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Denmark to launch hydrogen infrastructure programme, keep fuel cell vehicle tax exemptions

The Danish government has announced a new Energy Plan 2020 that will establish a range of initiatives for hydrogen infrastructure and fuel cell vehicles, with the overall aim of reaching 100% fossil fuel independence by 2050.

The hydrogen initiatives in the Danish Energy Plan 2020 provide a strong basis for establishing the hydrogen infrastructure needed to enable market introduction of fuel cell vehicles (FCVs) beyond 2015.

The Danish government initiatives follow the recommendations from a recent Danish industry coalition analysis and roadmap on ‘Hydrogen for transport in Denmark onwards 2050’.

A new infrastructure programme will be established to provide support for the rollout of infrastructure for both FCVs and battery electric vehicles (BEVs) in the 2012–2015 timeframe. The programme – together with industrial initiatives already under way – will enable the establishment of a country-wide hydrogen refuelling network by 2015.

Already implemented tax exemptions of up to €0.08 per kWh on electricity for hydrogen production provides a strong case for a renewable hydrogen supply for the infrastructure network.

The existing Danish tax exemption for FCVs is to be continued throughout 2015, ensuring a 180% tax reduction compared to conventional vehicles. With indicated FCV pricing by 2015, this could enable an FCV market introduction price that is competitive with that of comparable gasoline vehicles.

In Denmark 180% tax and 25% VAT is applied on the base vehicle price, meaning that a €17 000 gasoline vehicle has an end-price to the vehicle user of €50 000. The tax exemption provides indirect support of more than €23 000 for each FCV, after payment of 25% VAT.

The Danish Energy Plan also outlines a set of government analyses to be conducted to pave the way for continued efforts beyond 2020, with the aim of reaching 100% fossil fuel independence by 2050. The joint focus of the various analyses is to ensure an optimal linkage between the power/heat and transport sectors, and ensure optimal utilisation of the limited biomass potential.

Furthermore, the analyses will suggest solutions for energy storage of the increasing amount of fluctuating renewable electricity, which is to reach a 50% share of power and heat consumption by 2020, and 100% by 2035.

Hydrogen will play a key role in both energy storage as well as connecting the power/heat and transport sectors. Furthermore, hydrogen can act as a key component in the production of biofuels and biogas from biomass, thus helping to boost the potential of the limited biomass.

The various Danish government analyses are therefore expected to provide a strong basis for continuing support mechanisms for hydrogen beyond 2015.

The new Danish hydrogen support initiatives follow years of continued and increasing public support for fuel cells and hydrogen research, development, and demonstration in Denmark. Since 2001 public R&D programmes have provided €150 million in public support for fuel cell and hydrogen activities, reaching €29 million in 2010 alone, corresponding to one-third of all public funding for energy R&D in Denmark that year. Public funding for fuel cell and hydrogen activities in Denmark in 2011 is expected to total more than €30 million when fully summarised later this year.

Hydrogen Link Denmark is a national network for advancing the use of hydrogen for transport in Denmark. It is facilitating and coordinating the buildup of hydrogen refuelling infrastructure and the rollout of fuel cell vehicles in Denmark.

Hydrogen Link is part of the Scandinavian Hydrogen Highway Partnership, which is working towards ensuring that Scandinavia is one of the first regions in Europe where hydrogen is available and used in a network of refuelling stations.

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Energy infrastructure  •  Energy storage including Fuel cells  •  Policy, investment and markets