Danish energy companies ordered to return 1.2 billion kroner

Energy companies must turn over 1.2 billion kroner of the last year’s windfall to the Danish treasury, according to the country’s tax minister.

Danish energy companies ordered to return 1.2 billion kroner
The Danish tax ministry says it will give money from caps on energy companies back to consumers following forthcoming political negotiations. Photo: Bo Amstrup/Ritzau Scanpix

The money comprises part of the additional turnover raised by energy companies as a result of increased prices related to the energy crisis in 2022.

At least 1.2 billion of the extraordinary profit must be returned to the Danish state, tax minister Jeppe Bruus told business news outlet Finans. 

“Overall in 2023 there will be proceeds of 1.2 billion kroner. We want to return that money to consumers through the forthcoming negotiations on inflation relief,” Bruus said.

The minister meanwhile recognised that the 1.2 billion kroner sum is a fraction of what was expected to be recovered, which had been estimated at more than 10 billion. 

The tax ministry says it expects 800 million kroner from fossil fuel companies and 400 million kroner from electricity companies to be returned to the state through different regulations applied to either sector.

READ ALSO: Danish regulator says  electricity companies earn ‘excessive’ profits

In September, the European Commission said plans to cap to energy company profits as well as levy collections from fossil energy companies would raise 140 billion euros.

The policy was a key element of the Commission’s measures to relieve high energy prices for consumers.

The revenue will be used to assist consumers and small businesses that are struggling to pay bills.

READ ALSO: How much will energy cost in 2023 in Denmark compared to 2022?

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Denmark and Germany announce plans for hydrogen pipeline

Germany and Denmark will work together to construct a pipeline to transport hydrogen between the two countries, ministers announced on Friday.

Denmark and Germany announce plans for hydrogen pipeline

Danish climate minister Lars Aagaard and German counterpart, Minister for the Economy and Climate Robert Habeck, briefed press on Friday after signing a declaration which could see a hydrogen pipeline between the countries completed by 2028.

“A big thank you to Germany when it comes to questions of energy and climate,” Aagaard said.

“We have the same interests in so many areas. Today we are taking it one step further,” he continued.

The declaration means the countries will work on an underground hydrogen pipeline between the Danish region of West Jutland and northern Germany.

The agreement sets out the general framework for the plan and who will lead it, according to Danish news wire Ritzau.

A Danish-German partnership over a hydrogen pipeline can be seen in a broader context of the Danish government’s plans relating to Power-to-X technology.

Power-to-X is the process by which electricity and water are converted into hydrogen using electrolysis. The hydrogen which is produced can be used as fuel in a number of ways, including as power for ferries, trucks and industry.

An agreement passed by the Danish parliament last year aims to build electrolysis capacity in the Nordic country to 4-6 gigawatts by 2030.

Germany already uses a large amount of hydrogen in its industry and will eventually need to convert from fossil fuel-produced hydrogen to hydrogen produced from sustainable sources such as wind and solar.

Demand for hydrogen power in Denmark is currently more limited.