Eco-innovation in

EIO Country Profile 2014-2015

Eco-Innovation Observatory

The Eco-Innovation Observatory functions as a platform for the structured collection and analysis of an extensive range of eco-innovation information, gathered from across the 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 2014-2015: Denmark

Author: Henry Varga

Coordinator of the work package: Technopolis Group

Acknowledgments The document has been prepared with the kind support of: Mr Niels Henrik Mortensen Rasmussen (Ministry of Environment and Food of Denmark, Environmental Protection Agency), Mr Tobias Caspersen Panduro (Ministry of Business and Growth of Denmark), Mrs. Hanne Juel (Region Midtjylland), Ms. Maria Mølgaard Berg (Danish Regions),Ms. Pia Rønnov Jensen (Danish Regions), Mr. Christian Selmer Fredsø Jensen (Region Midtjylland), Ms. Signe Kromann-Rasmussen (Ministry of Environment and Food of Denmark, Environmental Protection Agency), Ms. Signe Sonne-Holm (The Ministry of Environment and Food of Denmark, The Danish Environmental Protection Agency) and Mr. Ole Olsen (Statistics Denmark).

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 and is not an exhaustive source of information on innovation at the company level.

This brief is available for downloaded from https://ec.europa.eu/environment/ecoap/denmark

Table of contents

Summary ...... 1 Introduction ...... 2 1 | Eco-innovation performance ...... 3 2 | Selected circular economy and eco-innovation areas and new trends ...... 8 3 | Barriers and drivers to circular economy and eco-innovation in Denmark ...... 14 4 | Policy landscape: towards circular economy in Denmark ...... 19 Annex: Policy measures addressing circular economy and eco-innovations in Denmark ………………………………………………………………………………………………………………….32

Summary

Denmark takes the top position on the EU28 Eco-Innovation Scoreboard for 2015: it is ranked before and Ireland on second and third position respectively. This an improvement in ranking compared to previous years which already showed good performance with a second position in 2014 and fourth position in 2013 and never ranked lower than fourth since 2010. In terms of eco- innovation output, compared to 2013 Denmark slides down the ranking from first place to fourth in the Scoreboard, while on the other hand Denmark moves up from a fourth place to the first spot in terms of eco-innovation input, which is also Denmark’s best performing indices. The worst performing score is eco-innovation activities, where it drops from a second place to 24th (note: data for two out of three indicators are not available). As in the previous report, the country does not manage to translate the high eco-innovation output into a higher socio-economic output, where it is below EU average. Denmark has been promoting eco-innovation since 2006, when a unanimous Danish Parliament requested the Danish Government to launch the first eco-innovation scheme, underpinned by a comprehensive policy framework in support of activities and initiatives in favour of the environment and combating climate change. After the Danish Local Government Reform that was implemented in 2007 and created five completely new regions in Denmark, green growth initiatives got off due to the synergy effects that the reform offered. Industrial symbiosis and public procurement are two areas that seem particularly to have benefitted from this. However, the new Danish Government (June 2015) has taken a more market oriented approach to green transition with the view that enterprises will implement green business models without the need of comprehensive state support, hence some drastic cuts have been proposed and taken place that will affect circular economy developments. In view of this, the latest Scoreboard results are a result of the work of previous governments and it needs to be seen how the latest policy developments will affect Denmark’s result in the future.

1 Introduction

The market for eco-innovation products is becoming increasingly competitive, involving a number of challenges for Denmark, most recently from . The country is experiencing a decrease in overall competitiveness, due to increasing salaries, which has damaged productivity and it is becoming harder to attract well-educated labour and researchers, Denmark is a modern economy with high dependence on foreign trade. With few natural resources, the of Denmark relies almost entirely on human resources, where the service sector makes up the vast amount of the employment and economy. The service sector accounts, by far, for the highest number of persons employed in Denmark and contributor to GDP. Despite highest governmental spending on education in Europe, it does not translate into high productivity and the green business sector is lacking the right skills and capabilities. Hence there is a need to better coordinate higher education and research with industry and business for two reasons: 1) to better match choice of education with the needs of the market; and 2) increase commercialisation of research and innovation. Another issue is the availability of mature (green) technology and processes to kick-off the full potential of circular economy, as well as the access and distribution of information: businesses can be unaware of potentially profitable new opportunities in circular economy. Information is also important in changing consumer’s behaviour towards waste. Despite improvements in cleaner air and the state of Danish lakes and streams, it is still does not meet the objectives for water bodies, biodiversity is under pressure, the condition for a great part of Danish lakes and streams still needs to be improved and resource consumption is among the highest in the world. Much of the pressure on nature and bio-diversity are related to the intense level of farming combined with that agricultural land covers more than 60% of Denmark’s area. Despite a trend in decreasing nitrogen load the use of pesticides exceeds the national targets and residues of pesticides and excess nitrate still cause a problem in some parts of the ground water. Denmark has seen a reduction of nitrogen discharge into inner Danish waters by approximately 50% since 1990, but many areas still suffer from oxygen deficit. Contamination with pollutants in blue mussels has decreased but the concentration of mercury is still above standards. Nature and biodiversity has been negatively affected by the impact of nutrients, and there is mixed development where biodiversity continues to decline in many areas, while there are positive developments in biodiversity in aquatic environments. As in many countries using a degree of in transport and energy, fine particles pose a challenges to improve the air quality in the overall positive trend, especially in the capital . Denmark ranks on 13th place in the Environmental Performance Index, above the European average (European Environment Agency (EEA) , 2015) Despite progress in material consumption per capita (declining since 2006), Denmark’s global ecological footprint remains one of the largest in the world. Denmark has developed an efficient infrastructure for harnessing energy from waste and has very low deposit of garbage; however, this also poses a challenge in ensuring the next steps up the ladder of the waste hierarchy to increase upcycling and resource efficiency and ensure the maintenance of the value of materials. Denmark has one of the highest material flows in Europe, and the material productivity would be rated lower, if it was not due to a high production of renewable energy and efficient recycling systems. An increased overall consumption in goods and energy has undermined the gains in efficiency, and it will take more than an improved performance in energy efficiency to reach the targets. Denmark has made rapid progress in the share of renewable energy in the gross final energy consumption with 29.2% in 2015 (, 2016), and has set the world record in wind energy consumption, in the total energy consumption but still relies on fossil fuel for energy, especially in the transport system.

2 1 | Eco-innovation performance

The analysis in this section is based on the EU-28 Eco-innovation scoreboard (Eco-IS) for the year 2015. Via its composite Eco-innovation index, produced by the Eco-Innovation Observatory (EIO), Eco-IS demonstrates the eco-innovation performance of a country compared with the EU average and with the EU top performers. Eco-IS is based on 16 indicators, aggregated into five components: eco-innovation inputs, activities and outputs, environmental and socio-economic outcomes.. With an overall score of 167, the 2015 Danish eco-innovation performance scores first place, up from second in 2014. Denmark is followed by Finland (index 140), Ireland (index 134), (index 129) and and (both index 124) in the list of EU-28 member states (EU average at 100), as illustrated below in Figure 1. Denmark has never been ranked below fourth place (2013) in the Eco-innovation scoreboard during 2010-2015. Figure 1 EU27 Eco-innovation scoreboard 2015, composite index

Source: EIO, 2016 Figure 2 illustrates the 5 main components behind the Eco-Innovation Scoreboard Index; Eco- Innovation Inputs, Eco-Innovation Activities, Eco-Innovation Outputs, Resource efficiency Outcomes and Socio-Economic Outcomes. Most notably is that for every year 2010-2015 Denmark has constantly been among the top five countries in eco-innovation inputs and eco- innovation outputs. In the latter in ranked first in 2013, although slipping down to fourth place in 2014 and 2015. This comes as no surprise considering the broad political consensus across parties to turn Denmark into a green economy and to become independent of fossil fuels by 2050. On the contrary, it is interesting to observe that Denmark does not manage to translate the high eco- innovation output into higher resource efficiency and socio-economic outcomes. In terms of

3 resource efficiency Denmark has moved up in ranking in comparison to 2013 from a 10th place to seventh in 2015 (down one place from 2014). Comparison of socio-economic outcomes with previous years will be avoided as there has been a change in data source for two out of the three indicators1. The new data ranks Denmark on 18th place, pulled down by very low results in two of the three indexes: employment in eco-industries and turnover (revenue) in eco-industries. The trend in eco-innovation activities should be approached with caution as two out of three indicators are based on data that dates back to 2008. The 2014 and 2015 scoreboard results places Denmark down at 23rd place for both years. This compared to Denmark’s second position in 2013, and 12th place in 2012. Reasons behind this is discussed under the heading for this indicator below. Figure 2 Components of the eco-innovation composite index for Denmark 2015

Eco innovation inputs The eco-innovation inputs are based on Governments environmental and energy R&D appropriations and outlays, total R&D personnel and researchers, and total value of green early stage investments (Clean-Tech). Denmark ranks first for both 2014 and 2015, up from fourth in 2013, with and index of 464 and 368 respectively. With Ireland on second with a score of 310, the two countries are well ahead of the rest: Finland (index 182), Germany (index 154), (index 126) and Sweden (index 121). One noticeable feature is that the scores for the top ranking countries in 2014 and 2015 are considerably higher than in 2013 (for instance, Finland ranked first with an index of 220). In terms of the financial inputs, Governments environmental and energy R&D appropriations and outlays were 5.0% of GDP in 2014 (index 136) down from 2012 figures (7.8%, index 181). This

1 Note that the data source for these indicators has changed. Thomson One data used in EIS2013 has been replaced by Orbis data, due to a larger coverage of the latter. Any change in countries’ rating in these indicators is subject to differences of two databases.

4 ranks Denmark on eight place just behind Sweden on 5.1% (index 137) and above EU average (3.7%), compared to third position in 2012. The top three positions are taken by Finland and Germany, both with 6.4% (index 172), and on 5.5% (index 149). Overall private and public spending on R&D has been stable around 3%of GDP in 2010-2014. Together with Finland, Denmark shares first position in R&D personnel and researchers share of total employment with 2.11% (index 167) ahead of Luxembourg with 2.06% (index 164) and Sweden with 1.75% (index 139). Denmark also shares the first position for the amount of total green early stage investments in 2012-2015, but this time with Ireland. Both countries invested USD 657 per capita giving an index of 801. This is way ahead of United Kingdom on third with an USD 170 per capita (index 208), followed by Germany on fourth with USD 163 per capita (index 199) and on fifth with USD 140 per capita (index 170). This good result falls well in line with policy objectives and strong promotion of turning Denmark ‘green’ (see https://stateofgreen.com/en). The EU average is USD 82 per capita. Interesting is that the EU average for the previous period 2010-2013 was only USD 12.30 per capita. Venture capital for new growing firms in general declined by 60% between 2007 and 2012 due to the crisis which means that SMEs have been more dependent on public funding than in many other OECD countries (OECD, 2014) Eco innovation activities The data and trends of this indicator has to be looked at with caution as two of the three sub indicators date back to 2008 and for six countries there is no data available. On top of that, there is no data available on Denmark for these two indicators - firms having implemented innovation activities aiming at a reduction of material input per unit output, and firms having implemented innovation activities aiming at a reduction of energy input per unit output. This leaves only the third indicator ISO 14001 registered organisations to measure trends of eco-innovation activities. In this perspective Denmark scores fairly poorly with index 71 (down from 151), which is below EU average. Interesting is that Denmark has far less number of ISO 14001 registered organisations in 2014 (895) than back in 2012 (1756). This results in 159 and 315, respectively, registered organisations per million inhabitants. The three top ranking countries are and , both with an index of 206 (460 registered organisations per million inhabitants), followed by with an index of 200 (447 registered organisations per million inhabitants). It should be noted that many companies in Denmark apply a strong environmental regulation, and have preferred to implement the European Eco Management and Audit Scheme, which set stricter environmental targets and standards for the company performance than ISO14001. However, there is a negative trend in the number of organisations and sites with EMAS registration, falling from 121 in 2005 to 45 in 2015. One reason why Denmark has a lower frequency of ISO14001 certifications could be the high share of products linked to agricultural production, where producers have been more resistant to obtain environmental standards. Although this could change as Denmark has the biggest, proportionally, organic market in the world, with organic food making up 8 percent of the total food market and there is an increasing demand, both at home and foreign markets, for organic food products. Furthermore, the Danish Government’s aim is to reach 15 percent organically farmed land area by 2020, up from current 7 percent (Danish Agriculture & Food Council, n.d.). One must also remember that Denmark is part of the Nordic Ecolabel (established in 1989) which has 63 product groups, which included services like hotels, restaurants and conference facilities (Nordic Ecolabelling, n.d.) . Eco innovation outputs

