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Eco-Innovation in Denmark

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Eco-Innovation in Denmark Eco-innovation in Denmark EIO Country Profile 2016-2017 Eco-Innovation Observatory The Eco-Innovation Observatory functions as a platform for the structured collection and analysis of an extensive range of eco-innovation and circular economy information, gathered from across the European Union and key economic regions around the globe, providing a much-needed integrated information source on eco-innovation for companies and innovation service providers, as well as providing a solid decision-making basis for policy development. The Observatory approaches eco-innovation as a persuasive phenomenon present in all economic sectors and therefore relevant for all types of innovation, defining eco-innovation as: “Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle”. To find out more, visit www.eco-innovation.eu and ec.europa.eu/environment/ecoap Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Commission. Eco-Innovation Observatory Country Profile 2016-2017: Denmark Author: Henry Varga Coordinator of the work package: Technopolis Group Belgium Acknowledgments The document has been prepared with the kind support of: Mr. Niels Henrik Mortensen (Danish Ministry of the Environment - Danish EPA), Ms. Signe Kromann-Rasmussen (Danish Ministry of the Environment - Danish EPA), Mrs. Hanne Juel (Central Denmark Region/ Midtjylland), Mr. Morten Christensen (Danish Regions), Mr. Christoffer Trojaborg Julian (State of Green) and Mr. Steffen Max Høgh (3R Kontor ApS). A note to Readers Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Union. A number of companies are presented as illustrative examples of eco-innovation in this report. The EIO does not endorse these companies (Nordregio, n.d.a) The report is based on an updated methodology for calculating the Eco-Innovation Index, which has also been applied retroactively to all previous years, hence the outcome in the Eco-Innovation Scoreboard (Eco-IS) for 2017 presented in this report can be compared with the analysis in the previous reports to a limited extent. Comments and suggestions on this document can be sent to Asel Doranova [email protected] This brief is available for download from https://ec.europa.eu/environment/ecoap/country_profiles_en Table of contents Summary…… .............................................................................................................. 1 Introduction ............................................................................................................... 2 1 | Eco-innovation performance .............................................................................. 3 2 | Selected circular economy and eco-innovation areas and new trends ............... 10 3 | Policy landscape: towards circular economy in Denmark .................................. 21 4 | Barriers and drivers to circular economy and eco-innovation in Denmark ......... 14 ANNEX: Policy measures addressing circular economy and eco-innovations in Denmark ………………………………………………………………………………………………………………….42 Summary Denmark ranks fifth (5th) in the overall 2017 Eco-IS, behind Luxembourg, Germany, Finland and Sweden on first place. This is a slightly lower ranking compared to the fourth position in 2016 and third position in 2015. Overall, since the first Eco-innovation scoreboard in 2010, Denmark has never been ranked below fifth place. For the period 2014-2017, Denmark has been in the same cluster of five top scoring countries mentioned above. In terms of eco-innovation output, compared to 2015, Denmark slides down the ranking from third place to fourth (4th) in the scoreboard, while it retains a second (2nd) spot in terms of eco-innovation input, which is also Denmark’s best performing indices. Denmark improves in terms of eco-innovation activities, where it moves up from twenty-first (21st) to eighteenth (18th). As in the previous report, the country does seem not manage to translate the high eco-innovation output into a higher socio- economic output, where it drops from fifteens place (15) to twenty-fourth (24th). Denmark has been promoting eco-innovation since 2006 and has decided to be a low-emission society in 2050, independent of fossil fuels, backed by an ambitious policy framework through a multiple-solutions approach. 2017 saw electricity production with the lowest CO2 emissions in history, reaching for first time below 200 grams CO2 per day and kilowatt hour (Danish Ministry of Energy, Utilities and Climate, 2018d). 2017 was also a record year for Danish wind power, with 43.4% of Denmark's electricity consumption supplied by wind power (Danish Ministry of Energy, Utilities and Climate, 2018a). With the 2007 Danish Local Government Reform (creating five completely new regions), green growth initiatives got off and the regions are today heavily involved in the circular economy transition and there is an increasing positive attitude towards circular economy amongst the population and businesses. Denmark’s pledge to circular economy goes beyond its borders and sees this as an economic opportunity for the country through export of Danish environmental technology and services and has capitalised on its reputation as a frontrunner in green solutions, signing numerous partnership agreements with governments at regional and national level around the world (see StateofGreen.com). Furthermore, Denmark is a long-standing member of the Circular Economy 100 network (CE100), a global platform run by the Ellen MacArthur Foundation1 and in 2015 Denmark was awarded the World Economic Forum’s Young Global Leaders award ‘The Circulars’2 for being a global front-runner in exploiting the potential of circular economy. The current Danish Government is committed to support an ambitious green change in a sustainable and efficient way, where consideration for Danish jobs and competitiveness goes hand in hand with environmental and climate considerations. (Regeringen, 2016). The government sees itself at the forefront of the green change and wants that the life-cycle perspective is more part of the decision-making basis for public investment and procurement. In line with these policies, the Danish government established the Advisory Board for Circular Economy in 2016, consisting of 12 business executives (including representatives from SMEs). This more market-oriented policy may have impacted the indicator governments environmental and energy R&D appropriations and outlays (Share of GDP), where Denmark scores below EU average for the first time. 1 www.ellenmacarthurfoundation.org/ce100 2 https://thecirculars.org 1 Introduction Denmark is a modern economy with high dependence on foreign trade. With high level of material flows, the mixed economy of Denmark relies almost entirely on human resources, where the service sector makes up the vast amount of the employment and economy. GHG emissions are low and are continuing to decline and there is evidence that a decoupling between growth in GDP and growth in greenhouse gas emissions has taken place. The main factor is that the share of renewable energy in final (gross) energy consumption is increasing and has surpassed the national target of 30% for 2020. Transport sector negatively affects the air and is a major contributor of pollutants. Only a quarter of the Danish rail network is electrified and electrification is a major priority for the rail industry in Denmark. Denmark has pledged to close all its coal fired plants by 2030 and is making good progress towards a low-carbon society independent of fossil fuels by (IEA, 2017). Taking a more market-oriented approach, the current Danish Government places strong emphasis on cost-effectiveness of measure to manage environmental sustainability which permeates almost all new policy documents since mid-2015. While there is no direct national funding to circular economy (CE), the Government established the Advisory Board for Circular Economy and the Energy Commission and it’s still needs to be seen how much of their recommendations will be translated into concrete national policy initiatives in the near future, although there are positive signs like the recent strategy on sharing economy. Local and regional governments are continuing their work and are developing CE strategies as well as intensifying public-public and public-private cooperation. Cooperation across sectors is in general a strong factor in Denmark and the attitude towards CE is very positive and interest in applying CE principles among Danish companies is high. Denmark also cooperates through the Nordic Council of Ministers on Nordic Bio economy, which is about green transition. Danish economy is performing well and the outlooks is promising, with real GDP growth driven by net exports, private consumption and investment. Despite stiff competition in Danish flagship sector of wind turbine manufacturing, Danish companies are doing very well and interest for Danish environmental technology, services and cooperation is strong. Employment is robust, particularly in services sectors, although there are some clouds in the horizon in terms of capacity constraints and boosting investment, productivity growth and labour supply remain key challenges. The downside of the economic growth is that it puts higher pressure on resources. Denmark has some of the highest governmental
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