targets in the Dan-
ish National Energy and Climate Plan is to promote re-
newable energy. The RRP includes initiatives, which
does exactly that, with investments in Power-to-X.
Power-to-X technology will become crucial in the fu-
ture when more and more energy will come from re-
newables and there is an increasing need for energy sta-
bility and storage of renewable energy. Power-to-X is
estimated to hold a technical reduction potential of 0.5
to 3.5 Mt CO
2
e by 2030, which the RRP contributes to
realise.
Energy efficiency
The National Energy and Climate Plan also emphasizes
energy efficiency, and the government climate partner-
ships have recommended investments in that area as
well. The RRP includes initiatives targeted at energy ef-
ficiency with energy renovations of public and private
buildings as well as replacing outdated and polluting en-
ergy sources with new green technology. The initiatives
combined will reduce greenhouse gas emissions of 0.1
Mt CO
2
e by 2030.
Research and development
The climate target of 70 per cent cannot be realized
with existing technologies. The National Energy and
Climate Plan includes a target of promoting green re-
search, development, and entrepreneurship. Therefore,
the RRP contains investments in demonstration of ex-
isting technologies as well as research and development
of new technologies that will contribute to the lowering
of greenhouse gas emissions. It is estimated that these
technologies combined have a technical reduction po-
tential of between 8.7 and 16.7 Mt CO
2
e by 2030,
which the investments in the RRP contribute to realise.
Furthermore, green entrepreneurship is supported, for
instance by introducing tax deductions for R&D initia-
tives for SMEs. Thus, the Danish RRP targets both re-
search and development as well as the introduction of
new technologies in SMEs, ensuring that new technolo-
gies will in fact be applied by enterprises.
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To summarize, the Danish RRP contributes significantly to the reduction of Den-
mark’s greenhouse gas emissions as set out in the Danish Climate Act and the Na-
tional Energy and Climate Plan by reducing greenhouse gas emissions by 2.8 Mt
CO
2
e in 2030. This is done by promoting investments especially in decarbonisa-
tion, energy efficiency, and green research, development, and entrepreneurship.
Furthermore, research and development initiatives contributes to unleash the po-
tential of key technologies, which combined can lead to further greenhouse gas re-
ductions in the scale of 8.7-16.7 Mt CO
2
e by 2030.
National Reform Programme
In the context of the European Semester, all EU Member States forward national
reform programs every spring, which accounts for the countries structural re-
forms.
Denmark´s National Reform Programme 2021 is an integrated part of the Danish
Recovery and Resilience Plan. The National Reform Programme 2021 accounts
for the measures taken by Denmark to comply with the 2019 and 2020 country
specific recommendations from the EU.
The Danish recovery plan responds to the country specific recommendations that
Denmark has received through the European Semester (Part 1, section 2). Fur-
thermore, the National Reform Programme 2021 describes Denmark’s progress in
reaching the UN’s Sustainable Development Goals (annex 1).
European Regional Development Fund
The Danish RRP takes funding from other EU funds into consideration in order
to ensure complementarity and to avoid double funding. The complementarities
are most prominent within support for digitalisation and green transition of
SME’s and start-ups.
The main focus in the distribution of the funds from the European Regional De-
velopment Fund is the recovery of SMEs, where the funds are targeted towards
making the recovery as green and digital as possible. SMEs operate in an ever-
changing environment and they need to be able to transition rapidly in order to
meet the consumers’ growing demand for green and digital solutions. Therefore,
the European Regional Development Fund focusses on strengthening the com-
petitiveness of SMEs by providing funds for advice and investments in fixed as-
sets.
Furthermore, the European Regional Development Fund will fund implementa-
tion of recommendations from the government’s regional growth teams. The local
growth teams will provide recommendations that considers the local context. The
growth teams will focus on delivering recommendations that will bring enterprises
and businesses strengthened out of the COVID-19 pandemic.
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European Social Fund
The European Social Fund will provide support for start-ups and enhancing com-
petencies for leaders as well as employees.
The support of entrepreneurship will materialise through initiatives to promote
entrepreneurship within all genders, backgrounds, and throughout all of Den-
mark. This effort will have a focus on businesses within digital and green indus-
tries. The effort also includes providing advice and business development as well
as strengthening entrepreneurs’ abilities to attract external financing.
The effort on enhancing knowledge and competencies will focus on both up-
skilling of leaders and employees as well as pairing unemployed people with enter-
prises in order to provide the enterprises with the competencies they need.
It applies to both the European Regional Development Fund and the European
Social Fund that they will not fund any of the initiatives in the Danish RRP, as to
comply with rules on double funding.
Just Transition Fund
By April 30 2021, the programming of the Just Transition Fund in Denmark is
awaiting the regional transition plans. The Just Transition Fund is expected to de-
velop business infrastructure and promote private investments to alleviate the
negative economic impacts of an ambitious transition to a greener and more cli-
mate friendly economy. It will be ensured that no overlaps between projects fi-
nanced by the Recovery and Resilience Facility and the Just Transition Fund will
occur.
European Agriculture Guarantee Fund & European Agricultural Fund for
Rural Development
On April 28 2021, the Danish government presented a proposal for a reform of
the agricultural sector in Denmark. This proposal includes how to utilise the funds
stemming from the Common Agricultural Policy. Negotiations between the gov-
ernment and parties in the Danish Parliament are thus ongoing on the agricultural
reform and the use of funds from Common Agricultural Policy.
3.3 Complementarity of funding
In section 6 of this chapter, the control and audit setup is described in detail. One
of the main purposes of the control and audit setup is to ensure that no double
funding will occur when the funds from the RRP is disbursed to recipients. This is
done by supplementing the current rigorous Danish control systems with new
management declarations in which the management in each responsible, imple-
menting authority pledges to be able to document at all times that double funding
is prevented and that all funds have been implemented according to relevant na-
tional and EU regulation.
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In the descriptions of each component throughout part 2 in the RRP, descriptions
are included on how double funding is prevented where relevant. For instance, in
funds that recipients can apply for, one of the application criteria is not to double
fund. This is an important criterion when assessing applications for all funds
within the Danish RRP, and only projects respecting the regulations on double
funding will be eligible for disbursements.
Initiatives financed by both the Recovery and Resilience Facility and additional
funding (e.g. national or European funds) will be disbursed at central level with
budget and appropriation authority in the Budget Bill. The central distribution en-
sures that the same applicant cannot receive double funding for the same project,
as the disbursement of funds will be handled within the same responsible ministry
and unit.
The funding for the recovery plan will be registered as revenue in the Budget Bill
for 2021 via a supplementary appropriation to be adopted by the Danish Parlia-
ment's Finance Committee. This ensures that it will be possible to separate fund-
ing from the Recovery and Resilience Facility from other funding.
3.4 Implementation
In section 3.6 in this chapter it is described how maladministration, fraud, and
corruption is prevented through the existing, rigorous Danish control and audit
system as well as additional layers of control and audit aimed specifically at the ad-
ministration of the RRP. Therefore, this section focuses on the decision-making
process leading up to the submission of the RRP.
During the COVID-19 pandemic, the Danish government has utilized a large
number of financial instruments to mitigate the economic consequences of the
pandemic. This includes a green stimulus package that was negotiated together
with the annual budget bill in the fall of 2020. Large parts of the Danish RRP is
comprised of initiatives that was negotiated as part of the stimulus packages with
the Danish Parliament.
The Green Stimulus Package contains initiatives that was recommended by “green
restart teams” and the governments “climate partnerships” which are comprised
of key stakeholders and enterprises.
In November 2019, the government launched 13 climate partnerships
2
. The part-
nerships consisted of enterprises and trade unions and were set to deliver recom-
mendations on how to deal with climate change and realise a green transition. The
partnerships were monitored by a “green business forum” comprised of govern-
ment representatives, enterprises, trade unions, scientists and green NGOs. The
partnerships have continuously delivered recommendations, and the Danish RRP
2
https://kefm.dk/klima-og-vejr/regeringens-klimapartnerskaber-og-groent-erhvervsforum
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reflects these. For instance, the component on energy efficiency is entirely de-
voted to following up on recommendations from the climate partnerships.
Eight green restart teams
3
were formed in August 2020 with the purpose of
providing recommendations on ensuring a green restart of Danish exports after
the COVID-19 pandemic. The teams were led by CEOs and chairs of large com-
panies and were comprised of representatives from enterprises and trade unions.
The teams delivered their recommendations in September 2020. The recommen-
dations were taken into account when the Danish RRP was drafted, and it in-
cludes initiatives recommended by the restart teams, such as investments in green
transition and digital transformation as well as tax deductions for research and de-
velopment just to mention a few.
The government has received valuable advice from the climate partnerships and
the green restart teams and thus the foundation of the Danish RRP builds on rec-
ommendations from civil society stakeholders.
Other initiatives in the Danish RRP have been negotiated separately between the
Danish government and a majority of the Danish Parliament in the relevant line
ministries, and have been undergoing the usual thorough process of consulting
stakeholders as well as hearing local and regional authorities, social partners, civil
society organizations, youth organizations, and other relevant stakeholders, during
the legislative procedure.
3.5 Consultation process
This section contains a description of how stakeholders have been consulted as
part of the preparatory process when drafting the Danish RRP. It also contains
considerations and plans on how to consult stakeholders as part of the implemen-
tation of the RRP.
Overall, the Danish RRP consists of components made in agreements between
the government and a broad majority of the Danish parliament. Stakeholders have
been consulted during the preparatory process through each individual compo-
nent – especially in relation to the recommendations of the climate partnerships
and the green restart teams,
cf. above.
The consultation of stakeholders in the preparatory process has been conducted
through a variety of forums and channels. The government has established 13 cli-
mate partnerships with a broad variety of stakeholders from corporations and
businesses that has given recommendations to the government on the green tran-
sition. The component on energy efficiency in the Danish RRP is entirely devoted
to follow-up on the recommendations from the climate partnerships.
https://em.dk/ministeriet/arbejdsomraader/samfundsoekonomi-konkurrenceevne-og-digitalisering/gen-
start-af-danmark/
3
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In the light of the COVID-19 pandemic, the government has summoned eight
“green restart teams” comprised of different stakeholders, including representa-
tives from the largest companies in Denmark. The green restart teams have deliv-
ered a large bundle of recommendations that – to a large extend – have been in-
corporated into the Danish RRP.
Throughout drafting of the Danish RRP, the Danish Ministry of Finance has been
in contact with many stakeholders, who provided ideas and inputs to the RRP.
Many stakeholders have also addressed the Minister of Finance directly with in-
put. To the extend that the inputs have contributed to fulfilling the purposes and
requirements for the Danish RRP, many suggestions from civil society have been
included in the plan. This includes e.g. electrification of road transport, energy
renovations of public and private buildings, investments in wind power including
Power-to-X, carbon capture and storage, and investments in digitalization includ-
ing digitalization of the healthcare sector, which are all key initiatives in the RRP.
The Danish Ministry of Finance and the Commission’s Representation in Den-
mark have arranged and participated in dialogue meetings with hundreds of par-
ticipants representing a broad variety of stakeholders in Denmark. For instance,
on February 26, the Ministry of Finance and the Ministry of Foreign Affairs ar-
ranged a seminar in cooperation with The Commission’s Representation in Den-
mark for around 200 stakeholders.
Stakeholders will also play a central role in the implementation of many aspects of
the RRP. Many of the components in the Danish RRP are in the form of funds
for which enterprises, households, citizens and organizations can apply. Thereby,
the RRP provides a framework various funds that various citizens, organizations,
and corporations can apply. This gives stakeholders great opportunities to influ-
ence how the RRP is implemented.
For other funds, the specific implementation has not yet been decided. The appli-
cation of the funds will be discussed in a partnership with civil society, key stake-
holders etc. The partnership will provide recommendations on e.g. the aims of the
funds, how it will be implemented and the criteria for eligibility. Thus, the consul-
tation process has been rigorous and lasted since before planning the RRP and
until the funds are being disbursed.
3.6 Control and audit
In this section, the current rigorous Danish control and audit setup is described in
general terms. The description includes how Denmark will follow up and secure
that funds from the Recovery and Resilience Facility are spent according to EU
regulation regarding anti-fraud and corruption and in particular regulation
2021/241 on establishing the facility. The setup aims at preventing, detecting and
correcting potential fraud, corruption and conflicts of interest as well as ensuring
to avoid double funding etc., cf. article 22 in EU regulation 2021/241.
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The section concerning control and audit consists of three parts. The first part of
the section describes the general internal audits. Furthermore, it is described how
the organisation of Danish government and administration works in general to
prevent fraud and corruption. The second part describes the specific and addi-
tional controls and audits that are established in order to accommodate EU re-
quirements on how to document the control with the application and implemen-
tation of the Recovery and Resilience Plan. The third part contains detailed de-
scriptions of the control and audit systems in place in each of the implementing
ministries.
Regulation on transparency and the duties of civil servants
Danish law has an explicit focus on ensuring transparency and objectivity in the
Danish public administration. This is primarily regulated in The Public Access to
Information Act
4
and The Public Administration Act
5
. Furthermore, a codex for
employees in government called “Kodeks 7
6
” describes the most important deeds
and duties to which government officials are bound to adhere.
The Public Access to Information Act has five overall objectives:
1.
2.
3.
4.
5.
To ensure freedom of speech and information
To ensure citizens’ involvement in democracy
To make sure that the public can oversee the public administration
To give the media the possibility to convey information to the public
To ensure a high trust in the public administration
The Public Access to Information Act also gives citizens and media access to all
documents in the public administration with a few exemptions.
The Public Administration Act governs the functioning of the public administra-
tion. The act states e.g. that civil servants has to be impartial when processing
cases and that they must always be objective.
Kodeks 7 is a mandatory set of rules for civil servants on behaviour and values
when being employed in the public administration. The codex states seven core
values with which civil servants must comply:
1. Legality
2. Truth
3. Professionalism
4. Collaboration
5. Responsibility
6. Openness about mistakes
7. Party-political neutrality
Cf.
https://www.retsinformation.dk/eli/lta/2020/145
Cf.
https://www.retsinformation.dk/eli/lta/2007/1365
6
Cf.
https://www.medst.dk/arbejdsomraader/publikationer/kodex-vii-de-syv-centrale-pligter/?query=kodex
4
5
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These core values are elaborated in a publication
7
published by the Ministry of Fi-
nance, which also includes cases describing appropriate and inappropriate behav-
iour for civil servants. Thus, the Kodeks 7 is part of the basic training and educa-
tion that civil servants receive when being employed in the public administration.
General control setup in Denmark
In Denmark, the responsibility for applying funds belongs to the individual minis-
try that pays out the funds. Every ministry that receives funding from e.g. the
RRF is responsible for ensuring and complying with practices that complies with
valid rules and secures a sufficient control and audit. The individual control and
audit systems of each ministry is described in detail below. The internal control in
governmental institutions includes control of both financial and non-financial
processes. Non-financial processes could for instance be control with it-infra-
structure, it-operations, administration processes, journaling, milestones, targets
etc.
The control and audit systems of the ministries include control with subordinate
institutions’ application of public funds, including planning of financial processes
and procedures, it-security, and the quality of the subordinate institutions’ internal
control and audit systems. Through the oversight, the management ensures a
sound administration of public funds on the entire ministry area. The subordinate
institutions themselves coordinate and own their control and audit systems and
risk management, but every ministerial department has the responsibility of ensur-
ing that the control and audit systems in subordinate units are sufficient.
Ministries, government corporations and state institutions must compile instruc-
tions describing how the institutions ensure a sound organisational placement and
completion of the internal control, audit, and risk management.
“Regnskabsbekendtgørelsen”
8
contains the specific rules on how to organize the
internal control and audit systems in public institutions. The rules include control
with financial processes to ensure correct financial reporting including establish-
ment of functional separation in payment processes etc.
Thus, in the administration of the Danish public sector, there is a comprehensive
and rigorous set of rules and procedures that ministries must comply with in order
to ensure that they apply sufficient internal audits and controls.
External audit
Additional to the rules on internal audits in the ministries, Denmark has a set of
rules governing the external audits of the ministries. The National Audit Office
(Rigsrevisionen), which is part of the Danish parliament, is responsible for con-
ducting external audits on government expenditures and revenues. The National
Cf.
https://www.medst.dk/arbejdsomraader/publikationer/kodex-vii-de-syv-centrale-pligter/?query=kodex
Rules governing audit and financial accounting in governmental institutions in Denmark:
https://www.retsinformation.dk/eli/lta/2018/116
7
8
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Audit Office are thus completely independent from the government and they re-
port to the Court of Auditors appointed by the parliament and the parliament it-
self.
If not otherwise specified, The National Audit Office is responsible for auditing
the state accounts and doing financial audits testing and controlling whether the
accounts are true and comply with relevant rules. Furthermore, The National Au-
dit Office checks whether the accounts are in line with grants, laws, signed deals,
and other common practices and assesses whether economic regards has been
considered in the administration.
Furthermore, The National Audit Office can require regions, corporations, and
municipalities etc. receiving funds from the government to provide detailed finan-
cial accounts. This serves the purpose of The National Audit Office being able to
audit them and to check that the financial accounts are audited properly and suffi-
ciently, that the requirements for receiving grants are met, and that the funds are
applied according to relevant rules and requirements.
Extended controls concerning the application of the RRF
In order to ensure compliance with EU regulation 2021/241 and in particular arti-
cle 22 on the protection of the financial interests of the Union, Denmark will
strengthen and expand its current control setup – both in terms of staffing and
control mandate. This extended setup will also ensure
one
central contact point be-
tween Denmark and the Commission on the implementation of RRF funds.
The Danish setup will consist of two levels of control and audit: A central level,
which is additional to the existing Danish control and audit mechanisms and the
existing decentralised level. In addition to the two levels of control and audit, the
control and audit system is comprised of The National Audit office, the Danish
Ombudsman, The Danish Data Protection Agency, and the whistle-blower
9
func-
tions in all ministries. The roles and responsibilities of the different layers of as-
surance are outlined in figure 3.1.
The relevant police authority is the State Prosecutor for Serious Economic and
International Crime. The State Prosecutor handles all cases of governmental sus-
picion of fraud in Denmark. The Ministry of Finance will get reports from all line
ministries, and the police will be notified if serious irregularities are observed.
9
Cf.
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Figure 3.1
Three layers of assurence
The Ministry of Finance is responsible of coordinating and ensuring that the audit
and controls are sound and well-functioning in the line ministries with regards to
the implementation of the RRP. The Ministry of Finance will also serve the func-
tion as contact point for the Commission, EU audit institutions, OLAF etc. The
Commission, the European Court of Auditors, OLAF and the EPPO will have
access to all relevant data concerning control and audit. The OAS will ensure at-
tention to ensuring high reliability of data provisions by beneficiaries on mile-
stones and target and the data will be stored according to relevant regulation.
Before each payment-request, The Ministry of Finance will require and collect
declarations from the management in each ministry that receives funding from the
RRF. The declarations will be signed at management level and sent to the Ministry
of Finance by members of the management in each of the nine responsible line
ministries,
cf. table 3.1.
With the management declarations, the management in the
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responsible ministries pledge to comply with the regulation (2021/241) on the es-
tablishment of the Recovery and Resilience Facility and in particular article 22 on
the protection of the financial interests of the Union.
In the management declarations, the ministries will furthermore pledge to:
Provide information that is complete, accurate, and reliable.
Comply with conditions for disbursement of the funds.
Be able to document that the funds have been spent according to what has
been agreed, including being able to provide data on individual recipients of
funds.
Be able to document and verify the achievement of milestones and targets for
each individual project.
Provide a summary of the completed audits, including possible weaknesses
and corrective action completed.
Have established sound and sufficient internal control and audit systems in or-
der to prevent, detect and correct potential fraud and corruption.
Ensure that there is not received funds from other instances, including other
EU-funds, in order to avoid double funding.
The Ministry of Finance will monitor and ensure that the ministries send the man-
agement declarations. Through the management declarations and the control and
audit systems that are already in place, it is ensured that the funds are applied ac-
cording to national- and EU-requirements.
After The Ministry of Finance has obtained sufficient assurance on the spending
of funds, the ministry will submit a single management declaration to the Com-
mission on behalf of Denmark. The single management declaration from Den-
mark will be based on the collection of line-ministry-level declarations and on the
conclusion of The Ministry of Finance’s own controls and supervision of the im-
plementation of the funds.
When assigning funding from the RRF to relevant line ministries, it is a clear con-
dition that the ministry applies funds according to the EU’s criteria for application
of funds from the RRF. Every ministry has a clear and lawfully binding responsi-
bility to ensure appropriate audit and control systems in order to ensure that the
funds are applied according to what has been approved by the Danish govern-
ment and the EU. Furthermore, every ministry has to design its financial accounts
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in a way that makes it possible to segregate the RRF-funding from other expendi-
ture in the ministry. This will be done in the supplementary financial act imple-
menting the RRF, in the official state accounts as well as in the annual budget bill.
As mentioned above, The National Audit Office may most likely also perform
risk-based and random audits with the disbursement of RRF-funds. However,
The National Audit Office is an independent entity and the central control unit in
the Ministry of Finance can thus not dictate how and if the National Audit Office
will carry out audits. To the extent that The National Audit Office performs au-
dits related to the disbursements of RRF-funds, the audit summaries will be pro-
vided to The Commission along with the biannual management declarations.
Table 3.1 shows the division of responsibilities between ministries.
Table 3.1
Ministries responsible for each component
Component
1. Strengthening the Resilience of the Health Care
System
2. Green transition of Agriculture and the Environment
3. Energy Efficiency, Green Heating and CCS
4. Green Tax Reform
5. Sustainable Road Transportation
6. Digitalisation
7. Green Research and Development
Responsible ministry
Ministry of Health
Ministry of Food, Agriculture and Fishery & Ministry of
Environment
Ministry of Climate, Energy and Utilities
Ministry of Taxation
Ministry of Transport
Ministry of Finance/Agency of Digitisation & Ministry of
Industry, Business and Financial Affairs
Ministry of Higher Education and Science
The central control- and audit unit within the Ministry of Finance
Within the Ministry of Finance, the existing internal audit unit will be assigned the
task of coordinating the audit systems and conducting the controls with the line
ministries’ application of funds and fulfilment of milestones and targets.
The function is independent and is anchored in the Office of Audit and Supervi-
sion (OAS) in the Ministry of Finance, and it reports directly to the permanent
secretary in the Ministry of Finance. The office has an individual description of its
role and functions, in which its special independent status is secured. An amend-
ment to the description of functions has been made, specifically regarding the new
mandate regarding control with the use of RRF-funds. The amendment to the de-
scription of function for the OAS regarding the specific RRF-mandate is ap-
proved at the government level. The government’s economic committee has ap-
proved the extended mandate.
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The OAS currently consists of a chief auditor with 13 years of experience from in-
ternal audits in the Ministry of Finance. Additionally, the OAS has eight highly ex-
perienced employees of which four is specialised in auditing, two in cyber security,
one in legal affairs, and one in financial affairs. Each of the employees in the of-
fice has more than 15 years of experience. All the employees in the office are con-
tinuously trained and upskilled. The office will hire the number of additional em-
ployees needed to ensure proper and sufficient control with the RRF funds. The
exact number of additional employees will be assessed continuously to ensure a
sufficient workforce.
The Office of Audit and Supervision’s controls related to the Recovery and
Resilience Facility funds
The OAS will perform controls regarding both the ministries’ application of funds
and the documentation and fulfilment of targets and milestones. The OAS will
draft an annual ‘audit and control strategy’ for the spending of the RRF funds. In
the strategy, focus will be on identifying risk prone areas.
In the assessment of the risk, OAS will include the following factors:
OAS’ assessment of the inherent risk in each project.
The line ministries’ description of the performed controls , including use of
systems
The level and scope of the internal control- and audit within the ministry.
In the assessment of the risks, it will furthermore be included whether The Na-
tional Audit Office has audited the operations in recent years and any recommen-
dations from The National Audit Office will be taken duly into account.
A risk assessment will be performed for every initiative in the Danish RRP. Here-
after, the OAS will draft a strategy for the control of each initiative.
In the case that an initiative in the RRP contains a milestone related to the de-
velopment of e.g. a strategy, the OAS will control that the strategy has been
drafted and approved and that the drafting and approval is sufficiently docu-
mented.
In case a target is related to e.g. a strategy having a certain effect or output, the
OAS will control that the ministry has obtained sufficient documentation for
the effect/output, and that the documentation supports and provides evidence
of the indicated outputs and effects.
In case an initiative consists of e.g. a pool from which applicant can apply for
funds, the control from the OAS will be more rigorous. The controls will then
consist of ensuring that the ministry has described and implemented appropri-
ate control mechanisms with the disbursement of funds. This also includes e.g.
focus on the controls in place to prevent double funding.
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Based on a rigorous assessment as described above, risks are categorized into
three different risk-categories: high, medium and low. This is shown in figure 3.2.
Figure 3.2
Factors deciding the risk category of the project
If the OAS asses that the risk for an individual project is high (red), further au-
dits of the systems in place and the underlying action (i.e. checks on final ben-
eficiaries) will be put in place. A control on the documentation for milestones
and targets will also be performed.
If the OAS asses that the risk is medium (yellow) the OAS will e.g. request
documentation on performance of controls. Furthermore, controls on the
documentation for milestones and targets will be performed.
