02. Strategic commitments to Power-to-X, the circular economy, bioeconomics, carbon capture and research

The public and the state, in particular, can guide the social development by identifying a number of key challenges and define the “missions” to solve them.

In 1961, John F. Kennedy formulated the Apollo mission by saying that, before the end of the decade, the US would “put a man on the moon” (Mazzucato, 2013). Similarly, the Danish government has referred to the 2030-target as a moon landing.

Missions that aim to solve challenges facing society will, typically, require the development of new technology and solutions. It is important to focus on both the supply- and demand side, i.e. both research and development and the creation of a market. The Danish state has already created a strong green wind turbine industry that way. Now, it must do something similar in new areas.

FH proposes the definition of three national, strategic “missions” which can gather different players to find solutions to challenges. It can be based on the experiences with gathering players for the government’s climate partnerships and the Green Industry Forum on how to meet the 2030 target.

The storage and use of green electricity: Power-to-X

The climate action programme must contain a strategic mission on the development and scaling up of Power-to-X[10], for example with the following wording:

With this venture, Denmark will take advantage of the fact that we, in the North and Baltic Seas, have some of Europe’s best wind resources, positions of strength in the wind turbine field, biogas and a strong electricity grid with good connections abroad[11].

A first step will be to prepare a strategy for Power-to-X, which can be based on Energinet’s action programme, and underpin it with specific initiatives, including the development and scaling of solutions as well as extending the energy production and infrastructure.

The initiatives that will be described in the next chapter entail a significant financing need. However, they also carry great potential for mobilising private investments, exports, employment and global reductions towards 2030 and 2050.

Cost-efficient carbon capture and storage

Despite widespread electrification etc., there will still be emissions to address in 2030, among other things from waste incineration. Part of the solution should be carbon capture with a view to storage in the subsoil (CCS, ”carbon capture and storage”) or subsequent use in connection with, for example, Power-to-X and new materials (CCU, ”carbon capture and utilization”).

The potential for carbon capture is great in view of the 2030 and 2050 targets. Among others, CCS is one of the ways in which the CO2 content in the atmosphere could actively be reduced, which may become necessary if the global emissions are not reduced quickly enough in the coming years. At the same time, Denmark may have good opportunities for underground storage.

However, the CCS/CCU technology is not sufficiently mature to realise its full potential and there is also a great deal of uncertainty concerning its costs. On that basis, a mission should be formulated with the intention of making carbon capture a cost-efficient instrument in Denmark before 2030.

A national strategy should be prepared and the state should take on a coordinating role with a special focus on Nordic cooperation, since Norway is at the forefront in this area.

From biomass and waste to high-value products

The climate action plan must also contain a mission on the circular economy, including bioeconomics in particular. For example, this mission could be phrased in the following way:

The circular economy is about moving away from linear production and towards methods of production where materials are maintained in a circuit and where the need for new raw materials is reduced.

In a Danish context, biorefining, whereby grass is converted to high-value products such as protein, can be highlighted as it can reduce emissions from agriculture, land use and/or soy imports with a high carbon footprint abroad and benefits the aquatic environment. In this way, the circular economy and bioeconomics hold potentials for reductions in greenhouse gasses across sectors and abroad.

A strategy with is underpinned by specific proposals, including a reform of the waste management system, funds for biorefining and the development of new materials should be prepared. These initiatives are described in the following chapters.

Master plan for green research and innovation

In addition to the three actual missions, there must be a general strategic commitment to research. It is important to ensure a food chain of new green ideas if Denmark is to meet the 2030 and 2050 goals in a way which is as cost-efficient as possible, ensures good jobs and is socially just. The master plan could include the following targets and sub-components:

• 10 more research grants for green purposes in 2030.
• A fund for business promotion that co-finances partnerships between universities, companies, green clusters and which rewards the repatriation of EU funds.
• DKK 200m for new green basic research centres.
• 500 green venture millions for an inventor/”unicorn” fund.
• Large-scale platforms across supplies and sectors.

The total financing need towards 2030 is assessed to constitute DKK 2.4bn. The master plan is underpinned by a 125% technology allowance for small and medium-sized enterprises (SME) which is described in more detail in the chapter on business and industry.

The state’s risks and yield

The state provides venture capital for many of the specific proposals that underpin the strategies described in the following chapters. Here, it should be considered very thoroughly to which extent the state should take ownership.

First of all, the initiatives will, to a large extent, represent critical infrastructure. Secondly, the state should, as a general rule, not take on disproportionately large risks (failed investments) without reaping the rewards to the benefit of the collective, i.e. all Danes, in the form of returns etc.

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