5 In terms of eco-innovation outputs, expressed as the number of pollution-abatement patents, waste management patents, and patents in energy efficiency in buildings and lighting (or just eco- patents), and eco-innovation related publications and eco-innovation related media coverage, Denmark is ranked fourth with an index of 157, down from first place compared to 2013 (index 184), behind Sweden (index 160) and ahead of Germany (140) and (136). The two top positions are taken by Luxembourg (index 205) and Finland (index 190). This is a lower result than previously but Denmark has always been among the top five. Despite an increase in terms of eco- innovation related patents to 36.4 per million inhabitants (index 196) compared with 2010, Denmark falls behind Finland and Germany, both with 16.8 eco-patents/per million population pop (index 230). This can be explained by that the performance level for all countries is rising faster than for Denmark. Behind Denmark in fourth and fifth place are Sweden (index 170) and (index 165). Denmark has two (previously three) times as many eco-patents than the average EU, which is also reflected in figure 2.2 with a high eco-innovation output. In comparison with the lower environmental outcomes, one could question if the higher number of eco-patents truly is contributing to a decrease in the overall flow of materials and energy. This could be explained by that Denmark has been for many years self-sufficient in energy thanks to the production of oil and gas in the . When it comes to eco-innovation related publications (per million inhabitants) Denmark ranks fifth (down from third) with an index of 237 behind (index 238). The top three spots are taken Finland and Luxembourg (both with index 284) while Sweden ranks third (index 270). Surprisingly Denmark has a low index of 50 (up from 15 previously) for eco-innovation related media coverage (per number of electronic media), as Danish media coverage of environmental issues, in general, is high. Although this is something that affects all three , despite being among the top four in eco-innovation outputs ranking (Denmark 4th, Sweden 3rd and Finland 2nd). Resource efficiency outcomes Denmark has moved up in ranking from 10th place in 2013 (index 107) to seventh in 2015 (index 108), scoring 108 just behind France on 1082 just ahead of Germany (index 107). Top three ranking countries are Luxembourg (index 131), United Kingdom (index 126) and the (index 124). Denmark could have ranked much better if it would not have been for quite poor performance with an index of 80 in material productivity (GDP/Domestic Material Consumption). This is the same result as in the previous scoreboard. This is less than half compared to the top ranking country Luxembourg and the Netherlands (both index 170). The result could most probably be attributed to that oil constitutes more than one third in gross energy consumption (Danish Energy Agency, n.d.). In the other three indicators under resource efficiency outcomes, Denmark scores fairly well. In terms of water productivity (GDP/Water Footprint) it reaches an index of 117 on ninth place with 15.02 EUR/m³, behind Finland (index 119) and Austria (index 120) while on top Ireland and United Kingdom share the first spot with an index of 140. Please note that the data for this indicator is based on information from the period 1996-2005. Despite better energy productivity of 10.07 (GDP/gross inland energy consumption – EUR/toe) in the latest updated data, Denmark slips down one place, with an index of 121, to third behind and Ireland who share first spot with 10.46 EUR/toe (index 125). Right behind ranks Italy with 10.06 EUR/toe (index 121) and 9.91 EUR/toe (index 119), while EU average is 8.34 EUR/toe.

2 Denmark scores 107.66 and France 108.49

6 The GHG emissions intensity of the whole economy was 0.31 kg of CO2 equivalent/EUR in 2013 (compared with 0.32 kg of CO2 equivalent/EUR in 2011), which is a total of 55 million tonnes CO2 equivalents, this gives an index of 113 for this indicator (same as previously). Denmark is one of the countries with the highest material flow in Europe, and the material productivity would be rated lower, if it was not due to a high production of renewable energy and efficient recycling systems, which have a positive influence on the above-mentioned indicators. The fact that 66% of the total land area in Denmark is under heavy agricultural production, and 16% is designated forestry, pushes the scores of eco-innovation in a negative direction (Statistics Denmark, n.d.-a). The agricultural activities are extremely resource intensive, in particular in terms of energy, which has a negative impact on the environmental outcome. Another important sector is transportation of cargo, where maritime transportation also contributes a large part of e.g. GHG emissions. Although Denmark has made progress, while the economic activity in Denmark increased by more than 40% from 1990 to 2007, CO2 emissions decreased by nearly 14% - corrected for fluctuations in weather and electricity exchange with other countries (Danish Ministry of Energy, Utilities and Climate, n.d.).

Socio-economic outcomes Aggregated statistics on employment in eco-innovation industries, the size of eco-innovation markets, and exports of eco-innovation products are used to measure socio-economic outcomes. As mentioned at the beginning the new data ranks Denmark on 18th place, pulled down by very low results in two of the three indexes: employment in eco-industries and turnover (revenue) in eco-industries. With a value of 1.38 for employment in eco-industries (% of total employment across all companies), Denmark only scores an index of 55 with a 22th place3, which is far below EU average of 2.52% and is far below the top ranking countries Czech Republic and , both with 4.63% and an index of 183, followed by France with 4.59%. Although, the indicator does not include renewable energy companies, a field that Denmark is particularly strong in and has a number of world champions, especially in the field of manufacturing, selling, installation and service of wind turbines4. According to Danish data 106,000 people were employed in green production in 2010. This means that 8.5% of employees in Danish enterprises are involved in green production (Danish Energy Agency, 2012). This does of course depend on methodology and its impact what is considered as eco-industries/green production. The same issue arises in turnover in eco-industries. The indicator states that the eco-industry only provides 1.35% of total revenue which gives and index of 62. This is below the EU average of 2.19%. The top three countries in the scoreboard are Czech Republic and the Netherlands, both with a value of 3.50% (index 159) and Slovenia with a value of 3.42% (index 156). Some aspects that can affect the negative outcome is that higher revenue is made in industries that are not counted for and that are more profitable which also can affect the number of employees in the sector. For instance, Denmark’s largest company (oil and gas, shipbuilding and transport) had a revenue (A.P. Møller - Mærsk A/S, 2015) in 2014 that was 1.7 times higher than

3 Two countries have no data. 4 NAICS: 221115 - Wind electric power generation; and NAICS 33361 - Wind turbines (i.e., windmills), manufacturing, are not included in the ORBIS list of eco-industries.

7 the total turnover from environmental goods and services for the same year (Statistics Denmark, n.d.-b). Another explanation could be that that the eco-innovation output is to some extent materialised as export to foreign markets and not for consumption at the national level. This also confirmed in the scoreboard. With an index of 142 in exports of products from eco-industries in 2014, Denmark ranks third behind Luxembourg and Germany (both index 147). Behind is Austria (index 118), (index 113) and United Kingdom (index 105). According to Danish Green Economy data, Denmark exported around 40% of its turnover of more of than DKK 173 billion in environmental goods and services in 2014 (Statistics Denmark, n.d.-b). Latest figures show, that despite a 4% decline compared to the previous year, the share of energy technology exports of the overall Danish export was 11% in 2015, which is the highest among countries in the EU (State of Green, 2016). This is more in line with policies to export green technology and services both in terms as a means of economic growth but also disseminating green technology and knowhow to other countries as a tool to help reduce greenhouse emissions overall.

2 | Selected circular economy and eco- innovation areas and new trends

Denmark is a forerunner in the field of circular economy and eco-innovation, strongly supported through governmental policy frameworks and funding as well as by the Danish people. There are 10 green sectors that the country is focusing on: Energy Efficiency, Heating & Cooling, Intelligent Energy, Wind Energy, Solar & Other Renewables, Bioenergy, Water, Climate Adaptation, Resources & Environment and Sustainable Transportation (State of Green, n.d.). Although one could not say that there is a particular trend, rather several areas are addressed that are important in generating a circular economy (or green economy) and protecting the environment. One of these issues is waste and resource management. Denmark generates the highest amount of municipal waste per capita in the EU (Eurostat, 2016) and in line with the other Nordic countries and the EU, waste prevention and management is at focus as it plays a central part in transforming today's linear economy, or take-make-waste’ economy, into a circular economy. An indication of the importance of this issue, less than two years after launched its first waste reduction strategy (November 2013), the Danish Government published its second strategy in April 2015 - “Danmark uden affald II - Strategi for affaldsforebyggelse” – with the objective to avoid waste and minimize waste among Danish companies and consumers (Ministry of Environment and Food of Denmark, n.d.). The strategy is based on two cross-cutting themes: Resource efficient businesses and Green consumption, as well as five areas: Food waste; Building and Construction; Clothing and textiles; Electronics and Packaging. The food sector is also seen as important growth sector by the new Danish Government - in “interaction with nature and the environment” (The Danish Government, 2015, p. 8).

8 Similar areas have been identified by the Nordic Waste Prevention Group under the Nordic Council of Ministers (Norden5) presented in the policy brief: "Moving towards a circular economy – successful Nordic business models” (Nordic Council of Ministers, 2015). In line with the idea of circular economy, the report outlines a number of best practise examples with focus on business models that prevent the generation of waste. Hence, examples have been identified in areas that have high environmental impact: Food; Textiles; Electric and electronic equipment (EEE); Building, construction and demolition; Furniture and Packaging (Nordic Council of Ministers, 2015). The Ellen MacArthur Foundation report – “Potential for Denmark as a Circular Economy” (2015b) also lists similar potential sectors6 for circular economy opportunities in Denmark: Food and Beverage; Construction and Real estate; Machinery; Plastic Packaging and Hospitals. In most of this cases it is about the potential of creating high-value circular flows (e.g. reuse, remanufacture, recycle, cascading value extraction from organics) in a circular economy. The idea is to avoid extraction of virgin resources and minimize waste, and the waste that is created should be seen as a resource, hence extract value of it as much as possible that is economically possible. Another important step is to try find other types of materials that are less harmful to the environment and can be harvested. An example of this is the idea of the fibre based bottle by (see below). Energy is also mention as a high potential sector in the report but as Denmark already has a vision of 100% renewable in energy and heating by 2050 (pending new government policies), policy recommendations are not needed. In the field of eco-innovation, under the Danish Eco-Innovation Program (Miljøteknologiske Udviklings- og Demonstrationsprogram - MUDP) the Board decided that for 2016, following priorities will be given to projects that: - Contribute to achieving the objectives of the “Vandvisionen 2015” (Water vision 2015) (DANVA, n.d.) of doubling the export of Danish water technology by 2025 and the objective to create a more efficient water sector. - Increase the quality and efficiency of water and waste supply management. - Promote circular economy by ensuring better (re)use of resources and waste; reduce harmful emissions and chemicals of concern in products and materials. - Help to reduce fine particle and flue gas emissions from industry and transport. - Support climate adaptation in such way so that the preservation of the countryside can go hand in hand with the protection of coasts and cities against erosion and flooding. The Danish Climate and Energy Policy (Danish Energy Agency, n.d.) has the long-term objective to cover the entire Danish energy supply by 2050 with renewable energy. Hence, energy and renewable energy technology are crucial in achieving this objective. One pressing issue with renewable energy sources is the issue of fluctuating and low-quality energy that is delivered. One area of research that has increased in importance in Denmark is energy storage for renewable energy sources like wind and solar, as well as research on smart energy grids where Denmark is a

5 Nordic co-operation is one of the world’s most extensive forms of regional collaboration, involving Denmark, Finland, , , Sweden, and the , , and Åland. 6 Based on five selected sectors, covering 25% of the Danish economy.

9 world leader (.dk, n.d.). Smart grids are vital in the transition to renewable energy and to cope with the characteristics of energy based completely on renewable sources. Circular economy also needs new business models as it is not possible to use the ideas and models of the linear-economy, the very source of unsustainability. Through the Fund for Green Business Development, the Danish Business Authority co-funded the development of new green business models. Besides supporting the development of new green business models, the fund also supported: Product innovation and re-design of products; Promotion of sustainable materials in product design; Sustainable transition in the textile and fashion industry; Reducing food waste; and Sustainable bio-based products based on non-food biomass. Together with the Danish EPA (Environmental Agency), The Danish Business Authority also spearheads a Task Force for Resource Efficiency. The taskforce was set up with aim of increasing the competitiveness of the Danish economy and was part of the national growth strategy of the Danish Government, published by the Ministry of Finance in 2014. Its aim is to review existing regulations affecting resource productivity and circular economy practices, identify barriers and work to find solutions. In addition to this the fund also focused on harnessing the potential for growth in Danish Businesses in the circular economy and the sharing economy. Part of this work is continued by The Danish Business Authority. (Danish Business Authority, n.d.)