If the OAS assesses that the risk is low (green) the OAS will e.g. request docu-
mentation on the milestones and targets.
OAS will report biannually on the controls performed during the work with the
management declaration. In the report, the OAS will provide a summary of the
OAS’ controls with the implementing ministries’ reports on control and audit.
The OAS will perform own controls on all project including the ones OAS as-
sesses as low risk projects. More rigorous controls will be performed on projects
where the OAS assess the risk as high.
The OAS will perform audits and controls prior to handling the first payment re-
quests. The OAS has started the dialogue with the ministries and will set up a
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number of workshops with each ministry to get a detailed understanding on their
control environment and internal control setup. This will allow the OAS to make
a sufficient risk assessment.
The number of audits will be approximately 10-15 per year, but will be decided
specifically dependent on the types of projects being carried out in the specific
year.
Systems used and collection of data
The OAS will use a specific Danish government system ‘F2’ to store documenta-
tion from the line-ministries. The system is used in almost all ministries and agen-
cies in the Danish central administration, and it is used for filing and journaling of
documents etc. to ensure compliance with various law requirements, including es-
pecially the public access to information act. Data will be sent via encrypted email
to the OAS.
For the purpose of data analysis and in order to obtain knowledge on risk areas,
the OAS will use the ARACHNE tool and will setup up a workshop on how to
technically implement ARACHNE.
The specific data that will be collected from the projects is data on final recipi-
ents/beneficiaries, contractors and subcontractors. The collection of these data
will serve the purpose of obtaining knowledge of risks specifically regarding ‘con-
centration’ and ‘reputational’ risks.
The OAS will ensure that these data is stored in order for the EU-authorities to
check when requested.
Specific controls to avoid double funding
In order to provide knowledge of risk and in order to get assurance specifically on
the risk of double funding, the OAS will perform three specific controls:
Check and compare with the responsible for the ministry’s budget in the Min-
istry of Finance to ensure that the project in the relevant ministry only receives
funds from one EU-fund.
Check the annual Budget Bill under the relevant ministry whether they receive
other EU-funds, which will indicate a risk of double funding.
Check the annual report for each relevant ministry or agency, that funds is not
received from any other sources, including other sources than EU-funds.
Finally, the OAS will include a new paragraph in the Ministry Management decla-
ration, where the Management declares not to have received funding from other
sources for the specific project.
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Summary of Ministry of Finance’s responsibilities
The Ministry of Finance collects the Management declarations from the line
ministries.
The Ministry of Finance collects the summaries of the audits completed in the
line ministries (‘audit summary reports’) and provides the Commission with a
summary of audits.
The Ministry of Finance will make a risk-based audit strategy – how to get a
satisfactory assurance regarding the Recovery and Resilience Facility-projects
in the implementing ministries.
The audit strategy will have a strong focus on internal controls, especially in
the projects with payments to citizens or multiple stakeholders.
The Ministry of Finance’s audit strategy will have a combined focus on sys-
tem-audits and project-audits, including how the ministries have performed
their controls and audits. The strategy will cover a specific focus on how the
ministries have documented their milestones and targets.
The Ministry of Finance can always require further information and documen-
tation of the audits and controls carried out regarding RRP funds.
Figure 3.3
Levels of complementarity and implementation
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Responsibilities of the decentral level (line ministries)
Each ministry is responsible for ensuring sufficient audit and control. The minis-
tries will have the flexibility to design these individually, thereby maintaining the
decentral Danish approach.
The internal control setup regarding the use of funds and documentation for im-
plementation of milestones and targets is specified in tables 3.2-3.10 for all rele-
vant line ministries.
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Table 3.2
Description of control setup in The Ministry of Environment
Monitoring and control arrangement
Internal control setup
The Danish Ministry of Environment and its agencies follow the general
guidelines issued by the Ministry of Finance (fm.dk) and Agency for Public Fi-
nance (oes.dk):
-
Lov om statens regnskabsvæsen (LOV nr. 131 af 28/03/1984 - Law on
State Accounting)
-
Bekendtgørelse om statens regnskabsvæsen mv.(BEK nr. 70 af
27/01/2011 – Executive Order on the State Accounting)
-
Vejledning om Intern Finansiel Kontrol, maj 2020 (Guidelines on Inter-
nal Financial Control)
The guidelines describe the required setup of the internal controls in three
lines of defence.
Third line of defence is the ministry’s monitoring of its agencies.
Second line of defence is the agency’s internal controlling function, which
monitor and test the internal controls of the Agency. In the Danish Environ-
mental Protection Agency (DEPA) the Internal Financial Control team con-
ducts the second line of defence regarding financial controls. The Internal
Financial Control team report to the management of the DEPA.
First line of defence is the general staff and managers that conduct the day-
to-day business of the DEPA according to general guidelines and the
DEPA’s own guidelines.
Instructions relevant to control, audit and
risk management.
The concept for the continual internal investigation of the control environ-
ment according to the guideline “Vejledning om Intern Finansiel Kontrol, maj
2020” (Guidelines on Internal Financial Control) is still under development
in the DEPA, but is expected fully implemented during 2021. See above.
Third line of defence is the ministry’s monitoring of its agencies.
Second line of defence is the agency’s internal controlling function, which
monitor and test the internal controls of the Agency. For the DEPA the Inter-
nal Financial Control team fulfils the function.
First line of defence is the general staff and managers that conduct the day-
to-day business of the DEPA according to general guidelines and the
DEPA’s own guidelines.
1. In order to create a purchase, commit to an agreement or a grant agree-
ment, at least two employees of which one must have authorization and al-
located budget, is necessary.
2. To create a payment of invoice or a payment request at least two em-
ployees are necessary. The payments are handled electronically. The pro-
cedure calls for two different employees, as the systems used at the DEPA
use segregation of duties.
The first line of defence conducts no. 1 and 2 above. The second line of de-
fence controls the procedures ensures segregation of duties etc. and test
the controls effectivity and efficiency.
Risk of fraud and corruption
Management verifications checking ab-
sence of irregularities
See above.
The first line of defence conducts no. 1 and 2 stated above.
The second line of defence performs internal investigations in order to de-
termine whether the control environment mitigates the possibility of inten-
tional or unintentional fraud.
Internal investigation usually focuses on segregation of duties, user access
within a given system as well as other controlling activities perform by the
first line of defence.
Separation of functions as regards imple-
mentation and control
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Process for reporting identified irregulari-
ties
Further, the second line of defence focuses on the control design, including
control effectivity and efficiency.
The DEPA follows the general guidelines regarding irregularities, which is
reported to the DEPA’s management, the National Audit Office, the local
police authorities, the Ministry of Finance. The latter report to OLAF.
The DEPA mitigate any irregularities according to the internal guidelines.
Procedures are controlled and updated. All documentation and information
are stored electronically.
Whistle-blowers can contact the Ministry of Environment by letter or an e-
mail.
All staff receive general training in guidelines in prevention of fraud, corrup-
tion and conflicts of interests.
Procedures for storing and following up on
detected irregularities
Prevention of fraud, corruption and con-
flicts of interests
Detection of fraud, corruption and conflicts
of interests
Internal controls in the ministry are based on risk and materiality. All pay-
ment-systems have a built in segregation of duties and this is overall en-
sured in the internal control focus.
If the project is regarded as ‘high risk’ the internal controls will be setup ac-
cordingly.
The DEPA’s Internal Financial Control team performed in 2020 an internal
investigation to determine whether the control environment was adequate.
The findings showed that the control environment in general was adequate,
but with room for improvements, which is under implementation during
2021.
The concept for the continual internal investigation of the control environ-
ment according to the guideline “Vejledning om Intern Finansiel Kontrol, maj
2020” is still under development, but is expected to be fully implemented
during 2021.
Auditors must audit all grants if they are above a certain materiality level.
The DEPA is audited by the National Audit Office of Denmark.
The National Audit Office of Denmark and National Organisation of Certified
Auditors (FSR) issues:
-
Guidelines for Audit
-
Paradigmes for Audit Statement
Where audits do not apply due to materiality levels, the conditions in the
Grant Agreement gives the DEPA opportunity to request documentation for
the expenditures associated with the Grant Project.
Correction of fraud, corruption and con-
flicts of interests
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).
The ministry’s ordinary procedures regarding refunds of payments will be
implemented.
The DEPA follows the general guidelines regarding irregularities, which is
reported to the DEPA’s management, the National Audit Office, the local
police authorities, the Ministry of Finance. The latter report to OLAF.
The DEPA mitigate any irregularities according to the internal guidelines,
procedures is controlled and updated. All documentation and information
are stored electronically.
Any funds will be recovered direct or by prosecution (if possible).
In grant administration, most arrears are paid after reporting on the project
milestones. Some prefunding can occur. Applicants are required to identify
by social security number (CPR) or by business registration number (CVR).
The DEPA is in a process of widening the use of digital two-factor identifica-
tions for login in the grant application system. The digital two-factor identifi-
cation is the NemId, which uses the social security number (CPR) or the
business registration number (CVR).
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Audit & control arrangements at the level of
The Ministry will collect data on the fulfilment of milestones and targets and
individual components/measures
do relevant controls of documentation. This will include desk reviews and
on-the-spot-checks if relevant to the milestone or target.
The Ministry will document data on final recipients and make these availa-
ble for both the control on fulfilment of milestones and targets and for the
Ministry of Finance.
In grant administration, most arrears are paid after reporting on the project
milestones (desk reviews). Some prefunding can occur. Applicants are re-
quired to identify by social security number (CPR) or by business registra-
tion number (CVR). The DEPA is in process widening the use of digital two-
factor identifications for login in the grant application system. The digital
two-factor identification is the NemId, which uses the social security number
(CPR) or the business registration number (CVR).
If physical inspections are needed the will be conducted by the staff of the
DEPA according to internal guidelines (on-the-spot checks).
Auditors must audit all grants.
The National Audit Office of Denmark and National Organisation of Certified
Auditors (FSR) issues:
-
Guidelines for Audit
-
Paradigms for Audit Statement
Where audits do not apply due to materiality levels the conditions in the
Grant Agreement gives the DEPA opportunity to request documentation for
the expenditures associated with the Grant Project.
Avoidance of double funding
Practical arrangements preventing dou-
ble funding
Grant applicants must provide a declaration regarding funding which is
checked by the grant administrators.
In order to create a purchase, commit to an agreement or a grant agree-
ment, at least two employees of which one must have authorization and al-
located budget, is necessary.
To create a payment of invoice or a payment request at least two employ-
ees are necessary. The payments are handled electronically. The proce-
dure call for two different employees, as the systems used at the DEPA
uses segregation of duties.
The Department of Accounting performs monthly or quarterly reconcilia-
tions to mitigate any errors or omissions regarding expenditures.
Preventing that different ministries fi-
nance the same project twice
Grant applicants must provide a declaration regarding funding which is
checked by the grant administrators.
Data, systems and reporting
Arrangements and mechanisms to col-
lect, store and make available data on
final recipients
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
The responsibility for control of payments depends on the system used on
the administration hereof.
The Department of Accounting is responsible for the systems:
Navision Stat - Accounting System
TAS - Grant Administration
The Department of Grant Administration is responsible for the systems:
-
F2 - Grant Administration
-
TILSKOV - Grant Administration
The Agency for Governmental Administration (statens-adm.dk) is responsi-
ble for the systems:
-
Navision Stat - Accounting System
-
-
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All payments from F2, TAS and TILSKOV are routed through Navision
Stat. The systems all implement segregation of duties. The Agency for
Governmental Administration is responsible for the final payment transferal
from Navision Stat to the bank, and apply segregation of duties during this
part of the process.
In order to create a purchase, commit to an agreement or a grant agree-
ment, at least two employees of which one must have authorization and al-
located budget, is necessary.
To create a payment of invoice or a payment request at least two employ-
ees are necessary. The payments are handled electronically. The proce-
dure call for two different employees, as the systems used at the DEPA
uses segregation of duties.
The Department of Accounting performs monthly or quarterly reconcilia-
tions to mitigate any errors or omissions regarding expenditures.
All accounting data are consolidated in the stat accounts.
Systems used by to collect and store
data on recipients
The DEPA does not at present administrate EU-funds and thus do not ap-
ply any systems specifically for this purpose.
For documentation of the Grant Administration, the DEPA uses several
systems.
For Grant Administration the current systems are:
-
Captia - Documentation (to Nov. 2019)
-
F2 - Documentation (from Nov. 2019)
-
F2 - Grant Administration
-
TAS - Grant Administration
-
TILSKOV - Grant Administration
-
Navision Stat - Accounting System
All information is stored electronically.
Types of data on final recipients, con-
tractors and subcontractors that will be
stored and collected
All information is stored electronically.
Application
Identification of applicants and other participants
Social security number (CPR) or by business registration number
(CVR) – (if available)
-
Payment information
-
Reporting on milestones and final reporting
-
Audit reports or samples
-
Accounts and financial statements
-
Grant Agreement and conditions
-
Other relevant documentation for the grant administration
-
-
-
Access to information for management
and audit authorities
Data will be available for both the Ministry of Finance and EU-institutions
upon request. The relevant level will be given access to the data.
All accounting data are consolidated in the state accounts.
All information are stored electronically and are available upon request. If
the information is required to be stored for a specific period other than five
years, the information must be provided prior to the application process.
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the appli-
cable rules
Some systems use payment limits – limited to the grant amount.
Payments are controlled recording to the grant amount (Grant Agreement).
In order to create a purchase, commit to an agreement or a grant agree-
ment, at least two employees of which one must have authorization and al-
located budget, is necessary.
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To create a payment of invoice or a payment request at least two employ-
ees are necessary. The payments are handled electronically. The proce-
dure call for two different employees, as the systems used at the DEPA
uses segregation of duties.
The Department of Accounting performs monthly or quarterly reconcilia-
tions to mitigate any errors or omissions regarding expenditures.
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Table 3.3
Description of control setup in The Ministry of Transport
DEP: Department
DRD: Danish Road Directorate
DRTA: Danish Road Traffic Authority
CARA: Danish Civil Aviation and Railway Authority
Monitoring and control arrangement
Internal control setup
DEP:
The following text is chapter 3 of the instructions for the Ministry of
Transport
3. Accreditation as well as risk management and formalized super-
visory and control functions in connection therewith
3.1. Approval of the interim accounts to the department
The companies make a technical approval of the interim financial state-
ments at the end of each month.
After the end of period 3, period 6, period 9, period 11, period 12 and the
supplementary periods, the companies must make a substantial approval
of the period accounts to the department. This substantial approval takes
place by an approval of the period accounts in Statens Koncern Sys-
tem/SKS (The State’s Concern System).
It must be stated in section 2.6 Period accounts of the company instruc-
tions who approves the period accounts. The accounts must be ap-
proved by the person to whom the competence has been delegated. The
procedures for periodic accounting clearance must also be described.
3.2. Risk management and formalised supervisory and control proce-
dures for the performance of the department's supervisory and control
functions
3.2.1 Organisational matters
The department has the overall supervisory and control responsibility to-
wards the companies. The Center for Finance, HR and Group Manage-
ment (Koncernstyring) in the department has the overall responsibility for
organising the overall and crosscutting accounting supervision and con-
trol procedures. These procedures are carried out to the extent neces-
sary in collaboration with the rest of the department.
The accounting area is supervised via quarterly network meetings with
the accounting managers of the ministry's large companies.
Accounting matters for the individual companies are also dealt with as
needed at the supervisory-based meetings agreed between the minis-
try/department and the major institutions in the ministerial area. This con-
cerns so-called financial meetings, which take place at caseworker level
between the department and the individual company, monthly meetings,
which take place at management level and top management meetings,
which take place at director level.
The ministerial area-related supervision and control procedures are
available to all employees in the department's case management and fil-
ing system and are distributed to the agencies to the relevant extent.
The Department's Executive Board continuously monitors that the most
important ministerial area - related supervision and control procedures
are implemented.
3.2.2 Supervision regarding basic budgets
In accordance with the Ministry of Finance's circular on budgeting and
accounting follow-up, companies prepare a basic budget each year prior
to the beginning of the financial year in accordance with the guidelines in
the circular.
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The Ministry must ensure that the total basic budgets, incl. budget cor-
rections, are within the ministerial area's total appropriations on the
Budget Bill under the state sub-ceiling for operating expenses.
The companies must load basic budgets in SKS in accordance with the
guidelines in the circular and guidance material. The Ministry must en-
sure that this is done in a timely and correct manner. Basic budgets must
be accrued according to the same principles as the accounts. The Minis-
try must approve and submit the basic budgets to the Ministry of Finance
before the beginning of the financial year.
3.2.3 Supervision regarding budget and accounting follow-up
The budget and accounting follow-up is determined by the Ministry of Fi-
nance's circular on budgeting and budget and accounting follow-up,
other guidelines from the Ministry of Finance supplemented with guide-
lines from the Ministry of Transport.
In accordance with the provisions of the circular, the companies must
carry out a budget and accounting follow-up every month (for certain
types of main accounts, however, every quarter), which must be submit-
ted to the company's management. The follow-up must include explana-
tions of deviations and considerations about the significance for the re-
sult for the year.
According to the before mentioned circular, the Ministry must for all main
accounts, carry out quarterly budget and accounting follow-up (group
and expenditure follow-up), which must be submitted to the Permanent
Secretary. The follow-up must contain explanations of deviations and a
description of any measures in relation to deviations, where this is
deemed relevant. The Ministry must carry out an expenditure follow-up in
accordance with the Ministry of Finance's guidelines and forward this to
the Ministry of Finance.
The companies must load forecasts in SKS in accordance with the
guidelines in the circular and associated guidance material. The Ministry
must ensure that this is done in a timely and correct manner. Forecasts
must be accrued according to the same principles as the accounts.
In addition to the reporting that follows from the circular's requirements,
the largest companies prepare a monthly financial report for the Ministry,
and at minimum quarterly reports are prepared at project level for rele-
vant building and construction projects. For the largest building and con-
struction projects, the so-called mega-projects, a report is prepared
every quarter for the project regarding time, economy and risk. For the
entire ministerial area's building and construction portfolio, a semi-annual
status is prepared for the Parliament’s Finance Committee.
The quarterly reporting from the larger companies and reports regarding
mega-projects management are discussed at a monthly meeting prior to
the preparation of the ministerial area's overall quarterly reporting. The
quarterly reporting from the larger companies, the follow-up of expenses
to the Ministry of Finance and semi-annual reports on mega-projects and
construction status are further discussed by management at a top man-
agement meeting prior to the submission of the expenditure follow-up to
the Ministry of Finance and the submission of construction status to the
Finance Committee of the Parliament. The Permanent Secretary’s ap-
proval of the follow up are declared in the minutes of the top manage-
ment meetings.
The deadlines for this are set for one year at a time.
3.2.4 Supervision of financial Accounting
The Ministry reviews the interim financial statements on the basis of out-
put data from SKS for errors and omissions from an angle of discretion
and materiality, and ensures that the financial statements are approved
in SKS.
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The Ministry approves the ministerial area's total annual accounts, which
form the basis for the Agency for Public Finance and Management over-
all compilation of the central government accounts, to the Agency for
Public Finance and Management and the National Audit Office. In the
event of significant errors and omissions, a reservation is incorporated in
the ministerial area declaration.
The Permanent Secretary also endorses all the companies' annual re-
ports.
(3.2.5 – see under description of Whistle-blower procedures)
3.2.6 Supervision regarding purchase
All purchases in the companies must, when posting, be attributed to the
Agency for Public Finance and Management’s purchasing categories. It
is the responsibility of the individual company to ensure a uniform and
correct use of the categories. Excluded from this are construction pro-
jects that follow previous practice.
3.2.7 Supervision regarding consulting procurement
A number of services, such as services related to IT and construction
and maintenance of infrastructure and buildings, are characterized by the
services being necessary or central elements in the solution of the com-
panies' core tasks. For these services, there is thus a choice between
whether the service in question is best and most advantageously re-
solved internally or externally.
For the above type of services, the Ministry supervises the scope and
budget compliance at the monthly supervisory meetings between the
company and the Department, cf. section 3.2.1. The company should
also have a policy that explicitly and consciously takes a position on the
intersection between internal and external task solution. In addition, the
decision on external task solution should be concretely justified.
For management services, e.g. consultants or lawyers who participate in
organizational analyses, strategy and policy development, recruitment or
interpretation of their own laws and regulations, etc., the company must
in each individual case obtain the department's approval prior to disposi-
tion.
Instructions relevant to control, audit
See above.
and risk management
Separation of functions as regards
DRD:
The relevant department of The Danish Road Directorate will do
implementation and control
running and final controls of all funded projects to make sure the funded
work has been completed by the funded entity. There is also a require-
ment for all projects above 500.000 DKK funded by The Danish Road Di-
rectorate to be audited by an independent accountant.
For the internal separation of functions in The Danish Road Directorate,
the department handling the funding is controlled regularly by the Fi-
nance Department to ensure compliance.
CARA:
Once disbursement of funds should be executed, the project
manager at the Danish Civil Aviation and Railway Authority will, review
all submitted reports and documents. Based on this a specific check list
will be completed which will be reviewed by Management. Subsequently,
prior to the disbursement, the financial controller in charge of transferring
any given amount, will also review all documents received both in rela-
tion to the administration of the pool and with respect to the specific re-
quest for disbursement.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
All funds, disbursements and procedures of the Transport Ministry and
the underlying bodies are closely monitored on both an annual and ad-
hoc project basis by the National Auditor’s Office, which on behalf of the
Danish Parliament supervises the use of all public funds in Denmark.
DRD:
In regard to the control of irregularities, The Danish Road Direc-
torate use spot checks, accountant demands and a whistle-blower sys-
tem. The Whistle-blower system is handled by the Legal Advisor to the
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Government (Kammeradvokaten) and the Director of Secretariat and Hu-
man Resources. More on this can be found on the following link:
https://vejdirektoratet.whistleblowernetwork.net/app-page;appPage-
Name=Whistleblower%20policy
There are spot checks for processes both within The Danish Road Direc-
torate and on the individual funded projects.
Generally, there are also regular budgetary checks in The Danish Road
Directorate, these are called BOF. BOF is completed 3 times per year.
For the funded projects, as noted above, The Danish Road Directorate
demand, though contractual provisions, that these will be controlled by
independent accountants.
Process for reporting identified irreg-
Within the Ministry of Transport, there are several different ways of han-
ularities
dling identified irregularities. These include the following:
Contact to management
Contact to the National Audit Office (Rigsrevisionen)
Contact to the Police
Contact to The Ministry of Transport
Contact to The Ministry of Finance
DRD:
Furthermore, within the Danish Road Directorate there are differ-
ent processes. For the contact to management, the irregularities will, to
begin, be handled internally according to the nature of the report and if
deemed necessary, further action will be taken.
For contact to the National Audit Office (Rigsrevisionen), The National
Audit Office will handle the possible investigation. If the National Audit
Office has any findings these will be described in a management letter to
the Ministry of Transport and the ministry will then act upon the findings.
For irregularities reported to the police there will be a police investigation
into the matters.
For reports to The Ministry of Transport, the ministry will handle the irreg-
ularities.
For reports to the Ministry of Finance, the irregularities will be handed
over to OLAF.
Each of the above-mentioned entities handles the storage of documenta-
tion for irregularities when approached.
Besides this, The Danish Road Directorate has set in place a Whistle-
blower function, which is under the administration of the Legal Advisor to
the Government (Kammeradvokaten) in collaboration with The Danish
Road Directorates directors of respectively secretariat and human re-
sources.
Procedures for storing and following
up on detected irregularities
DRD:
Internally found irregularities due to potential fraud, conflict of inter-
ests or corruption are handled through investigation and potential em-
ployment penalty. If it is found that there is a problem, or in the case that
the fraud etc. is financially significant The Danish Road Directorate will
include the necessary authority, as mentioned in the answer above.
All internal investigations and its consequences for both the financial
statements and the employee are saved and journalized. This also goes
for cases handed over to other authorities.
DEP:
All details regarding serious irregularities are stored in the F2
cases system in the Ministry of Transport.
Prevention of fraud, corruption and
conflicts of interests
DEP:
3.2.5 Whistle-blower scheme etc.
In section 2.7 of the company instructions. Internal control and risk man-
agement, companies must describe the procedures for the companies'
internal control and risk management associated with financial reporting.
There are per. March 1, 2020 introduced a group-wide whistle-blower
scheme in the ministerial area. The Ministry and the companies will
themselves be responsible for following up on reports received. There is
access to the scheme from the companies' websites, as well as a portal
from the department's website, which guides the whistle-blower to the
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relevant company. The scheme allows for anonymous inquiries. Condi-
tions regarding, this must be stated in section 2.7 of the company in-
structions.
In addition to matters concerning accounting and financial crime, the
scheme can be used in relation to e.g. unethical and illegal management,
serious breaches of environmental considerations and breaches of envi-
ronmental rules, serious breaches of working environment and safety
rules as well as other breaches of laws and serious breaches of inter-
nally established rules.
Examples of other procedures for internal control and risk management
associated with financial reporting could be supervisory concepts for ac-
tion, process and documentation, IT automation processes ("robotics"),
accessibility for actors, management involvement, responsibility place-
ment, etc.
