The subsurface is a key factor in explaining the poor result of the recent Danish CCS tender

Denmark is one of the coun­tries that aims to be a leader when it comes to climate change mitigation meas­ures. That’s why the government launched a  tender process  in October 2024 for businesses to apply for a juicy pot of €4 B to fund carbon capture and storage projects.

The idea was to have a competitive tendering process, hoping that compa­nies would submit equally competitive bids, thus driving down the costs of the individual project plans.

The tender process seemed to at­tract interest, with 16 companies ap­plying to be prequalified, and 10 ulti­mately qualified to tender. But as the deadline was approaching, one after the other dropped out, to the point where only one company remained. Why did that happen?

Read also: Denmark’s CCS Tender: Failure Or Reality Check? – by Carbon Herald

Apparently, the imposed timelines for development of the chosen projects were so strict that applicants did not see this work. Penalties were introduced, too, which provided further reason for companies to withdraw.

From a government point of view, it can be understood that there is a desire to put a deadline on projects relying on subsidies in order to justify the spending.

But the reality of CO₂ storage site screening, validation and construc­tion has been proven to take longer than two years, as previous cases have shown. In the UK, some have been on the go for a decade and have still not progressed to FDP.

“We tried to stop this process at the very start,” someone with knowledge on the matter told me during a phone conversation, “because we could see the time and money being lost on pro­posals that were ultimately not going to be submitted.”

And that’s exactly what has now happened. At the last minute, just be­fore the round closed in February this year, a second bidder came in, prevent­ing just one being submitted, but the result was a lot poorer than expected at the start.

The website of the Danish Ener­gy Authority lists the revisions in the tender documents that were made fol­lowing initial criticism of the imposed timelines. More flexibility was intro­duced to make a change in plans if a site turned out to be unsuitable. It was also allowed not to proceed with devel­opment at all, following a detailed geo­logical assessment.

But it was either too late or the rules were still too stringent. The Dan­ish CCS tender process is now regard­ed as a failure.

Is there the possibility that the CO₂ will be carried abroad when the process to look for a site in Denmark itself is so challenging? “There are no criteria in the tender to use Danish storage sites,” writes Tobias Johan Sørensen from the Danish organisation CONCITO in an email to us. The evaluation is strictly 80% costs and 20% project maturity, with matu­rity obviously dragging the Danish sites down compared to Northern Lights, for example. However, Aalborg Port­land (one of the submitters) has publicly stated that they are aiming for the CO₂ storage to take place onshore Denmark.”