COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Denmark Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Denmark
Date: 2021-06-17
Institutions: European Commission, Secretariat-General
Subjects: Denmark, EU aid, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.6.2021  SWD(2021) 154 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Denmark Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Denmark {COM(2021) 326 final}  
 
 
Table of contents 
1. 

Executive summary ............................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter ................................................................................ 6 

2.1 Macroeconomic outlook and developments since the 2020 country report ..................................... 6 

2.2 
Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation ................................................................................................................................................. 8 

2.3 

Challenges related to the green and digital transitions .............................................................. 11 

3.  Objectives, structure and governance of the plan.............................................................................. 21 

3.1 

3.2 

Overall strategy of the plan ........................................................................................................ 21 

Implementation aspects of the plan ........................................................................................... 22 

4. 

Summary of the assessment of the plan ............................................................................................ 25 

4.1 

4.2 

Comprehensive and adequately balanced response to the economic and social situation ...... 25 

Link with country-specific recommendations and the European Semester ............................... 30 

4.3 
Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ...... 35 

4.4 

4.5 

4.6 

4.7 

The principle of ‘do no significant harm’ .................................................................................... 41 

Green transition .......................................................................................................................... 43 

Digital transition .......................................................................................................................... 45 

Lasting impact of the plan ........................................................................................................... 49 

4.8  Milestones, targets, monitoring and implementation................................................................ 50 

4.9 

Costing ........................................................................................................................................ 52 

4.10  Controls and audit ....................................................................................................................... 54 

4.11  Coherence ................................................................................................................................... 58 

5.  Annex .................................................................................................................................................. 60 

1 

 
 
 
 
 
 
 
1.  EXECUTIVE SUMMARY     

The COVID-19 pandemic has had a major impact on Denmark, albeit less severe in terms 
of  loss  of  output  and  jobs  than  in  many  other  EU  Member  States.  Denmark’s  real  GDP 
contracted by 2.7% in 2020, with private consumption and exports seeing the largest decline. A 
resurgence of infections brought new lockdown restrictions early in 2021, yet GDP growth is set 
to recover from the second quarter of 2021 onwards. Substantial government support prevented a 
surge in unemployment and bankruptcies. Still, the unemployment rate increased from 5.0% in 
2019 to 5.8% in 2020 but it is set to decrease gradually with the return of economic growth.   

Government finances  have been negatively  impacted by the COVID-19 crisis.  While there 
was a clear deterioration in public finances, the budget deficit of 1.1% of GDP in 2020 was the 
smallest recorded in the EU. Following a steep rise in the debt-to-GDP ratio in 2020, to 42.2% of 
GDP, due to one-off and denominator effects, the government debt ratio is expected to gradually 
fall to 38.8% of GDP by 2022. 

Denmark is  expected to receive approximately EUR 1.551billion (DKK 11.5 billion) from 
the EU’s Recovery and Resilience Facility (RRF). Its recovery and resilience plan consists of 
39 measures (6 reforms and 33 investments) divided into seven components, which can be linked 
with three main objectives: 

(i) accelerating the green transition, including by supporting a green tax reform, investments in 
energy  efficiency  in  buildings,  sustainable  road  transport,  a  climate  action  plan  for  agriculture 
and green research and development;   

(ii)  supporting  digitalisation,  including  a  new  digital  strategy,  SME  digitalisation  support  and 
extending rural broadband coverage; and 

(iii)  increasing  the  resilience  of  the  healthcare  system,  including  digitalisation  of  healthcare, 
infrastructure and logistics support for critical medical products, and support for COVID-related 
research.   

The estimated total cost of the recovery and resilience plan of Denmark is DKK 12 010 000 000, 
which equals EUR 1 615 267 709 on the basis of the EUR DKK ECB reference rate of 30 April 
2021.  This  amount  exclusively  relates  to  expenditures  and  therefore  excludes  the  awaited 
proceeds  from  the  tax  reform  related  to  the  Emission  taxes  on  businesses  that  have  been 
estimated to amount to DKK 410 000 000, which equals to EUR 55 142 361.  

2 

 
 
The plan contributes to  the general  objective of the Facility to  promote the Union’s economic, 
social  and  territorial  cohesion  and  constitutes  a  balanced  response  to  the  six  policy  pillars 
referred to in Article 3 to the RRF Regulation1. 

The  plan  will  make  a  significant  contribution  to  Denmark’s  economic  rebound  and 
accelerate the green and digital transitions. It includes measures to frontload private green and 
digital  investments  and  advance  environmental,  climate,  energy  and  infrastructure  projects. 
Targeted  measures  will  support  the  reduction  of  greenhouse  gas  (GHG)  emissions  in  sectors 
responsible for most of the emissions. The plan also includes reforms and investments that are 
set  to  promote  the  digital  transformation  across  society  and  help  improve  the  prospects  for 
welfare and equality, growth and employment.   