DRD:
The Danish Road Directorate has several initiatives in order to pre-
vent fraud, corruption and conflict of interests. This includes, but is not
limited to, a mandatory training session upon start of employment. This
training has a build in test that determines whether the employee has
passed the training. Along with ongoing communication about controlling
and the monitoring of financial controls, inflicts that “Opportunity” from
the fraud triangle is less accessible due to the risk of being caught.
As mentioned above, the Danish Road Directorate also have a whistle-
blower function.
Detection of fraud, corruption and
conflicts of interests
Internal controls in the ministry are based on risk and materiality. All pay-
ment-systems have a built in segregation of duties and this is overall en-
sured in the internal control focus, see descriptions above.
If the project is regarded as ‘high risk’ the internal controls will be setup
accordingly.
DRD:
Along with the general control setup, the Danish Road Directorate
performs randomized verification of costs and its documentation. This
ensures, that financial transactions, which normally would not be audited
due to its insignificance or the limitation of the audit, will have the chance
to be random selected for internal verification.
Correction of fraud, corruption and
conflicts of interests
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).
The ministry’s ordinary procedures regarding refunds of payments will be
implemented.
The ministry will collect data on the fulfilment of milestones and targets
and do relevant controls of documentation. This will include desk reviews
and on the spot check if relevant to the milestone.
The ministry will document data on final recipients and make these avail-
able for both the control on fulfilment of milestones and targets and for
the Ministry of Finance.
CARA: For the financing pool to promote the infrastructure for bicycles,
an accounting instruction has not yet been prepared. The reason for this
is that the purpose, delimitation of applicants, and the financial manage-
ment has not been determined. In addition to this, the pool will be imple-
mented in 2024. It is therefore not yet possible to provide a full and com-
plete description of the arrangements in place.
In general, for the pools administered by the Danish Civil Aviation and
Railway Authority concerning public transport, it can be said that the
agency requires auditor-certified accounts for projects that have a dis-
bursement of above DKK 500,000. This ensures that the disbursed funds
have been spent in accordance with their purpose and that no fraud has
taken place.
Audit & control arrangements at the
level of individual compo-
nents/measures
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In relation to the disbursement of funds, an internal and specific manage-
ment guideline will be elaborated. The guideline will amongst others, be
used for the elaboration of an agreement with the successful applicants.
The agreement will specify the correct use of the entitled funds, including
the reporting and accounting requirements.
DRD/DRTA:
The Danish Road Traffic Authority (DRTA) is involved in the
project “Analysis of double trailer combinations” administered by the
Danish Road Directorate. The expenditures for DRTA in the project will
primarily consist of travel expenditures.
All expenditures will be scrutinised following DRTA’s guidelines and ac-
counting instruction with two-step validation. Furthermore, DRTA has
quarterly internal financial reviews.
The Danish Road Directorate will collect data on the fulfilment of mile-
stones and targets and do relevant controls of documentation. This will
include desk reviews and on the spot check if relevant to the
milestone. Furthermore, most funded projects are subject to independent
accounting statements.
The Danish Road Directorate will document data on final recipients and
make these available for both the control on fulfilment of milestones and
targets and for the Ministry of Finance.
Furthermore, all financial transactions will be linked to project specific fi-
nancial governance.
Avoidance of double funding
Practical arrangements preventing
double funding
See above.
Preventing that different ministries fi- DRD:
The department handling the specific funded projects does a con-
tinuous control when the funded project seeks payment. This is con-
nance the same project twice
trolled and managed within the department’s case management system.
Furthermore, the accounting department of The Danish Road Directorate
does a monthly control regarding posted funding measures versus pay-
ments regarding funding within the current period. By this monthly con-
trol, The Danish Road Directorate control that no funded projects are be-
ing overly funded.
All correspondence and documentation regarding funding are journalized
and saved in SAP, ECC, and 360.
Data, systems and reporting
Arrangements and mechanisms to
These data will be available for both the Ministry of Finance and relevant
collect, store and make available data
EU-institutions.
on final recipients.
Systems used by the ministry to col-
lect and store data on recipients
DRD:
The Danish Road Directorate utilizes SAP ECC and 360
The Ministry of Transport uses F2 to as case and journal system.
Types of data on final recipients, con-
N/A
tractors and subcontractors that will
be stored and collected
Access to information for manage-
ment and audit authorities
Data will be available for both the Ministry of Finance and EU-institutions
upon request. The relevant level will be given access to the data.
Furthermore, the National Audit Office also have the data available
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Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the ap-
plicable rules
DRD:
For the Danish Road Directorate, there are many things involved
with securing no project get more funding than the maximum allowable.
All funded projects over the value of the EU public tendering rules, follow
these rules. For funded project below this threshold, the national Danish
rules apply.
Furthermore, The Danish Road Directorate employ contracts with the
project managers of the funded projects. These outline the rules for the
funding, including the amount of funding allowed. The contents of these
contracts are followed up on by on-the-spot-checks. When the works are
completed both desk checks, financial checks, and physical control will
take place. When the checks are completed, a final rapport is to be done.
If the funded amount is above 500.000 DKK, an independent accountant
must audit the final rapport.
All the above steps are to ensure that no beneficiary receive more fund-
ing than the allowed under the applicable rules.
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Table 3.4
Description of control setup in The Ministry of Higher Education and Science
Monitoring and control arrangement
Internal control setup
Administration of the component 2.7 has been be allocated from The
Danish Ministry of Higher Education and Science to Innovation Fund
Denmark. Innovation Fund Denmark is an independent body under the
Danish state administration, and management and national law governs
operations of the Fund.
Instructions relevant to control, audit
The general instructions describe the control-setup for the Ministry and
and risk management.
Agencies. They include clear process of internal financial control. This in-
cludes for example functional separation between the financial registra-
tion and payment, and control of the basis for payments.
Separation of functions as regards
implementation and control
The running administration of Innovation Fund Denmark is under exter-
nal supervision by The Danish Agency for Higher Education and Sci-
ence, which is an entity under the of Ministry of Higher Education and
Science. Supervision activities encompass economic reporting as well as
compliance to budget provisions and national standards for professional
public administration.
Innovation Fund Denmark’s granting activities and control systems is un-
der the general inspection of The National Audit Office for Denmark. The
National Audit Office will report, if irregularities or system deficiencies are
observed, and the Danish Agency for Higher Education and Science will
intervene upon such notice.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
Ordinary controls regarding payments etc. See below.
Process for reporting identified irreg-
ularities
Identified irregularities will be reported by the Innovation Fund Denmark
staff to The Innovation fund Denmark Board.
The Innovation Fund Board will decide upon action and report to the Min-
istry of Higher Education and Science.
The Ministry of Higher Education will report to The Ministry of Finance
and The National Audit Office
In case of fraud, The Innovation Fund Denmark Board will notify the po-
lice.
Procedures for storing and following
up on detected irregularities
The Innovation Fund Denmark has a defined procedure for internal re-
porting and correction of irregularities.
Any documentation in regard to irregularities will be filed by The Innova-
tion Fund Denmark.
Prevention of fraud, corruption and
conflicts of interests
IFD staff (employees and board of directors) are educated in the rules of
conflict of interest.
Formally IFD staff reports yearly on financial and other relevant interests.
Potential conflict of interest is monitored and updated systematically in all
calls and individual applications.
IFD has a clear process of internal financial control. This includes func-
tional separation between the financial registration and payment, and
control of the basis for payments.
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IFD has also introduced a risk assessment scheme, where potential fi-
nancial risks are continuously assessed, in order to always have a clear
picture of potential financial risks, including the risk of fraud.
Furthermore, IFD has implemented a whistle-blower function, where it is
possible to report suspicion of fraud.
Detection of fraud, corruption and
conflicts of interests
Internal controls at The Innovation Fund Denmark are based on risk and
materiality. All payment-systems have a built in segregation of duties and
this is overall ensured in the internal control focus.
If the project is regarded as ‘high risk’, the internal controls will be set up
accordingly. If irregularities occur, they will be flagged in an internal re-
porting system and escalated stepwise through the Innovation Fund
Denmark organisation.
Correction of fraud, corruption and
conflicts of interests
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).
The Innovation Fund Denmark’s ordinary procedures regarding refunds
of payments will be implemented.
Audit & control arrangements at the
level of individual compo-
nents/measures
The Innovation Fund Denmark will collect data on the fulfilment of mile-
stones and targets and do relevant controls of documentation. This will
include desk reviews and on-the-spot-checks if relevant to the milestone.
All projects that receive funding from IFD must enter into an investment
agreement (an elaborate grant letter). In the agreement, project manage-
ment submit to a formal system of reporting, and commit the project to
specific milestones and results. Milestones are required to be quantifia-
ble and supplied with specific criteria of success before IFD can approve
the agreement.
If milestones and results are not met IFD will be able to stop further pay-
ments to the project. If the project is in direct breach of the investment
agreement IFD have solid grounds for recovering paid funds.
The investment agreement also defines a specific model of follow-up.
The model is based on frequent dialogue and formal follow up on the
progress and finances of the project. Formally, the project must form a
steering group committee that convenes at least twice a year.
Investment officer from IFD participates in the steering group meetings
where the project leader gives a status on milestones and project
budget. On top of that, the project will deliver a written status report and
a financial account of the project once a year.
The model ensures flexibility and focuses on progress and results, and
leaves little room for fraud and spending outside the investment agree-
ment that the project consortia have entered into.
All data and information about the project is stored in an internal report-
ing system that all employees in IFD have access to. The internal report-
ing system is designed to visibly flag if concerns regarding project plan,
budget or progress are raised.
The Innovation Fund Denmark will document data on final recipients and
make these available for both the control on fulfilment of milestones and
targets and for the Ministry of Finance.
Avoidance of double funding
Practical arrangements preventing
double funding
To prevent double funding applicants are specially required by The Inno-
vation Fund Denmark to declare of funding from other sources (public
and private) on activities similar to what is proposed in the application.
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Each application is evaluated by IFD and external peer reviewers. At the
core of the evaluation is investigation of State-of-the-Art level, including
overview of existing similar projects in the field. If overlapping projects
with the same partners exist, it is a prerequisite for funding that activities
are clearly defined and separated.
Preventing that different ministries fi-
nance the same project twice
See description above.
Data, systems and reporting
Arrangements and mechanisms to
All grants under The Innovation Fund Denmark are managed via the E-
collect, store and make available data
grant administration system. All applications must be submitted, and all
grants for the approved applications are registered via this integrated
on final recipients
system.
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
Systems used by Innovation Fund
Denmark to collect and store data on
recipients
The E-grant administration system is used by The Innovation Fund Den-
mark for collection and storage for data on recipients.
Types of data on final recipients, con-
Data on project participants include CVR-number, account information,
tractors and subcontractors that will
address, contact person etc. The project participants uploads this data
themselves in the E-grant administration system, where the data are also
be stored and collected.
kept afterwards.
Access to information for manage-
ment and audit authorities
Data will be available for both the Ministry of Finance and EU-institutions
when requested. The relevant level will be given access to the data.
Ensuring in practice that one benefi-
Not relevant.
ciary does not get more than what is
the maximum allowable under the ap-
plicable rules
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Table 3.5
Description of control setup in The Ministry of Health
Monitoring and control arrangement
Internal control setup
Health professionals approve the project overall and makes a recom-
mendation to the ministry to approve and grant the project a specified
amount and specifies the terms, milestones and targets. After approval,
a grant is prepared at send to the project.
The project requests a partial payment of the grant.
The grant office prepares the case for payment of the amount to the re-
cipient, and prepares documentation.
Accounting unit creates invoice based on the request and perform a
technical control of the invoice and documentation.
Accounting unit receives approval of the payment from the grant unit.
The grant unit performs a check of the documentation.
When preparing and approving a payment the grant offices check in-
volves:
Indication that milestones and targets will be fulfilled.
That the grant terms been agreed and accepted by recipient.
Grant and / or invoice recipient is correct, including i.a. bank
account.
Correct amount to be paid out.
The process and description can be adapted to specific grants as
needed. The payment is the approved and accepted by an authorized
person. Administration under the Ministry of Finance posts and executes
the payment. Administration under the Ministry of Finance prepares
monthly financial statements. Accounting unit performs a control of the
financial statement. Finally, the financial statement is approved.
The Ministry makes an additional control quarterly when reporting the ex-
pected annual expenditure to the Ministry of Finance.
Instructions relevant to control, audit
General instructions that apply for all governmental institutions.
and risk management.
Separation of functions as regards
Health professionals e.g. Danish Health Authority or Danish Medicine
implementation and control
Agency work in co-operation with the ministry's specialist office to ap-
prove and control on fulfilment of milestones and targets.
The grant office is responsible for the overall administration of the grant
and payments.
The accounting unit is responsible for administrating the financial sys-
tems and payments.
Administration under the Ministry of Finance (shared service) is responsi-
ble for all bank transfers.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
Process for reporting identified irreg-
ularities
All grants are checked minimum when making payments. All grants are
required to have an external audit on financial statements.
If fraud is detected the ministry will inform the management office, the
National Audit Office, The Ministry of Finance and report the fraud to the
police.
All documents are stored in the accounting system and document man-
agement system (Work Zone).
Procedures for storing and following
up on detected irregularities
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Prevention of fraud, corruption and
conflicts of interests
The Ministry of Health has a whistle-blower scheme:
For instructions and further information see:
https://sum.dk/minister-
iet/sundhedsministeriets-whistleblowerordning
Internal controls in the ministry are based on risk and materiality. All pay-
ment-systems have a built in segregation of duties and this is overall en-
sured in the internal control focus, see description above.
If the project is regarded as ‘high risk’ the internal controls will be setup
accordingly.
Detection of fraud, corruption and
conflicts of interests
Correction of fraud, corruption and
conflicts of interests
If fraud, corruption or conflict of interest is detected, this will be corrected
and the ministry’s ordinary procedures regarding refunds of payments
will be implemented.
The Ministry will collect data on the fulfilment of milestones and targets
and do relevant controls of documentation. This will include desk reviews
and on the spot checks if relevant to the milestone.
The Ministry will document data on final recipients and make these avail-
able for both the control on fulfilment of milestones and targets and for
the Ministry of Finance.
Audit & control arrangements at the
level of individual compo-
nents/measures
Avoidance of double funding
Practical arrangements preventing
double funding
Ordinary controls regarding payments. See above.
The Ministry of Health will perform the usual checks that ensures that no
one receives double funding.
Preventing that different ministries fi-
See above.
nance the same project twice
Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
Systems used by the ministry to col-
lect and store data on recipients
These data will be available for both the Ministry of Finance and relevant
EU-institutions. See below.
Navision is used for accounting.
Workzone is used for electronic document management system
IndFak is used for handling payments and invoices.
Local data warehouse (LDV) is used for ongoing checks and follow-up
The State Group System (SKS) is used to approve the company and the
ministerial area's accounts
In systems used for payment and financial systems a 4-eye principle is
enforced so that the same person cannot both receive goods and ap-
prove an invoice. In addition, neither the goods recipient nor the ap-
prover can influence the creditor information or account setup.
All documents and data is store in the document management system.
All contractors and subcontractors are required to be registered e.g.
have a CVR number, meaning that they are registered centrally.
Data will be available for both the Ministry of Finance and EU-institutions
when requested. The relevant level will be given access to the data.
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
Access to information for manage-
ment and audit authorities
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
Any excess funds will be repaid to the EU.
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Table 3.6
Description of control setup in The Ministry of Industry, Business and Financial Affairs – The Danish
Business Authority
Monitoring and control arrangement
Internal control setup
Control measures during the application phase:
All applications are accepted through a secure application module run
by the program operator. All systems used are subject to VPN and two-
factor authentication.
All companies (beneficiaries) are required to use their NemID
10
to ap-
ply, so the applicant is always a representative of the company.
Management verification executed by caseworks during the application
phase:
We verify that the company complies to the current requirements of be-
ing an SME etc. by crosschecking the individual company on
www.virk.dk.
We verify whether a company has finished (participated in) any previ-
ous projects before applying again by checking up on existing com-
pany-data in TAS (TilskudsAdministrationSystem).
All application documents will be reviewed by three separate case-
workers as part of the legality check/verification (two caseworkers from
the operator and one from our team). The key requirements a company
must live up to are clearly stated at both the website and on the
state-
ment on consent
that the company must sign before applying. Most of
the requirements are related to the specific digital project as described
by the company in their application, and whether the project is eligible.
Approval of a project is based on a professional decision made by the
three caseworkers. New caseworkers can follow an available standard
guideline on application procedure.
Any suspicious information in their application will be checked up on
and the company may be contacted to specify specific information. If a
company does not live up to one or more of the program requirements,
we will send a letter of rejection to the company with a justification
based on our listed criteria.
All company documents and company correspondences received and
produced will be journalized in F2 and/or TAS for safekeeping and doc-
umentation as part of the audit trail.
Finally, we verify that the grants are allocated to the correct companies
etc. by looking them up on cvr.dk.
If a company’s project is approved, they will receive a letter of consent
(grant letter) with the associated terms (grant conditions) included.
These will be referred to in the control setup during the submission
phase.
Financial and milestone control during the final submission phase:
When the company submits their documentation and invoices, man-
agement verifications are performed on the received information/docu-
mentation. Information that is verified consists of, among others,
whether the expenses in the invoices are eligible (e.g. within the given
project period, whether the advisor/consultant used is recorded in the
program’s advisor database, checking the accounts and whether the
reported output and activities of the project are eligible. This is all veri-
fied based on registered data in the cvr.dk and in TAS.
The company must use a fixed accounting model when they submit
their documentation.
While the financial control is done by the finance department, the mile-
stone control is done by a team of caseworkers in another team. They
check whether the description of the completed digital project align with
the original project that was approved. We can request additional docu-
mentation if needed. If the company documentation or the submitted
documentation is inadequate (financial or milestone), we have the op-
tion to reject the payment claim from the company. This decision must
be based on a discrepancy between the received documents/invoices
10
National digital identification system for both companies and citizens
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and the associated terms and letter of approval that the company
signed during their application and at the approval stage.
We also make sure to check that the company has not gone bankrupt
based on information at virk.dk.
In relation to the reimbursement of the grant, there are implemented
several authorization steps and a two-step control regarding approval
of the payment of the grant. The financial approval is done in an office
separate from the office that is doing the milestone control.
Finally, the case is sent to be approved in the accounting office where
the payout is also controlled by a number of factors according to the es-
tablished procedures.
Instructions relevant to control, audit
See the above.
and risk management.
Separation of functions as regards
implementation and control
The office of ”Digital responsible growth” oversees internal control and
implementation during the application phase. The office is responsible to
make sure that the companies comply with the basic standards and re-
quirements of the program. The office also does casework and checks
up on relevant information if something is suspicious regarding infor-
mation on the applicants through virk.dk.
The economic office oversees control with funds and grant allocation,
and that all documents during the final submission phase is verified.
They also check up on whether there is a conflict of interests between
applicants and their advisor/consultant.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
The Implementing office checks up on conflict of interest between apply-
ing companies during the application phase.
The economic office checks up on conflict of interest between applicant
and advisor/consultant during the final phase of approval of the grant.
If suspicion of irregularities or suspicion of fraud is detected, the offices
will use the databases of TAS, F2 or use virk.dk to disclose whether
there is a conflict of interest or not according to our guidelines.
If there is, the applicant will be denied the grant.
Process for reporting identified irreg-
The Agency will follow the usual reporting procedures – which include re-
ularities
porting to own management, National Audit Office, The National Police
Department for investigation and to the Ministry of Finance, who will re-
port to OLAF.
Procedures for storing and following
up on detected irregularities
Irregularities are stored in TAS and F2. The cases will be followed up on
by either the implementing or the economic office depending on
where/when in the process that the error is detected. All documentation
around errors and irregularities are stored and journalized in the above
mentioned systems.
Steps are taken in the application phase and the submission phase, as
described above.
Internal controls in the ministry are based on risk and materiality. All pay-
ment-systems have a built in segregation of duties and this is overall en-
sured in the internal control focus.
If fraud, corruption or conflict of interest is detected, corrective measures
will be taken and the agency’s ordinary procedures regarding refunds of
payments will be implemented.
Prevention of fraud, corruption and
conflicts of interests
Detection of fraud, corruption and
conflicts of interests
Correction of fraud, corruption and
conflicts of interests
Audit & control arrangements at the
level of individual compo-
nents/measures
All applications are subject to control, where 3 separate caseworkers will
verify whether the applicants meet the eligibility criteria.
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The implementing office will later evaluate the effects and performance
of the program by the usage of surveys.
Other than that desk reviews will be performed as part of the verification
in the submission phase.
The result of the review and control will be stored accordingly in the sys-
tems.
Avoidance of double funding
Practical arrangements preventing
double funding
The applicants must state in their application whether they have previ-
ously received public grants and how much. We also ask whether they
have participated in SMV:Digital before. We have a database with data
on all previous applications so that we can always crosscheck on a spe-
cific company. The program used for this is TAS.
Preventing that different ministries fi-
nance the same project twice
Se specific control procedures above.
Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
Systems used by the ministry to col-
lect and store data on recipients
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
We use TAS and F2 to journalize and store data on all applicants.
We use TAS, virk.dk and cvr.dk.
We store the applications for funding, the declaration of de minimis, let-
ters of approval/rejection, and all material related to the payment of
grants. This means we have access to all data on the companies (benefi-
ciaries) such as CVR number, names, emails and such. This data is
stored in TAS and F2.
Data will be available for both the Ministry of Finance and EU-institutions
when requested. The relevant level will be given access to the data.
Access to information for manage-
ment and audit authorities
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
The grant is registered in TAS system with the amount given. The sys-
tem cannot pay out more than is registered. The amount granted is
checked against the amount payed, before final payment is approved.
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Table 3.7
Description of control setup in The Ministry of Climate, Energy and Utilities
Monitoring and control arrangement
Internal control setup
The Danish Energy Agency (DEA) operates with two types of internal
controls (preventive and discovering controls). The purpose of the pre-
ventive controls is to reduce the probability of mistakes, intended or unin-
tended events, while the purpose of discovering controls is to discover if
mistakes, intended or unintended events, have taken place. The extent
of the controls is determined based on probability and consequences,
where consequences are not necessarily monetary but can also be quali-
tative management control. Currently, the probability and consequences
are assessed based on the Ministry’s overall risk management model,
which is developed by the Department.
Instructions relevant to control, audit
The Department has the responsibility for updating the ministry instruction
and risk management.
in even years or as needed. The ministry instruction outlines the overall
management of accounting. The Department may if necessary, pose addi-
tional demands towards the institutions.
The DEA follows the Departments instructions, and makes a number of pre-
ventive and discovering controls, of which a few are mentioned under the
topic of Risk of fraud and corruption.
Separation of functions as regards
implementation and control
The DEA ensures functional separation of the different administrative steps
by dividing the responsibility for the schemes between the specialist office,
Finance and Compliance.
The specialist offices handle the specialist administration of the Agency’s
subsidy schemes, while the Finance department handles the financial-ad-
ministrative elements in the administration of subsidy schemes, including
transfer of commitments for grants, as well as payment from the Energy
Agency’s grant administration system (TAS) to the Danish state’s account-
ing system Navision Stat.
Furthermore, there is a functional separation between the accounting treat-
ment of payment and the bank’s actual payment. The Energy Agency itself
cannot make payments in the bank. It is only The Agency for Governmental
Administration (SAM), a shared service agency under the Ministry of Fi-
nance, which can access this.
Furthermore, the Finance department has a Compliance team, which, based
on current rules and guidelines, sets up frameworks for correct and efficient
management of subsidy schemes in the Energy Agency, provides advice
and controls regarding the specialist offices’ compliance, as well as plans
and executes internal control. All legal binding economic transactions re-
quire a minimum of four eyes to complete.
A normal payment undertake a minimum of four eye confirmation in the spe-
cialist office, two eyes in the finance function and four eyes in SAM (a total
of 10 eyes in for the whole payment chain). For some part of the administra-
tion in the DEA there are six eyes in the specialist office, hence some pay-
ments have 12 eye confirmation in the whole chain.
The separation is supported by systems for the most part and the DEA have
implemented internal controls in order to make sure, that the separations of
duties and functions are compliant.
Furthermore, the DEA is subject to an external audit of the National Audit
Office, which also declares the accuracy of the Danish Energy Agency's
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accounts and internal processes with a view to meeting intentional or un-
intentional errors in the accounts. The National Audit Office's report is
sent directly to the Danish parliament.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
Examples of preventive controls
- Control and approval of case management concerning transportation
agreements and bank account information where payments are made to
- Control of DDI’s (digital reporting) before these are sent to booking in
accounting system by SAM (two-factor approval in Navision)
- System supported double-approval of invoices and travel settlements in
the digital invoice system
Examples of discovering controls
- Control of log concerning account changes in KMD Easy Energy, also
including deaths and company terminations
- Control of log concerning account changes in NemKonto.dk, also includ-
ing deaths and company terminations
- Control of case management concerning reimbursement of PSO or
losses on debtors
- Yearly management control of the areas of subsidies and service
charges
- Balancing of the accounts in connection with quarterly and annual ac-
counts
- Special controls of specific commitments, disbursements, purchases,
etc.
Process for reporting identified irreg-
All identified irregularities are initially reported to the management. Fur-
ularities
thermore, The Energy Agency hands over the rapports of the internal
control to the National Audit Office on an annual management audit
level.
In case The Energy Agency discovers that there has been fraud or cor-
ruption, it will be reported to the police.