The newly established Innovation Fund Denmark7 (April 2014) has identified six research disciplines: Bio resources, Food and Lifestyle; Trade, Service and Society; Energy, Climate and Environment; Production, Materials, Digitisation and ICT; Infrastructure, Transport and Construction; and Biotech, Medico and Health (Innovation Fund Denmark, 2015). As we can see circular economy and eco-innovation are intertwined. This is not a coincidence; as eco-innovation is one important tool in achieving a circular economy. Overall there is a more holistic and integrated approach towards circular economy and eco-innovation, hence, not a specific technology, process or system is promoted rather activities and projects that help to achieve the objectives set by the Danish Government in towards a green transition and a circular economy.

7 A consolidation of the Danish Council for Strategic Research, Danish Council for Technology and Innovation and Danish National Advanced Technology Foundation

10

The DreamWind project – How to recycle glass fibre from used blades The end-of-use and end-of-life solutions for wind turbine blades is currently that they are mostly crushed and put on landfill. The issue is becoming more and more urgent as many early erected wind turbines are closing into their end date. There are also broken blades that need to be waste managed. The objective of the project is to develop a chemical substance which makes it possible to separate composite materials from each other. The idea is that after it has been cleaned the glass can be reused in new fibreglass components and structures, e.g. wind turbines, aircraft or cars. Besides the economic benefits for the wind turbine industry, this new technology can also reduce carbon dioxide emission by lessen the need for producing new fiberglass. Image: Wind Systems A/S - Keywords: Wind turbine blades, recyclable, fibreglass, separation. - Links: http://innovationsfonden.dk/en/node/789 https://stateofgreen.com/en/profiles/state-of-green/news/recyclable-wind-turbine- blades - Contact: Mogens Hinge, [email protected].

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Vigga – circular subscription of baby clothes: One of the biggest issues for parents is that babies grow out of their cloths quickly. It’s both expensive and a waste of resources. Vigga offers a circular subscription model for baby cloth. The baby clothes are made from organic fabrics and once the baby has grown out of the clothes they are returned to Vigga. There the clothes are dry cleaned in an environmentally friendly way and made ready for another baby. - Keywords: Baby clothes, circular Image: www.vigga.us subscription, reuse - Link: http://www.vigga.us/in-english/ - Contact: [email protected]

Sashimi Royal / Nordic Aquafarms – sustainable fish production Sashimi Royal will create a land-based sustainable production of fish in 2016. Production method includes from fingerlings to harvest of fish is based on RAS systems (land-based recirculation systems) will low water usage, very low discharge levels and no risk of fish escape. The facilities will include robust water treatment systems that minimize the risk of intake or spreading of disease. The production will not be exposed to the growing problem of sea lice. The facility will also harness all Image: www. waste streams to develop value-added blueridgeaquaculture.com/recirculatingaquaculture.cfm products. Nordic Aquafarms is majority shareholder in Sashimi Royal. - Keywords: sustainable aquaculture - Link: www.sashimiroyal.com; www.nordicaquafarms.com

12 Amminex Emissions Technology – new standard for NOx reduction The company’s unique NOx reduction technology is based on a system for ammonia storage and delivery, known as ASDS™. The system reductant is ammonia bound in a solid, together called AdAmmine™, to dramatically reduce the emissions of toxic NOx gasses from diesel exhaust.

Image: https://stateofgreen.com/en/profiles/seed-capital/solutions/amminex - Keywords: NOx reduction, storage, diesel, pollution - Link: www.amminex.net - [email protected]

Carlsberg Circular Community - Partnering to eliminate the concept of waste Carlsberg Circular Community is a partnership between key companies in the beverage industry: cans, coating, paperboard, fibre based bottles, PET containers, glass packaging and also in PR & communication. The objective of the partnership is to create new ways of designing and producing packaging material to eliminate waste and optimize the materials in such a way that they can be used for high-quality reuse and recycling. An example of this partnership is the development of the ’GreenFiberBottle’ that is made out of wood- fiber that is 100% biodegradable and bio-based, hence generating zero waste. Image: www.carlsberggroup.com - Keywords: waste, sustainable packaging, biodegradable - Link: http://www.carlsberggroup.com/media/PressKits/CarlsbergCircularCommunity/ Pages/CarlsbergCircularCommunity.aspx - Jim Daniell (Director, International Media Relations), [email protected]

13 3 | Barriers and drivers to circular economy and eco-innovation in Denmark

The most important driver in Denmark is the commitment to green structural change that has been underpinned by over 40 years of policy initiatives and measures by the Danish Parliament (Folketing), the Danish Government8, local authorities as well as by Danish businesses. This process has been reinforced in recent years with more imminent effects and issues of climate change. However, there is a barrier in horizon as the new Danish Government (June 2015) has taken a more conservative stand on the issue and even suggested to amend the 2050 objective on fossil fuel. On the other hand, a driver is that the process is not dependent on government initiatives only and there is a kind of grass root movement that has developed within the new regions and municipalities in cooperation with the business sector. Many Danish enterprises take also a positive view on circular economy and have taken the path towards circular economy. But overall the process can be slowed down as business may be not convinced to take the risk to implement circular economy models unless they get some kind of risk assurance through public support and funding. Danish economy is closely connected to Europe and especially its neighbours, the situation in Denmark is in the same situation as most other European countries. Hence, its economy is depended on the state of economies around it. A positive or stable economy provides a bigger scope for developing circular economy as business have a tendency to be more willing to try new business models because of less uncertainties. From this perspective, the reasonable recovery of the Danish economy (European Commission, 2016) could help implementation of circular economy. It is projected that it will continue this recover at just under 2% in 2016 and 2017 with the help of increased investments and stronger world trade (OECD, n.d.). Fiscal situation is sound which should leave manoeuvre for public investment in measures in support of circular economy and eco-innovation. Denmark has already a high R&D expenditure which since 2009 has been pending around 3% of GDP, on par with Sweden and Finland (Eurostat, 2016). The new Danish Government has pledged to invest at least 1% of GDP in publicly funded research (The Danish Government, 2015). There is an increase in environmental subsidies and similar, more than doubling in the period from 2010 to 2014, from DKK 4423 million to DKK 9369 million (Statistics Denmark, n.d.). The environmental protection expenditure is also increasing with DKK 29,229 million in 2007 to DKK 33,885 million in 2013 (Statistics Denmark, n.d.). The level of environmental has been pending between DKK 90 to DKK 100 billion during the 2010- 2014 period (Statistics Denmark, n.d.). Although these developments have to be monitored considering the new Danish Governments cuts in environmental and climate funding.

8 Most recently entrenched in the Government Platform from June 2015, “Together For The Future”.

14 Barriers Drivers

Economic Cuts in funding of environmental Reasonable sound economy and and climate activities and initiatives fiscal situation High demand for organic products, that can be translated also into Access of public funding reduced Good access to private and public with new government funding (?) Low productivity (opportunity – better use of resources) Small domestic market Strong exports, that has even higher potential Insufficient competition in certain Opportunity to increase competition sectors through circular economy Technological Availability of mature technology at Investments and research into new scale technology and processes Level of commercialisation of Well-developed research and research and innovation results innovation infrastructure, good science base Human Lack of skills and capabilities High public spending on education relevant to circular economy Better use highly skilled immigrants Pool of highly skilled immigrants Social and Business and consumer behaviour, Overall positive culture towards cultural break ingrained habits and practises green transition Natural capital Few natural resources Through high level of consumption, lot of waste that can be used in circular economy practises Better collaboration needed High level of public-private between research and business cooperation Policy Change in national support towards Strong support towards green framework environment, climate change and growth, established on local and green growth regional level Regulatory Unintended consequences from Opportunity – assess where existing legislation that could limit regulation needs to be adapted to circular circular economy economy opportunities

One of the main long-term challenges for Denmark is its low productivity despite improvements in resource productivity (Eurostat, n.d.) and it has lost in productivity compared to its neighbours

15 (Innovation Fund Denmark, 2015). In the final report by the Danish Productivity Commission9 it stated that there was no single cause to the decline, hence there is no single solution to it (Innovation Fund Denmark, 2015). This is an opportunity to strengthen efforts of the green transition to solve these issues. The European Commission and OECD on the other hand identify the main issues in the service sector and research. The service sector is seen having to many regulatory hurdles, including need for better procurement processes in the public sector (European Commission, 2016; OECD, 2014). For instance, the use of performance models in procurement for hospitals in circular economy opportunity identified as a solution in the Ellen MacArthur Foundation repot (2015b). OECD (2014) sees the weak competition in some sectors and shortcomings in the research and innovation framework as a reason to low productivity and possibly hinder participation in global value chains. The Ellen MacArthur Foundation (2015b) also lists insufficient competition as a barrier to circular economy. It also states that policy interventions at EU-level is needed to complement national Danish policies in this issue as the value chains of many sectors extend across borders. For instance, product policy and promoting the market for secondary raw materials are areas that could be coordinated at European level in order to simplify and reduce the cost of conducting (circular) business. Overall, Denmark has a strong science base and business innovation, especially in renewable energy technology (OECD, 2014). Denmark has also good access to investment and funding, both public and private. The internet service platform Nordicgreen.net lists 55 public and private organisations that are available to invest in cleantech start-ups and SMEs (Nordicgreen, 2016). Although, the Danish research and innovation system has been dominated by the public sector which has focused on large multinationals in the pharmaceutical, and energy sectors. This can be a barrier as SMEs need to be better included and the system is not used to its full potential. Hence, an area that Denmark needs to improve is the cooperation between universities and the business sector to better translate the high public investment in R&D in universities into productivity, employment and economic growth (European Commission, 2016; OECD, 2014). The Innovation Strategy: Denmark – a nation of solutions (2012-2020) as well as the new Governments (The Danish Government, 2015) also addresses these issue. The previous Danish Government also worked on the simplification of the overall research and innovation system. A result of this is the consolidation of the Danish Council for Strategic Research, Danish Council for Technology and Innovation and Danish National Advanced Technology Foundation Furthermore into Innovation Fund Denmark (Innovationsfonden) in 2014. A new National Roadmap for Research Infrastructure 2015 has been recently published to upgrade existing research infrastructure as it is seen as a venue for the transfer of knowledge, innovation and technology between research and industry (Uddannelses- og Forskningsministeriet, 2016). Such measures could help to overcome the barrier of (green)technology not yet fully available at scale (Ellen MacArthur Foundation, 2015b). Business community involvement and cross-government department collaboration is also mentioned as a crucial step in developing the circular economy by the Ellen MacArthur Foundation (2015a; 2015b). Involving the business on an early stage provides three advantages: 1) get an overview and understanding to identify the most prospective sectors in circular economy as well as what the barriers are in each focus sector; 2) establish alignment between stakeholders

