Denmark Narrows Down Competing Field Vying for $4.1 Billion Carbon Capture Finance

Denmark's Carbon Capture Funding Scheme Attracts Fresh Proposals

Denmark is moving forward with its ambitious plans to combat climate change, as the Danish Energy Agency confirms the receipt of fresh proposals for the DKK 28.7 billion ($4.1 billion) funding scheme aimed at capturing and storing carbon dioxide.

This is Denmark's third major round of CCS funding, following earlier awards to Ørsted and the NECCS consortium. Ørsted, the recipient of the first contract from the CCUS fund, is set to capture and store 430,000 tonnes of CO2 annually from 2026 for a 20-year period.

The tender process began earlier this year with 10 companies prequalified, including Aalborg Portland A/S, AffaldPlus Affaldsenergi A/S, ARGO CCS A/S, E.ON Carbon Capture Solutions Copenhagen ApS, Energnist CaptureCo A/S, Fjernvarme Fyn Fangst A/S, Gaia ProjectCo P/S, HOFOR DSS SPV A/S, Kredsløb Holding A/S, and Ørsted Bioenergy & Thermal Power A/S.

However, it's unconfirmed if a further two projects have submitted bids. Notably, wind energy company Ørsted withdrew from the tender to focus on its core business due to a U.S. administration decision to cancel a project. As of now, official submissions for the Danish Carbon Dioxide Storage System have not yet been confirmed or publicly disclosed by companies.

The consolidated CCUS and GSR funds aim to secure deep emissions cuts at the lowest possible cost. Successful bidders will receive payments based on the volume of carbon dioxide they permanently store. The funding scheme will distribute DKK 1.77 billion ($257 million) annually between 2029 and 2044. Companies must have capture facilities running by late 2029 to qualify for the funding.

If successful, the program could make Denmark a leader in Europe's race to deploy large-scale carbon storage technologies. Full-scale storage must begin the following year for companies to qualify. The contracts are expected to be awarded by April 2026, subject to European Commission approval.

The program extends beyond storage, also backing the reuse of captured CO2 through Carbon Capture and Utilisation (CCU). Contracts are designed with flexibility, allowing firms to withdraw if more profitable CCU options emerge. The consultation period has started, and final offers are expected by December 17, 2025.

The consolidated tender in September 2023 was a response to industry requests for more preparation time before scaling up operations. Early movers can access subsidies. The storage sites may be located domestically or abroad, but carbon capture must happen in Denmark to count toward national climate targets.

In conclusion, Denmark's carbon capture and storage funding scheme is a significant step towards the country's goal of reducing emissions and becoming a leader in Europe's race to deploy large-scale carbon storage technologies. The program offers opportunities for both established energy firms and newcomers, and its flexibility allows for the reuse of captured CO2 through Carbon Capture and Utilisation (CCU). The future of Denmark's carbon capture and storage initiatives will be revealed as the consultation period progresses and final offers are submitted.

Denmark Narrows Down Competing Field Vying for $4.1 Billion Carbon Capture Finance