In cases of irregularities of such matters, that they can be considered a
risk of fraud or faults, the Energy Agency reports these to the Depart-
ment, who sees to that the Ministry of finance gets the information in or-
der to send in registration to OLAF.
Procedures for storing and following
All accounting errors or recommendations from the Danish National Audit
up on detected irregularities
Office are recorded in the department follow-up tool. The DEA is then re-
sponsible for handling the remarks and the department have quarterly
follow-ups. The compliance team is responsible for making sure that re-
marks are handled according to priority and risk assessment. All quar-
terly reports are reported and endorsed by the CEO of the DEA.
All documentation regarding errors or recommendations is saved in the
EDRM-system F2.
Prevention of fraud, corruption and
conflicts of interests
All payment-systems have a built in segregation of duties, monitoring of
privileged users and data logs that prevent internal fraud. Prevention of
external fraud is a part of the agency’s obligations and they are moni-
tored in the departments risk assessments-tool.
The Danish Ministry of Climate, Energy and Utilities has per November
1, 2020, established whistle-blower regimes throughout the ministry area
(the Ministry, the Danish Energy Agency, The Danish Agency for Data
Supply and Efficiency, the Danish Geodata Agency, The Danish Meteor-
ological Institute, the Geological Survey of Denmark and Greenland, The
Danish Utility Regulator, The Danish Council on Climate Change and En-
erginet),
The Ministry's team IT and Security and team Legal Affairs administrate
the whistle-blower regimes.
Internal controls in the ministry are based on risk and materiality. All pay-
ment-systems have a built in segregation of duties and this is overall en-
sured in the internal control focus, see description above.
Detection of fraud, corruption and
conflicts of interests
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Correction of fraud, corruption and
conflicts of interests
Audit & control arrangements at the
level of individual compo-
nents/measures
If the project is regarded as ‘high risk’ the internal controls will be setup
accordingly.
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered and the Energy Agency will follow the stand-
ard procedures regarding refunds of payments.
The Ministry will collect data on the fulfilment of milestones and targets
and do relevant controls of documentation. This will include desk reviews
and on the spot check if relevant to the milestone.
The Ministry will document data on final recipients and make these avail-
able for both the control on fulfilment of milestones and targets and for
the Ministry of Finance.
Avoidance of double funding
Practical arrangements preventing
double funding
When calling for an application concerning commitment, the Energy
Agency informs that support can be applied for regarding net costs of
projects – that is, the costs must be deducted from any discounts, re-
funds and any support from other parties. At the time of applying, the ap-
plicant declares in good faith that the applicant meets the requirements.
Furthermore, all grants and payments regarding grants are reported to
the tax authorities.
Preventing that different ministries fi-
nance the same project twice
See descriptions of controls above.
Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
The implementation of the framework for the subsidy schemes and the al-
location and payment of the individual commitments are filed in TAS,
where the individual project can be followed from beginning to end. It is
the responsibility of the specialist offices to ensure that the allocated
means are used during the fiscal year for the purposes, which the Parlia-
ment has decided, cf. the Budget Bill. Any repayment of subsidies may be
considered if the subsidy recipient fails to meet the criteria and require-
ments of the commitment and thus loses the right to the grant.
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
Systems used by the ministry to col-
lect and store data on recipients
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
F2, TAS
The DEA stores all kind of information and the data are available with the
grant management system, the accounting system and journaling sys-
tem. The data is mainly collected from the recipients, minimum:
Data on final recipients
Supplier/Contractor (CVR-number and name)
Subcontractor (CVR-number and name).
Data will be available for both the Ministry of Finance and EU-institutions
when requested. The relevant level will be given access to the data.
Access to information for manage-
ment and audit authorities
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
In the DEA ensures this mainly by the four / six eyes confirmation of a
transaction. We have instruction manuals, which the case worker has to
follow.
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Table 3.8
Description of control setup in The Ministry of Taxation
Monitoring and control arrangement
Internal control setup
The four legislative initiatives within the remits of the Danish Ministry of
Taxation all concern additional tax deductibles targeted companies. The
initiatives do not involve disbursement of funds. Consequently, the legis-
lative initiatives are managed within the already established internal con-
trol framework of the ministry.
The Danish Tax Agency organizes the control of companies, including
their tax returns and the claimed deductibles, on the basis of an assess-
ment of materiality and risk. The control work involves carrying out a risk
assessment based on available information (internal and external
sources), previous experience and the taxpayer's specific circumstances.
The risk assessment results in an in-depth audit of selected individual
companies.
It is a natural part of the Danish Tax Agency's general control work to fo-
cus on new rules that change the administrative basis. The purpose is to
ensure full taxpayer compliance.
Instructions relevant to control, audit
The Danish Tax Agency has a detailed framework of instructions de-
and risk management.
scribing how risk-based control of companies are performed.
All audits are conducted according to these standard instructions.
The Danish Tax Agency has a system of separation of functions in all
parts of the tax auditing and tax collection and return process.
The framework and implementation of internal control and separation of
functions is subject to auditing from the internal auditing office of the Min-
istry of Taxation as well as external auditing from the Danish National
Audit Office.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
The Danish Tax Agency has a system of separation of functions in all
parts of the tax auditing and tax collection and return process.
Separation of functions as regards
implementation and control
In addition, a system is in place ensuring internal control of tax returns of
employees in the Danish Tax Agency.
Process for reporting identified irreg-
The Ministry of Taxation has processes to:
ularities
Report to own management
Report to National Audit Office (Rigsrevisionen)
Report to Police Authority
Report to Ministry of Finance (who will inform OLAF)
Procedures for storing and following
In general, all irregularities detected by the Danish Tax Agency are in-
up on detected irregularities
vestigated and followed-up according to set-down procedures.
Prevention of fraud, corruption and
conflicts of interests
In general, all irregularities detected by the Danish Tax Agency are in-
vestigated and followed-up according to set-down procedures.
The Ministry of Taxation has a Whistle-blower-function in place.
No measures within the Ministry of Taxation’s area of responsibility in-
volves disbursement of funds to projects.
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).
The ministry’s ordinary procedures regarding refunds of payments will be
implemented.
The Danish Tax Agency organises its auditing of tax compliance in a
number of control projects selected on the basis of materiality and risk.
The four legislative initiatives will be managed within the framework of
Detection of fraud, corruption and
conflicts of interests
Correction of fraud, corruption and
conflicts of interests
Audit & control arrangements at the
level of individual compo-
nents/measures
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the control projects. The Danish Tax Agency sets measurable targets for
each control project, including the number of audits conducted, the value
of additional assessments raised and the share of companies, whose tax
payments are corrected after audits. The audits conducted within each
control project are selected on the basis of materiality and risk. Every
three months, the targets delivered by each project are reviewed. The
Danish Tax Agency uses the following systems for documentation and
audits: WorkZone, SkatLigning, 3S / DIAS, TastSelv Erhverv and CSRL.
Avoidance of double funding
Practical arrangements preventing
double funding
The four legislative initiatives do not involve out payment of funds to pro-
jects.
In general, it is included as an element in the Danish Tax Agency's risk
assessment whether the companies apply the individual sets of rules
correctly, including that the company does not deduct the same expense
according to two or more provisions in the tax legislation.
Preventing that different ministries fi-
No disbursements of funds to projects.
nance the same project twice
Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
The Danish Tax Agency receives tax returns from companies and stores
relevant information in its IT systems. The Agency can ask companies to
supply additional information if required.
Various IT systems of the Danish Tax Agency.
Various IT systems of the Danish Tax Agency.
Systems used by the ministry to col-
lect and store data on recipients
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
Access to information for manage-
ment and audit authorities
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
Audit authorities, including EU-institutions, will be able to receive data
upon request, as it is stored and kept.
See above.
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Table 3.9
Description of control setup in The Ministry of Food, Agriculture and Fisheries
Monitoring and control arrangement
Internal control setup
The Danish Agricultural Agency (DAA) serves as an accredited paying
agency in Denmark in addition to national funding under the Ministry of
Food, Agriculture and Fisheries. The agency handles payments to bene-
ficiaries of national funds under the ministry and under the Common Ag-
ricultural Policy. The European Agricultural Guarantee Fund (EAGF) or
the European Agricultural Fund for Rural Development (EAFRD) finance
or co-finance these payments.
Paying agencies can only be accredited by Member States if they com-
ply with certain minimum criteria and if they have an administrative or-
ganization and a system of internal control c.f. regulation no. 907/2014
annex 1.
Furthermore, a paying agency shall be certified in accordance with Inter-
national Standards Organization 27001: Information Security Manage-
ment Systems (ISMS) – Requirements (ISO) starting on 16 October
2016 (FY 2017). Since 2016 DAA has been certified accordingly
Instructions relevant to control, audit
As specified above instructions comply with regulation no. 907/2014 and
and risk management.
certified in accordance with International Standards Organization 27001:
Information Security Management Systems (ISMS) – Requirements
(ISO) starting on 16 October 2016 (FY 2017).
Separation of functions as regards
implementation and control
No matter what payment to a beneficiary, there will be an organisation
within the paying agency that secures a separation of functions at three
levels:
I. Authorisation and control of payments to establish that the amount to
be paid to a beneficiary is in conformity with Union rules, which shall in-
clude, in particular, administrative and on-the-spot controls;
II. Execution of payments of the authorised amount to beneficiaries (or
their assignees) or, in the case of rural development, the Union co-fi-
nancing part;
III. Accounting to record all payments in the paying agency’s separate
accounts for EAGF and EAFRD expenditure, in the form of an infor-
mation system, and the preparation of periodic summaries of expendi-
ture, including the monthly (for EAGF), quarterly (for EAFRD) and annual
declarations to the Commission.
Risk of fraud and corruption
Management verifications checking
absence of irregularities
Staff training at all operational levels includes fraud awareness focusing
on known risks. Risk analysis and registration is used to identify and miti-
gate the risk of fraud. The paying agency maintains an antifraud strategy
for ongoing improvement of prevention, detection and correction of fraud.
Process for reporting identified irreg-
Fraud and irregularities are reported to OLAF via IMS by the paying
ularities
agencies
Procedures for storing and following
Applications are blocked to prevent payment when the risk of fraud is de-
up on detected irregularities
tected. The presence and nature of the irregularity is assessed and cor-
rection procedures are initiated. The outcome of these assessments and
procedures are store in an electronic filing system.
Prevention of fraud, corruption and
conflicts of interests
Employees and leaders in the Danish Agricultural Agency are prohibited
from being accountable or participate in the management or control of
cases wherein they are incompetent. All employees and leaders in the
Danish Agricultural Agency must therefore upon employment, by change
of employment or by changes in his/hers own or spouse’s conditions sign
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a declaration of competence. The declaration is discussed on a yearly ba-
sis at the employees’ development interview (MUS/LUS).
Detection of fraud, corruption and
conflicts of interests
Correction of fraud, corruption and
conflicts of interests
Staff at all operational levels are trained in detecting red flags relevant to
their field of work.
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).Beneficiaries
are also reported to the police in case of suspicion of fraud.
The ministry’s ordinary procedures regarding refunds of payments will be
implemented.
The Ministry will collect data on the fulfilment of milestones and targets
and do relevant controls of documentation. This will include desk reviews
and on the spot check if relevant to the milestone.
The Ministry will document data on final recipients and make these avail-
able for both the control on fulfilment of milestones and targets and for
the Ministry of Finance.
Audit & control arrangements at the
level of individual compo-
nents/measures
Avoidance of double funding
Practical arrangements preventing
double funding
Concerning the administration and control of the NON-IACS under the ru-
ral development measures financed by the European Agricultural Fund for
Rural Development (EAFRD) the DAA ensures that the same applicant
cannot receive double funding for the same project. The control is con-
ducted using an IT-system and takes place when the beneficiary claims
the support. For each programme, an it-system/set-up is developed and
as a part of the development of the IT-set up the DAA identifies previous
support programmes which included projects/investments similar or over-
lapping to the programme in question.
In the instances where the beneficiary has previously received support to
the same project the beneficiary will automatically have his claim rejected.
In other cases where the applicant has previously received support from
other support programmes which could include similar projects/invest-
ments the beneficiary is not automatically prevented from submitting his
claim for support but will be made aware that support cannot be paid out
for projects or investments where funds have been received from other
instances
EUDP
EUDP only supports actual costs, i.e. on the basis of expenses incurred.
In addition, applicants must indicate when submitting an application if
they are applying for funding elsewhere. It is not possible to get a higher
aid percentage in this way. This is followed up annually through auditor
statements from ongoing project participants. Finally, the EUDP program
has been notified under Article 25 of the GBER,
Preventing that different ministries fi-
Under some support programmes under the EAFRD the DAA conducts
nance the same project twice
checks of whom have received funds from the structural funds (adminis-
trated by the Danish Business Agency) in order to check that the same
project has not received double funding.
For each support programme the ministry or the DAA adopts an execu-
tive order by which the conditions and eligibility criteria are defined. It is a
standard rule in the executive order that it is not possible for a benefi-
ciary to receive support to a project or investment that has received
funds from other instances including EU-funds or other national funds.
The only exception being if the other funds can legally be received as
part of a co-financing.
If a beneficiary has received funding from other instances, he is obliged
to submit documentation describing to which part of the project he has
received the funds (e.g. bank statements). The documentation must be
submitted to the DAA no later than together with the claim for support.
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EUDP
The efforts of the two ministries under the Pyrolysis Pool are aimed at
the respective areas of responsibility. EUDP will focus on the energy-re-
lated, ie "within the fence" of the conversion unit. A joint information
meeting will be held prior to the publication, and there will be dialogue
meetings between the two units that evaluate the applications.
Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
The Foundation of Organic Farming.
Data and information about final recipients is kept by The Foundation of
Organic Farming.
The Danish Agricultural Agency supervises The Foundation of Organic
Farming. The Danish Agricultural Agency has determined rules for the
administration of the foundation’s funds and for how the foundation must
reports on the use of the funds to the Danish Agricultural Agency. The
Foundation sends in the budgets and annual reports for approval by the
Danish Agricultural Agency. The Foundation’s budgets and annual re-
ports must each year state which projects the Foundation has supported
and with what amount.
Budgets and annual reports from the Foundation of Organic Farming is
stored in the electronic system Workzone.
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
Brown bio refineries - GUDP
Data and information on applicant and final recipients including all finan-
cial transactions are recorded in electronic grant administration and pay-
ment systems. Stored data and information can be provided for manage-
ment, audit or control purposes upon request.
EUDP:
Applicants apply with their CVR number. Company type and size are
checked. Compatibility note has been prepared in order to comply with
GBER and is incorporated into the set of rules, which is administered in
order to comply with the state aid rules.
The Foundation of Organic Farming.
The Danish Agricultural Agency receives budgets and annual reports
from the Foundation of Organic Farming electronically and the data is
stored in the electronic system Workzone.
Brown bio refineries - GUDP
The electronic systems used collect and store data at project and benefi-
ciary level is named BTAS and TUS and at measure level Workzone.
Information and data in BTAS are transferred to TUS daily and validated
on a monthly basis.
EUDP:
The electronic systems used collect and store data at project and benefi-
ciary level is named TAS.
The Foundation of Organic Farming.
Data and information about final recipients is kept by The Foundation of
Organic Farming.
The Danish Agricultural Agency will once a year transfer the funds to the
Foundation of Organic Farming. Data concerning the transferred funds
will appear from the accounting system named BTAS and TUS.
The Danish Agricultural Agency receives the annual report from the
Foundation of Organic Farming once a year. The report contains infor-
mation about the Foundation’s CVR-number, address, management, ac-
countant etc. The reports furthermore contains outlined information about
the beneficiaries and their projects.
Systems used by the ministry to col-
lect and store data on recipients
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
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Brown bio refineries - GUDP
Unique company identification number (CVR), Address and contact
point, bank account information, all financial transactions, etc.
Information is collected from application and payment requests.
EUDP:
Project documents: Cooperation agreement, Disbursement request, Fi-
nal reports and Annual reports
Access to information for manage-
ment and audit authorities
The Foundation of Organic Farming.
The Foundation sends in annual reports for approval by the Danish Agri-
cultural Agency. Data can be made available upon request for both man-
agement and audit.
In addition, overall level information is summarized in periodic manage-
ment reports.
Brown bio refineries - GUDP
Data can be made available upon request for both management and au-
dit. In addition at a measure level information is summarized in periodic
management reports
EUDP:
SANI notification to the EU. Random checks from the EU Commission
and from the National Audit Office.
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
The Foundation of Organic Farming.
The Danish Agricultural Agency supervises that the Foundation of Or-
ganic Farming only use the means of the foundation within the frame of
the law including the EU state aid rules. The aid to the Foundation of Or-
ganic Farming is state aid approved cf.
state aid case SA.57228
(2020/N) — Danmark Promille- og produktionsafgiftsfonde i landbruget
In regards to aid that is provided as “de minimis aid” the Foundation must
secure that, the aid comply with the de minimis regulation. The Founda-
tion must specifically ensure that the beneficiaries have declared them-
selves about all the public de minimis aid they have been granted during
the period. The Foundation must in this context ensure that the applicant
will not exceed the limit of aid within the period, when they are granted
the new aid.
Brown bio refineries - GUDP
Data on total maximum allowable for one beneficiary are recorded and
stored in BTAS as a commitment upon project approval. All future pay-
ments to the beneficiary is made against the commitment and the system
has a default check that prevent payment above commitment.
EUDP:
TAS is designed so that it is not possible to exceed the assigned commit-
ment. The budget sheet is arranged so that it is not possible to exceed
the allocated commitment.
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Table 3.10
Description of control setup in The Ministry of Finance
Monitoring and control arrangement
Internal control setup
The Ministry of Finance is setup with a department and 5 Agencies.
The Agency for Digitisation
The Agency for Public Finance and Management (where the
ministry’s Group Finance is places)
The Agency for Governmental It-services (shared service)
The Agency for Governmental Administration (shared service)
The Danish Economic Councils (independent advisory board)
Instructions relevant to control, audit
The general instructions describe the control-setup for the Ministry and
and risk management.
Agencies. They include clear process of internal financial control. This in-
cludes for example functional separation between the financial registra-
tion and payment, and control of the basis for payments.
The overall setup is illustrated in the figure below with explanation on the
3 different lines of defense in the ministry’s internal control model. Each
line is further described in the instructions and clearly placed in the or-
ganization.
Separation of functions as regards
implementation and control
There is a clear separation of functions in the Ministry. The administra-
tion of the RRF-projects (planning, implementation, achievement of mile-
stones and targets etc.) has been be allocated to the Agency for Digitisa-
tion.
The Agency for Public Finance and Management ‘Group Finance’ is re-
sponsible for some internal controls regarding financing, budgets etc.
and the Agency for Governmental Administration is responsible for the
payment of invoices, payrolls etc.
In the Department the Office of Audit and Supervision (OAS) is responsi-
ble for overall Supervision on the implementation of internal controls.
The activities and control systems is under the general auditing of The
National Audit Office. The National Audit Office will report to the manage-
ment, if irregularities or system deficiencies are observed. The Ministry of
Finance typically have 10-15 audits from NAO each year.
Risk of fraud and corruption
Management verifications checking
Ordinary internal controls regarding payments, segregation of duties 4
absence of irregularities
eye-principle, system checks etc.
Process for reporting identified irreg-
Identified irregularities will be reported by the management in the relevant
ularities
Agency. If substantial irregularity the OAS will be notified.
The OAS in the Ministry of Finance will report to The National Audit Of-
fice.
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If the irregularity concerns the achievement of milestones and targets
this will be reported to the management in the Agency for Digitisation.
In case of fraud or suspicion of fraud, the Department will notify the po-
lice department and report to OLAF via the OLAF reporting website.
Procedures for storing and following
up on detected irregularities
Any documentation concerning irregularities will be stored in the F2 sys-
tem, which is used in all the relevant Agencies.
The OAS have a supplement system in use called FIRST (An auditing
and supervision-follow-up-system) where all audit findings are stored and
followed up by relevant management.
The OAS use the system to ensure, that all irregularities are handled and
documented and use the system to report to top management on pro-
gress on handling detected irregularities. In the system each irregularity
is reported as 1 (serious) 2 (inappropriate) or 3 (nice to have/recommen-
dation). The management follows up on all irregularities via FIRST.
Prevention of fraud, corruption and
conflicts of interests
Employees are educated in the rules of Danish administration. There is
an on boarding-programme for all new employees in the Ministry.
All new managers in the ministry also has a workshop with the OAS as a
part of their introduction, so they are made aware of the ministry’s rigid
systems of following up on audit remarks and recommendations.
The Group Finance office has a clear process of internal financial con-
trols. This includes functional separation between the financial registra-
tion and payment, and control of the basis for payments.
Furthermore, the ministry have implemented a whistle-blower function,
where it is possible to report suspicion of fraud etc. In each Agency,
there is a WB-coordinator and the overall coordination is in the OAS.
The Whistle-blower-function is available on
www.fm.dk
Detection of fraud, corruption and
conflicts of interests
Internal controls are based on risk and materiality and all payment-sys-
tems used in the Ministry have a built in segregation of duties and this is
overall ensured in the internal control focus.
If the project is regarded as ‘high risk’ the internal controls will be setup
accordingly. If irregularities occur, they will be flagged in an internal re-
porting system on irregularities from audits and supervision, see descrip-
tion above.
The OAS conducts audits on the material and high-risk internal controls
(40-50 audit reports every year).
If fraud, corruption or conflict of interest is detected, this will be corrected
and funds will be recovered (or held back if not yet paid).
Correction of fraud, corruption and
conflicts of interests
Audit & control arrangements at the
level of individual compo-
nents/measures
Covered by the general audit and control setup.
Controls concerning the fulfilment of milestones and targets will be done
from the relevant office in the Agency of Digitisation and the OAS will
perform additional checks on the documentation for achievements of
milestones. All will be documented in F2 systems.
Data on final recipients will be available in the ministry accounting sys-
tem Navision Stat.
Avoidance of double funding
Practical arrangements preventing
double funding
Preventing that different ministries fi-
nance the same project twice
The Budget department in the Ministry of Finance watch the funding of
initiatives and programmes.
There is a clear separation between projects under the Agency for Digiti-
sation and other ministries.
See general description.
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Data, systems and reporting
Arrangements and mechanisms to
collect, store and make available
data on final recipients
All payment data is documented in Navision Stat (NS) or the State pay-
roll system (SLS). Data on final recipient is available in the systems.
These data will be available for both the Ministry of Finance and relevant
EU-institutions.
F2
Data on project participants include CVR-number, account information,
address, contact person or CPR-number etc.
Data will be available for both the Ministry of Finance and EU-institutions
when requested. The relevant level will be given access to the data.
Systems used by the ministry to col-
lect and store data on recipients
Types of data on final recipients,
contractors and subcontractors that
will be stored and collected
Access to information for manage-
ment and audit authorities
Ensuring in practice that one benefi-
ciary does not get more than what is
the maximum allowable under the
applicable rules
Not relevant at this point as the projects under this initiative are not yet
finally determined.
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Summary of decentral level responsibility:
Deliver ‘Management declaration’ biannually –
the wording of the management dec-
laration will be similar to the management declaration provided by the Commission.
Performing controls and audits from a risk-based perspective.
Deliver an ‘audit summary report’ and send it to the Ministry of Finance along
with the ‘management declaration’.
Ensure the independence between the function responsible for the spending
of funds and handling the milestones and targets and of the control-function.
Ensure that administrative capacity and staffing are sufficient
Ensure that milestones and targets are met and that this is documented
(central
level can require this documentation).
The typical internal control setup in the ministries is regulated in a guidance from
The Danish Agency for Public Finance and Management ‘Guidance on internal
financial control’
11
where they operate with a ‘3 lines of defence’ model. Each
ministry can adapt these guidelines to fit their own organisation.
For example, the Ministry of Finance’s model for internal control and audit is
shown in figure 3.4. The model shows the interplay between the department and
the Agency for Public Finance and Management.
Figure 3.4
General internal control set-up
11
https://oes.dk/media/37196/vejledning-om-finansiel-intern-kontrol.pdf
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It should iterated that the model shows the organization of internal controls and
audits within the Ministry of Finance and that this may vary between ministries.
General Fraud and corruption regulations in Denmark
An important element in the Danish anti-fraud and corruption-setup is Whistle
Blower-functions. All Danish ministries implemented Whistle Blower functions in
November 2020 meaning that employees, contractors and subcontractors have
clear ways of communication when making the management aware of potential
fraud and corruption.
Each decentral level will specify their controls to prevent fraud and irregularities.
Irregularities can be both of a financial kind and of a non-financial kind – for ex-
ample an irregularity in the documentation of milestones and targets.
The procedure in regards to reporting on suspicious use of funds involves that
each ministry is obliged to immediately send reports of any suspicious use of
funds or substantial irregularity to the Ministry of Finance. Each line-ministry will
report any other irregularities in their ‘Audit and control-report’ to the Ministry of
Finance (the OAS).
The OAS will then follow up on the investigation of all substantial irregularities
and all fraud issues. The data will be stored in the F2 system in the Ministry of Fi-
nance.
If the irregularity concerns fraud-issues the relevant procedures is activated, in-
volving information to the police and to the National Audit Office. The relevant
ministry will report to the police authority (the State Prosecutor for Serious Eco-
nomic and International Crime). The National Audit Office will also be informed.