9 Ended its mandate in 2014 after delivering its final report - http://produktivitetskommissionen.dk.

16 on an early stage on the direction for the country and which sectors to focus on; and 3) present the benefits of circular economy to businesses and build needed skills and capacity (Ellen MacArthur Foundation, 2015a). Above discussion commercialisation and cooperation between research and business is important regarding the issue of the availability of mature technology. This is especially important for the more technology dependent circular economy sectors, for instance: 3D printing and design for disassembly in construction; bio-based alternatives to plastics (see Carlsberg Group in previous chapter); remanufacturing and waste separation management (Ellen MacArthur Foundation, 2015b). Technology helps to increase the utilisation of physical assets, extend their life, and shift resource use from finite to renewable sources as well as help to reduce the costs. Despite that Denmark has the highest expenditure on education in the EU relative to GDP, the results are only average and overall Danish science, technology and industry skills lie in the mid- range of OECD countries (OECD, 2014; European Commission, 2015; OECD, 2015). Another related issue is that the share of high-skilled workers in the private sector is relatively low due to weak incentives to undertake tertiary education and to choose more demanding jobs (OECD, 2014). A barrier to circular economy is that the right set of skills are missing according to the findings in the Danish case study by the Ellen MacArthur Foundation (2015b). The Danish Government, although not explicitly referenced to circular economy, sees a stronger need for alignment between the choice of studies made by students and what skills the labour market needs in general (2015). The issues of labour market inclusion remain a challenge in Denmark and many of the non-EU born immigrants with a tertiary education are over-qualified for their job. This should be seen as a barrier, or opportunity, in developing a circular economy in Denmark as there is a lack of capabilities and skills and many are highly skilled workers that could be more productive and help to bridge the gap in terms of skills. Denmark development of know-how of green technology and services is strongly export driven and Danish companies are at the forefront and internationally well renowned. This is thanks to a strong support framework of export financing and assistance for internationalisation of innovation and commercial activities, both at home and abroad. Exporting Danish green technology and know-how is actually not only a way to make business but also part of the Danish Governments stand to combat climate change by diffusing green technology and know-how. Especially the Danish wind industry has been very successful. In 2014, exports of energy technology constituted 12% of Denmark’s total exports of goods (Danish Minsitry of Energy, Utilities and Climate, 2015) nonetheless Denmark is receiving stiff competition from China in its flagship technology – wind energy – and 2015 a Chinese company became the world’s biggest wind turbine maker, thanks to its large domestic market (Clark, 2016; North American Windpower, 2016). Other areas that Denmark has profiled themselves in is water management. Despite success internationally the Danish Government sees a need for the innovation system to have a stronger international connection (The Danish Government, 2012). When it comes to the Danish market, there are a number of barriers besides those mentioned in terms of commercialisation of innovation. One barrier in the issues of imperfect information. For instance, business might not be aware of profitable new opportunities in circular economy due to lack of knowledge how for instance how to repair, disassemble and remanufacture products. Another problem, common in many countries, is that enterprises in a value chain have different incentives and goals to a transaction (agency problem). Information is also crucial in building

17 awareness and knowledge for consumers how to reduce food waste and maximise the use of recycling opportunities, which is crucial in the latter case when establishing a recycling business to know the constant volumes of the flow of material coming in. Further barriers to circular economy market are administrative and transaction costs incurred by the government to set up and operate a certain policy and the cost to the private sector of complying with it. Transaction costs can also incur when business change to circular economy focused supply chains if more suppliers are getting involved, for instance established companies cannot offer certain products or service like bio-based packaging materials, becoming reliant on more single specialised companies. Connected to the market is also the issue of the cost of externalities: today the true cost of environmental impact is not reflected in the final product or service, if it was, there would be a stronger incentive towards reduce, reuse, recycle, recover mentality. (Ellen MacArthur Foundation, 2015b) Overall, Denmark experiences fierce competition, not only from inside EU (the Netherlands and Germany) but more and more from China, especially within once its special domain of wind turbines where it used to be the leader. A barrier to continued growth in eco-innovation and a reason for low socio-economic impacts could also be the high living standards and . It makes it more difficult to attract foreign researchers and scientists to the country, and it has resulted in a decreasing competitiveness, due to high salaries (The Copenhagen Post, 2012). Although, there are special schemes to attract foreign researchers which seems to show positive effects (The Copenhagen Post, 2013; Danish Customs and Administration, 2015). Deteriorating competitiveness in the past decade has also contributed to some extent to export market losses, although there are signs that wage competitiveness is beginning to improve, reflecting a slight pickup in productivity growth and some wage moderation (OECD, 2014). Finally, probably the most challenging barrier, in Denmark, and in the modern society in general, is the ‘take-make-waste’ economy model we are living according to, are the ingrained customs and habits. To be able to realise the potential and use the opportunities that circular economy and eco-innovation can offer, behavioural changes are necessary both on the part of consumers and businesses.

18 4 | Policy landscape: towards circular economy in Denmark

Denmark had so far a progressive green policy backed by an ambitious policy framework, a multiple-solutions approach and necessary funding (see previous EIO Country Profile from 2013 for a full background). Although, with the new Danish Government (June 2015) there seems to be a discontinuity in this policy as major cuts in funding has been announced for environment and climate activities and initiatives of DKK 340 million and the Ministry of Finance wants to cancel several key green goals, including the goal of reducing CO2 by 40 percent by 2020, goal of 100 percent renewable energy by 2050 and the goal of phasing out coal in power plants (Steen Nielsen & Koch Stræde, 2015; Gottschalck, 2015; Ritzau, 2015). One of the programmes that have been affected is the Fund for Green Business Development (see below). This does not however reflect the general position among stakeholders in Denmark on green transition and circular economy. There is fierce resistance from opposition parties and many regions have still the view that green transition is the only way forward. How this will affect the continuity in support of green transition is too early to say, but for sure it will have an impact. Especially as it changes the stability of the regulatory framework which creates uncertainty among stakeholders. Many of the programmes described below have managed to secure funding before the new governments policy were implemented, the full impact of the new policies remains to be seen. There are no specific circular economy activities or initiatives, rather many activities can contribute to a circular economy, and eco-innovation is a tool in that process. Besides its own activities and initiatives, as a key priority, a strong platform for green growth has emerged between the Nordic countries through the Nordic Council and the Nordic Council of Ministers – Green Growth the Nordic Way (Norden, n.d.)

Circular economy and eco-innovation The Danish Government has been promoting eco-innovation initiatives since 2006, after a request from a unanimous Danish Parliament (the Folketing) (Ministry of Environment and Food of Denmark, n.d.). During the period 2006-2013 DKK 410 million in funding has been approved by the Danish Parliament (Danish Environmental Protection Agency (Danish EPA)). Current measures in eco-innovation and circular economy/green economy are presented below.

Funding and activities in the field of environmental technology (eco-innovation): • The Danish Eco-Innovation Program (MUDP) • The Danish Green Investment Fund (Danmarks Grønne Investeringsfond) • Innovation Network for Environmental Technologies (Inno-MT) • TEST - Your sustainable solution for building

Funding and activities in sector specific environmental technology: • Green Development and Demonstration Programme (GUDP) • INNO+ Partnership (?)

Funding and activities in resource and energy efficiency: • The Energy Technology Development and Demonstration Program (EUDP)

19 • PSO-Programmes (Public Service Organisations) • VE til process

Non-thematic funding: • Innovation Fund Denmark (Innovationsfonden) • The Growth fund • The Market Development Fund

The Danish Eco-Innovation Program (MUDP) The Danish Eco-Innovation Program (in Danish: MUDP - Miljøteknologisk Udviklings- og Demonstrationsprojekt) in its current form dates back to 2012. MUDP promotes the development and application of new efficient environmental solutions to environmental challenges while simultaneously supporting growth and employment. The general focus of MUDP is on: water; climate change adaptation; circular economy and recycling of waste; cleaner air; less noise; fewer hazardous chemicals; the industry's environmental performance; and ecological and sustainable construction (Danish Environmental Protection Agency (Danish EPA) , n.d.). The aim is also to boost and strengthen cooperation between companies, knowledge-based institutions and partners in the EU within the field of environmental technology. The initiatives on eco-innovation include three main activities: 1. Development, testing, and demonstration of eco-efficient technology (subsidy scheme) 2. Environmental cooperation and green exports 3. Partnerships for eco-innovation The program targets Danish technology manufacturers and others that aim to develop, export and use of new environmental technologies. The majority of the funds are earmarked towards specific development and demonstration projects, including for major lighthouse projects where new environmental technology solutions are demonstrated and tested in full scale, but also smaller projects can receive funding. The most recent framework law for MUDP was adopted by the Danish Parliament, in February 2015. A Board of Directors has been appointed with the mandate to manage and implement the strategy plan laid out under the priorities of the Ministry of Environment and Food. The Board prepares an annual action plan, which is based on the Board's strategy for 2016-2019 as well as priorities under the Ministry of Environment and Food on environmental challenges. For 2016, MUDP has been allocated approximately DKK 110 million. (Danish Environmental Protection Agency (Danish EPA), 2016)

The Danish Green Investment Fund (Danmarks Grønne Investeringsfond) The Danish Green Investment Fund is an independent state loan fund with the purpose of co- financing economically viable projects that facilitate and support the sustainable development in Denmark. The fund seeks to bridge the gap between traditional bank financing and equity capital. The fund was established as part of the agreement ‘Et Grønnere Danmark’ (“A Greener Denmark”) from 2014 (Ministry of Finance) and has a net capital of up to DKK 200 million as well as a state guaranteed lending limit of up to DKK 5 billion in capital to co-finance projects within following areas:

20 • Environmental • Renewable energy sources • Resource efficiency The evaluation is based on four funding criteria: Green effect; Healthy economy; Scalability and Socio economic return. Organisations that are eligible are: Privately-held companies; Non-profit housing associations; Public sector companies and institutions with budgets separated from the municipalities, regions and the state. (The Danish Green Investment Fund, 2015)

Innovation Network for Environmental Technologies (Inno-MT) Inno-MT was established in December 2010 by the Ministry of Science, Innovation and Higher Education providing DKK 14 million in funding. In 2014 Inno-MT received 27.4 million DKK to continue the work until 2018. Inno-MT focuses on technologies, which help solve key social challenges in the field of environmental technology. The network has four primary focus areas: 1. Soil resources and nutrient cycling 2. Clean air technology 3. Efficient use of resources: 4. Water treatment and water supply Activities funded are: Innovation Projects; Technology Outlooks; Technology Demands and Events. (Innovationsnetværk for Miljøteknologi, n.d.)

TEST - sustainable solutions for buildings The programme supports market maturation of sustainable solutions in construction that are technically fully developed or almost fully developed, but need be approval and documentation. The program is temporarily closed but is expected to start up again in the spring/summer 2016. (Realdania, n.d.)

Green Development and Demonstration Programme (GUDP) GUDP (Grønt Udviklingsog Demonstrations Program) was established under the Ministry of Food, Agriculture and Fisheries in 2010 and is a business support scheme that provides co-funding for development, demonstration and networking projects with market potential in the Danish food industry through green transition, hence the projects must show that they simultaneously support both environmental and economic sustainability. The target group for GUDP program are research institutions, manufacturers, entrepreneurs, and others in the Danish food industry. The budget for 2016 is DKK 100 million, with 90% earmarked for large projects. (Minsitry of Environment and Food of Denmark, 2016)

INNO+ Partnership The INNO+ catalogue identifies promising focus areas for strategic investments in innovation. The focus areas target fields where Denmark has particular industrial and research strengths and capabilities that can contribute not only to finding solutions that address important Danish and global societal challenges, but also to creating growth and employment in Denmark. The INNO+ catalogue contains six main thematic areas, subdivided into 21 focus areas. The current status of the programme is unsure as the latest funding was to be granted by end of 2015. (Ministry if Higher Education and Science, 2015)

21

Energy Technology Development and Demonstration Program (EUDP) EUDP or the Energy Technology Development and Demonstration Program (in Danish: Energiteknologisk udvikling og demonstration), supports new energy technologies that create growth and jobs, increase security of supply and contribute to making Denmark independent of fossil energy by 2050. EUDP funds Danish participation in international cooperation and knowledge sharing on energy technologies. Around DKK 173 million in funding is available in 2016. (Danish Energy Agency, n.d.)

PSO-programs PSO programs (Public Service Obligations) has funding of DKK 1.1 billion for the period 2015-2020 and provides subsidies to businesses. The program will finance following programs: • ELFORSK: Danish Energy research and development program to support research, development and demonstration of efficient use of electricity in the final phase. (www.energinet.dk) • ForskEL: Energinet.dk administers support for external energy research and is obliged to carry out research, development and demonstration of environmentally friendly electricity for the benefit of society and the development of the Danish energy systems based on renewable energy. (www.elforsk.dk)

Innovation Fund Denmark Innovation Fund Denmark (Innovationsfonden) was established in 2014, consolidating the Danish Council for Strategic Research, Danish Council for Technology and Innovation and Danish National Advanced Technology Foundation. The fund invests in new knowledge and technology at an early stage where other funding institutions might not be convinced of its potential without taking any stake in the project nor is there request of repayment. Assessment criteria is based on the projects potential to generate growth and employment. There are three programmes under the fund: • Large-Scale Projects: For substantial investments and long-term projects/partnerships where the focus is on research, technology, experimental development and market development. • InnoBooster: For small enterprises and entrepreneurs with sound development plans. • Talents: For undergraduates, recent graduates or postgraduate researchers aiming to become entrepreneurs or to secure a research career in the private sector. (Innovation Fund Denmark, n.d.)