The plan is  expected to boost Denmark’s economic growth potential through increases in 
companies’ productivity and competitiveness.  In 2021-2023, the positive impact is projected 
to  be  stronger  as  firms  bring  forward  their  investments  to  benefit  from  the  tax  rebates  of  the 
investment  window.  From  2024  onwards,  the  GDP  growth  effect  is  expected  to  be  slightly 
negative,  due  to  the  discontinuation  of  the  investment  window  and  the  increase  in  taxes  on 
energy consumption that are part of the second stage of the green tax reform. Over the medium 
and longer term, the plan is expected to enhance productivity. By the end of 2026, real GDP is 
forecast to be 0.12% higher than it would have been without the plan in place. The plan is also 
set to lift employment, notably in 2021-2022, driven by the investment window. While the effect 
of the green tax reform on employment turns negative from 2024 onwards (due to tax increases), 
this  is  outweighed  by  the  positive  employment  effects  of  the  other  green  components,  notably 
targeting  energy  efficiency,  green  heating,  carbon  capture  and  storage  (CCS)  and  sustainable 
road transport.  

The  reforms  and  investments  underpinning  the  plan  address  the  2019  and  2020  country-
specific recommendations (CSRs) in a satisfactory manner.  The plan focuses on investment 
in  the  green  and  digital  transitions,  in  particular  the  clean  and  efficient  production  and  use  of 
energy, sustainable transport, and research and innovation. Research measures have the potential 
to broaden the innovation base and involve more companies in R&D&I activities. Some CSRs, 
namely on investment-related economic policy on education and skills, and measures to address 
the shortage of health workers and ensure the effective supervision and enforcement of the anti-
money  laundering  (AML)  framework,  have  been  addressed  in  a  broadly  satisfactory  manner 
outside the plan. Hence  measures  relating to  these areas were not  incorporated in  the recovery 
and resilience plan. 

1 Regulation (EU) 2021/241 of the European Parliament and of  the Council of 12 February 2021 establishing the 

Recovery and Resilience Facility. 

3 

 
 
                                                           
 
The  measures  in  Denmark’s  plan  comply  with  the  ‘do  no  significant  harm’  (DNSH) 
principle. Denmark has conducted a broadly adequate DNSH analysis. The DNSH requirements 
are upheld in the design of the measures, including their milestones or targets. Certain types of 
investment  that  would  not  comply  with  DNSH  have  been  excluded  ex  ante  from  any  RRF 
support (such as fossil-fuelled machineries under the investment scheme). Selection procedures 
for projects financed under the RRF will be conducted on condition that the applicant complies 
with the DNSH principle.   

The measures in the plan should accelerate the green transition, enhance biodiversity and 
protect  the  environment.  They  support  Denmark’s  decarbonisation  and  energy  objectives,  as 
set out in the 2030 national energy and climate plan and are thus a step towards achieving carbon 
neutrality  by  2050.  The  plan  therefore  provides  for  a  sustainable  recovery  of  the  Danish 
economy. It includes a broad set of measures improving the energy efficiency of buildings and 
industry,  promoting  sustainable  mobility,  supporting  organic  farming,  and  facilitating  green 
research  and  innovation.  In  sum,  measures  supporting  environmental,  biodiversity  and  climate 
change objectives account for 59% of the plan’s total allocation.  

The  digital  transformation  is  promoted  by  incentivising  digital  investments  and  a  new 
strategy  to  address  future  digitalisation  challenges.  Targeted  measures  will  focus  on  the 
digitalisation of SMEs, extending rural  broadband coverage and digitalisation in  the healthcare 
sector.  An  ambitious  reform  agenda  under  a  new  ‘digital  strategy’  is  envisaged,  with  the 
objective  of  further  digitalising  the  public  administration  to  address  the  emerging  new  digital 
challenges in this area.    

The  implementation  of  the  planned  reforms  and  investments  is  expected  to  bring  about 
deep  structural  changes  in  the  economy.  Raising  energy  taxes  (and  subsequently  the 
introduction of a uniform GHG emission tax) should accelerate the green transformation of the 
economy  and  make  Denmark  one  of  the  frontrunners  in  reducing  GHG  emissions.  The  other 
RRP  measures  and  investments  support  these  objectives  coherently  and  efficiently,  notably  by 
focusing  funding  on  sectors  with  the  most  GHG  emissions  (transport  and  agriculture)  and 
improving  energy  efficiency  at  the  same  time.  Key  RRP  measures  are  based  on  wide  political 
agreements  that  extend  beyond  2026  (when  the  RRF  funding  expires).  The  plan’s  ambitious 
R&D&I projects  are expected to  have a long-lasting positive impact  on climate objectives (for 
instance  by  facilitating  CCS).  Stronger  management  systems  for  critical  supplies  in  the  health 
sector should contribute to its long-term resilience. 