The Ministry of Finance will report any suspected fraud to OLAF via the report-
ing website
https://ec.europa.eu/anti-fraud/olaf-and-you/report-fraud_da
The Ministry of Finance will – also involving the AFCOS network – ensure that
all ministries are aware of OLAF’s mandate to investigate in all areas of the Dan-
ish Administration.
OAS in collaboration with the AFCOS coordinator will host an annual workshop
with the relevant ministries and their AFCOS members to discuss e.g. internal
controls and reporting, focus on the fraud risk etc. In this workshop the OAS will
share any relevant information from OLAF on the development of fraud risks etc.
3.7 Communication
In this section, the communication strategy on the RRP is described. This applies
for the communication during the preparation of the RRP as well as the imple-
mentation.
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Almost all the initiatives in the Danish RRP was negotiated during the negotia-
tions on the annual national budget and negotiations on economic recovery and
green stimuli. Therefore, the initiatives in the RRP have all been subject to public
attention. In relevant agreements on RRP initiatives (e.g. green tax reform, green
road transport, green stimuli etc.) references are made to financing from the RRP.
In the communication about the political agreements financed by the Recovery
and Resilience Facility, it has been clearly marked that parts of, or the entire fi-
nancing will come from the Recovery and Resilience Facility. When the plan as a
whole is completed, it will be published on the webpage of the Ministry of Fi-
nance
12
.
A substantial share of the Danish RRP is disbursed via pools that will be open to
eligible applicants. During the calls and tenders for these pools, it will be clearly
marked that part of, or the entire funding comes from the Recovery and Resili-
ence Facility. This ensures that communication of the spending of Recovery and
Resilience funds is clear through the preparation part and the implementation part
of the RRP.
12
www.fm.dk
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4. Overall impact
This chapter describes the current macroeconomic and social
outlook in Denmark as well as the overall impact of the Danish
Recovery and Resilience Plan.
Section 4.1 describes the current macroeconomic and social
outlook.
Section 4.2 presents the overall impact of the Danish Recovery
and Resilience Plan on key magnitudes such as employment and
GDP.
Finally, section 4.3 provides a comparison of the public expenses
related to the initiatives in the Danish Recovery and Resilience
Plan with the level of comparable public expenses in most recent
years.
4.1 Macroeconomic and social outlook
The economic outlook presented below takes as its starting point the most recent
economic forecast in
Denmark's Convergence Programme 2021,
April 2021. In addi-
tion, this section presents a status for the social outlook in Denmark, which fo-
cuses on income inequality and intergenerational social mobility. This includes an
overview of youth unemployment in the wake of the pandemic.
4.1.1 Economic outlook
The onset of the COVID-19 pandemic caused a marked drop in Danish output
and a rise in unemployment in the first half of 2020. As the infection rate sub-
sided and health-related restrictions were lifted, this was followed by a strong re-
bound in activity and employment in the third quarter. Growth continued in the
fourth quarter, albeit at a slower pace. A second wave of infections late in 2020
necessitated a renewed tightening of health-related restrictions and put a renewed
dampener on economic activity. This second wave including the emergence of
new variations of virus. A number of restrictions were in effect, including closing
of shopping malls and restaurants as well as other measures. Restrictions are being
lifted gradually since March as part of the broad agreed upon reopening plan be-
tween the Government and other parties.
High-frequency indicators point to a substantial decline in activity in January and
February, however not as large as during the partial lock-down in spring 2020.
Unemployment rose, although much less severely than in March 2020. Since
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March, where some restrictions have been lifted again, high-frequency indicators
of e.g. private consumption and unemployment point to renewed economic activ-
ity.
The impact on annual growth in 2021 will depend notably on the evolution of the
pandemic and how long health-related restrictions will remain necessary to pre-
vent renewed escalation of the virus.
The second wave of the pandemic is expected to have affected growth most se-
verely in the first quarter of 2021. Prospects remain, however, for a continued re-
bound in activity over the course of the spring and summer, supported by the on-
going and gradually intensifying roll-out of COVID-19 vaccines as well as contin-
ued policy support. The easing of restrictions is set to follow the broad agreed
upon plan by the Government and other parties.
Risks are mainly related to the development of the pandemic and speed of vac-
cinations, which will affect private consumption of services – including tourism –
and employment in the affected service sectors. Danish exports consists largely of
food products and pharmaceuticals that are relatively less affected by the pan-
demic.
The fundamentals of the Danish economy remain sound, policies are highly stim-
ulative, including via the impact of the European Recovery and Resilience Facility,
and the experience of the bounce back after the first wave of the pandemic sug-
gest the potential for solid rebound in growth in the course of this year as well as
continued recovery in 2022. Thus, real GDP is expected to grow by more than 2
per cent in 2021 and almost 4 per cent in 2022. Nonetheless, unemployment is ex-
pected to remain above pre-COVID-19 levels in both 2021 and 2022.
Table 4.1
lists key figures from
Denmark's Convergence Programme 2021.
Table 4.1
Key figures from Denmark’s Convergence Programme, April 2021
2019
Real GDP, growth, per cent
Inflation, per cent
Nominal wages, growth, per cent
Employment, 1,000 persons
Employment, change, 1,000 persons
Unemployment, 1,000 persons
Unemployment, change, 1,000 persons
Unemployment, per cent of labour force
Labour force, 1.000 persons
Labour force participation rate, per cent
2.8
0.7
2.5
3,003
37
104
-4
3.4
3,105
82.9
2020
-2.7
0.4
2.2
2,981
-22
133
29
4.3
3,113
82.3
2021
2.1
1.1
2.4
2,988
6
124
-9
4.0
3,109
81.4
2022
3.8
1.5
2.6
3,025
37
118
-7
3.8
3,140
81.3
Source:
Convergence Programme,
April 2021.
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4.1.2 Public finances
The sustainability of the Danish public finances as well as the underlying struc-
tures and prospects remain solid.
Despite the significant economic setback and the sizeable steps Denmark has
taken to ease the negative economic consequences of COVID-19 for e.g. busi-
nesses and jobs, the expected budget deficit in 2020-2021 continues to be fairly
limited compared to other countries,
cf. figure 4.1.
Additionally, the public gross
debt continues to be moderate. Thus, a wide margin to the EU’s limit of 60 per
cent of GDP is maintained, and Denmark continues to have relatively low EMU-
debt seen in an international perspective,
cf. figure 4.2.
Figure 4.1
Actual budget balance in Denmark and abroad
Per cent of GDP
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
Per cent of GDP
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
50
50
100
100
150
150
200
200
Figure 4.2
EMU-debt in Denmark and abroad
Per cent of GDP
250
Per cent of GDP
250
DK
CHE
SWE
DEU
FIN
IRL
NLD
PRT
NOR
EU
ITA
AUT
GRC
FRA
BEL
ESP
UK
USA
2020
2021
Note: Estimates for Denmark are from
Denmark's Convergence Programme 2021,
while estimates for other countries
are based on the economic forecast by the IMF.
Source:
Denmark's Convergence Programme 2021,
April 2021, Statistics Denmark, IMF World Economic Outlook, April
2021, and own calculations.
Based on the planned fiscal policy, the most recent economic forecast, and other
new information and estimates, the deficit on the actual budget balance is ex-
pected to amount to around 3 per cent of GDP in 2021 and 1 per cent of GDP in
2022, including substantial one-off expenditures in 2021,
cf. table 4.2.
Furthermore,
the deficit on the structural budget balance is currently estimated to stay within
the limit of the Danish Budget Law of -0.5 per cent of GDP and is set to ease
back a little from 2021 to 2022.
Table 4.2
lists key figures relating to fiscal policy from
Denmark's Convergence Pro-
gramme 2021,
April 2021.
SWE
NOR
DK
CHE
NLD
IRL
FIN
DEU
AUT
EU
UK
FRA
BEL
ESP
USA
PRT
ITA
GRC
2020
2021
-20
0
0
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Table 4.2
Key figures relating to fiscal policy from Denmark’s Convergence Programme 2021, April 2021
2021
Structural budget balance, per cent of structural GDP
Actual budget balance, per cent of GDP
EMU-debt, per cent of GDP
Net debt, per cent of GDP
Public consumption growth
1)
Multi-year fiscal effect, per cent of GDP
2)
Multi-year employment effect, 1,000 persons
Output gap, per cent
3)
Employment gap, per cent
3)
2)
2022
4)
-0.3
-0.9
41.3
-6.2
0.1
2.3
40
0.2
0.1
-0.5
-3.3
40.7
-7.4
3.2
3.5
83
-0.8
-0.4
Public consumption is calculated using the input method incl. depreciations. The estimated growth in public
consumption is technically assumed to be the same using the input and the output method. The estimate for
the growth rate in forecast years is heavily affected by extraordinary expenditures related to COVID-19.
2)
Calculated measure of the fiscal policy’s demand effect (level effect compared to 2019) on GDP and
employment, calculated excl. the effect of structural policies on the productive capacity of the economy. The
effect is measured incl. contribution from the temporary compensation schemes, pay out of withheld holiday
payments, and publicly initiated private investments.
3)
Calculated measure of how far production and employment are from their structural levels. When the gaps
are negative, it indicates more available resources in the economy than under normal cyclical conditions.
4)
The estimates for 2022 are based on technical assumptions about the fiscal policy in 2022.
Source:
Denmark’s Convergence Programme 2021,
Statistics Denmark and own calculations.
1)
In August 2020, the Danish government presented an updated medium-term pro-
jection including revised fiscal guideposts towards 2025. This updated projection
sets out an expansionary fiscal policy in the coming years to support economic re-
covery, including a boost to public investment. Towards 2025, fiscal policy is
planned based on an adjusted profile for the structural budget balance, which sup-
ports the recovery of the Danish economy. The updated projection includes an
unchanged objective of the structural balance in 2025, which contributes to stabi-
lizing the development of public debt and supports the credibility of the public fi-
nances.
4.1.3 Social situation
Denmark has a relatively high level of income per capita and a relatively even dis-
tribution of incomes compared to most other countries. Various indicators also
currently show that Denmark has managed to provide relatively equal opportuni-
ties and outcomes when it comes to areas such as social mobility, health and edu-
cation.
The differences in income has increased over the last decades (as in many other
countries). The increase is caused partly by the development in demographic and
structural factors (e.g. an increased number of students who have low incomes
while studying, increased property incomes related to lower interest rates etc.) and
changes in tax and transfer legislation. However, the income differences are still
relatively small compared to other OECD countries, and the number of people
with incomes below 50 per cent of the median income is low,
cf. figure 4.3.
Sweden
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is included in the figure as another example of a country with a relatively even in-
come distribution.
Figure 4.3
There are relatively few persons with in-come
below 50 per cent of the median in-come in
Denmark
Index, OECD=100
200
Index, OECD=100
200
Figure 4.4
There is a high degree of intergenerational
social mobility in Denmark
Index, OECD=100
200
Index, OECD=100
200
150
150
150
150
100
100
100
100
50
50
50
50
0
BRICS
OECD
Sweden
Denmark
0
0
OECD
Sweden
Denmark
0
Note.: OECD includes available OECD-countries for the relevant indicator. BRICS includes Brazil, Russia, India,
China and South Africa. Fig. 4.3: Share of population which is in the low-income group in 2017 or latest
available year. Fig. 4.4 is measured as 1 minus the elasticity between father's and son's income,
cf. Fordeling og
incitamenter 2017,
Ministry of the Economy and the Interior.
Source: OECD and own calculations.
Denmark also has a relatively high degree of income mobility between genera-
tions,
cf. figure 4.4.
A high degree of intergenerational income mobility indicates
that there are relatively weak links between the income of a person and the in-
come of the parents of that person. It is also an indication that there is a high de-
gree of possibility to use ones potential in the education system and on the labour
market. High income mobility may contribute to reduce income differences and
prevent social problems from becoming entrenched between generations.
4.1.4 Youth unemployment
According to the European Union Labour Force Survey (EU-LFS), unemploy-
ment among people under the age of 25 years in Denmark was around 13 per cent
in the fourth quarter of 2020 compared to around 17 per cent in the EU as a
whole,
cf. figure 4.5.
Youth unemployment has been consistently lower in Denmark
compared to the EU in the period 2008Q1-2020Q4,
cf. figure 4.6.
In both Denmark and the EU, youth unemployment is higher than the unemploy-
ment among people aged 25-74 years. A relatively substantial part of the measured
youth unemployment in Denmark consists of students who are looking for a part-
time job while studying, in addition to receiving student grants. If the registered
gross unemployment is considered instead, unemployment in Denmark among
people under the age of 25 is lower than the unemployment rate in other age
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groups. The registered gross unemployment includes recipients of unemployment
benefits and social benefits deemed ready for work.
Figure 4.5
Unemployment by age group, 2020Q1 and
2020Q4
Per cent
30
25
20
15
10
5
0
Denmark
EU27
Denmark
EU27
Less than 25 years
1st quarter 2020
25-74 years
4th quarter 2020
Denmark
European Union (EU27)
Per cent
30
25
20
15
10
5
0
Figur 4.6
Youth unemployment (less than 25 years),
2008Q1-2020Q4
Per cent
30
25
20
15
10
5
0
08 09 10 11 12 13 14 15 16 17 18 19 20
Per cent
30
25
20
15
10
5
0
The unemployment data is based on the European Union Labour Force Survey (EU-LFS). The time series
in figure 4.5 is seasonally adjusted (not calendar adjusted).
Source: Eurostat and own calculations.
Note:
Since the beginning of the corona crisis, youth unemployment has risen in both
Denmark and the EU according to the Labour Force Survey. The rise in youth
unemployment is higher than the corresponding increase in unemployment
among people aged 25-74 years.
1
This reflects, among other things, how many
young people work in industries particularly hard hit by the corona crisis, e.g. re-
tail, hotels, restaurants etc.
Many young people returned to employment after the partial lockdown in the
spring of 2020. However, the second wave of the corona pandemic and the re-
newed tightening of health-related restrictions gives rise to new uncertainty and
the risk of a new rise in youth unemployment. The risk of long-term effects on
youth unemployment is mitigated by the prospect of a relatively rapid recovery in
light of the upcoming reopening and the current rollout of vaccines. Nevertheless,
the risk of more long-term effects may increase the longer the setback lasts.
4.2 Macroeconomic and social impact of the plan
Since the beginning of the COVID-19 crisis, Denmark has pursued a highly ex-
pansive fiscal policy to support the economy. The Danish Recovery and Resili-
ence Plan will underpin this approach in the years to come.
Note that this is not the case when considering the registered gross unemployment. Registered gross unem-
ployment in Denmark among people under the age of 25 years is approximately unchanged in 2020Q4 com-
pared to 2020Q1.
1
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The Danish government has so far implemented both comprehensive temporary
compensation schemes, temporary supportive liquidity measures, and a number of
expansionary fiscal policy measures in order to stimulate the Danish economy.
Most recently, the 2021 budget bill and related agreements include several new
measures, which further support the recovery of economic activity. This includes
several measures financed under the auspices of the Danish Recovery and Resili-
ence Plan. In total, the already implemented and the planned fiscal policy initia-
tives for 2020 and 2021, including the Danish Recovery and Resilience Plan, are
estimated to increase employment by some 83,000 persons in 2021, while GDP is
estimated to be about 3�½ per cent higher than would otherwise be the case (i.e.
without exceptional support measures and stimulus).
Table 4.3
presents an overview of the initiatives in the Danish Recovery and Resili-
ence Plan, including their budgetary effects in 2021-2025. The contents of the in-
dividual components of the Danish Recovery and Resilience Plan, including a
more detailed description of the initiatives and the channels through, which their
impact is expected to take place, are further expanded upon in
Part 2: Description of
reforms and investments.
Table 4.3
Initiatives in the Danish Recovery and Resilience Plan
2021
Bn. DKK (2021-prices)
1.1 Strengthening the Resilience of the Healthcare System
1.2 Green transition of Agriculture and Environment
1.3 Energy Efficiency, Green Heating and CCS
1.4 Green Tax Reform (phase 1)
1.5 Sustainable Road Transport
1.6 Digitalisation
1.7 Green Research and Development
Initiatives in total
0.2
0.4
0.8
1.0
0.6
0.1
0.7
3.7
0.1
0.4
0.6
1.4
0.4
0.1
1.1
4.0
0.0
0.3
0.3
0.8
0.3
0.1
-
1.8
-
0.3
0.3
0.5
0.2
0.1
-
1.4
-
0.1
0.1
0.2
0.1
0.1
-
0.7
0.2
1.3
2.0
3.9
1.6
0.7
1.8
11.6
2022
2023
2024
2025
Total
The initiatives funded in the Recovery and Resilience Plan are estimated to
increase aggregate demand by approximately 0.2 per cent of GDP in 2021 and 0.3
per cent of GDP in 2022,
cf. table 4.4.
Consequently, the initiatives are estimated to
increase employment by around 0.2 per cent (4,500-6,000 persons) in 2021 as well
as in 2022,
cf. table 4.5.
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Table 4.4
Macroeconomic impact of initiatives in Recovery and Resilience Plan, effect on GDP
2021
Short-term effect on GDP, per cent of GDP
1.1 Strengthening the Resilience of the Healthcare System
1.2 Green transition of Agriculture and Environment
1.3 Energy Efficiency, Green Heating and CCS
1.4 Green Tax Reform (phase 1)
1.5 Sustainable Road Transport
1.6 Digitalisation
1.7 Green Research and Development
Initiatives in total
0.01
0.00
0.02
0.12
0.02
0.00
0.03
0.21
0.00
0.00
0.03
0.22
0.02
0.01
0.03
0.31
0.00
0.00
0.02
0.00
0.02
0.01
0.01
0.07
0.00
0.00
0.02
-0.07
0.01
0.01
0.00
-0.03
0.00
0.00
0.00
-0.04
0.00
0.01
0.00
-0.02
2022
2023
2024
2025
Effect on structural productivity, per cent of GDP
0.06
0.1
0.12
0.13
0.14
End-of-period effect on GDP
0.12
Note: Effect on GDP is rounded to the nearest 0.01 per cent of GDP.
Source: Own calculations.
The driving forces behind the macroeconomic impact of the initiatives is an
increase in aggregate demand for both the public and private sector. Public
demand is stimulated through increased funding for public consumption and
investment, while private demand is stimulated by targeted subsidies and transfers
to the private sector. Furthermore, the targeted tax cuts for investments are
estimated to increase the level of private investment.
The economic impact can primarily be attributed to the Green Tax Reform and
Green Research and Development, which are the initiatives receivning the largest
funding in the Recovery and Resilience Plan.
Note that the Green Tax Reform has a negative short-term effect on GDP in
2024 and 2025. This represents advanced private investment as a consequence of
the investment window included in the Green Tax Reform. The investment win-
dow increases total private investment over the period from 2021-25 and creates
an incentive to advance investment to 2021-22. Consequently, the negative effect
in 2024 and 2025 is offset by an additional increase in GDP during the investment
window in 2021 and 2022.
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Table 4.5
Employment impact of initiatives in Recovery and Resilience Plan
2021
Effect on employment, 1.000 persons
1.1 Strengthening the Resilience of the Healthcare System
1.2 Green transition of Agriculture and Environment
1.3 Energy Efficiency, Green Heating and CCS
1.4 Green Tax Reform (phase 1)
1.5 Sustainable Road Transport
1.6 Digitalisation
1.7 Green Research and Development
Initiatives in total
0.2
0.1
0.4
2.0
0.4
0.0
1.1
4.3
0.1
0.2
0.5
3.9
0.4
0.1
0.3
5.6
0.0
0.2
0.4
0.7
0.4
0.2
0.2
2.1
0.0
0.2
0.4
-0.7
0.3
0.2
0.2
0.4
0.0
0.1
0.2
-0.6
0.2
0.2
0.1
0.1
2022
2023
2024
2025
Note: Effect on employment is rounded to the nearest 100 persons.
Source: Own calculations.
The objectives of the initiatives in the Recovery and Resilience Plan are both
short- and long-term, with the aim of supporting the Danish economy in the re-
covery from the pandemic as well as supporting long-term growth and the green
transition. As such, several of the initiatives can be expected to have a positive ef-
fect on the long-term growth potential of the Danish economy. While these are
often difficult to quantify, one example is that public investment in Energy Effi-
ciency, Green Heating, and CCS, and Sustainable Road Transport are assessed to
increase long-term productivity and structural GDP by around 3�½ bn. DKK per
year, corresponding to around 0.1 per cent of GDP,
cf. table 4.4.
The effect on structural GDP is calculated using standard evaluation tools. The
result can be attributed to an increase in the public capital stock, by the improve-
ments of infrastructure for green means of transportation, as well as the improve-
ments of the energy efficiency of buildings. These measures improve the existing
infrastructure to the benefit of both the private and public sector, as well as sup-
port the green transition in the private sector, by making it easier to invest in
green transportation. In addition to this, public investment in green research and
development and a tax deduction for private research is estimated to increase
structural productivity by developing new green technology.
The methods used for the assessment of the macroeconomic impact are described
in
box 4.1.
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Box 4.1
Methodology
The impact assessment of the initiatives in the Danish Recovery and Resilience Plan is calculated using the macro
econometric model ADAM (Annual Danish Aggregate Model). The ADAM-model is developed by the macroeconomic
modelling unit of Statistics Denmark, and gives a simplified mathematical description of the interactions in the Danish
economy. The model is empirically based, and most of the behavioural equations are estimated on national accounts
data.
The Danish Ministry of Finance estimates a wide range of fiscal multipliers using the ADAM-model, describing the
marginal effect on GDP and employment of different expansionary fiscal measures. These standard multipliers are
used to calculate the economic impact of the initiatives in the Recovery and Resilience Plan. Some initiatives, such as
funds dedicated for phasing out oil burners, have a direct effect on private investment in addition to the effect on pub-
lic expenditure. For these initiatives, the impact assessment on GDP and employment is based on a calculation made
with the ADAM-model, describing the effect of both private and public investment.
A number of initiatives included in the Recovery and Resilience Plan, such as the Green Tax Reform and Sustainable
Road Transport, are part of a larger package of initiatives. For these initiatives, the economic impact is calculated as
the isolated effect of the parts that are funded in the Recovery and Resilience Plan.
The long-term impact on growth potential from public investment is calculated as the marginal gross return of the pub-
lic capital stock, since an increase in public investment results in an increase in public capital stock, and consequently
increases the productive capacity of the economy. This is in line with the standard procedure for calculation of struc-
tural effects used by the Danish Ministry of Finance.
The Danish Recovery and Resilience Plan includes new measures supporting
SMEs, e.g. a digitisation fund to strengthen SMEs’ digital transition and exports.
In addition to the initiatives funded by the Recovery and Resilience Facility, the
Danish government has taken decisive measures to address the economic impact
of the crisis on Danish businesses, including SMEs. This reflects broad and ex-
traordinary direct support measures such as salary and fixed costs compensation,
state guarantees, and deferred tax payments.
In addition, the Danish Recovery and Resilience plan comprises new initiatives
strengthening the resilience of the healthcare systems in Denmark. This includes
e.g. investments in infrastructure to ensure critical medical supplies to continue
broad access to healthcare. The Danish healthcare system is based on a universal
model and the principles of free and equal access to healthcare for all citizens. In
the light of the pandemic, free testing for COVID-19 has been made broadly
available to all Danish residents, as are the COVID-19 vaccines currently being
rolled out.
The initiatives in the Danish Recovery and Resilience Plan are aimed inter alia at
supporting growth and employment, reducing greenhouse gas emissions, further-
ing digitalisation and underpinning the healthcare system. These objectives benefit
all citizens and in some cases more so for the least advantaged. Education and
health services are already universally available for all citizens, including the least
advantaged, at little or no direct cost. Measures to strengthen employment will be
of most value for those with a less firm attachment to the labour market and thus
these efforts benefit the least advantaged more. In addition, increased productivity
generally benefits all citizens, including those outside the labour market, as higher
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wages are automatically reflected in higher transfer incomes for all recipients of
social transfers in Denmark.
4.2.1 Sustainability
Several of the initiatives financed by the Recovery and Resilience Facility, includ-
ing the Green Tax Reform, the Sustainable Road Transport Agreement etc., are
part of agreements that extend into the years after 2025, i.e. also after the funding
from the Recovery and Resilience Facility is terminated. In the medium- and long-
term, such initiatives will be financed within the overall fiscal framework in Den-
mark. Furthermore, many of the initiatives, for instance the Green Tax Reform,
are supported by a broad political coalition, which ensures political support be-
yond the current electoral period. Thus, the initiatives are assessed to be sustaina-
ble beyond 2025.
Additionally, the Green Tax Reform and the Sustainable Road Transport Agree-
ment are estimated to reduce greenhouse gas emissions in 2030 by 0.5 m. tons and
2.1 m. tons, respectively. This contributes to the reduction of greenhouse gas
emissions towards Denmark's 70 per cent reduction target in 2030.
4.2.2 Cohesion
Denmark is generally characterized by small regional differences. However, while
there was growth in employment across the whole country in the years leading up
to the COVID-19 crisis, this growth was not evenly distributed. Employment
growth has generally been largest in and around the big cities,
cf. Regional and Rural
Policy Report 2020,
Danish Ministry of Industry, Business and Financial Affairs.