The Danish Growth Fund The Danish Growth Fund is a state investment fund. The Fund invests equity and provides loans and guarantees for small as well as medium-sized enterprises in collaboration with private partners and Danish financial institutions. (www.vf.dk)

The Market Development Fund The Market Development Fund (Markedsmodningsfonden) helps enterprises to bring their new products to the market faster. For 2016 the fund has been allocated DKK 56.4 million. The aim is to promote growth, employment and export, particularly for small and medium-sized enterprises

22 in areas where Denmark has particular strengths and potential. The Fund has three primary focus areas: • Market development through co-funding for private enterprises’ innovative solutions • Market development through innovative public procurement • Market development through industry partnerships

The Market Development Fund focuses on the early developmental phases and provides grants for activities such as tests and adaptation. This could include tests to gain proof that a prototype works in a realistic environment with potential customers; or adaptation of the prototype in order to strengthen the commercial potential. (The Market Development Fund, n.d.)

Grønomstilling.dk (Green Transition) Grønomstilling.dk is an internet platform administered by the Danish Business Authority which has been affected by the cuts in funding by the current Danish Government. The status of the activities is following: 1) The Fund for Green Business Development (discontinued); 2) Green Industrial Symbiosis (discontinued); and 3) The Task Force for Resource Efficiency (continued). The internet platform is still continued by The Danish Business Authority and serves as a platform for knowledge on circular economy and resource efficiency. The Fund for Green Business Development has been promoting resource efficiency in Danish businesses by giving grants to selected businesses. The Fund has especially been focusing on harnessing the potential for growth in Danish businesses in the circular economy and the sharing economy. From 2013 till 2015 the fund invested in 33 projects with a total of approx. EUR 7.3 million as well as 8 partnerships within the circular economy and the sharing economy. The Fund has invested in projects related to six themes: 1. Development of new green business models 2. Product innovation and re-design of products 3. Promotion of sustainable materials in product design 4. Sustainable transition in the textile and fashion industry 5. Reducing food waste 6. Sustainable bio-based products based on non-food biomass The selected projects all feature a high degree of novelty; they have the potential to create growth and new green jobs in Denmark as well as catalyse environmental improvements. Together with Danish Regions and the Regional Municipality of , the Fund for Green Business Development also established an accelerator programme in the years 2013-2015 focusing. The programme was intended to promote the development of new green business models by Danish businesses to generate growth and employment for the businesses and reduce their consumption of resources and environmental impact at the same time. The programme supported 29 companies in their development of new green business models. The Danish Business Authority with the five Danish Regions and the Regional Municipality of Bornholm also facilitated a programme on Green Industrial Symbiosis promoting competiveness and resource efficiency through symbioses. Through the programme 172 match were made

23 between businesses where one business' residual product potentially could be used as a resource by another business. Together with the Danish EPA (Environmental Agency), the Danish Business Authority operates a Task Force for Resource Efficiency. The Task Force was set up with aim of increasing the competitiveness of the Danish economy and was part of the national growth strategy of the Danish Government, published by the Ministry of Finance in 2014. Its aim is to review existing regulations affecting resource productivity and circular economy practices, identify barriers and work to find solutions. It will use explorative studies of the experiences and daily work of companies to understand how barriers appear and affect the behaviour of the companies, covering the rules themselves, how they are administered and the help businesses receive to navigate them. In 2015 the taskforce will identify barriers blocking potential increases in resource efficiency. In its second and third years (2016–2017) the task force will work on selected barriers to find the most effective way to overcome them.

Other initiatives:

Green Labs Were launched in support of the Danish government’s Business Climate Strategy and there are now 10 in total (increased by two in 2014). The main goal is to facilitate the development of Denmark as a green laboratory for technology development to secure competitive framework conditions for enterprises active in the field of clean technology, including research and development, demonstration and marked entrance. The programme primarily focuses on efficient energy use and renewable energy, but can also support all technology types which can contribute making Denmark independent of fossil fuels. In 2015 an evaluation was conducted by the Danish Energy Agency with a positive result, fulfilling their objectives and contributed to technology development and to create growth within the technology areas where Denmark has a position of strength. (Danish Energy Agency, n.d.)

Regional strategies

Background Denmark went through a Local Government Reform in 2007 with new division of municipalities and regions and a new distribution of tasks between municipalities, regions and the state. The local government reform created a new map of Denmark where: 271 municipalities became 98 municipalities and the fourteen counties were abolished and replaced by five regions. The objective was to create synergies effects and better scale on activities to the benefits if the citizens. The purpose was to strengthen Denmark’s strong culture of a decentralised public sector. (Danske Regioner, 2014)

Policy Framework The Danish regions apply RIS3 in their eco-innovation and circular economy policies, according to the new rules and legislation on EU Cohesion Policy 2014-2020. Each Danish region has passed a Regional Growth and Development Strategy which sets out the framework that the regional partners (business, municipalities, knowledge institutions, labour market parties, etc.) will follow in order to create an attractive region with development, growth and employment. In some of

24 the regions green technology has a key focus. Furthermore, each region makes an agreement on partnerships for growth with the government. These agreements aim for a high degree of coherence alignment between the regional and governmental effort to ensure growth. Both types of agreements will ensure that regions pursue policies tailored to their capabilities, opportunities and needs. Some of them have a focus on green technologies, for instance the Capital Region of Denmark and Region .

Circular economy developments Policies and initiatives in the direction of circular economy started first in (Region Midtjylland) in 2008, when first ideas around cradle-to-cradle took place followed by other Danish regions shortly after (Juel, 2016). In 2009 Central Denmark Region started activities in four areas: mobilisation; business development; collaboration and procurement. Activities consisted of activities focused on SMEs (40), Green Business Models (20) and Design and Assembly (10). The region then scaled-up the experience and learnings from these initiatives. They took the stand to push the agenda on a national level as they saw that the issue of circular economy reaches beyond regional boundaries. The region managed to include the idea of circular economy in the finance bill under the previous government. Furthermore, Central Denmark Region approached the Ellen MacArthur Foundation (Juel, 2016) and managed to become a partner, years before the study on circular economy in Denmark was conducted and published. The first initiative addressing Circular Economy in Central Denmark Region was Rethink Business (see below).

Rethink Business Is an initiative by the in the Central Region of Denmark to increase the share of innovative enterprises in region, to create sustainable projects and products that are in demand in the local and global market. Rethink Business contributes to the internationalization of Danish companies and helps to improve conditions for SMEs to prepare them for Image: Rethink Business the future economy. The ambition of Rethink Business is to create growth and new jobs through the development of new business models that can strengthen the green development regionally and nationally. The project is co- financed by the European Regional Development Fund (ERDF). - Keywords: green development, SMEs, innovative, regional - Link: http://rethinkbusiness.dk - Contact: Hanne Juel, [email protected]

25 Recycling building materials The project Genbyg Skive (Rebuild Skive), by Skive Municipality, is about demolishing houses and recycling building materials for new purposes, such as construction of new houses and by that job creation in the local area. Thanks to this project the municipality has gained expertise in the field and has received international attention and has been mentioned as a good example and a pioneer project in an international report from the Ellen MacArthur Foundation (Ellen MacArthur Foundation, 2015a). The ambition is to make Skive Municipality the most well-known area in Denmark in relation to the reclaiming industry and with the most know-how within the industry of reusing old building materials. The project was funded by Central Region Denmark by DKK 1.4 mill. and Skive Municipality. Image: www.energibyenskive.dk - Keywords: recycling, reuse, building materials - Links: www.energibyenskive.dk/en/archive/rethink-business; www.energibyenskive.dk/en/archive/rethink-business/skive-municipality-as- frontrunner-in-recycling-building-materials/

Fossil free island – Samsø Municipality The municipality has decided in 2011 that the island should be independent of fossil fuels such as oil, gas and coal in 2030. Samso Energy Academy has put forward a new masterplan for fossil free island and sets the targets for 2020 and 2030. The work is based on This work requires focus on ‘next practice’ as well as ‘best practice’. The island is already 100% self- sufficient on renewable energy. Image: Energiakademiet.dk

- Keywords: sustainable community, fossil free - Links: http://energiakademiet.dk/en/fossilfri-o/; www.samsoe.dk/site.aspx?MenuID=174&Langref=1&Area=&topID=&ArticleID =6945&expandID=2151

26 References A.P. Møller - Mærsk A/S. (2015). Financial Reports. (J. Cramon, F. Glismand, & H. Lund, Eds.) Retrieved from A.P. Møller - Mærsk A/S: http://investor.maersk.com/financials.cfm?Year=2014 Clark, P. (2016, February 23). China’s Goldwind becomes world’s largest wind turbine maker. Retrieved from The Financial Time: http://www.ft.com/intl/cms/s/0/123f1af0-d97e- 11e5-a72f-1e7744c66818.html#axzz45Jvu4IhZ Danish Agriculture & Food Council. (n.d.). . Retrieved from Danish Agriculture & Food Council: http://www.agricultureandfood.dk/danish-agriculture-and-food/organic- farming Danish Business Authority. (n.d.). Fund for Green Business Development. Retrieved from Grøn Omstilling: https://groenomstilling.erhvervsstyrelsen.dk/fund-green-business- development Danish Business Authority. (n.d.). grønomstilling.dk. Retrieved from grønomstilling.dk: https://groenomstilling.erhvervsstyrelsen.dk/ Danish Customs and Tax Administration. (2015, December 15). Tax scheme for foreign researchers and highly-paid employees. Retrieved April 07, 2015, from skat.dk: http://www.skat.dk/SKAT.aspx?oId=107035&chk=212078 Danish Energy Agency. (2012, November). Green production in Denmark - and its significance for the Danish economy. Copenhagen: Danish Energy Agency. Retrieved from Danish Energy Agency: http://www.ens.dk/en/policy/green-production-denmark-contributes- significantly-danish-economy Danish Energy Agency. (n.d.). Danish Climate and Energy Policy. Retrieved April 10, 2016, from Danish Energy Agency: http://www.ens.dk/en/policy/danish-climate-energy-policy Danish Energy Agency. (n.d.). Danish key figures. Retrieved from Danish Energy Agency: http://www.ens.dk/en/info/facts-figures/key-figures/danish-key-figures Danish Energy Agency. (n.d.). Eksisterende Green Labs. Retrieved from Danish Energu Agency: http://www.ens.dk/ny-teknologi/green-labs-dk/startskuddet-lydt-fire-forste-green-labs- danmark Danish Energy Agency. (n.d.). EUDP - Energiteknologisk udvikling og demonstration. Retrieved from Danish Energy Agency: http://www.ens.dk/ny-teknologi/eudp-energiteknologisk- udvikling-demonstration Danish Environmental Protection Agency (Danish EPA) . (n.d.). Ecoinnovation subsidy scheme. Retrieved April 11, 2016, from Ecoinnovation: http://eng.ecoinnovation.dk/the-danish- eco-innovation-program/ecoinnovation-subsidy-scheme/ Danish Environmental Protection Agency (Danish EPA). (2016). Strategi og handlingsplan. Retrieved from Ecoinnovation - MUDP: http://ecoinnovation.dk/bestyrelsen/strategi-og- handlingsplan/ Danish Environmental Protection Agency (Danish EPA). (n.d.). The Danish Eco-Innovation Program. Retrieved April 11, 2016, from ecoinnovation.dk: http://eng.ecoinnovation.dk/media/mst/9584418/fact_sheet__2013.pdf

