The EU has announced its official support for the Danish carbon capture rollout scheme, under the EU’s State aid regulations.
The total budget approved by the European Commission is roughly €1.1 billion (~$1.19 billion) and it will be dedicated to funding the implementation of carbon capture and storage (CCS) technologies to deepen the decarbonization of industry in the country.
As a result of this, officials expect to see an influx of investors in CCS, as well as a drop in the costs of future application of this technology, which will, in turn, help develop a commercial CCS market in Denmark.
“This €1.1 billion scheme will enable Denmark to capture and store a significant amount of CO2, preventing its release into the atmosphere. It will help Denmark achieve its ambitious target of climate neutrality by 2050 at the latest, in line with the European Green Deal objectives, while ensuring that competition distortions are kept to the minimum,” Margrethe Vestager, Executive Vice-President in charge of competition policy, said.
The €1.1 billion scheme is to be awarded via a competitive tendering procedure that is set to be completed this year.
It will be open to corporate representatives of the industrial sector, such as energy and waste, among others, and will contribute to the nation’s ambition to achieve a 70% reduction of its greenhouse gas (GHG) emissions by 2030.
The beneficiaries will be awarded a 20-year contract, under which they will be obligated to capture and store at least 400,000 metric tons of CO2 annually, starting from 2026.
And the air will pay for the difference between the total return expected by the beneficiary and the estimated costs for capturing and storing 1 ton of carbon dioxide over the contract lifetime.
The maximum amount of the aid will be the equivalent of €54.9 million (~$59 million) per annum.