The recent economic setback due to the COVID-19 pandemic has hit certain geo-
graphical areas harder than other. The direct impact appears to be relatively more
pronounced in the larger cities, where many cultural activities, restaurants and ho-
tels tend to be concentrated. However, certain rural areas have also suffered dis-
proportionately, in part due to the COVID-19-related closing of mink farms. Alt-
hough cities may be more affected in the short term, poorer regions are, however,
generally more vulnerable and less resilient in the face of economic crises. The po-
tential longer-term consequences of COVID-19 for cohesion and regional dispari-
ties is currently unclear.
The initiatives in the Danish Recovery and Resilience Plan are assessed to broadly
support employment across both industries and geography. Furthermore, the
Danish Recovery and Resilience Plan includes several measures aimed at strength-
ening cohesion, e.g. a broadband initiative, which promotes high-speed internet
access for citizens, households and companies across the country (i.e. including in
some less densely populated areas) as well as support for ecological agriculture.
This also applies to investments in Energy Efficiency, Green Heating and CCS re-
garding renovation and measures to ensure energy efficiency for households, pri-
vate enterprises, and public sector buildings, which are expected to temporarily in-
crease the number of local jobs and investments and reduce energy bills.
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4.3 Comparison of the investment expenditure with the spending baseline
The investment expenditure funded by the Recovery and Resilience Facility is pri-
marily within the functions (COFOG groups) of economic affairs, environmental
protection, housing and community amenities and health.
The investment spending funded by the Recovery and Resilience Facility is in-
cluded below in a spending baseline, which takes is based on all public expendi-
ture within each of the said COFOG groups, except transfers abroad, for the
years 2017-2019,
cf. table 4.6
2
. Budget plans in Denmark are not made on a level of
detail that allows for a projection by COFOG function. Hence, the level of public
expenditure in 2020 has been extrapolated mechanically in the period 2021-2026
before the addition of investment spending under the Recovery and Resilience Fa-
cility.
Table 4.6
Comparison of investment expenditure to spending baseline
2017
Spending baseline,
m. EUR
Environmental protection
Housing and community
amenities
Health
Sum of expenditure af-
fected by expenditure fi-
nanced through RRF
grants (a)
Growth-enhancing ex-
penditure financed through
RRF grants (b)
Expenditure excluding ex-
penditure financed through
RRF grants (a-b)
907
570
1,615
950
648
1,633
925
563
1,710
974
576
1,796
1,160
637
1,817
1,073
608
1,805
1,004
583
1,799
1,006
593
1,796
974
581
1,796
974
576
1,796
2018
2019
2020
2021
2022
2023
2024
2025
2026
3,092
3,231
3,198
3,347
3,614
3,486
3,387
3,395
3,351
3,347
0
0
0
0
267
139
40
48
4
0
3,092
3,231
3,198
3,347
3,347
3,347
3,347
3,347
3,347
3,347
Note: The table is further expanded upon in tables T4A and T4B in the excel file.
Source: Statistics Denmark and own calcultations.
Public expenditure funded by the Recovery and Resilience Facility is expected to
be incurred in the period 2021-2025. Only Recovery and Resilience Facility ex-
penditure defined broadly, as
investments
is included in the comparison with the
baseline, and expenditure defined broadly as
reforms
is excluded. Roughly, half of
the planned expenditure funded by the Recovery and Resilience Facility is defined
as
investments.
All Recovery and Resilience Facility-financed expenditure is ex-
pected to be growth-enhancing.
In Denmark, there is no predefined classification of Growth-enhancing expenditure vs. other expenditure.
The table includes all public expenditure excluding transfers abroad in each COFOG category.
2
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Kapitel 6
Offentlige finanser og institutionelle rammer
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Appendix. Sustainable Development Goals
Content
SDG 1.
SDG 2.
SDG 3.
SDG 4.
SDG 5.
SDG 6.
SDG 7.
SDG 8.
SDG 9.
No Poverty .....................................................................................................
Zero Hunger...................................................................................................
Good Health and Well-Being .........................................................................
Quality Education ..........................................................................................
Gender Equality .............................................................................................
Clean Water and Sanitation...........................................................................
Affordable and Clean Energy ........................................................................
Decent work and Economic Growth ..............................................................
Industry, Innovation and infrastructure ..........................................................
297
299
301
303
305
308
310
313
315
318
321
323
325
328
331
334
336
SDG 10. Reduced Inequalities .....................................................................................
SDG 11. Sustainable Cities and Communities.............................................................
SDG 12. Responsible Consumption and Production ...................................................
SDG 13. Climate Action................................................................................................
SDG 14. Life Below Water ...........................................................................................
SDG 15. Life on Land ...................................................................................................
SDG 16. Peace, Justice and Strong Institutions ..........................................................
SDG 17. Partnerships for the Goals .............................................................................
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SDG 1. No Poverty
The government has a clear goal of fighting poverty – both nationally and glob-
ally.
A national poverty threshold
There is no extreme poverty in Denmark, where people have to live for less than
1.90 USD a day. This is partly because Denmark has a well-developed social safety
net that ensures everyone a livelihood as well as the necessary support and help
and access to services. Denmark has thus come a long way in meeting a number
of the targets under SDG 1. However, more can and must be done.
There are still children in Denmark who do not have the same opportunities as
their peers. Therefore, the intention is to reintroduce a national poverty threshold.
With a new poverty threshold, an important step is being taken towards eradicat-
ing poverty and especially child poverty. A new national poverty threshold is set
to be an active tool in i.a. social policy and can be included in the follow-up to
SDG 1.
A responsible and just society
All citizens in Denmark have access to a social security system, and it is a priority
for the government to ensure that everyone has the opportunity to take part in the
labour market and that there is a fair distribution of growth and prosperity.
The government strives for everyone in Denmark, vulnerable and non-vulnerable,
to have the same right to financial resources and services. People with social chal-
lenges, mental difficulties or a disability can, for example, receive support and help
under the Service Act, and all people have the same free and equal access to the
health care system.
The government has implemented a number of initiatives to ensure that everyone
who is capable to contribute actively to society has the best conditions to be able
to do so. Among other things, through several initiatives aiming at strengthened
qualifications and a special pool to help people with disabilities in jobs.
The existing cash benefit system has become unbalanced, which is due to a num-
ber of ongoing adjustments and additions – not least the introduction of the cash
benefit ceiling. The cash benefit ceiling affects i.a. some families with children
hard. That is why the government has established a Benefit Commission to make
recommendations on how to create a more balanced cash benefit system. Until
the Benefit Commission makes its recommendations, a temporary child allowance
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has been adopted for the families most affected financially by the cash benefit
ceiling.
Denmark supports partnerships in some of the poorest countries in the world
Through international cooperation and the government's development policy
strategy, Denmark strives to be a significant global player. Denmark supports
some of the poorest countries in the world by supporting new partnerships be-
tween governments, businesses, investors and civil society to create responsible
and sustainable growth and development.
Denmark is one of the few countries in the world to meet the international target
of providing at least 0.7% of GNI in development assistance (since 1978). Den-
mark fights poverty in different ways. Overall, there is a particular focus on ensur-
ing that the most marginalised groups also enjoy the same rights and opportuni-
ties as others.
The government will increase Denmark's focus on improving living conditions in
refugee neighbourhoods, which at the same time benefits some of the most vul-
nerable people in the world and prevents economic migration. It is a key priority
of Danish development cooperation to contribute to poverty reduction. In addi-
tion, Denmark also works actively to uplift the most vulnerable groups and those
who suffer from discrimination or other forms of unequal treatment.
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SDG 2. Zero Hunger
Danish agriculture is characterized by high productivity and profits and despite
the fact that regulation and technology in many areas have reduced the environ-
mental impact of agriculture, there is still an urgent need to promote a green tran-
sition and sustainable agriculture and to reduce the negative agricultural impacts
on the environment, nature and climate, For example through an increased focus
on precision agriculture, ecology, bioeconomy, fodder and – food capabilities,
space for natural areas, biodiversity and reduction in the usage of pesticides. Hun-
ger and food insecurity are not exactly pressing matters in Denmark but remains
essential challenges in developing countries.
Reduced environmental impact
Danish agriculture has succeeded in reducing the environmental impact on a num-
ber of areas through regulation and integration of environmental technologies and
production methods. For example, over the last 30 years, Denmark has roughly
halved the release of nutrients from agriculture and halved the negative impact of
pesticides. Agricultural production has become more environmentally efficient,
but intensive production does not allow much space for nature and biodiversity.
With the political agreements from 2017 and 2019 on the usage of pesticides, a
broad majority in the Parliament decided to reduce the impact from pesticides and
to initiate several initiatives to support better protection of the environment and a
more sustainable food production.
Sustainable food production
In cooperation with the agricultural organizations, the government is implement-
ing several projects on precision agriculture where new cultivation technologies
are being tested which have the potential to both improve the economy of the
farmers and at the same time enrich the quality of the surrounding nature and en-
vironment.
Denmark has in the past few years focused on bioeconomy to increase the utiliza-
tion of biological resources in a sustainable manner. The industry has contributed
to delivering solutions to future challenges by for example improving the capabil-
ity of fodder and food and by exploiting waste flows from fodder and food pro-
duction. Furthermore, the government has set new targets for a reduction of use
of antibiotics in pig production to prevent antimicrobial resistance which also fa-
cilitates a more sustainable food production. Moreover, Denmark has established
the International Centre for Antimicrobial Resistance Solutions (ICARS), which
will provide relevant knowledge and contribute to preventing antimicrobial re-
sistance in low- and middle-income countries.
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It is the government’s ambition to implement further sustainability measures in
the agricultural sector. Among other things, this implies a significant reduction of
nitrogen emissions into the aquatic environment and the contribution of the agri-
culture sector to the government’s ambition to reduce the total greenhouse gases
by 70 percent no later than 2030. On top of this, it is the government’s ambition
to double organic in 2030 regarding both hectares, export, and consumption.
Dietary guidelines and healthier food habits
Obesity is one of the largest societal and health challenges. Since 1987 the occur-
rence of overweight and obesity has doubled. In January 2021 Denmark launched
the official dietary guidelines – good for health and climate, which for the first
time offer advice to live both healthy and climate-friendly. By following the die-
tary guidelines, the risk of lifestyle diseases such as cardiovascular disease, type 2
diabetes and cancer is reduced.
The sustainability of the international food system
Global food production is one of the most crucial sectors when it comes to the
global emissions of greenhouse gases and the main driver for the destruction of
biological diversity. Denmark works to advance a more sustainable food produc-
tion in countries with which Denmark cooperates. Moreover, Denmark works to
reduce deforestation by the initiation of more sustainable supply chains. Among
other things, this is facilitated through the Amsterdam-Partnership that seeks to
support initiatives that promote responsible and deforestation-free production of
agricultural raw materials such as soy, palm oil and cocoa. Denmark works to en-
courage a greener European agricultural sector and to ensure that international
agreements under the Convention of Biological Diversity and the Climate Con-
vention promote a greener and more sustainable agriculture on a global scale.
The international effort to end hunger
Global hunger is rising and the international community must strengthen its effort
substantially if SDG 2 is to be achieved by 2030. Denmark supports the interna-
tional effort through the United Nation’s World Food Programme and joined the
Food Aid Convention in 2012. Denmark also supports the prevention of hunger
crises and initiatives, which establish structures that can prevent climate shocks
that damage agriculture and food production in many developing countries. Fur-
thermore, Denmark supports the development of the food and agricultural sector
through bilateral development cooperation and through the Danish civil society
organisations. Denmark works to strengthen the partnerships and to capitalise
fully on the global political platforms.
In April 2021 the Danish government hosted the fifth annual World Food Sum-
mit – Better Food for More People, gathering sustainability leaders wishing to
transform food systems to become safer, healthier, and more sustainable in re-
sponse to the UN Sustainable Development Goals. The National Food Systems
Summit Dialogue, which was a part of the summit, acts as an important stepping-
stone leading into the UN Food System Summit 2021.
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SDG 3. Good Health and Well-Being
Health for all and universal health coverage are fundamental for the Danish wel-
fare model where easy and equal access to health remains a core principle. The
Danish health system thus constitutes a framework for a healthy life and wellbeing
for all citizens in Denmark in accordance with SDG no. 3.
A well-functioning health system is vital for the continued social development.
The Danish government monitors progress and development of healthcare
through national targets for the health system. This includes patient satisfaction
surveys, monitoring and prevention of hospital readmissions, monitoring of the
five year survival of cancer patients etc. In this way, the SDGs are already closely
reflected in the ongoing work and general monitoring of the Danish health system
as well as in the priorities of the Danish government in the field of health.
Early intervention against premature death, inequality, and promotion of mental
health
Even though Denmark generally performs well regarding the fulfilment of SDG
no. 3 there is still room for improvement. Since 2000, average life expectancy has
increased with more than 4 years. According to the OECD, this is especially due
to efforts targeting cardiovascular disease and cancer. The Danish lifespan is how-
ever only slightly higher the average lifespan in the EU and half of the Danes
above the age of 65 suffer from at least one chronical disease. This is why contin-
uous efforts are made to address SDG no 3 of reducing early deaths due to cardi-
ovascular disease, cancer diabetes and other non-communicable diseases among
other though the four national cancer plans that were launched between 2000 and
2016. In addition, the government remains focused on prevention of for instance
smoking and the use of drugs and alcohol.. In 2020 a broad parliamentary agree-
ment was reached on a national action plan addressing especially children’s and
adolescents use of tobacco and nicotine products.
At the same time, studies show that inequality in health still remains a challenge in
Denmark. Social inequality in health reflects the fact that health and disease is un-
evenly distributed in society. This means that social status is a determinant for the
lives and general well-being of the citizens, the prevalence of both infectious and
non-communicable diseases, mental health problems and the overall life span. Put
differently, some groups in society fall ill earlier in life, are harder affected by se-
vere illness and die earlier than others.
For this reason, the government will aim to address and prevent inequality in
health and thereby address the overall notion of the SDGs of ”leaving no one be-
hind”.
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The government will furthermore prioritise mental health and well-being in the
future 10-year plan for psychiatric care. The10-year plan will ensure a coordinated
and long-term approach for the development in the field of psychiatric care in or-
der to ensure that fewer people will experience serious consequences of mental ill-
ness.
Denmark’s international efforts
Denmark is a frontrunner for universal health coverage and sexual and reproduc-
tive health and rights. Denmark works actively to promote SGD 3.7 and 5.6 of
ensuring sexual and reproductive health and rights for all and SDG 3.8 of achiev-
ing global access to universal health coverage for all. At the same time, Denmark
has a lot to offer as a life science nation when it comes to delivery of innovative
healthcare services and pharmaceutical products, for instance for the treatment of
chronic diseases.
The Danish health authorities participate actively in international cooperation with
the overall aim of contributing to capacity building in partner countries and
thereby further access to healthcare and universal health coverage
The COVID-19 pandemic has emphasised the need for global health prepared-
ness and response as well as the development of global norms and health stand-
ards based on scientific evidence. Denmark will continue to contribute actively to
the work of the WHO and the EU in order to strengthen international coopera-
tion in health.
The Danish government will engage actively in the ongoing discussions on a
strengthened health crisis management framework in the EU. The government
furthermore supports the
on-going work on an in-depth evaluation of WHO-led
international response to COVID-19 and a strengthening of the WHO.
With the Danish nomination to the Executive Board of the WHO in 2021-2024,
Denmark will work to promote key priorities for global health, including antimi-
crobial resistance, non-communicable diseases, sexual and reproductive health and
rights, and mental health.
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SDG 4. Quality Education
Free and equal access to quality education is one of the most important tools to
break negative social inheritage and secure equal opportunities for all. The govern-
ment has a focus on improving the quality of education and pre-primary educa-
tion. As well as focusing on a high-level of well-being throughout pre-primary ed-
ucation, lower and upper secondary school and the whole education system in
general.
Education is vital for achieving the Global Goals as a whole. Throughout the
Danish education system, pupils and students are achieving the knowledge and
skills needed for contributing to a more sustainable development in the future.
Furthermore, the Danish educational tradition with elements of critical thinking
and competences of teamwork are important skills to reach the goals that are set.
Standardization of staff-ratio in pre-primary education
From 2024, the number of employee’s are regulated in pre-primary facilities by
law. This measure has been taken to ensure the quality and time and for the indi-
vidual child. In the financial acts from 2020 and 2021 an increasing amount of
grants are earmarked the sector from 2020-2023. Furthermore, grants are ear-
marked more pedagogues and pedagogical assistants in facilities with vulnerable 0-
5 year olds. In addition, the earmarked grants are set for upgrading skills to ensure
more educated and qualified pedagogical staff from 2023 and forward. The gov-
ernment has also launched an action plan to ensure quality for the education of
pedagogical staff.
Education for sustainable development
As a broad concept, sustainability is integrated in many ways in the school system
from primary and lower secondary school to upper secondary school. In the para-
graph of the purpose with the primary and lower secondary schools, it is stated,
that the schools must give the pupils knowledge and skills needed for further edu-
cation. The pupils must acquire the realization, that natural science and technol-
ogy are a part of our culture and worldview. The pupils’ responsibility towards na-
ture and the environment is to be further developed to gain confidence in their
own opportunities for opinions and taking actions when it comes to sustainable
development and human interaction with nature – local and global. In addition
the education system makes the pupils acquainted with Danish culture and his-
tory, give them an understanding of other countries and cultures and contribute to
their understanding of human interaction with nature.The basic knowledge for
participating in a society with freedom and democracy are provided through the
upper secondary school, were students also learn about co-responsibility, rights as
well as obligations.
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In this way the pupils achieve the knowledge and skills needed for contributing to
a democratic society.
High quality education
In the recent reforms of the primary and lower secondary school, and the upper
secondary schools and vocational education the focus has been on strengthening
the quality, academic results and the well-being for all pupils and students. The
aim is that primary and lower secondary schools challenge all pupils in order for
them to be as skilled as possible and reduce the implications of social background
when it comes to academic results. Quality education is necessary in order to
break negative social inheritage. Therefore, quality education delivers equal access
to education no matter the background of every pupil and student.
Higher share of young people to complete an education or be employed
It is the government’s ambition that all 25 year olds must have completed an edu-
cation, be enrolled as a student or be in a form of employment in 2030. In 2030,
at least 90 pct. of 25 year olds must have completed a youth education. It is a clear
Danish aim that the share of young people that are not related to the educational
system or the labour market must be reduced with 50 pct. by 2030. This is supple-
mented with the aim that a higher share of young people must choose a voca-
tional education. More specifically, all young people (25 years old or younger) who
are not enrolled or have not completed a youth education are offered guidance
with proactive measures from the municipality they live in. The higher education
institutions attempt to support students through a range of measures to prevent
dropout, specific measures for students with decreased functionality physically or
mentally in addition to the fundamental tax-founded educations and the State Ed-
ucational Grant and Loan Scheme.
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SDG 5. Gender Equality
Gender equality is fundamental to democracy, human rights and prosperity. Den-
mark has achieved a high degree of gender equality compared to international stand-
ards, but data show that there is still a long way to go before there is real gender
equality in Denmark. The government is therefore continuously working to pro-
mote gender equality and thereby achieve the UN's world goal 5, just as there is a
focus on promoting and maintaining a cross-cutting focus on gender equality. The
government prepares i.a. each year a statement and a perspective and action plan
for gender equality with initiatives across ministries.
Policies and legislation to promote gender equality in Denmark
A number of laws and bodies in Denmark support SDG 5. The Gender Equality
Act aims to promote equality between women and men, including equal integration,
equal influence and equal opportunities in all functions of society based on the equal
value of women and men. Prohibition of discrimination based on sex, harassment
and direct and indirect discrimination are included in a large number of other laws,
e.g. in relation to pregnancy, maternity and equal pay. There is also an independent
complaints body for gender equality cases, and the Danish Institute for Human
Rights has been appointed as a national equality body with a view to monitoring
the government's efforts in this area.
Efforts against physical and psychological violence as well as harmful practices
As part of the government's work to combat violence against women and girls,
psychological violence was criminalized in 2019 like physical violence in the Penal
Code, and work is ongoing to strengthen the services for victims of various forms
of violence. Since 2019, the government has implemented a number of initiatives
in this area:
An action plan to combat physical and psychological violence in close rela-
tionships.
Funds for more rooms in shelters and the right to psychological help for
women in shelters.
Outpatient counseling services for victims of violence and a treatment service
for perpetrators of violence have been made permanent.
A consent-based rape provision and a subsequent awareness raising campaign
informing about where to get help.
An action plan to combat trafficking in human beings.
Combating negative social control and honor-related conflicts in ethnic mi-
nority communities, including forced marriages, child marriages, genital muti-
lation and re-education journeys.
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A bill on a strengthened effort against negative social control. Including a
tightening of the punishment for forcibly detaining someone in a marriage or
other marriage-like relationship. In addition, religious marriages of minors are
prohibited.
Gender equality in the labour market
In general, women and men have a high labor market participation in Denmark.
Day care and infrastructure are well developed and help to promote a high employ-
ment rate for men and women. Through the Technology Pact and the agreement
on free research, talent development and research in climate change, the govern-
ment is working to get more women with competencies in technology, science, en-
gineering, IT and digitalisation in the workforce and the research environments.
Although Danish women are well-educated, there is still an unequal gender distri-
bution in managements and boards. Since 2012, Denmark has had legislation on
target figures and policies to promote an equal gender distribution on the boards of
private and state-owned companies. Furthermore, the government is working on
how to strengthen rules and leg islation in the area. A voluntary code for diversity
in recruitment to boards and managements has also been established. In Denmark,
women take the vast majority of parental leave, which the government tries to
change with the implementation of the EU directive on 2 months of earmarked
leave for each parent and through work with organizations in the labor market. The
government has also established a maternity compensation scheme for the self-em-
ployed and in November 2020 launched 14 initiatives to strengthen the prevention
of sexual harassment both in the labor market and in education.
Equal access to technological aids
In 2021, the Danish Parliament passed a law that obliges public authorities to send
digital mail about a child to both parents. Digital technologies offer many new op-
portunities, but it also creates new challenges. Social media is used differently by
men and women and affects their lives differently. In the spring of 2020, the gov-
ernment launched a campaign on digital forms of harassment, which i.a. informed
young people about what is illegal online. The government expects to present a
proposal on social media, as well as proposals for initiatives to strengthen digital
education among children and young people.
Denmark as a global advocate for women's and girls' rights
Denmark is at the forefront globally in the fight for gender equality and women's
and girls' rights. Despite significant development on gender equality, progress has
stalled or even regressed in many parts of the world. COVID-19 has reinforced
existing inequalities and has inter alia had serious health and socio-economic con-
sequences for women and girls in developing countries. Particularly in relation to
the increase in sexual and gender-based violence, which the UN Secretary-General
has called a “shadow pandemic”. Therefore, there is a continued need for a strong
Danish international commitment to women's and girls' rights and equal opportu-
nities. Denmark is a strong global advocate for sexual and reproductive health and
rights (SRHR) and provides DKK 755 million annually through development aid
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to a number of international frontline organisations. Denmark’s efforts are based
on the recognition that women and girls’ right to decide over their own body and
sexuality are fundamental human rights.
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SDG 6. Clean Water and Sanitation
Denmark has ensured universal and equal access to safe and low-priced drinking
water and sanitation. However, Denmark has some challenges in relation to pesti-
cides in drinking water, and Denmark's work with SDG 6 therefore mainly deals
with water quality (sub-goal 6.3) and protection of ecosystems (sub-goal 6.6).
Protection of water resources and water-related ecosystems
In relation to sub-goal 6.3 on water quality and sub-goal 6.6 on ecosystems, the
Danish Government has a strong focus on taking care of the groundwater and
drinking water by reducing pressure from pesticides, protecting and restoring wa-
ter-related ecosystems and a water sector investing in long-term and sustainable
solutions. The Government has chosen to continue its work with groundwater
mapping and the municipalities' program of measures for the protection of the
groundwater, in order to secure the groundwater in the best possible way against
pollution. As the drinking water in Denmark is based on a limited treatment of
groundwater, it is thus ensured that there is also clean drinking water for many
generations to come.
Denmark has a long tradition of integrated planning of water resources, including
through compliance with EU regulations. In the Danish lakes and water courses,
there has been an improvement in the environmental condition, and the Danish
bathing water is of very high quality. The Government is working to achieve ob-
jectives for good chemical and ecological status in the Danish aquatic environ-
ment, although there are still challenges, as Danish water areas continue to be af-
fected primarily by diffuse pollution (nutrients, organic matter and pesticides)
from agriculture, but also pollution from point sources (nutrients, organic and
chemical pollutions) from urban wastewater, industry and aquaculture. However,
there has been a significant strengthening of wastewater treatment, and agriculture
has significantly reduced nutrient emissions.
With the Agreement on a Pesticide Strategy 2017-2021 from 2017 and the Supple-
mentary Agreement Text to the Agreement on a Pesticide Strategy 2017-2021
from 2019, a broad majority in the Danish Parliament agreed to maintain the pes-
ticide tax and the objective of reducing the pressure from pesticides, including the
pressure on groundwater. Based on the pesticide agreement, the Government has
asked the municipalities to assess the risk of the protected areas near water wells
against the risk of pollution from leaching pesticides and nitrate. The two pesti-
cide agreements from 2017 and 2019 both help to regulate and increase considera-
tion in the use of pesticides in order to take care of the groundwater and drinking
water as well as protect consumers and support the fulfillment of sub-goals 6.3
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and 6.6. In general, the condition in the Danish aquatic environment has im-
proved significantly in recent decades.
