In Denmark, the Danish Energy Agency (DEA) has announced the publishing of the final tendering materials for its DKK 28.7 billion (≈ US$4.2 billion) CCS Fund to secure capture and storage of carbon dioxide from as early as 2029, and to help Denmark along its path to climate neutrality.
The CCS Fund has a total budget of DKK 28.7 billion (≈ US$4.2 billion) including VAT (in 2025 prices), which will cover the costs of capture, transportation, and geological storage of fossil, biogenic or atmospheric carbon dioxide (CO2) over a 15-year contract period.
The subsidies are tied to a requirement for the commissioning of carbon capture facilities by December 1, 2029, and a minimum requirement for full capture and storage from 2030.
With CCS technology, we can store CO₂ underground instead of releasing it into the atmosphere, where CO₂ contributes to the greenhouse effect and thus to global warming. Now the Danish Energy Agency’s tendering procedure will ensure that we get the highest CO2 reductions from the funds allocated by politicians, said Peter Christian Baggesgaard Hansen, Deputy Director General at the Danish Energy Agency.
The contract notice and tendering materials for the CCS Fund will be published on the EU’s electronic tendering platform: Tender Electronic Daily (TED) as well as on the Danish Energy Agency website.
The deadline for applying for participation in the tendering procedure for the CCS Fund is March 25, 2025.
Implementation of the new CCS Fund requires state-aid approval from the European Commission.
Contribution to reaching climate goals
Carbon capture and storage is considered one of the most important tools for achieving both national and international climate targets.
The European Commission has recommended capturing and storing approximately 50 million tonnes of CO2 by 2030 to achieve a 90 percent reduction by 2040 towards climate neutrality by 2050.
Similarly, the Intergovernmental Panel on Climate Change (IPCC) estimates that 730 billion tonnes of CO₂ will have to be stored globally by 2100 to meet the Paris Agreement.
According to the Danish Energy Agency’s latest point source analysis, the full capture potential of all Danish point sources amounts to 6.9-13.7 million tonnes CO₂ in 2030.
Overall, it has been estimated that the CCS Fund will reduce Denmark’s annual carbon emissions by 2.3 million tonnes by 2030. This corresponds to around five percent of Denmark’s total current emissions over a year.
The Fund has been designed to ensure maximum competition for funding to achieve the highest possible carbon reductions at the lowest possible cost. The subsidy will be paid per tonne of CO₂ stored.
The tendering procedure will be carried out by negotiation, in which market players bid a fixed amount of CO₂ per year and a price per tonne they will capture and store. Funding from the CCS Fund can be awarded to multiple tenderers.
Third carbon capture fund
The CCS Fund is the third fund administered by the Danish Energy Agency with funding for carbon capture and storage.
The first fund, the CCUS pool, which was worth approximately DKK 8 billion, was won by Ørsted, which will capture and store 430,000 tonnes of CO2 annually from 2026 and for the following 20 years. Ørsted expects to capture and store the first CO₂ from as early as 2025.
The second fund, NECCS pool, was completed in May 2024, when the Danish Energy Agency contracted three companies to capture and store 160,350 tonnes of biogenic CO₂ annually from 2026 to 2032.
Denmark has granted six licenses for exploration for CO₂ storage and has political agreements with several countries for cross-border transportation of CO₂ for geological storage under the seabed.