Denmark’s  control  and  audit  system  is  up  to  the  task  of  preventing,  detecting  and 
correcting  potential  fraud,  corruption  and  conflicts  of  interest,  and  avoiding  double 
funding.  The  ministries’  control  and  audit  systems  include  control  of  subordinate  institutions’ 
application  of  public  funds,  covering  the  planning  of  financial  processes  and  procedures,  IT 
security  and  the  quality  of  the  institutions’  internal  control  and  audit  systems.  The 
implementation  of  the  plan  rests  on  the  successive  fulfilment  of  high-quality  targets  and 
milestones that are clearly defined, specified and operational. 

4 

 
 
Denmark has provided individual cost estimates for the investment measures in the plan. 
The estimates and supporting documents show that the costs are justified, reasonable, plausible 
and  commensurate,  in  line  with  the  principle  of  cost-efficiency.  However,  less  comprehensive 
information was provided on costs associated with the reforms in the plan (including the digital 
strategy) and novel projects (or mission-based R&D&I projects). The individual components do 
not  include  full  information  on  whether  RRF  funding  for  respective  reforms  and  investments 
would  be  additional  to  the  support  provided  under  other  EU  funds  and  instruments,  since  the 
2021-2027  Partnership  Agreement  is  still  under  negotiation.  However,  this  is  compensated  by 
strong governance and control systems, which provide assurance that the total cost is not covered 
by existing or planned Union financing.  

(1) 

Balance
d 
Respons
e 
A 

(2) 
 CSRs 

(3) 

Growth, 
jobs… 

(4) 
 DNSH 

(5) 
 Green 
target 

(6) 
 Digital 
target 

(7) 
 Lasting 
impact 

(8) 
 M & T 

(9) 
 Costing 

(10) 
 Control 
Systems 

(11) 

Coheren
ce 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

5 

 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
 
 
 
 
2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1 Macroeconomic outlook and developments since the 2020 country report  

The Danish economy has proved more resilient than the EU average during the COVID-19 
pandemic. This is mainly due to the relatively lower impact of the pandemic at the early stage 
(which led to avoiding a lockdown in many sectors), a favourable industrial specialisation (with 
large shares of pharmaceuticals and food industry) that proved rather resilient to the downturn, 
and  the  large  and  timely  fiscal  stimulus  from  the  government.  While  private  consumption  and 
exports took a dive in 2020 due to the confinement measures in Denmark and its export markets, 
investment still increased by 2.1%. The construction sector was a major driver, growing by 7.6% 
in  2020  supported  by  the  public  sector  demand  for  construction  and  rising  house  prices.  A 
gradual  reopening  and  a  recovery  in  external  demand  are  expected  to  pave  the  way  for  an 
acceleration of economic activity. As a result, after a drop in real GDP of 2.7% in 2020, output is 
forecast to expand by 2.9% in 2021 and by 3.5% in 2022.  

The Danish government has put in place timely and appropriate measures to mitigate the 
negative  economic  and  social  impact  of  the  crisis.  Emergency  measures  included  direct 
support  to  cover  businesses’  fixed  costs  and  wage  expenditures,  tax  payment  deferrals,  capital 
release for banks  and liquidity provision for firms. The amount of direct  grants  reached 3% of 
GDP,  while  the  liquidity  and  guarantee  measures  amounted  to  more  than  22.3%  of  GDP.  The 
government also paid out direct cash transfers to households (related to frozen holiday savings) 
to  support consumption at  the magnitude of 5 weeks of household  income or 3.3% of GDP  in 
late  2020  and  in  early  2021.  The  pre-existing  tax-benefit  system  and  the  emergency  policy 
measures  to  address  the  exceptional  socio-economic  situation  are  estimated  to  have  cushioned 
about  93%  of  the  shock  on  households’  income,  with  the  monetary  compensation  schemes 
absorbing  the  largest  share  of  the  market  income  shock  (70%).2  Investment  surprised  on  the 
upside  throughout  the  coronavirus  crisis  and  will  be  further  supported  by  the  government’s 
national economic ‘recovery package’ reaching approximately 1.7% of GDP.   