Water-related ecosystems
Denmark has extensive experience in the protection and restoration of water-re-
lated ecosystems and works to protect and restore water-related ecosystems based
on the implementation of EU water legislation, including the Water Framework
Directive. Denmark prepares river basin management plans, which set general ob-
jectives, such as good condition in water courses, lakes, coastal waters and
groundwater. This supports sub-goal 6.6 on the protection of ecosystems. Pricing
of water contributes to increased awareness among citizens and companies about
considerate consumption, which supports sub-goal 6.4 on water consumption.
Access to drinking water, sanitation and water supply
In support of sub-goal 6.1 on universal and equal access to drinking water, the re-
vised Drinking Water Directive from 2020 includes requirements for member
states to ensure that there is access to drinking water for all, including vulnerable
groups. As part of the implementation of the Drinking Water Directive, an assess-
ment will be carried out prior to the implementation deadline in 2023, which will
indicate whether there is sufficient access to drinking water for everyone in Den-
mark. If the assessment shows that improvements should be made, Denmark is
obliged to implement an action plan to improve this.
In relation to sub-goal 6.2 on access to sanitation, Denmark has regulations on ac-
cess to proper sanitary conditions in public and private buildings, including condi-
tions for people with disabilities. Denmark is continuously working on sewer ren-
ovation, especially in relation to handling heavy rain. Denmark does not have spe-
cific challenges in relation to sanitation, as the necessary infrastructure is in place,
but there is a continuing need to expand and maintain the overall value of the
sewer system. The leakage level in the Danish drinking water distribution system
is among the lowest in the world with an average loss in supplies of less than 6 per
cent. Efforts in this area contribute to the achievement of sub-goal 6.4.
Water resources and water supply in developing countries
Denmark is a global front-runner when it comes to efficiency in water supply and
exploitation of wastewater through the export of intelligent, sustainable and effi-
cient water solutions to the whole world. Denmark aims for a climate- and en-
ergy-neutral water sector, and have made a national Paris Model, which urges wa-
ter utility companies to make goals for among others their CO
2
emission. In addi-
tion, Denmark supports developing countries towards securing water resources
and water supply, including through support and cooperation with a number of
global and regional organizations, among them the world's largest network organi-
zation for water, the Global Water Partnership. This helps to support sub-goal 6.5
on water resource management.
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SDG 7. Affordable and Clean Energy
Danish climate and energy politics are ambitious and contributes to the goal of
ensuring everyone’s right to reliable, sustainable, and modern energy at an afforda-
ble price. As a pioneer within innovative climate solutions in the energy system,
energy efficiency, and renewable energy, Denmark has a responsibility to contrib-
ute with solutions at a national and international level.
High energy supply security, increasing renewable energy, and energy efficiency
In accordance with SDG sub target 7.1, the Danish regulation supports access to
stable energy supplies at an affordable price for all households. Denmark is ad-
vanced in its integration of renewable energy into the energy mix while maintain-
ing a high level of energy security. Since the 1970s, Denmark has actively pro-
moted energy efficiency through a combination of tariffs and subsidies, product
requirements, and information for citizens and businesses alike. Among other
things, this effort has contributed to a stable gross energy consumption since the
middle of the 1970s despite the Danish GDP having grown twofold in the same
period.
The 2018 Energy Agreement, the 2020 Climate Agreement, and the 2021 annual
national budget included initiatives to ensure more efficient use of energy moving
towards 2030. Among other things, funds have been allocated for subsidies to im-
prove the energy efficiency of buildings and businesses. Denmark is internation-
ally acclaimed for the development of energy efficient solutions and for expanding
and integrating renewable energy into the Danish energy mix in accordance with
sub target 7.3. These experiences are shared internationally through participation
in international organizations and bilateral collaborations. Denmark has taken
global leadership over efforts to promote SDG7, aimed to support an increase in
global ambitions by taking a leadership position in the high-level dialogues regard-
ing SDG7 at the 2021 UN General Assembly.
Energy and climate agreements: increasing Denmark’s share of renewably
sourced electricity
Several current initiatives support SDG sub target 7.2 of increasing the share of
renewable energy. With the Energy Agreement of 2018 it was agreed to put out
government tenders for three offshore wind farms. The first two wind farms are
expected to be completed by 2027 and have a combined capacity of 2.2 GW. The
third park will be integrated into the future energy islands. The electric system and
market are crucial in supporting the green transition amid increasing consumption
and production of electricity. Consequently, Denmark is working on developing
its electricity market model to ensure the market’s ability to support the green
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transition through incentives for flexibility from producers and consumers alike.
Simultaneously, Denmark is exploring opportunities to establish a secure frame-
work for grid companies’ future expansion and maintenance of the electric grid.
Denmark’s focus on the electric system and market is paramount to the continu-
ous cost-effective integration of affordable renewable energy and a high level of
energy security. The Climate Agreement of 2020 for Energy and Industry started a
new era in Danish offshore wind expansion by establishing the world’s first off-
shore wind hubs – the so-called energy islands. These two hubs will, once com-
pleted, have a combined capacity of 5 GW. Excess power from these offshore
hubs will be able to be exported to Denmark’s neighboring countries, thus con-
tributing to the global achievement of SDG sub target 7.2. Denmark will also con-
tinue to build on its solar power and onshore wind farming, which will be sup-
ported throughout 2021 by technology-neutral government tender processes. In
2018 and 2019, these tenders yielded historically low subsidy prices thereby opti-
mizing the return on government subsidies. This development indicates that this
technology will soon be ready to be implemented without the help from govern-
ment subsidies. The Danish electricity consumption is expected to be more or less
covered by the production of renewable energy from around 2027.
Sustainable energy research, development, testing, and demonstrations
Historically, Denmark has held a central position in the production of windmills.
This has benefitted both the climate and the Danish labor market while also to a
great extent facilitating SDG sub target 7.a. Development, testing, and demonstra-
tions of turbine prototypes are supported by government funding. Tests sup-
ported by this funding can be conducted within or without the two national test
centers, Høvsøre and Østerild. With the Climate Agreement of 2020 it was agreed
to continue government support for testing of wind turbines through 2021. Dan-
ish efforts in development and testing has contributed to the development of in-
dustry-leading technological solutions. Energy technology accounts for just over
13.5 percent of Danish goods export (2019). These innovations are comple-
mented by Denmark’s solid research base in universities and companies that co-
operate internationally through the International Energy Agency, the EU, and bi-
lateral research collaborations etc.
Upscaling of renewable energy and international cooperation
At the international level, Denmark contributes to the achievement of SDG tar-
gets 7.a and 7.b by supporting the development of renewable energy and improv-
ing energy efficiency through bilateral institutional cooperation with 16 countries
that together represent 60% of global CO
2
-emissions. The Danish Government
has recently established a green strategic partnership with India and is working to-
wards creating similar partnerships with other countries while operationalizing ex-
isting ones with new green action plans. Denmark has also been a vocal advocate
on the international scene for a green recovery after the COVID-19 crisis.
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The Government and the Danish pension funds have together mobilised 350 bil-
lion DKK for green investments by 2030. This effort will be further expanded in-
ternationally in the coming months before COP26 in the framework of the Cli-
mate Investment Coalition. The goal is to engage institutional investors from
across the world through outreach activities and sharing of best practices and en-
courage them to adopt a greener approach to investing and strengthen green fi-
nance.
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SDG 8. Decent work and Economic
Growth
The purpose of the Danish government’s policy on business and industry is to
promote inclusive, sustainable and persistent growth. The government pursue a
high level of employment with an accommodating working community, a fair di-
vision of growth and wealth and a strong and supportive framework for the Dan-
ish labour market model. This continuous work will contribute to the fulfillment
of Sustainable Development Goal 8.
Digitization of Denmark
A more digitized production in Danish companies will improve the basis for both
persistent and sustainable growth and contribute to further innovation and in-
creased economic productivity through technological development. The govern-
ment have compiled a new Danish digitalization strategy that promote that Den-
mark utilize the technological potential. The Government have appointed a digi-
talization partnership for the Danish digital future comprising of business leaders
and experts from the industry, academia, civil society and unions that will discuss
and provide recommendations on how Denmark shall utilize the future possibili-
ties of digitalization (sub-goal 8.2).
Stable Framework Conditions for a Sustainable and Responsible Business
Today Denmark have a pronounced position on the world market for life science,
green technology, transport and food products because Danish companies have
been able to develop great ideas for global business. The Government work to se-
cure favorable and stable framework conditions for Danish businesses so they can
develop the solutions of the future. Favorable framework conditions will improve
the growth in productivity and the innovative capacity of Danish companies. The
Government actively encourage Danish companies to pursue societal responsibil-
ity and the Sustainable Development Goals (sub-goal 8.4).
Export: Restart after the Covid-19 Crisis
A considerable part of Danish business rely on the ability to export their goods
and services abroad and export is central for the Danish economy and business
and important for the achievement of sustainable economic growth. The govern-
ment entered in June 2020 a broad political agreement on export initiatives among
other things. With the agreement, half a billion DKK was earmarked a package of
export initiatives and 15 million DKK to strengthening the export and job crea-
tion task force.
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In addition, the government have appointed seven regional growth teams – cover-
ing the whole country – that will come with recommendations on how best to in-
vest in local industry strengths and potentials so they can evolve into local busi-
ness landmarks and improve growth and employment in the region. The regional
growth teams will also come with recommendations on how to restart the growth
specifically in their region.
The Danish Labour Market Model
A high degree of organization in strong labour unions and employers’ organiza-
tions is at the core of the Danish labour market model where payment and work-
ing conditions are determined through common agreements between unions and
employers’ organizations. Neither the government nor parliament intervene in the
labour market process. The Government works to improve the framework for
the model without influencing the unions and employers’ organizations negotia-
tions.
Sustainable Tourism
The government has in December 2019 initiated the process of compiling a new
national strategy for sustainable growth in the Danish tourism industry (sub-goal
8.9).
Denmarks International Efforts
Denmark strongly supports job creation and sustainable growth in developing
countries through development cooperation. This is done by directly supporting
activities in a number of priority countries and through Denmark's engagement in
international institutions. Denmark also supports the establishment of new part-
nerships for the promotion of sustainable growth between Danish companies,
NGOs and local companies in developing countries, where economically sustaina-
ble projects are developed to promote jobs and strengthen income generation.
Denmark has also established partnerships with development actors, which focus
on corporate social responsibility.
In addition, Denmark seeks to promote sustainable economic growth through
trade policy, including through EU trade agreements. Finally, the focus on attract-
ing green foreign investments in all of Denmark is being strengthened.
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SDG 9. Industry, Innovation and
infrastructure
The Government have a clear target of reducing greenhouse gas emissions with
70 % in 2030. In order to reach the target the Government have established a
close co-operation with the business community in the form of climate partner-
ships. The Government supports the application of green technologies and green
fuels by converting parts of the industry’s energy consumption. The Government
further pursue infrastructure that support sustainable development by focusing on
climate friendly materials and recycling, stipulate requirements for sustainable in-
frastructure in public tenders and by working towards regulation that can support
CO
2
e-friendly solutions.
Climate Partnerships
Thirteen climate partnerships have been established in the sectors of trade and in-
dustry, which include production companies, energy-intensive industry, the energy
and utilities sector and land transport among others. The work in the climate part-
nerships is monitored by the Green Business Forum, which will strengthen the di-
alogue on the green transition between the Government, the business community
and the labour movement. (Sub-goal 9.2)
Electrification Strategy
In extension of the Climate agreement of 2020, the government will present an
electrification strategy primo 2021. The strategy will set the course for increased
electrification of the Danish society and industry (sub-goal 9.2).
Technology Pact
Through the technology pact, the Government supports projects that motivate
the Danes for focusing and educating themselves in effective infrastructure and
inclusive and sustainable industrialization with focus on all age groups from pre-
school to post-graduate education (sub-goal 9.4 and 9.5).
Green Start-up Culture
A strong start-up culture is part of a dynamic and innovative business community
that can create new solutions and products as well as new Danish jobs. This is es-
pecially true in the green sector. In order to promote this, the government have
established Denmark’s Green Future Fund that among other things will help
green start-ups and companies with risk capital for development and diffusion of
green solutions. (Sub-goal 9.3)
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A Sustainable Infrastructure
The Government focus on reducing the road system’s negative impact on the sur-
rounding environment through pursuing improved traffic safety, environment, bi-
odiversity and noise. Focus is on climate friendly materials and recycling for in-
stance through development of climate friendly asphalt and green concrete and
through requirements for contracts in public tender. Equally the government fo-
cus on the development and extension of biking infrastructure with the purpose
of promoting biking as a sustainable and health promoting transportation. (Sub-
goal 9.1 and 9.2)
A Sustainable Industry
The Government support increasing electrification across all sectors of society in-
cluding several industrial processes. Equally, the Government support the exten-
sion of the production of biogas and other green gasses through the planned pub-
lic tender, which increase the share of sustainable energy in the gas consumption.
Latest the Government have supported this development with the decision on es-
tablishing a gas pipe to Lolland-Falster in order for the sugar mills to utilize the
increasing supply of green gas.
The government will with reference to the 2018 Energy Agreement present a gas
strategy that will address the gas systems role in the green transition among other
things. Further, with the 2018 Energy Agreement, the 2020 Climate Agreement,
and the 2020 green tax reform the Danish Government has allocated funds to a
business reserve for green transition and energy efficiency in the industry. In ex-
tension of the 2020 Climate Agreement the Government will present an electrifi-
cation strategy in 2021. The strategy will include scenarios for the role of electrifi-
cation in relation to the 70% target and will state a series of indicators of the in-
creased electrification of the Danish society including industry (sub-goal 9.2). Fur-
ther, the Danish Government will present a CCS-strategy, which can support the
reduction of CO
2
emissions from business processes that are difficult or impossi-
ble to avoid without CO
2
capture.
Denmarks International Efforts
Denmark works internationally for the improvement of developing countries pos-
sibilities for developing and financing sustainable infrastructure projects through
the Global Infrastructure Facility among other things. In addition, Denmark sup-
ports concrete projects through the Investment Fund for Developing Countries
(IFU), which through expert assistance and cheap debt finance support the prepa-
ration and execution of sustainable and climate friendly infrastructure projects in
the world’s poorest countries.
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Finally, Denmark support the spread of green and sustainable solutions with a
number of high-income countries. The effort have focus on the export of green
and sustainable solutions through business alliances and partnerships with author-
ities. In addition to this Denmark work on securing the jobs of the future by fo-
cusing on the attraction of foreign investment that contribute with innovation,
new knowledge and new technologies to Denmark including to the green transi-
tion.
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SDG 10. Reduced Inequalities
The government focuses on fighting inequality in Denmark and the rest of the
world.
Strengthen efforts for children and young people
The policy area on vulnerable children and young people aims at strengthening
the personal resources of vulnerable children, young people and their families.
The children need to get the right help and support early in their lives, in order to
provide the children and young people with the same opportunities for personal
development, health and an independent adulthood as their contemporaries. It is
the government’s intention to improve the living conditions for vulnerable chil-
dren and young people. All children have the right to a safe childhood with
school, friends, leisure and adults who can take care of them. In January 2021, the
government presented the initiative ‘Children First’.
The initiative contains i.a. a proposal for a completely new Child's Act to ensure
that the child's voice is heard and that the child's wishes and needs has the highest
priority.
Strengthen efforts for the inclusion of persons with disabilities
Denmark has a strong welfare system that supports the possibilities for persons
with disabilities to participate in society on equal terms with other citizens. For ex-
ample through concrete and individual assessments of the need for compensation
as well as universal tax financed social benefits.
Currently, the government is working on a range of initiatives to strengthen the
inclusion of persons with disabilities in society and to reduce discrimination. This
work contributes to target 10.2 on empowering and promote the social, economic
and political inclusion of all, irrespective of age, sex, disability, race, ethnicity,
origin, religion or economic or other status and target. Plus target 10.3 on ensur-
ing equal opportunity and reduce inequalities of outcome, including by eliminating
discriminatory laws, policies and practices and promoting appropriate legislation,
policies and action in this regard.
In 2018, the Danish Parliament passed the Act on Prohibition against Discrimina-
tion on Grounds of Disability, which prohibits discrimination outside the labour
market due to a disability. According to this act, the Danish Board of Equal Treat-
ment can consider complaints of discrimination due to a disability and the Board
may award compensation and invalidate dismissals. On 1 January 2021, an amend-
ment to this act came into force, underlining the right to reasonable accommoda-
tion in public and private schools and day cares and providing the Board of Equal
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Treatment the competence to consider complaints and award compensation for
lack of reasonable accommodation. The purpose of this amendment is to avoid
discrimination of children and young people with disabilities in schools and day
cares and to ensure that they have the same possibilities for participation as other
children and young people. This way, they can attain better possibilities for inclu-
sion and equal treatment in society.
Furthermore, The Danish Disability Counsel is planning to continue an anti-dis-
crimination campaign in 2021 aimed at removing prejudices on children with disa-
bilities among children without disabilities and fostering inclusion of children with
disabilities.
In December 2020, the Parliament passed an act obligating municipalities in Den-
mark to start the preparation of the transition into adult life for young people with
disabilities when they turn 16. The transition into adult life is especially difficult
for young people with disabilities because it often entails important changes and
decisions for example regarding education, housing and help and support accord-
ing to the legislation. The act came into force 1 January 2021
Facilitation of safe, orderly and regular migration and mobility of persons
The Danish Government’s aim is for all migration to take place in a safe, orderly
and regular manner, which is why Denmark actively work towards combatting ir-
regular migration. The Danish efforts in this regard are an inherent part of the Gov-
ernment’s endeavor to create a fair and humane asylum system, and the day-to-day
work in the EU, where Denmark focuses on actions along the migratory routes in
order to establish new and strengthening already existing partnerships with third
countries on migration. In sum, all these efforts to contribute to the achievement
of objective 10.7 on the facilitation of safe, orderly and regular migration and mo-
bility of persons.
As part of the Government’s work to establish a more fair and humane asylum
system, the Government also supports controlled resettlement of refugees through
the UN, thus making resettlement the primary path for obtaining protection in
Denmark.
One of the fundamental conditions for orderly migration is effective cooperation
on return and readmission, which is also a key priority for the Danish Government.
Since 2017, Denmark has annually been allocating funds from the development
budget (ODA) to projects that promote both development purposes and facilitates
cooperation on return and readmission in countries of origin. In 2021, the Danish
Government has allocated 110 Million DKK of the state budget to facilitate return
and readmission, and 190 million DKK is additionally allocated to promote the
work of creating a fair and humane asylum system, i.e. through broad capacity build-
ing efforts in the area of migration handling.
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Development policy focus on global inequality
Globally, things are moving in the wrong direction with inequality rising both
within and between countries. This includes economic inequality in terms of in-
come and wealth disparities, political inequality in terms of discrimination and lack
of social participation, climate inequality where vulnerable countries and popula-
tions are affected the most, and social inequality in terms of for example gender
equality. Denmark addresses these international trends through development co-
operation – both through a crosscutting effort, but also in individual countries.
This is done through Denmark's strong focus on gender equality, efforts on de-
mocracy, human rights and good governance, and through an increased focus on
addressing the consequences of climate change. Thus, Denmark focuses on both
the underlying structures of inequality, but also on ensuring that concrete efforts
benefit the poorest and those most in need.
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SDG 11. Sustainable Cities and
Communities
Denmark is well on track to attain SDG 11. The government's ambition is for
Denmark to be a cohesive country where you can live, work and educate yourself
in all parts of the country. Cities must offer an opportunity for people to meet
across economic and social differences, because this supports the cohesion that
the welfare state presupposes. Therefore, the government will take a stand against
the centralization in Denmark and ensure mixed cities.
Mixed cities
Mixed cities and a cohesive Denmark are the starting point and objective for a
large part of the initiatives that the government is presenting these years. There is
a focus on reducing the environmental impact in cities, ensuring access for citi-
zens to green spaces and preserving cultural heritage. The new initiatives are a
continuation of many years of effort, which means Danish cities are generally safe.
In addition, virtually all citizens have access to housing of a good standard and ac-
cess to basic services such as water, sanitation and electricity. A solid basis has
thus been established for Denmark to live up to SDG 11 on inclusive, safe, robust
and sustainable cities and local communities.
In order to make cities more mixed, national focus has been on the social housing
areas with more than 1,000 residents, which are characterized by significant social,
employment and integration challenges. A number of initiatives have been
adopted to dissolve and prevent parallel societies and make the residential areas an
integral part of the surrounding city. This is evident in the parallel society agree-
ment from 2018, which involves physical transformation, social efforts, renova-
tions, infrastructure changes, efforts for a more varied mix of residents and other
initiatives that can contribute to a mixed composition of housing and residents
(target 11.3).
Housing prices in Denmark
As an instrument for ensuring mixed cities and lower housing prices, municipali-
ties can demand 25 percent social housing in new housing areas, which means that
housing is being built that can be paid for by citizens with average and low in-
comes. In Copenhagen, new urban development areas have been established and
further area expansions are planned using surplus soil from construction work in
the Port of Copenhagen. The city grows bigger which creates new opportunities
for housing. There is thus an ongoing adjustment of the supply of housing in the
cities, which supports the provision of affordable housing (target 11.1).
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Sustainable transport and traffic safety
The infrastructure and transport systems in Denmark are well-functioning, and
Denmark is systematically working with safety – both in relation to accident statis-
tics and in relation to efforts that specifically improve traffic safety. The transport
companies in Denmark focus on creating attractive ticket products for the travel-
ers that are both affordable and adapted to the passengers' travel patterns. Fur-
thermore, Denmark has improved the accessibility of the railway system and en-
sured alternative travel options for people with severe mobility impairments who
do not have the opportunity to use public transport in Denmark on their own
(target 11.2).
Protection and preservation of the world's natural and cultural heritage
In Denmark, both the state and the municipalities make a significant contribution
to protect and preserve the world's natural and cultural heritage. On an interna-
tional level, this happens through participation in UNESCO conventions, Euro-
pean conventions and directives and other international cooperation. In the field
of culture, on a national level the protection manifest itself in the Museums Act
and the Building Conservation Act, and the municipalities with world heritage
sites make a significant contribution by including the protection of the areas in
municipal planning (target 11.4).
Green transition
With its agreement on a climate plan for a green waste sector and circular econ-
omy from June 2020, the government has initiated a green transformation of the
waste sector, among other things by focusing on increased sorting and recycling
of waste as well as less import and incineration of waste. In recent years, several
measures have also been taken to reduce air pollution, especially in cities, includ-
ing an update of the environmental zone rules, a scrapping scheme for old diesel
cars and stoves, stricter control of lorries' NOx exhaust to avoid cheating, sulfur
monitoring of ships and the promotion of environmentally friendly cruise tourism
(target 11.6).
Green public spaces
In addition to limiting the environmental impact, the Nature Conservation Act
ensures that the public has the right to visit beaches and dunes, uncultivated areas,
forests and along roads and paths in the open country. Both the state and the mu-
nicipalities are also continuously working to establish roads and paths to nature
areas as well as living areas. The Danish Nature Agency establishes many disability
facilities on state land and describes the disability friendliness in all hiking leaflets
(target 11.7).
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SDG 12. Responsible Consumption and
Production
The annual consumption of natural resources per capita in Denmark is 22 tons,
which is significantly higher than the EU average of 14 tons. Further, Denmark
produces the highest amount of municipal waste, 800 kg per capita, in the EU. In
this context, SDG 12 on achieving sustainable consumption and production pat-
terns represents a particular challenge for Denmark. In response, the government
has charted an ambitious course in the transition to a more circular economy. The
government also actively supports an ambitious transition to a circular economy
in the EU.
Less waste and better utilization of natural resources
The government of Denmark’s vision for the circular economy includes an ambi-
tion to reduce waste, and Denmark supports the European Commission's ex-
pected proposals for quantitative waste reduction targets. In addition, the govern-
ment is working to ensure that the EU adopts a coherent legal framework for
products that make sustainable consumption and production easy, transparent
and credible for consumers and producers, while reducing environmental and cli-
mate impact. The Government's proposed Action plan for circular economy fo-
cuses, among other things, on sustainable design, recycling, life-extension and
green public procurement. The plan ensures Denmark's fulfillment of SDG target
12.1 of adopting a national action plan for sustainable consumption and produc-
tion.
The government is working to support a more circular economy through various
initiatives including implementing the Ecodesign Directive and promoting the
‘Nordic Swan Ecolabel and the EU Ecolabel. Ecolabels widen the understanding
of sustainable production and consumption from a life cycle perspective, which
supports SDG targets 12.2 on more efficient use of natural resources and 12.8 on
ensuring that people have the relevant information and knowledge about sustaina-
ble lifestyles. Denmark is also working to achieve SDG target 12.4 on environ-
mentally sound handling of chemicals and waste products through a targeted ef-
fort for safe handling of chemicals and waste.
Denmark is a frontrunner on SDG target 12.7 on sustainable public procurement.
In October 2020, the government launched a strategy for green public procure-
ment, which includes requiring eco-labeled and total economic procurement as
well as a national food policy. The strategy also entail work on developing further
guidelines, requirements and tools for green procurement.