27 Danish Ministry of Energy, Utilities and Climate. (n.d.). The Danish example. Retrieved from Danish Ministry of Energy, Utilities and Climate: http://www.efkm.dk/en/facts/the-danish- example Danish Minsitry of Energy, Utilities and Climate. (2015, April 30). Exports of energy technology reach record high. Retrieved from http://www.efkm.dk/en/news/exports-of-energy- technology-reach-record-high Danske Regioner. (2014, April 14). Danish Local Government Reform. Retrieved from Danske Regioner: http://www.regioner.dk/in+english/regional+denmark/danish+local+government+refor m DANVA. (n.d.). Vandvision 2015. Retrieved from Danva: http://www.danva.dk/vandvision Ellen MacArthur Foundation. (2015a). Delivering the circular economy – a toolkit for policymakers. Cowes: Ellen MacArthur Foundation. Retrieved from http://www.ellenmacarthurfoundation.org/assets/downloads/publications/EllenMacArt hurFoundation_PolicymakerToolkit.pdf Ellen MacArthur Foundation. (2015b). Potential for Denmark as a circular econom - A case study from: Delivering the circular economy - a toolkit for policy makers. Cowes: Ellen MacArthur Foundation. Retrieved from http://www.ellenmacarthurfoundation.org/assets/downloads/government/20151113_ DenmarkCaseStudy.pdf Energinet.dk. (n.d.). Smart Grid. Retrieved from Energinet.dk: http://energinet.dk/en/forskning/energinet-dks-forskning-og-udvikling/Smart- Grid/Sider/default.aspx European Commission. (2015). Country Report Denmark 2015. Brussels: European Commission. Retrieved from http://ec.europa.eu/europe2020/pdf/csr2015/cr2015_denmark_en.pdf European Commission. (2015, October 1). Environmental accounts - establishing the links between the environment and the economy. Retrieved from Eurostat: http://ec.europa.eu/eurostat/statistics-explained/index.php/Environmental_accounts_- _establishing_the_links_between_the_environment_and_the_economy European Commission. (2016). Country Report Denmark 2016. Brussels: European Commission. Retrieved from http://ec.europa.eu/europe2020/pdf/csr2016/cr2016_denmark_en.pdf European Environment Agency (EEA) . (2015, February 27). Denmark. Retrieved from European Environment Agency (EEA) : http://www.eea.europa.eu/soer-2015/countries/denmark Eurostat. (2016, April 9). Gross domestic expenditure on R&D (GERD). Retrieved from http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&pcode=t2020_ 20&language=en Eurostat. (2016). Municipal waste generation and treatment, by type of treatment method. Retrieved March 04, 2016, from Eurostat: http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tsd pc240&plugin=1 Eurostat. (2016, April 10). Share of renewable energy in gross final energy consumption. Retrieved from Eurostat:

28 http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en& pcode=t2020_31 Eurostat. (n.d.). Resource productivity - per kilogram, chain linked volumes (2010). Retrieved April 8, 2016, from Eurostat: http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en& pcode=tsdpc100 Gottschalck, A. (2015, November 15). Connie Hedegaard kritiserer regeringens miljøbesparelser. Retrieved from Berlinske: http://www.b.dk/ Innovation Fund Denmark. (2015, January 29). About IFD. Retrieved from innovationsfonden.dk: http://innovationsfonden.dk/sites/default/files/download/2015/02/10/Innovationsfond ensstrategiEN.pdf Innovation Fund Denmark. (n.d.). About IFD. Retrieved from Innovationsfonden: http://innovationsfonden.dk/en/about-ifd Innovationsnetværk for Miljøteknologi. (n.d.). Innovation Network for Environmental Technologies (Inno-MT). Retrieved from Innovationsnetværk for Miljøteknologi: http://inno-mt.dk/english/ Juel, H. (2016, April 11). Project manager at Rethink Business. (H. Varga, Interviewer) Ministry if Higher Education and Science. (2015, June 30). INNO+ Catalogue. Retrieved from Ministry if Higher Education and Science: http://ufm.dk/en/publications/2013/inno- catalogue/inno-catalogue Ministry of Environment and Food of Denmark. (2015, January). Organic Action Plan 2015. Retrieved from Ministry of Environment and Food of Denmark: http://en.mfvm.dk/fileadmin/user_upload/FVM.dk/Dokumenter/Landbrug/Indsatser/O ekologi/7348_FVM_OEkologiplanDanmark_A5_PIXI_English_Web.pdf Ministry of Environment and Food of Denmark. (n.d.). Affaldsforebyggelse: Strategi & aktiviteter. Retrieved from Miljøstyrelsen: http://mst.dk/virksomhed- myndighed/affald/affaldsforebyggelse-strategi-aktiviteter/ Ministry of Environment and Food of Denmark. (n.d.). The Danish Eco-Innovation Program. Retrieved from Ecoinnovation: http://eng.ecoinnovation.dk/the-danish-eco-innovation- program/ Ministry of Finance. (2014, Juni 24). Det grønne Danmark et gear op. Retrieved from Finansministeriet: http://www.fm.dk/nyheder/pressemeddelelser/2014/06/det- groenne-danmark-et-gear-op/ Minsitry of Environment and Food of Denmark. (2016, March 15). Grønt Udviklings- og DemonstrationsProgram (GUDP). Retrieved from Minsitry of Environment and Food of Denmark: http://naturerhverv.dk/tilskud-selvbetjening/tilskudsguide/groent-udviklings- og-demonstrationsprogram-gudp/#c10113 NORDEN. (2016). Making the environment count - Nordic accounts and indicators for analysing and integrating environment and economy. Nordic Council of Ministers. doi:10.6027/TN2016-507 Norden. (n.d.). Green Growth the Nordic Way. Retrieved from Norden: http://www.norden.org/en/theme/green-growth

29 Nordic Council of Ministers. (2015). Moving towards a circular economy – successful Nordic business models. Nordic Council of Ministers. doi:10.6027/ANP2015-771 Nordic Council of Ministers. (2015). Well dressed in a clean environment: Nordic Action plan for sustainable fashion and textiles. Copenhagen: Nordic Council of Ministers. doi:10.6027/ANP2015-764 Nordic Ecolabelling. (n.d.). Home. Retrieved from Nordic Ecolabelling: http://www.nordic- ecolabel.org/ Nordicgreen. (2016). Investors. Retrieved from Nordicgreen.net: http://www.nordicgreen.net/startups/investors North American Windpower. (2016, February 23). Top 10 Wind Turbine Makers For 2015: ‘The Year Of China’. (Zackin Publications Inc) Retrieved from North American Windpower: http://nawindpower.com/top-10-wind-turbine-makers-for-2015-the-year-of-china OECD. (2014). “Denmark”, in OECD Science, Technology and Industry Outlook 2014. Paris: OECD Publishing. doi:10.1787/sti_outlook-2014-en OECD. (2014). Economic Survey of Denmark 2014. doi:10.1787/eco_surveys-dnk-2013-en OECD. (2014). Green Growth Indicators 2014. Paris: OECDpublishing. doi:10.1787/9789264202030-en OECD. (2015). "Denmark" in Education at a Glance 2015: OECD Indicators. Paris: OECD Publishing. doi:10.1787/eag-2015-en OECD. (2015). Education at a Glance 2015: OECD Indicators. Paris: OECD Publishing. doi:10.1787/eag-2015-en OECD. (2015). Revenue Statistics 2015 - Denmark. Centre for Tax Policy and Administration. Paris: OECD. Retrieved from http://www.oecd.org/tax/revenue-statistics-denmark.pdf OECD. (n.d.). Denmark - Economic forecast summary (November 2015). Retrieved from OECD: http://www.oecd.org/economy/denmark-economic-forecast-summary.htm Realdania. (n.d.). OM TEST. Retrieved from TEST: http://www.test-din-baeredygtige-loesning.dk/ Ritzau. (2015, September 1). Konservative: Det ligner en slagtning af miljøområdet. Retrieved from Information: www.information.dk State of Green. (2016, April 28). 2015 EXPORT FIGURES FOR DANISH ENERGY TECHNOLOGY. Retrieved from State of Green: https://stateofgreen.com/en/news/2015-export-figures- for-danish-energy-technology State of Green. (n.d.). Explore the Danish Green Sectors. Retrieved from State of Green: https://stateofgreen.com/en/sectors Statistics Denmark. (n.d.). Green economy. Retrieved April 9, 2016, from Statistics Denmark: http://www.dst.dk/en/Statistik/emner/groent-nationalregnskab/groen-oekonomi Statistics Denmark. (n.d.-a). Area by use. Retrieved from Statistics Denmark: http://www.dst.dk/en/Statistik/emner/areal/arealanvendelse Statistics Denmark. (n.d.-b). Green economy. Retrieved from Statistics Denmark: https://www.dst.dk/en/Statistik/emner/groent-nationalregnskab/groen-oekonomi

30 Steen Nielsen, J., & Koch Stræde, M. (2015, September 1). Regeringen vil spare 340 mio. på miljø og klima. Retrieved from Information: www.information.dk The Copenhagen Post. (2012, August 20). International talent continues to forgo Copenhagen. Retrieved from CPH POST ONLINE: http://cphpost.dk/news14/immigration- denmark/international-talent-continues-to-forgo-copenhagen.html The Copenhagen Post. (2013, August 8). Low researcher tax attracting highly-skilled workers. Retrieved from CHP POST ONLINE: http://cphpost.dk/news14/national-news14/low- researcher-tax-attracting-highly-skilled-workers.html The Danish Government. (2012). Denmark – a nation of solutions. Enhanced cooperation and improved frameworks for innovation in enterprises. Copenhagen: Ministry of Science, Innovation and Higher Education. The Danish Government. (2015, June). Together For the Future. Retrieved from Statsministeriet: http://www.stm.dk/multimedia/TOGETHER_FOR_THE_FUTURE.pdf The Danish Green Investment Fund. (2015). About The Danish Green Investment Fund. Retrieved from The Danish Green Investment Fund: http://gronfond.dk/en/ The European Environment Agency (EEA). (2015). The European environment — state and outlook 2015: synthesis report. Copenhagen: Publications Office of the European Union. doi:10.2800/944899 The Market Development Fund. (n.d.). The Market Development Fund. Retrieved April 12, 2016, from Markedsmodningsfonden: http://markedsmodningsfonden.dk/in_english The Nordic Council and Nordic Council of Ministers. (n.d.). Formal Nordic Co-operation. Retrieved from Norden: http://www.norden.org/en/om-samarbejdet-1/formal-nordic-co- operation Uddannelses- og Forskningsministeriet. (2016, January 28). Dansk Roadmap for Forskningsinfrastruktur 2015. Retrieved from ufm.dk: http://ufm.dk/forskning-og- innovation/indsatsomrader/forskningsinfrastruktur/danske-roadmap-for- forskningsinfrastruktur United Nations. (2016). System of Environmental-Economic Accounting (SEEA). Retrieved from unstat.un.org: http://unstats.un.org/unsd/envaccounting/seea.asp

31 ANNEX: Policy measures addressing circular economy and eco- innovations in Denmark

Focus of policy measure (tick if relevant) Specific measure Other Group of policy Please provide reference to or brief summary of specific measures Generic Resource Energy Reduction relevant Type of policy measure measures (national, regional) Circular focus on efficiency efficiency of areas (e.g. economy eco- improveme improve emissions renewable add cells if necessary innovation nt ment incl. CO2 energy, etc.)

The Danish Green Investment Fund is an independent state loan fund with X X X X X the purpose of co-financing economically viable projects that facilitate and support the sustainable development in Denmark. The fund seeks to bridge the gap between traditional bank financing and equity capital. The fund was established as part of the agreement ‘Et Grønnere Danmark’ (“A Greener Denmark”) from 2014 (Ministry of Finance) and has a net capital of up to DKK 200 million as well as a state guaranteed lending limit of up to

DKK 5 billion in capital to co-finance projects within following areas:

• Environmental savings • Renewable energy sources Equity/business Publicly co-funded venture • Resource efficiency support capital funds http://gronfond.dk/en/om-fonden/ SUPPLY SIDE FOCUS Danish Venture Capital and Private Equity Association (DVCA) is the trade X organization for a wide range of investors in Denmark and focuses on Denmark to position itself even more as an attractive investment destination - nationally and globally. http://www.dvca.dk/

Vaekstfonden (The Growth Fund) is a national funding scheme that focus X X X X X on investing in companies, who put innovation and environment high on their agenda. http://vf.dk/det-hjaelper-vi-med/bliv-groennere-og-mere-effektiv.aspx

32 Innovationsmiljøer (Innovation Environments) provides innovative X entrepreneurs with starting a new business. The Innovation Environments act as an incubator for new knowledge-based businesses with origins in public or private research and development. This is done by providing professional advice and on behalf of the state to invest risk capital in the very early stage where normal market investors are reluctant. Link: https://startvaekst.virk.dk/find-stoette/risikovillig-kapital-til-forskere- og-videnbaserede-ivaerksaettere There are four approved innovation environments: Pre-Seed Innovation: http://www.preseedinnovation.dk Syddansk Teknologisk Innovation https://www.sdti.dk CAPNOVA http://www.capnova.dk Borean Innovation http://www.borean.dk/da/om-borean There are also regional initiatives: Region Syddanmark Region Sjælland Region Nordjylland Region Midtjylland Region Hovedstaden Link: https://startvaekst.virk.dk/find-stoette/risikovillig-kapital-til-forskere- og-videnbaserede-ivaerksaettere SEED Capital is an early stage venture fund in Denmark. Their investment X portfolio includes IT, life sciences and cleantech companies at the seed or pre-seed stage from Denmark and southern Sweden. The company should have a highly innovative solution and a scalable business model. SEED Capital has almost DKK two billion under management. An initial investment can range from 50,000 to 500,000 . It can follow a with subsequent rounds with a total commitment of 10 million euros over the lifetime of a company http://www.seedcapital.dk Innovationsfonden (Innovation Fund Denmark): was established as of 1 X April 2014 by bringing together research, technology development and innovation grants from the Danish Council of Strategic Research, the Danish National Advanced Technology Foundation and the Danish Council for Technology and Innovation into one new powerful foundation.

