Energy can help Denmark fulfil climate goals

Date: 29/06/2017

The energy industry can help Denmark reach the climate goals within transportation, agriculture, heating and in the industry. By choosing the right solutions, the climate goals can be reached without inflicting high economic expenses on the society and still reach the 50 % renewable energy target set for 2030. At the same time, the agricultural industry can be protected from climate actions that can negatively affect the competitiveness of the industry.

To reach the Danish climate goals, it would be sensible to use green power to replace oil and gas in heating and transportation. That is one of the conclusions of a new analysis from the Danish Energy Association, which was presented the 22nd June at a joint meeting with the Climate Council.

The energy sector can deliver half of the 28 million tonnes of CO2 that is set to be reduced in 2020-20320 in transportation, agriculture, heating and in the industry (non-quota sectors).  The energy sector can do this without inflicting high economic costs on society. A number of inititatives even provide socio-economic benefits.

“We can see that the use of large and small heat pumps instead of oil burners and natural gas in the heating system, using electric cars instead of petrol-powered cars and using biogas in heavy transports can pull Denmark closer towards fulfilling the climate goals. Moreover, it is also possible to do this with a fair cost”, says Stine Leth Rasmussen, Head of the Danish Energy Association’s Analysis Unit.

The four most important elements in the climate package are: 1) Replacing oil with heat pumps 2) Phasing out natural gas from the heating system 3) Increased use of electric cars 4) Biogas to play a bigger role in heavy transports. “These climate actions do not heavily affectthe economy for the Danish society and it also has the advantage of providing cleaner air, contributing to the political goal of Denmark becoming independent of fossil fuels by 2050, and to the government’s 50 % renewable energy target in 2030”, says Stine Leth Rasmussen and continues: “A climate package focusing on green transitioning of the energy sector also means avoiding weighing down the agricultural industry with climate actions that reduce competitiveness and the risk of pushing agricultural production out of Denmark”.

The analysis shows that in energy and transportation, there are some actions that result in socio-economic benefits; the benefits of new green technology outweigh the investment costs. For example, replacing oil burners with electric pumps will give a socio-economic gain, because the oil savings more than outweigh the cost of acquiring and operating an electric powered heat pump. In addition, the shift from oil and gas to green energy also contributes to the government’s 50% renewable energy target in 2030.

However, if the energy and transportation sectors are to reach half of the future climate challenges, actions that are more expensive are needed such as using biogas instead of diesel in heavy transports and increased use of long-range electric cars. However, the costs are still in the moderate end.

In theory, the other half of the climate goal can be reached by including the carbon footprint in soil and forests – the so-called LULUCF credits.

In order for the energy sector to deliver the additional CO2 reductions, the Danish Energy Association proposes the following political priorities:

  • Reducing or removing the electricity tax
  • Consider extending the ban on oil burners and/or establishing an oil burner tax
  • Prioritise electric cars – both in the tax system and in the infrastructure
  • Use biogas to replace diesel in parts of heavy transports
  • Make a strategy to reduce natural gas consumption in private heating and decentralised district heating
  • Expand the use of renewable energy in the electricity production to make the electricity greener

Source: State of Green / Danish Energy Association