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Press corner
Danish State aid scheme

 Dostępne języki:  danskDeutschEnglishfrançais
Press release Dec 17, 2024 Brussels 3 min read


COMMISSION APPROVES €1.7 BILLION DANISH STATE AID SCHEME TO SUPPORT THE
PRODUCTION OF RENEWABLE GAS



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The European Commission has approved, under EU State aid rules, an estimated
€1.7 billion (DKK 13 billion) Danish scheme to support the production of
renewable gas to be injected into the grid. The scheme will contribute to the
EU's climate targets in line with the European Green Deal, as well as the
objectives of the REPowerEU Plan to reduce dependence on Russian fossil fuels
and accelerate the green transition.

The Danish scheme

Denmark notified the Commission of its plans to introduce a scheme, with an
estimated budget of around €1.7 billion (DKK 13 billion), to support the
production of upgraded biogas and e-methane to be injected into the Danish grid.
The measure is expected to support the production of 7.9 petajoules of renewable
gases per year.

The scheme will support the construction of new plants, as well as the extension
of existing plants. The biogas plants must comply with the sustainability and
greenhouse gases (GHG) emissions saving criteria set out in the Renewable Energy
Directive, while the e-methane plants must prove compliance with the criteria
for the production of renewable fuels of non-biological origin (RFNBOs) set out
in the delegated acts on renewable hydrogen.

Under the scheme, the aid will take the form of a price premium per gigajoule of
renewable gas produced, paid on top of the market price for natural gas, over a
20-year period. The aid will be awarded through a competitive bidding process
where beneficiaries will bid on the price premium needed to carry out their
project. Denmark plans to conduct five bidding rounds from 2024 until 2030. The
plants must be connected to the grid within three years after the granting of
the aid.

The scheme is expected to reduce GHG emissions by approximately 450,000 tonnes
of CO2 annually from 2033. It will also contribute to Denmark's efforts to
reduce its GHG emissions by 70% by 2030 compared to the 1990 levels and to reach
carbon neutrality by 2050.

The Commission's assessment

The Commission assessed the scheme under EU State aid rules, in particular
Article 107 (3)(c) of the Treaty on the Functioning of the European Union, which
enables Member States to support the development of certain economic activities
subject to certain conditions, and the 2022 Guidelines on State aid for climate,
environmental protection and energy (CEEAG).

The Commission found that:

 * The scheme is necessary and appropriate to facilitate the production of
   upgraded biogas and e-methane in line with the EU's objectives under the
   European Green Deal and the REPowerEU Plan.
 * The aid has an incentive effect, as the beneficiaries would not carry out the
   investments in renewable gas plants to the same extent without the public
   support.
 * Denmark has put in place sufficient safeguards to ensure that the scheme has
   a limited impact on competition and trade within the EU. In particular, the
   beneficiaries will be selected following an open, transparent and
   non-discriminatory bidding process and the aid will be kept to the minimum
   necessary to undertake the projects.
 * The aid brings about positive effects that outweigh any potential distortion
   of competition and trade in the EU.

On this basis, the Commission approved the Danish scheme under EU State aid
rules.

Background

The  2022 CEEAG provide guidance on how the Commission assesses the
compatibility of environmental protection, including climate protection, and
energy aid measures which are subject to the notification requirement under
Article 107(3)(c) TFEU.

With the European Green Deal Communication in 2019, the Commission set an
objective of net zero emissions of GHG in 2050 that is enshrined in the European
Climate Law. In force since July 2021, the law also introduced the intermediate
target of reducing net GHG emissions by at least 55% by 2030 compared to 1990
levels. Through the adoption of the ‘Fit for 55' legislative proposals, the EU
has in place legally binding climate targets covering all key sectors in the
economy.

In May 2022, the Commission published the REPowerEU plan, which sets out a
series of measures to rapidly reduce EU's dependence on Russian fossil fuels by
accelerating the clean energy transition. The REPowerEU plan is based on three
pillars: saving energy, producing clean energy and diversifying the EU's energy
supplies.

The non-confidential version of the decision will be made available under the
case number SA.102206 in the State aid register on the Commission's competition
website once any confidentiality issues have been resolved. New publications of
State aid decisions on the internet and in the Official Journal are listed in
the Competition Weekly e-News.


CYTAT(Y)

> This €1.7 billion scheme will boost the production of renewable gas in
> Denmark. The measure will help Denmark meet its emission reduction targets and
> reduce reliance on imported fossil fuels. It will also contribute to the green
> transition, while limiting possible distortions of competition.
> 
> Teresa Ribera, Executive Vice-President for Clean, Just and Competitive
> Transition


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Danish State aid scheme
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KONTAKT DLA MEDIÓW


OLOF GILL

 * Spokesperson

Telefon
+32 2 29 65966
Adres
olof.gill@ec.europa.eu  


NINA FERREIRA

 * Press Officer

Telefon
+32 2 29 98163
Adres
nina.ferreira@ec.europa.eu  
Osoby niepracujące dla mediów proszone są o kontakt z UE za pośrednictwem
serwisu Europe Direct – pisemnie lub telefonicznie pod numerem 00 800 6 7 8 9 10
11.
IP/24/6464

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