33 One of its programmes InnoBooster invests in knowledge-based innovation projects of small and medium businesses, entrepreneurs and researchers. The demand is that the idea has commercial potential and innovation project is well thought out. It can be a new product, a new service or improvement of a process that increases a company's competitiveness. Depending on the needs and potential of InnoBooster project the programme may invest up to DKK 5 million. http://innovationsfonden.dk/da/investeringstype/innobooster

Dansk Vækstkapital invests in unlisted funds with a view to achieving a X competitive and double-digit return for the combined portfolio of funds. The funds must adhere to fundamental social and ethical principles in relation to their investments. For instance, it finances SEED Capital (see above) which focuses on early investments (start-up companies) and is specialised in identifying, financing and developing entrepreneurs in the fields of life science, cleantech and IT. http://www.danskvaekstkapital.dk/en/

Public guarantee funds

Miljøteknologisk Udviklings- og Demonstrationsprogram (MUDP) - The X Danish ECO-innovation Program: In connection with the action plans for eco-efficient technology, the secretariat for eco-innovation under the Danish Ministry of Environment and Food has its own funding scheme, where organizations can apply for co-financing of R&D, pilots, and concrete demonstrations of promising eco-technologies in the field of water, air, and waste, or international projects with focus on water technologies. The budget for 2015-2016 is approximately €151m. www.ecoinnovation.dk

Support for R&D Innovationsfonden (Innovation Fund Denmark): was established as of 1 X in public sector R&D funding April 2014 by bringing together research, technology development and and industry innovation grants from the Danish Council of Strategic Research, the Danish National Advanced Technology Foundation and the Danish Council for Technology and Innovation into one new powerful foundation.

The overall aim of Innovation Fund Denmark is to support the development of knowledge and technology, including advanced technology, in order to strengthen research and innovative solutions that may benefit growth and employment in Denmark. The fund works within the following 6 research areas: - Bio resources, Food and Lifestyle - Trade, Service and Society

34 - Energy, Climate and Environment - Production, Materials, Digitisation and ICT - Infrastructure, Transport and Construction - Biotech, Medico and Health The fund offers three programmes: Large-Scale Projects: For substantial investments and long-term projects/partnerships where the focus is on research, technology, experimental development and market development. Innovation Fund Denmark offers co-financing for projects focusing is on research, technology, experimental development and/or market development. The fund has the following requirements for Grand Solution projects: - 2-5 years’ duration - Maximum co-financing of up to 50% (60% for SMEs). Upon successful application projects receive DKK 5-30m in co-funding - Participation from a minimum of one Danish company and one Danish public research institution - The funding from Innovationsfonden – Denmark can account for a maximum of 75% of the total project cost http://innovationsfonden.dk/en http://www.techfunding.eu/innovationsfonden-denmark

Grønt Udviklings- og DemonstrationsProgram (GUDP) - Green X Development and Demonstration Programme - is a Danish funding program, which supports development and production in the Danish food industry through co-funding of Development and Demonstration projects with a view to commercialisation of promising technologies having high market potential as well as positive environmental effects.

http://nordicinnovators.com/gudp-program

http://naturerhverv.dk/tilskud-selvbetjening/tilskudsguide/groent- udviklings-og-demonstrationsprogram-gudp/

Energiteknologisk Udviklings- og Demonstrationsprogram (EUDP) - The X X X X Energy Technology Development and Demonstration Program: The main objective of the EUDP is to ensure the development and demonstration of new energy technologies, which can reduce dependency on fossil energy, and which can contribute to minimising the CO2 burden and the environmental impact of energy consumption. The EUDP especially encourages submission of innovative projects within energy efficiency (construction, processes, appliances etc.) with significant commercial potential.

35 http://www.ens.dk/ny-teknologi/eudp-energiteknologisk-udvikling- demonstration

Energinet.dk – issues each year funding for research into wind power, X X X biogas, fuel cells, solar energy, wave power and Smart Grids. Energinet.dk administers funding for external energy research via ForskEL and ForskVE which are both financed by PSOs (Public Service Obligations) to which all electricity consumers contribute to. They promote the development and deployment of environmentally friendly electricity generation technologies and the integration of these for the benefit of a society based on renewable energy. - ForskEL supports the development and integration of environmentally friendly power generation technologies for grid connection. - ForskVE-programme disseminates minor renewable energy technologies like biogas, photovoltaic and wave power. http://www.energinet.dk/EN/FORSKNING/Sider/default.aspx

Groen Omstillingsfond (The Green Transition Fund) supports businesses to X X become more resource efficient, develop environmentally friendly solutions and create green jobs (currently closed): https://groenomstilling.erhvervsstyrelsen.dk/groen-omstillingsfond

Groen Industrisymbiose (The Green Industrial Symbiosis program) is a X X national task force that helps companies to identify economic potentials by exchanging residual resources between two or more companies or via reprocessing companies with the aim to enhance businesses' competitiveness by increasing the utilization of waste products and reduce costs of waste disposal, as well as achieve environmental improvements (currently closed):

http://groenomstilling.erhvervsstyrelsen.dk/gronindustrisymbiose

Groenne forreningsmodeller (Green business models). The program X X focusses on enhancing the ability of Danish companies to develop new business models with positive environmental effects throughout the value chain: http://groenomstilling.erhvervsstyrelsen.dk/groenne-forretningsmodeller

Maritim Omstillingspulje (The Maritime Transition Fund) supports X X X projects, that develop or demonstrate new solutions within shipbuilding with lightweight materials, environmental retrofitting or the use of alternative fuels for ships (status ?):

36 http://www.danskemaritime.dk/da/information-og- presse/nyheder/nyheder-2013/791-5-mio-ekstra-i-maritim- omstillingspulje

Markedsmodningsfonden (The Market Development Fund) helps enterprises bring their new products to the market faster. The fund can grant funding to enterprises for the testing and adapting of new products or for guarantees which gives the buyer peace of mind. The Fund is close-to- market-, enterprise-oriented and commercially focused. It seeks to assist Danish enterprises in overcoming the barriers encountered in the market development phase, e.g. by providing co-funding for the testing and adaptation of an enterprise’s innovative prototypes on-site for prospective customers or by providing a guarantee to give peace of mind to the buyer of an innovative new product. http://markedsmodningsfonden.dk/in_english

Collaborative grants

Det groenne ivaerksaetterhus (The House of Green Entrepreneurship) is X X an environment for sharing experience, receive counselling and produce/test new green products. http://dgih.dk/

R&D infrastructure At the Danish Green Labs, companies can test and demonstrate new X X X climate and energy solutions with global marked potential. http://www.ens.dk/en/policy/energy-technology/green-labs

Tax incentives for R&D and High environmental and resource taxes as the main driver. start-ups

25 % Tax Scheme: Taxation of the Salaries of Well-paid Foreigners and Foreign Researchers. In 1992 a special taxation scheme was introduced for researchers and key employees who take up residence in Denmark for a limited period of time. Effective as from 13 May 2000 there has been a Fiscal measures revision of that scheme. The rules are contained in section 48 E of the Tax incentives for R&D Danish Act on Taxation at the Source. The Scheme implies that well-paid personnel employees and researchers recruited abroad have access, subject to a number of conditions, to choose - for a period of not more than 36 months - taxation at the rate of 25% of the remuneration with no deductions - instead of the normal income tax. http://www.taxindenmark.com/article.34.html

37 Innovation Management. The course gives an insight into the principles and methods used to implement both incremental and radical changes Tailored training courses for that are necessary for your organization's innovation efforts create value. companies, entrepreneurs http://www.teknologisk.dk/ydelser/ideudvikling-og- innovation/ideudvikling-og-innovation/22709?cms.query=innovation

Startvaekst: is a fast short-cut to comprehensive and useful information and X advice for entrepreneurs and established enterprises with growth potential. This portal is operated by the Danish Business Authority in collaboration with the regional business link centres (“Vaeksthus”). http://startvaekst.dk

Vaekstguiden (Guide to Growth) provides a general view of all public-sector X schemes aimed at generating enterprise growth and development. The website “Vaekstguiden.dk” is the result of a collaborative effort involving Denmark’s state and regional governments and the EU. https://startvaekst.virk.dk/find-stoette

Proof of Concept. The policy measure aims to strengthen the further development and documentation of inventions made by researchers in public research institutions. The funding shall be used to allow these Advise/consulting for start- researchers to concentrate on the further development of their inventions ups, companies, and to reduce the education and research burden for a period. Education, entrepreneurs training and http://fivu.dk/en/research-and-innovation/funding-programmes-for- mobility research-and-innovation/find-danish-funding-programmes/collaboration- between-research-and-innovation/innovation- vouchers?set_language=en&cl=en

Innovationsfonden (Innovation Fund Denmark): The Entrepreneurial Pilot X programme is an opportunity for new graduates wanting to develop their innovative business idea. The scheme is designed to help newly graduated talents inspiring to become innovative entrepreneurs and aims to strengthen knowledge-based entrepreneurship – short and long-term. The programme offers personal mentoring and a monthly grant of 14,473 DKK for up to 12 months. http://innovationsfonden.dk/en/investment/entrepreneurial-pilot

Innovationsfonden (Innovation Fund Denmark). Industrial PhD X programme is a three-year industrially focused research project and PhD education which is carried out in a collaboration between a company, an Placement schemes for Industrial PhD candidate and a university. An Industrial PhD student is students employed in the private sector company and enrolled at the university. The private sector company applies for funding from Innovation Fund Denmark for the project, and the student is hired by the company and receives a wage during the entire Industrial PhD project. The student shares

38 her/his working time between the company and the university, and spends all the work time on the Industrial PhD project. http://innovationsfonden.dk/en/application/erhvervsphd

Support for R&D worker’s recruitments

Danish Energy Solutions (DES) is a Danish cluster organisation co-financed X by EU funds and its corporate members. They are the international division of Lean Energy DES facilitates and negotiates tailor-made financial solutions including supplier credits guaranteed by the Danish Export Credit Foundation. Together with its partner companies, they use financial tools to finance energy savings projects in the Denmark. http://energysolutions.dk New Nationalt testcenter for vandteknologi og klimatilpasning (National X X centre for test of water technology and climate adaption) is a network of existing facilities complemented by a mobile testing facility to promote Danish water technology. http://www.teknologisk.dk/ydelser/nyt-nationalt-testcenter-for- vandteknologi-og-klimatilpasning-ser-dagens-lys/33360

CLEAN is Denmark's green energy and environment cluster through projects X X X X X and collaborations create green growth and innovation, both nationally and Competence centres, internationally. CLEAN is the focal point that provides knowledge, talent and Networks and clusters, science-technology collaboration between large and small businesses, government and partnerships parks institutions - and here sounds sector's collective voice nationally and globally. http://cleancluster.dk Scion DTU – Science and Technology Park offers high-tech facilities, X business support and network and innovation. It has something called the “Green Entrepreneur House” which includes physical facilities, such as incubation, access to the prototype workshop (the FabLab) and to testing- and demonstration-facilities. In also offers guidance and competency- development, access to knowledge resources, mentors and the opportunity to work together with established and successful companies. Scion DTU also has an innovation cluster in cooperation with Medico Innovation and Cleantech Innovation. Part of the networks’ objective is to create specific public-private innovation cooperation and international exposure. http://www.sciondtu.com/

CAPNOVA – is an investment and development company that provides X capital (state, regional and private), business expertise and a network, to

39 turn innovates ideas into successful businesses. Amongst companies supported are also in the field of cleantech. http://www.capnova.dk/

