☝️ When Italy goes low, Denmark goes high

🤔 Is European industry losing its competitiveness because of the EU ETS, as Italy and many other countries are arguing? Not according to Denmark!

💪 In fact, the relentless climate pioneer think the ETS is not going far enough.

🇩🇰 Denmark just introduced a national CO2 tax of €17/tCO₂e in 2026, increasing annually to roughly €48–50/tCO₂e from 2030 for ETS-covered installations. This means that facilities in Denmark will have to pay the ETS price PLUS the domestic tax.

🪜 The system has two tiers, with significantly lower rates for mineralogical processes like cement versus other sectors like power or chemicals.

💶 The objective is to reduce Denmark’s exposure to ETS price volatility to guarantee more reliable revenue to be channelled into decarbonisation efforts, including CCUS/CDR.

📉 Just one example: a potential delay of the ETS 2 - as currently being discussed - could cost Denmark €500m/year in revenue. 

🇪🇺 Importantly, the reform does not interfere with the EU ETS cap, auctioning framework or price formation; it operates strictly as a national augmentation. The measure was notified to and approved by the European Commission.

🔎 Pricing measures are accompanied by targeted relief mechanisms and support instruments to mitigate competitiveness and distributional impacts, including up to €80m in tax relief by 2030 as well as reduces taxes on space heating and energy use.

💰 For me, the jury is still out. I have huge respect for Denmark’s holistic approach to decarbonisation: sticks for polluters and carrots for changemakers. But it does feel excessive to make an already burdensome ETS even more expensive.

🙋🏻‍♀️ Thoughts?

📩 Want to cut through the noise? Stay up to date with the top 10 CDR policy news with my monthly briefing, The GigaTen: https://lnkd.in/d2BKe7gr

Follow the Conversation