European Commission approves €550 million state aid scheme to generate electricity from biomass in Denmark

The European Commission has approved a DKK 4,150 million (€550 million) state aid scheme to support the production of electricity using biomass.

The funding will allow Denmark to produce electricity via existing and depreciated biomass installations in the country. Installations benefitting from the scheme receiving support in the form of a premium, covering the additional operating costs of producing electricity from biomass compared to producing electricity from a coal plant.

Premiums will be calculated on an annual basis and will be capped at DKK 0.11 (€0.015) per kilowatt-hour. The Commission assessed the Danish measure under the 2014 Guidelines on State aid for environmental protection and energy 2014-2020 and found that the scheme is “necessary” to prevent the switch of the supported installations to fossil fuels. In a statement, the Commission said it concluded that the scheme will contribute to the EU’s energy and environmental objectives and the goals outlined in the European Green Deal, without “unduly distorting competition”.

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