Is the end nigh for Danish bacon?
Mundus Nordic Green News
Mundus Nordic Green News covers the Green transition in the Nordics with a weekly newsletter and monthly indices
Shock and awe. Even by the standards of climate doomism, the headline from the Potsdam Institute for Climate Research that the world economy will suffer a $38 trillion per year impact from climate change makes for tough reading. The effects will be felt in most regions, with agricultural yields, labour productivity and infrastructure identified as suffering. If the impacts are only half that, it still feels like quite a bit of money to us.
Set against this alarming prospect, Danish politicians seem to be showing some sort of leadership in pushing challenging issues towards a conclusion, especially the thorny problem of agriculture. As we reported last week, the Agerskov group, a group of irate farming representatives is readying itself to fight a resistance against "putting a tax on a biological process."
Feature Stories
Denmark to fund green transition of agriculture sector with higher fuel tax
Denmark is set to spend DKK5bn (USD735m) through 2030 on the green transition of its agriculture sector and other environmental initiatives, with a portion of the funds coming from revenues of a higher fuel tax, as reported by Bloomberg on April 15. The Danish government will provide subsidies for a range of green initiatives, including methane-reducing feed in the agricultural sector, promotion of plant-based food, reforestation, clean drinking water, and green district heating. To raise funds for the subsidies, the government will raise its diesel fuel tax by 0.5 kroner per litre from 2025. The increased fuel tax is expected to result in a reduction of 0.3 million tons of carbon dioxide emissions in 2025. These initiatives aiming for a greener agriculture industry could set the stage for Denmark’s plan to incorporate farming, the country’s second-largest greenhouse gas (GHG) source, into Europe’s emissions trading system (ETS). The government expects agriculture to remain as one of the largest emitters in Europe by 2040, considering that Brussels has introduced stringent regulations to curb emissions from energy and road transport. Therefore, Denmark is actively seeking solutions to decarbonise this sector. The country already set out binding targets in 2021, targeting a 55% to 65% reduction in the GHG emissions from its agricultural and forestry sector by 2030, compared with 1990 levels. Additionally, the government is considering imposing a carbon tax on agricultural production, priced at DKK750 (USD109) per ton of CO2 emissions, to prompt farmers to adopt new decarbonisation technologies.
In the coming years, traditional industry in the Sea Lapland region will take on a new look if even only a few of the plans for the green transition are realised. The plans for various fibre, carbon, and ammonia projects, potentially to be located in Tornio and Kemi, would create numerous new jobs. Tuomas Pussila, the director of the circular economy centre in Kemi, speaks of thousands, even tens of thousands of jobs. "We need these first pioneers. We strongly believe that they are just the beginning, and that plans for even larger facilities are being drawn up elsewhere. [But] the problem in the north could be a labour shortage [see Northvolt story below] …Skills shortage is real - especially when we are competing for labour with northern Sweden. Our educational institutions have taken this issue seriously. Lapland University of Applied Sciences is the largest trainer of circular economy engineers in Finland, and Lapland Vocational College has made preparations to ensure a workforce for the Veitsiluoto recycled fibre factory," Pussila explained.?
Torghatten Nord has selected the Norwegian Myklebust Shipyard to construct two hydrogen ferries, set to be the world's largest of their kind. These ferries will operate between Bod? and Lofoten, accommodating up to 120 cars. Hydrogen bunkering will be done in Bod?, further bolstering Norway's commitment to sustainable transportation. The decision to build the vessels in Norway is seen as a significant boost to the country's maritime and technological sectors. Myklebust Verft, located in Gursken, will undertake the construction, leading to increased employment and activity at the shipyard. Delivery of the ferries is expected in 2026, with Norwegian suppliers and close collaboration with regulatory bodies ensuring adherence to safety standards.? ?
E.ON Energidistribution is to invest SEK 23 billion in its Swedish electricity network between 2024 and 2027, marking its largest investment program to date. This initiative aims to enhance the grid's capacity and reliability, aligning with Sweden's goals for climate change mitigation. CEO Johan M?rnstam highlights the importance of these investments in meeting the growing demand for infrastructure and facilitating sustainable electrification. The regulatory period 2024–2027 provides a framework for addressing market challenges and accelerating Sweden's transition to net-zero emissions. These investments will support various initiatives, including the integration of electric vehicles and renewable energy solutions.
The Chinese conglomerate Geely Holding intends to divest its entire stake of Class B shares in AB Volvo, valued at SEK 14.5 billion based on the current closing price. Geely will retain its holdings of A-shares, totaling over SEK 88 million. Geely Sweden states that the sale is part of its ongoing strategic investment review and is unrelated to its other holdings. Analysts suggest that Geely aims to reallocate capital, possibly focusing on its passenger car ventures like Volvo Cars, Zeekr, Lynk, and Polestar, as seen in its recent exit from Daimler and now the truck business
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