🇩🇰 What happened to the €4bn Danish CCS subsidy?

🤨 I recently found out that 9 out of 10 pre-qualified entities withdrew their applications from this much praised fund, leaving a single contender for what is supposed to be a competitive, landmark fund.

🔎 So I dug deeper, and what I found provides really useful lessons for how we need to structure government funding for fairly novel technologies like CCS and CDR.

💰 Back to the start: the Danish government created a 28.7bn Danish Krona fund (€3.9bn) with the objective of capturing and storing 2.3Mt of CO2 per year from 2029-2044. 

⚠️ The government received 16 applications in March 2025 and narrowed it down to 10 companies in May 2025. By January 2026, only one bid - Aalborg Portland - remains. Even if awarded, they would only be able to provide max 1.5Mt/year, meaning the tender as a whole is already set to fall short of core target.

What went wrong (and why this matters beyond Denmark):

✖️ TIMELINES: aligned to political targets (2030) rather than CCS project reality

✖️ STORAGE: insufficient access to bankable CO₂ storage on acceptable terms

✖️ RISK ALLOCATION: punitive penalties and guarantees for delays or changes

✖️ PRICE CAP: created an artificial ceiling that discouraged realistic bids

🏗️ Summing up, it looks like the tender was designed in a way that simply does not reflect the realities of CCS project developers in Denmark today.

🛑 The result, sadly, is a situation in which plenty of capital was available to scale CCS projects which will now not be allocated, projects not go ahead, and - ultimately - CO2 not be captured and stored.

👉 Now, I do think we have to cut the Danish officials in charge some slack: they are pioneers. When you are at the cutting edge - in this case designing one of the first CCS funds in the world - it is normal to get things wrong.

🏛️ I just hope that other governments are following closely and integrating learnings from this experience into their own. 

🤔 Finally, really curious how they will proceed: give the award to the only contender? Or cancelling it altogether and re-tendering with updated terms that take into account these shortcomings?

🙋🏻‍♀️ Curious how others see this playing out? Particularly interested to hear the opinion of those directly involved or who pulled out?

✉️ Enjoyed this analysis? Stay up to date with the top 10 CDR policy news with my monthly briefing, The GigaTen: https://lnkd.in/d2BKe7gr

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