Energy Cluster Fionia - is a business development initiative by the X X development agency for the Danish sub-region of Fyn – Udvikling Odense. It offers general cluster support and services and project development support to companies and other partners within the energy sector – primarily in the region of Southern Denmark. Special thematic focus areas are: and CHP; energy systems / smart grid / integrated resource planning for energy production and supply; energy efficiency especial in production systems (i.e. green-house production), phasing in energy from biomass and other sustainable sources (wind, sun). http://www.lorc.dk/affiliation/energy-cluster-fionia

LORC is a non-profit and independent commercial foundation that was X founded in 2009 by the major players in the offshore renewables sector. The aim is to improve product reliability and consequently lower the Cost of Energy extracted from green offshore sources. http://www.lorc.dk/

Lean energy cluster is a national cluster organisation. We support Cleantech X business development in the field of energy and climate technology. We work to promote energy efficiency based on sustainability throughout the value chain of the entire energy system. Our focus is therefore on developing technologies and solutions in the fields of energy efficiency and intelligent energy systems. http://energysolutions.dk/lean-energy-cluster/

The Alliance for Offshore - Renewables: Focus areas for Offshoreenergy.dk X – Renewable - is offshore wind, the offshore maritime area and wave energy.

http://www.offshoreenergy.dk/renewables/renewables.aspx

Green Tech Park - is an energy park with integrated micro energy X infrastructure for electricity, district heating and gasThe park has test and demonstration facilities for products and services for the future Smart Grid system with all platforms connected to the Green Tech Lab. http://www.greentechcenter.dk/uk.aspx

Centres of Excellence is an initiative of the Danish National Research X Foundation (DNRF) and supports Danish basic research regardless of subject. The activities of the Foundation are regulated by law, and the

40 purpose of the Foundation is to support the development of unique Danish research. It is the position of the board that the best Danish basic research environments should have a possibility for extra support when and if expertise, creativity and the right constellation of people is present in combination. http://www.tekniq.dk/Medlemsraadgivning/El-%20og%20vvs- uddannelserne/Laerlingeuddannelserne/CentreOfExcellence.aspx

Nationalt Vandtestcenter. The platform identifies needs, opportunities and X X challenges for Danish research, innovation and technology development in the water sector. http://vandtestcenter.dk/viden-om-vandtest/organisationer-i- vandsektoren/

BioRefining Alliance recommends that bio-economy be made a new priority X X X area for Denmark and that a political action plan be adopted on the basis of 19 recommendations in the areas of markets, bioresources, demonstration and R&D. http://biorefiningalliance.com/

Inno-MT is a triple helix partnership with the participation of private X X X X companies and organizations, research, training and knowledge institutions as well as public authorities, public undertakings and other public organizations Inno-MT focuses on technologies, which help solve key social challenges in Technology platforms and the field of environmental technology. The network has four primary focus innovation networks areas: 1. Soil resources and nutrient cycling 2. Clean air technology 3. Efficient use of resources: 4. Water treatment and water supply

http://inno-mt.dk/english/

TEST - The programme supports market maturation of sustainable solutions X X in construction that are technically fully developed or almost fully developed, but need be approval and documentation. The program is temporarily closed but is expected to start up again in the spring/summer 2016. TEST is a Realdania initiative. www.test-din-baeredygtige-loesning.dk www.realdania.org

Godkendt Teknologisk Service (GTS) – Advanced Technology Group. The X GTS institutes offer knowledge, technology and consultancy, co-operation on technological and market-related innovation, testing, optimisation,

41 quality assurance, certifications and benchmarking - all of which are intended to contribute to enhancing the international competitiveness of the business sector and benefit society in general. http://gts-net.dk

Innovationsfonden (Innovation Fund Denmark): Co-financed projects with X several participating countries. Innovation Fund Denmark participates in several international programmes, where evaluation is done by international expert panels. The final investment, however, must be approved by Innovation Fund Denmark within the budget limits allocated to joint projects. Examples of this are the EU-based ERA-NETs, JPIs, JTIs or the Eurostars and the BONUS programme. International networks and bilateral Co-operations with emerging countries. Innovation Fund Denmark is engaged in several bilateral and multilateral collaborations with other countries. Examples of this can be bilateral collaborations with emerging countries about joined calls within prioritised areas or about international networks such as EUREKA. Foreign partners in projects financed by Innovation Fund Denmark Foreign partners can be invited to participate in projects funded by Innovation Fund Denmark. Investment from Innovation Fund Denmark may be used to finance both Danish and foreign partners in a project if the foreign partner contributes with new knowledge and thereby ensure increased growth and employment in Denmark. Special rules are set up for Innovation Fund Denmark’s financing of foreign partner I Danish projects. http://innovationsfonden.dk/en/investment/international-collaborationst

Ministry of Environment and Food - Partnerships in Environmental X Technology Included in Program. The authorities support the establishment of partnerships, by e.g. identifying areas in which the partnership model could have particular potential, by bringing relevant actors into play, and by providing financial support for the partnerships' secretariats. Moreover, as participants in partnerships, authorities contribute with knowledge about the future need for environmental technology solutions.

Foresight and common http://eng.ecoinnovation.dk/the-danish-eco-innovation- vision building program/publicprivate-partnerships/

Innovation Packages (international cooperation). It is offered to small and medium sized Danish companies wishing to seek new knowledge, technology or business partners in leading foreign innovation environments. Innovation Package offered by the Danish Innovation Centres providing tailored advice to the individual company. Innovation Package includes 25 hours of counselling in a selected market and provides

42 50% subsidy to do so. There is a limit of grants to four innovation packages per market. https://indberet.virk.dk/myndigheder/stat/TC/Innovationspakke-0

Danish Water Forum (DWF) is a network of Danish water organizations aiming at highlighting Danish water expertise and knowledge and facilitating concerted actions. DWF represents: contractors and manufacturers; water companies and consultants; research institutions; and government authorities and NGOs. The activities of DWF are: to promote export of innovative Danish solutions for the water sector, to strengthening cooperation in the Danish water sector, to enhance the visibility of Danish water expertise linking water networks in North and South. http://www.danishwaterforum.dk/

Regional Innovation Agents. Experts from nine regional centres offer innovation checks to SMEs of the regions in question. http://www.innovationstjek.dk/

State of Green is a public-private partnership founded by the Danish X Government, the Confederation of Danish Industry, the Danish Energy Market intelligence and Association, the Danish Agriculture & Food Council and the Danish Wind other forms of information Industry Association. As the official green brand for Denmark, State of Green sharing gathers all leading players in the fields of energy, climate, water and environment and fosters relations with international stakeholders interested in learning from the Danish experience.

http://www.stateofgreen.com/en

Nordic Innovation Centre. Analysis and overview of Nordic venture capital X and innovation. http://www.nordicinnovation.org/

Overview of Environmental Laws in DK. The Danish Environmental X

Protection Agency provides an overview of laws and regulations connected to the environmental, including areas like production and consumption

http://mst.dk/service/lovstof/danske-miljoelove/ Regulations and Regulations, targets, cap & standards trade schemes Danish Industries. The association of Danish Industries, which supports X promotion of Danish exports, identification of trade, and counselling to Danish companies. DEMAND SIDE FOCUS http://di.dk/VIRKSOMHED/MILJOE/Pages/miljoe%20og%20energi.aspx

43 Fees and labels on recyclable materials. Management and overview of fees X and labels on products that needs to be recycles, such as plastic and glass materials. https://www.dansk-retursystem.dk/dk/

Danish Standards provides advice and consultancy in the use of Danish and X international standards. Based on your company's profile and needs, Danish Standards can be an active partner throughout the process - from analysis to implementation and follow-up. http://www.ds.dk/en/

Performance standards, Eco-label Denmark. Management of the official eco-labels in Denmark, X labelling, certification e.g. “blomsten” and “svanen”, with information to producers and consumers on how to get or react to labels, as well as an overview of labelled products. http://www.ecolabel.dk/

Green Building Council Denmark has established a Danish certification X X within sustainability: DGNB Denmark. A sustainable certification scheme provides the necessary framework and criteria for the construction and property industry concerning new construction, rebuilding and improvement of existing properties in a sustainable manner. http://www.dk-gbc.dk/english.aspx

The public procurement in Denmark amounts to 160 billion DKK/year and X private enterprises for even greater amounts. This large shopping muscle can help to promote the production and marketing of environmentally less harmful products throughout the product chain. More information about strategic plans can be found on the website of DEPA.

http://mst.dk/virksomhed-myndighed/groen-strategi/groenne- “Green“ public procurement indkoeb/om-baeredygtige-indkoeb/ Public of goods and services http://www.ansvarligeindkob.dk/ procurement

Markedsmodningsfonden (The Market Development Fund) helps X enterprises bring their new products to the market faster and makes it easier for public-sector institutions to obtain innovative solutions. http://markedsmodningsfonden.dk/in_english

R&D procurement

44 Pre-commercial procurement

Act on technology transfer on Public Research Institutions. The act allows X X for universities and sectorial research institutes to establish a limited company responsible for the transfer of knowledge/technology to the private sector. These companies shall support commercialisation of intellectual property rights and they shall be co-owners of science parks, incubators and spin-off companies. http://ufm.dk/lovstof/gaeldende-love-og-regler Universities play an important role in adaptation of new technologies Advisory support for through research, identification, and testing. A few links on the area are technology adopters http://www.au.dk/om/profil/strategi/ http://www.dtu.dk/english/Collaboration/Industrial_Collaboration/Resear Technology ch-collaboration-with-businesses Transfer http://dkuni.dk/english http://www.regionh.dk/menu/Forskning/Raadgivning_til_forskere/

Food processing. Support for technologies improving the processing of X Financial or fiscal support for food, including quality and efficiency. technology adopters http://www.dtu.dk/english/Collaboration/Industrial_Collaboration/Resear (e.g. grants for purchasing ch-collaboration-with-businesses new technology) http://www.skm.dk/skattetal/statistik/generel-skattestatistik/skattetryk- for-groenne-afgifter-1970-2014

Greening Private Houses. Danish houses may now be more environmentally X X and climate friendly thanks to “BoligJobordning”, which makes it possible to implement green roofs solar panels, creating combo heaters, geothermal heat, air to water heating and photovoltaic - all with a tax deduction on expenses for . Tax incentives for consumers http://www.bolig-job-ordning.dk/Green tax on Automobiles. Higher tax is Support of (e.g. for purchasing applied on cars consumption of fuel. private demand environmentally efficient products) http://www.skm.dk/skattetal/satser/satser-og- beloebsgraenser/braendstofforbrugsafgiftsloven/ Progressive income taxes to the government have decreased over the years while the tax basis has widened and labour market contributions and green taxes on environmentally harmful consumption have become more important.

45 http://www.skm.dk/english/facts-and-figures/the-tax-structure/

Green tax on Automobiles. Higher tax is applied on cars consumption of Tax reductions for products fuel. and services (e.g. VAT http://www.skm.dk/skattetal/satser/satser-og- reductions) beloebsgraenser/braendstofforbrugsafgiftsloven/

Support to install solar cell panels. On 11 February 2015 a new legislation on increased support for PV came into force after being approved by the EU Commission. Energinet.dk, approves or rejects the application. Demand subsidies (e.g. eco- vouchers, consumer http://www.ens.dk/undergrund-forsyning/el-naturgas- subsidies) varmeforsyning/elforsyning/elproduktion/stotte-vedvarende-energi-3 http://solcelleforening.dk/en/legislation/

Information on environmental laws and standards for public citizens: X “borger”, or in English “citizen”, is the national website where the public can seek information on laws and regulations, and adjust their own public obligations. This website includes information on environmental awareness. https://www.borger.dk/Sider/default.aspx

Awareness raising and Bedreinnovation.dk (Better Innovation). A comprehensive approach to the X information provision development of new technological services for the benefit of Danish industry and Danish society, which is concluded by the Council for Technology and Innovation and the 9 Approved Technological Service Institutes for the period 2013-2015 with a total budget of DKK 850 million. There are currently 67 activities amongst the nine service institutes.

http://www.bedreinnovation.dk/

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About the Eco-Innovation Observatory (EIO)

The Eco-Innovation Observatory (EIO) is the initiative financed by the European Commission’s Directorate- General for the Environment. The Observatory is developing an integrated information source and a series of analyses on eco-innovation trends and markets, targeting business, innovation service providers, policy makers as well as researchers and analysts.

Visit EIO and DG ENV Eco-innovation Action Plan (EcoAP) website and register to get access to more information and to access all EIO reports, briefs and databases. www.eco-innovation.eu ec.europa.eu/environment/ecoap