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More and better recycling
Denmark is among the countries in the world that sends the least amount of
waste to landfill. Instead a relatively large share of waste is incinerated. In June
2020, the government entered into a political agreement on a Climate plan for a
green waste sector and circular economy to increase recycling. The agreement in-
cludes measures for increased and more streamlined waste sorting, strengthened
and risk-based waste supervision, and a reduction in the capacity of Danish incin-
eration plants, so that Denmark reduces the import waste containing plastic for
incineration. The agreement supports SDGs 12.1, 12.2 and 12.5 through more re-
cycling of waste.
Less food waste
To achieve SDG target 12.3 on food waste and food loss, Denmark focuses on
reducing food waste through public-private partnerships, legislative changes, fo-
cus on business opportunities for the donation of food, designation of a national
official food waste day, and deepening consumers' understanding of “best before”
dates. In 2019, the government set up a think tank on Prevention of Food Loss
and Food Waste, ONE \ THIRD. The think tank runs Denmark's voluntary
agreement on reducing food waste, where the Danish food industry pledged to
measure and reduce their food waste and food loss by 50 percent by 2030.
Sustainable construction
In March 2021, the government entered into a political agreement on a strategy
for sustainable construction, which focuses on, amongst other areas, increased
quality, durability and health in construction, less resource consumption to pro-
mote strong sustainable buildings with a long life span and construction processes
with less material waste and defective work. The strategy contributes to achieving
SDG targets 12.2, 12.4 and 12.5 on sustainable resource consumption, environ-
mentally sound management of chemicals and wastes throughout their life cycle
and substantially less waste generation, respectively.
Plastic in a circular economy
In order to achieve the government's vision of moving 80 percent of Danish plas-
tic waste away from incineration in 2030, a reduction of unnecessary consumption
of plastic and more recycling of plastic waste is required. This includes bans on
certain disposable plastic products, specific sectoral requirements for higher col-
lection of plastic waste and the extended producer responsibility for packaging,
which through contributions must create an incentive for circular design and con-
sumption of plastic packaging, which makes up a large part of the total plastic
waste. Denmark has also been at the forefront of the effort to reduce the use of
plastics and plastic pollution through a central role in the European Plastics Pact,
which focuses on increasing the recycling of plastics and reducing the use of un-
necessary plastics. Overall, these measures help to achieve SDG targets 12.2 and
12.5.
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SDG 13. Climate Action
Denmark works ambitiously both nationally and internationally to fight the cli-
mate crisis and its consequences. Denmark has adopted a Climate Act to secure a
reduction in greenhouse gas emissions in 2030 by 70% compared to the level of
emissions in 1990, and achieve a climate-neutral society by 2050 at the latest. Due
especially to the many climate initiatives undertaken since the change of govern-
ment, so far a 55 % reduction of greenhouse gas emissions in 2030 relative to
1990 is expected. In Denmark, since the change of government, decisions have
been made, which together secure an expected reduction of [7.2] million tonnes of
CO
2
in 2030. In 2020, the Government launched the first long-term Danish strat-
egy for a global climate effort, “A green and sustainable world”. Internationally,
Denmark contributes through the UN and the Paris Agreement, government co-
operation, climate diplomacy, export promotion efforts and green development
assistance.
The Climate Act
Denmark has adopted legislation in order to secure a significant reduction in the
greenhouse gas emissions towards 2030 and beyond. The Climate Act sets a le-
gally binding target of reducing greenhouse gas emissions by 70% compared to
1990, and a long-term target of climate neutrality by no later than 2050 in regard
of the 1.5 degrees °C ambition of the Paris Agreement. Furthermore, the Climate
Act mandates the setting of a national climate target every five years, with a 10-
year perspective towards 2050. The broad political support of the parties of the
Danish Parliament makes the law legally binding for the future. The at any time
incumbent Minister of Climate and the Government will be obligated to meet the
Climate Act targets.
Along with the Climate Act, an annual Climate Programme is introduced, which
will provide a status on the fulfillments of the national climate targets, present the
Government’s climate initiatives and provide an assessment of whether it appears
probable that the national climate targets will be reached. This amongst other
things contributes to the fulfillment of sub target 13.2. The Climate Act requires
the Government to present a climate action plan with a ten-year perspective, at
least once every five years and, as a minimum, in connection with setting the cli-
mate targets. The Climate Act will also contribute to Denmark achieving other cli-
mate commitments such as the EU commitment on a 39% reduction of green-
house gas emissions in 2030 relative to 2005 in the non-ETS sectors.
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Climate policy agreements and climate partnerships
Denmark emitted 46,7 million tonnes of CO
2
e in 2019, which is a 40% reduction
of total greenhouse gas emissions compared to 1990. Since there has been made a
number of policy agreements and the Government has established 13 Climate
partnerships with the Danish business community to ensure that the business
community will contribute to reducing greenhouse gasses and to strengthen their
green competitiveness. The newest projection of greenhouse gas emissions from
April 2021 shows an accumulated reduction of 8,2 million tonnes CO
2
e in 2030
since the last projection from June 2020, a reduction largely caused by the many
climate initiatives undertaken in the energy, industry, waste and transportation
sectors.
The climate agenda has achieved great attention among the Danish population.
The Government has therefore launched a number of initiatives in order to pro-
mote public knowledge on how to counteract climate change, which contributes
to sub target 13.3. The Government has initiated the first Danish citizens’ council
on climate, strengthened the Youth Climate Council, and launched a number of
initiatives to promote information and awareness about the climate footprint of
food consumption.
Climate change adaption
Due to its geography, Denmark is facing multiple challenges, especially floods, be-
cause of climate changes. This is addressed through a range of actions in munici-
palities, at national- and at EU-level, including initiatives using advanced geo-
graphic elevation models and a cross-cutting portal for adaptation to climate
change presenting knowledge, tools and data for climate change adaption initia-
tives. Furthermore, the Danish Government has taken initiative to new regulation
supporting the wastewater companies’ climate change adaption actions. These ac-
tions are contributing to fulfilling sub target 13.1. Finally, the development of a
new national climate adaption plan was initiated in 2020.
Global climate action and green development aid
The government is aware that the Danish greenhouse gas emissions constitutes
only 0.1 pct. of the global emissions. Therefore, the goal for the Danish climate
action is to have a global impact. Denmark has a strong position and solid solu-
tions in regards to the development and integration of sustainable energy and en-
ergy efficient solutions. These solutions are brought into play through e.g. bilateral
institutional cooperation, where Denmark supports the transition from fossil fuels
to green energy as well as the distribution of energy efficiency and electrification
in 16 countries. Through the United Nations Framework Convention on Climate
Change (UNFCCC), Denmark is advocating for strengthening intergovernmental
cooperation and the establishment of a credible framework around the global ef-
forts, as well as mobilizing climate finance and increase global ambitions on cli-
mate.
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Through bilateral cooperation, Denmark supports developing countries in regards
to the green transition and adaptation to climate change. Denmark provides cli-
mate-related aid through bilateral and multilateral assistance to partner-countries,
international institutions and climate funds, to support climate action developing
countries. Denmark’s climate related development aid for 2019 constituted 2.1 bil-
lion DKK. The funding is expected to increase in the years to come. Furthermore,
Denmark contributes to the mobilization of public and private finance for climate
action in developing countries through the Investment Fund for Developing
Countries (IFU) and co-ownership of a number of multilateral development
banks. In addition, Denmark has doubled the contribution to the Green Climate
Fund to a total amount of 800 billion DKK during 2020-2022 in support of pro-
jects regarding mitigation and adaptions in developing countries in accordance
with sub target 13.a and 13.b.
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SDG 14. Life Below Water
The government is committed s to achieve good environmental status in the ma-
rine environment and at the same time enable sustainable use of the Danish ma-
rine waters. It is done, among other things, through Denmark’s commitments to
implementing EU legislation, including marine strategies, water management
plans, Natura 2000 plans and Denmark's first maritime spatial plan. Furthermore,
Denmark contributes to SDG 14 through its commitment to regional and interna-
tional work related to the marine environment and sustainable management of the
seas as well as the EU's common fisheries policy.
Marine strategies and measures in Danish waters
Ongoing efforts are made to achieve good environmental status in the Danish wa-
ters, including the implementation of EU regulations such as the Water Frame-
work Directive, Marine Strategy Framework Directive and the nature directives, as
well as coomitments under international agreements such as HELCOM, OSPAR,
MARPOL and the UN Convention on the Law of the Sea (UNCLOS). Den-
mark's first maritime spatial plan intends to ensure sustainable development and
growth in the maritime sector, using an ecosystem-based approach by promoting
the coexistence of various relevant activities and uses.
Denmark develops marine strategies and water plans with the aim of achieving or
maintaining good environmental status in the marine environment. The work of
the two regional sea conventions HELCOM and OSPAR also contributes to
achieving this objective. The marine strategy and water plans contribute to the
achievement of the sub-goals 14.1 on the reduction of marine pollution, 14.2 on
the protection of ecosystems, 14.4 on sustainable fisheries and 14.5 on the protec-
tion of coastal and marine areas.
In connection with the marine strategy, a number of targets and measures are set
in order to achieve good environmental status. Among other things, targets and
measures have been set for emissions of nitrogen and phosphorus as well as ma-
rine litter. Initiatives that seek to reduce the emissions of nutrients are imple-
mented by means of the water plans (14.1).
In relation to sub-goal 14.5 on the conservation of sea areas and coasts, approxi-
mately 19 percent of Danish coastal and marine areas are designated as protected
areas. In addition, the Ministry of Environment has proposed the designation of
new marine protected areas which will increase the protection to 29.6 per cent.
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Focus on the sea and climate
Sub-goal 14.3 concerns minimizing the impact of ocean acidification. Denmark is
committed to ensure healthy marine ecosystems that are resilient to ocean acidifi-
cation. This is done, among other things, by ensuring that the impacts from hu-
man activities are at sustainable levels - also in the time of a future climate. Fur-
thermore, efforts are made to achieve good conditions for eelgrass and macroal-
gae communities, both of which store carbon and thus help to limit acidification
in Danish waters. Efforts such as the restoration of rock reefs contribute to the
spread of macroalgae communities. Denmark also participates in the Nordic
Council of Ministers' work on ocean and climate.
Fishery
Denmark works within the framework of the EU Common Fisheries Policy for
more sustainable fisheries, better resource utilization and ecosystem-based fisher-
ies management. It is in Denmark's interest that more stocks are utilized within
the levels that provide maximum sustainable yield.
A landing obligation (ban on discards) has been introduced as a general principle
in fisheries. This leads to the elimination of a large waste of resources in the form
of especially many juvenile fish that were previously discarded. Nationally, Den-
mark has initiated a project with electronic monitoring on a number of fishing
boats in the Kattegat to protect the vulnerable cod stock, and to support the com-
pliance with the landing obligation. Additionally, efforts are made to revise the
EU fisheries control system to ensure better compliance with and control of the
EU Common Fisheries Policy.
At the national level, Denmark supports coastal fishermen through a special vol-
untary scheme, which makes low-impact coastal fishing more attractive. Further-
more, in 2021, a new public labeling scheme has been established for fish caught
with low-impact fishing gear and which come from sustainable stocks. These
measures contribute to sub-goal 14.4 on sustainable fishing, sub-goal 14.b on sup-
porting small-scale fishermen and 14.6 on fisheries support schemes.
Green shipping
Denmark is working both in international fora and in the context of strategic sec-
tor collaborations to strengthen efforts for green shipping, including making ships
more energy efficient, so that fewer harmful particles are emitted. The efforts also
include the work of implementing and developing the Ballast Water Convention
in the IMO, which is intended to prevent the introduction of non-native species
from ships' ballast water, which contributes to sub-goal 14.1.
International commitment
Denmark is committed to create new international agreements on marine plastic
litter, marine protected areas beyond national jurisdiction and new, global nature
targets, including a target on 30 percent marine protected areas globally, contrib-
uting to sub-goal 14.1, 14.2, and 14.5.
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The focus on Ocean Governance is internationally, and Denmark is an active
player in this area. At the regional level, Denmark is working to implement the
EU's strategy for Ocean Governance. This strategy builds on the framework set
out in the UN Convention on the Law of the Sea (UNCLOS) as well as the imple-
mentation of the development goals in all EU policies.
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SDG 15. Life on Land
Denmark is continuously working for protection, restoration and sustainable use
of ecosystems and forests, as well as promoting biodiversity. This is done through
national legislation, EU directives and a number of international UN conventions
on climate, biodiversity and desertification. The Danish Government wants to in-
crease the amount of wild nature, set aside forest and continuous nature areas,
where nature can develop on more natural terms than today. The Danish Govern-
ment therefore supports the European Commission's biodiversity strategy, which
among other things will lead to more protected areas in the EU and an ambitious
EU position in the international negotiations on a new global biodiversity agree-
ment.
Denmark’s Nature
Approximately 60 pct. of Denmark's area is agricultural land. The area of open
habitats has decreased significantly in the last century, but is now relatively stable
at around 10 pct. of the territory of Denmark. The forest area has been steadily in-
creasing for several hundred years. Today, forests cover almost 15 pct. of the
country's area, and the Danish Forest Act aims, among other things, to promote
sustainable forestry and to increase the forest area and thus the fulfillment of sub-
goal 15.1 on conservation, restoration and sustainable use of ecosystems and 15.2
on sustainable management of forests and afforestation, etc. Denmark's national
forest program from 2018 maps challenges and opportunities in the forest area
and sets goals and direction for a sustainable development of Denmark's forests,
including goals for the forest area and biological diversity, which also contributes
to the fulfillment of sub-goals 15.1 and 15.2.
Framework for Nature Management
As a small country with a dense population and intensive land use, Denmark is
constantly working to optimize the utilization of resources and land in a sustaina-
ble and environmentally friendly way. A challenge for Denmark is that large parts
of the Danish nature areas under the EU Habitats Directive are in an unfavorable
condition. This applies to many forests, meadows and coastal nature types. An im-
portant framework for Danish nature policy is the Nature Conservation Act, but
also the EU's nature directives and the EU regulation on the control of invasive
alien species. The 1979 Birds Directive and the 1992 Habitats Directive aim to
promote biodiversity in the Member States by defining a common framework for
the protection of all wild birds and of species and habitats relevant to the EU.
This is mainly achieved through legislation on hunting and through designation
and management of special areas of conservation. These EU directives and regula-
tions help to support Denmark in meeting sub-goals 15.1 on ecosystems, 15.5 on
biodiversity and habitats and 15.8 on invasive species.
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The EU Water Framework Directive and its Danish implementation provide di-
rection and set the level of ambition for efforts to protect aquatic ecosystems,
which contributes to sub-goal 15.1. As a follow-up to the EU regulation on inva-
sive alien species, Denmark has prepared a national action plan, and campaigns
are continuously launched to combat various invasive species, which supports the
fulfillment of sub-goal 15.8 on invasive species.
International Cooperation and Conventions
The Danish Government wants the production of agricultural products to be re-
sponsible and deforestation-free, and is working to ensure that Danish companies
make ambitious demands on their agricultural products. Denmark is active in the
fight against international deforestation, including through the Amsterdam Part-
nership, which seeks to support initiatives that can promote responsible and de-
forestation-free production of agricultural raw materials such as soy, palm oil and
cocoa, which contributes to sub-goal 15.2 on deforestation.
On a global scale, Denmark is active in the UN Convention on Biological Diver-
sity and has ratified the international agreement on access to and exploitation of
genetic resources – an agreement that protects biodiversity by ensuring a fair dis-
tribution of benefits. This helps to meet sub-goal 15.6 on access to genetic re-
sources. In addition, Denmark also participates in international cooperation on
combating trade in endangered animals and plants under the CITES Convention,
protection of migratory species under the Bonn Convention (CMS) and protec-
tion of wetlands under the RAMSAR Convention. These efforts help to meet sub-
goal 15.1 on ecosystems, 15.5 on biodiversity, and 15.7 and 15.c, both of which
deal with poaching and protected species. Denmark's primary contribution to sub-
goal 15.9 on implementing the UN's Strategic Plan for Biodiversity is through the
EU's Biodiversity Strategy.
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Strengthened efforts in the field of nature
The Danish Government wants to strengthen the efforts concerning nature.
There is a need for an increased amount of wild nature, set aside forest and con-
tinuous nature areas, where nature can develop on more natural terms than today.
In June 2020, the government entered into an agreement with the Danish Social-
Liberal Party, the Socialist People's Party, the Unity List and the Alternative on
designating more set aside forest and on the establishment of Denmark's first two
nature national parks. In addition, the Government entered into an agreement in
December 2020 with the above mentioned parties on a nature and biodiversity
package to promote nature and biodiversity in Denmark, including through desig-
nation of up towards 75.000 hectares of set aside forest, establishment of an esti-
mated 13 new nature national parks making a total of 15 nature national parks and
preparation of a strategy on the management of endangered species. The agree-
ment broadly helps to support SDG 15.
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SDG 16. Peace, Justice and Strong
Institutions
Increased security in the public space
It is a key priority for the Danish Government to provide security for the Danish
population and thus contribute towards the fulfillment of Global Goal no. 16
concerning the promotion of peaceful societies. This will happen i.a. through initi-
atives in the Government´s security policy package from October 2019, initiatives
to combat insecurity-creating behavior, and initiatives in the agreement between
the Government and a number of the Danish Parliament´s political parties on the
economy of the police and the prosecution service for the years 2021-2023.
Combating violent extremism
The Danish Government has a strong focus on combating extremism, radicaliza-
tion and terror, which contribute towards the fulfillment of target 16.a on combat-
ing terrorism and crime. The Government has i.a. initiated work on an action plan
against anti-Semitism with a holistic approach to the problem. Moreover, the
Government has increased penalties for terrorism and terror-like activities, and
has created the possibility to impose location bans and contact bans on convicted
foreign fighters.
The rule of law and ensuring access to legal assistance
The Danish Government is working for a reduction in the processing time of
criminal cases, which contributes towards the fulfillment of target 16.3 on pro-
moting the rule of law and ensuring equal access to justice. Furthermore, the
Government has set up a pre-legislative committee to review the existing rules on
legal aid in civil cases in order to ensure that everyone has access to legal assis-
tance and to the courts.
Freedom of expression
Based on the conclusions of the Commission of Freedom of Expression in report
no. 1573/2020 about the framework and conditions for freedom of expression in
Denmark, the Government will introduce a bill increasing the penalty for threats
aimed at preventing others from expressing themselves and participating in the
public democratic debate. This initiative contributes towards the fulfillment of tar-
get 16.10 on ensuring public access to information and protecting fundamental
freedoms.
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Combating organized crime and corruption
The Danish Government wants to ensure protection against financial and orga-
nized crime, which contributes towards the fulfillment of i.a. target 16.4 on com-
bating organized crime and illicit financial and arms flows. A more specialized and
effective approach must be developed so that the authorities are ahead of the de-
velopment of crime and the methods of the organized criminals.
Furthermore, the Government focuses on measures to combat human trafficking.
As part of the agreement on the economy of the police and the prosecution ser-
vice 2021-2023, a new national investigation-unit is being established where the
most specialized competences of the police and the prosecution service will be
gathered with the aim of strengthening the effort against the most complex finan-
cial and organized crime.
International peace and state building
Through integrated efforts, Denmark supports conflict prevention and peace and
state building in fragile and conflict-affected countries. The Peace- and Stabiliza-
tion Fund is a central Danish instrument for tackling challenges such as violations
against local populations, irregular migration flows and breeding grounds for ex-
tremism. The efforts thus primarily contribute to Global Goal 16, including target
16.1 on reducing all forms of violence and related death rates everywhere, as well
as target 16.a on preventing violence and combatting terrorism by strengthening
relevant national institutions. In addition, the Fund’s engagements contribute to
Global Goal 1, 2, 3, 5, 6, 8, 14, and 17.
International cooperation
As a continuous contributor to UN peacekeeping operations, particulary in Africa
and the Middle East, Denmark is actively supporting the UN reform agenda. As a
part of the Danish candidacy for the UN Security Council 2025-26, the Danish
Government will strive to maintain momentum in the reform work.
Denmark must once again be a pioneering country in the promoting of the
women, peace and security agenda. The Danish Government has increased ef-
forts to ensure the active and meaningful participation of women in all aspects of
the work with peace and security. Denmark must support sustainable develop-
ment based on human rights. Denmark will continue to focus on the link between
the Global Goals and human rights and will work to ensure that the Global Goals
are implemented in line with the human rights-based approach (HRBA).
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SDG 17. Partnerships for the Goals
The strengthening of the global partnerships is an essential element in achieving a
more sustainable world in 2030, and Denmark is ambitiously working for goal 17.
Denmark’s development cooperation
Denmark’s development aid is 0.7 percent of the Danish GNI, which makes Den-
mark part of a small leading circle of countries that comply with the UN’s 0.7 per-
cent aim. Denmark has fulfilled the target in more than 40 years (sub-target 17.2).
It is a crucial part of the governments approach and development policy that
Denmark plays and continues to play a key role in international development co-
operation as a credible and respectable partner that lives up to our international
responsibility. Denmark is a pioneering country that inspires other and larger
countries and economies to follow our lead.
Partnerships, ambitious alliances, mobilization of investments and strategic
sector cooperation
Denmark has a strong tradition for public-private cooperation with diverse actors
on both national and international level. Denmark has shown that partnerships
can contribute to solutions, that promote sustainable and climate resilient socie-
ties. This is needed to achieve the sustainable development goals and the Paris
Agreement (sub-target 17.17 on partnerships). Over the past 5-10 years, Denmark
has worked to promote the mobilisation of private capital for investments in the
sustainable development goals (SDGs) through public-private investment partner-
ships. This has primarily been done in cooperation with the Investment Fund for
Developing Countries (IFU) and Danish pension companies. In 2018, the SDG
Fund was launched with a total capital base of DKK 4.8 billion DKK. 60 percent
has been mobilised by a number of pension companies and private investors,
while the state provided 40 percent, of which DKK 100 million is from the devel-
opment aid budget and DKK 800 million come from a state’s guarantee. In total,
the SDG Fund is expected to mobilize DKK 30 billion for sustainable investment
in the development countries.
In 2020, the government established Denmark’s Green Future Fund. The aim of
the Future Fund is to contribute to A green transition – in Denmark and the rest
of the world. The Future Fund will mobilize private green finance to supplement
private actors and help build the required bridges between green projects and pri-
vate sources of finance. What is required are partnerships that are able to develop
and disseminate green technology. With the Future Fund, the IFU was reinforced
with 1 billion DKK to ensure more private investment in green solution in the de-
velopment countries.
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Through the strategic sector cooperation – cooperation between Danish authori-
ties and authorities in developing and middle-income countries – the Danish con-
tribution to the UN’s sustainable development goals and the Paris agreement is
strengthened. It has a special focus on green transition and sustainable develop-
ment. The purpose of the cooperation is to improve framework conditions, regu-
lation, enforcement, policies etc. in sectors where Denmark has particular
strengths in the terms of expertise and technology in the public and private sec-
tors. The strategic sector cooperation is implemented in 18 countries with the par-
ticipation of 13 Danish authorities.
Free trade through EU and WTO
Denmark’s trade policy is conducted through the EU, where Denmark has sup-
ported the agreements and arrangements that make the EU the most open market
for development countries, especially sub-Saharan African countries. The EU’s
negotiation directives for the economic partnership agreements with developing
countries have been updated to reflect international agreements relevant to trade
and development, including the SDGs and the Paris Agreement. Denmark has
succeeded in influencing the directive in order to ensure, among other things, that
trade and sustainability must be promoted in relation to climate, environment, la-
bour rights and gender equality. Through its Aid-for-Trade program 2018-2020
(170 million DKK), Denmark has provided support to the Aid-for-Trade organi-
zations in Geneva to promote integration of small and medium-sized companies
in global and regional value chains and the implementation of the WTO’s Trade
Facilitation Agreement (TFA).
Denmark’s initiatives looking ahead
Denmark will continue to support international partnerships and alliances be-
tween government, companies, cities, financial institutions and the civil society. By
combining knowledge, innovation and technology across sectors, we can find new
solutions to global challenges. There is international recognition of the fact that
the private sector plays a crucial role in achieving the SDGs and the Paris Agree-
ment. At the same time, the business sector is showing a growing interest in social
responsibility and sustainability, both environmental and social.
Denmark will support companies in transitioning their global product and supply
chains to limit their impact on the climate, while still creating the best terms for
poor small farmers and factory workers in production countries. In cooperation
with Danish and international partners, the government will take action against
value chains, where Danish and European imports cause very large CO
2
emissions
in production countries as a result of extensive deforestation. The government
will also promote climate partnerships with the business sector internationally, as
a model for how public and private actors can find joint solutions. Finally, the
government is launching climate development partnerships focusing on for exam-
ple SDG 6 and SDG 7 in order to bring the business sector’s skills into play when
it comes to achieving the SDGS in the development countries.
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April 2021
Ministry of Finance
Christiansborg Slotsplads 1
1218 Copenhagen K
Tel. : +45 33 92 33 33
E-mail: [email protected]
ISBN 978-87-93823-54-9 (digital version)
2020/21:10
Layout: Ministry of Finance
Photo: Colourbox
The publication is available for download at
www.fm.dk / www.regeringen.dk
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Ministry of Finance
Christiansborg Slotsplads 1
1218 Copenhagen K
Tlf. : +45 33 92 33 33
E-mail: [email protected]