Unemployment  rose  moderately  in  2020.  When  the  pandemic  hit  in  spring  2020,  Denmark 
quickly established a wage support scheme to avoid massive lay-offs in the economy and prevent 
a  surge  in  unemployment.  The  resumption  of  economic  activity  following  the  end  of  the 
lockdown period quickly spread to the labour market: from the 70000 jobs lost in the first half of 
2020,  more  than  50000  had  already  been  recovered  by  end  of  the  year,  paving  the  way  for  a 

2 See Christl, M, De Poli, S., Figari, F., Hufkens, T., Leventi, C., Papini, A. and Tumino, A. (2021) “The cushioning 
effect  of  fiscal  policy  in  the  EU  during  the  COVID-19  pandemic”,  JRC  Working  Papers  on  Taxation  and 
Structural  Reforms,  02/2021  (forthcoming);  and  Almeida,  V.,  Barrios,  S.,  Christl,  M.,  De  Poli,  S.,  Tumino,  A., 
Van der Wielen, W. (2020): ‘Households´  income and the cushioning effect of fiscal policy measures during the 
Great Lockdown’, JRC Working Paper on Taxation and Structural Reforms, 06/2020, available at 

https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf. 

6 

 
 
                                                           
 
further recovery. As a result, the unemployment rate only increased from 5% in 2019 to 5.8% in 
2020.  With  job  creation  projected  to  rise  in  line  with  the  reviving  economic  activity,  the 
unemployment rate is set to decline steadily to 5.2% by 2022. 

The  economic  downturn  in  2020  had  limited  impact  on  Denmark’s  social  situation. 
Denmark remains a society with limited economic inequality, as income inequality is markedly 
below  the  EU  average.  The  ‘at  risk  of  poverty’  or  ‘social  exclusion’  (AROPE)  rate  stood  at 
15.9%  in  2020.Vulnerable  groups  are  more  likely  to  be  at  risk  of  poverty  or  social  exclusion, 
including  non-EU  born,  children,  low  skilled  workers,  and  people  with  disabilities.  The  social 
situation for people above the age of 65 is generally relatively favourable. Income inequality has 
remained fairly stable in recent years, while the median household income has increased slightly.  

Government finances have been negatively impacted by the COVID-19 crisis. Nevertheless, 
the  budget  deficit  of  1.1%  of  GDP  in  2020  was  the  smallest  in  the  EU.  Government  revenues 
were boosted by high pension yield taxes reaching 2.5% of GDP, while the rise of expenditures 
remained limited to around 1.5% of GDP as the take-up of COVID-related emergency measures 
was  lower  than  expected.  In  addition,  one-off  taxes  related  to  the  payment  of  frozen  holidays 
raised government tax revenues to the tune of 0.8% of GDP. Following a steep rise in the debt-
to-GDP  ratio  in  2020,  to  42.2%  of  GDP,  government  debt  is  expected  to  reduce  gradually 
towards  38.8%  of  GDP  by  2022.  The  Commission’s  Debt  Sustainability  Monitor  of  February 
2021 projects that debt will reach 26.6% of GDP in 2031. Hence, Danish debt continues to be on 
a sustainable path. 

Some  macroeconomic  developments  could  signal  risks  of  imbalances.  The  current  account 
balance  continues  to  show  large,  albeit  narrowing,  surpluses.  It  reached  8.9%  of  GDP  in  2019 
and  is  expected  to  decline  slightly  to  8.4%  of  GDP  by  2022.  House  prices  accelerated 
significantly,  particularly  in  the  main  urban  areas  where  prices  were  already  high.  Over  the 
medium  term,  rising  interest  rates  could  put  a  strain  on  the  finances  of  households  that  are 
exposed  to  high  mortgage  loans  with  variable  interest  rates.  High  house  prices  coincide  with 
large  household  gross  debt  levels  in  Denmark,  thus  entailing  potential  macroeconomic  risks. 
However, some household balance sheet deleveraging is expected to continue in 2021-2022, with 
both GDP and disposable income set to recover.  

The macroeconomic scenario contained in the plan projects a rebound of economic growth 
in 2021 following the COVID-induced contraction in 2020. Real GDP growth is expected to 
reach  2.9%  in  2021  and  to  strengthen  further  to  3.8%  in  2022,  before  falling  back  to  a  more 
moderate 2.3% in 2023 and 1.3% in 2024 and 2025, respectively. According to this scenario, real 
GDP growth  would be driven by private consumption and investment,  with  a slightly negative 
contribution from net external trade. According to the plan, inflation is set to increase moderately 
as economic activity accelerates, from 0.5% in 2020 to 1.6% in 2022. 

7 

 
 
 
 
 
Table 2.1: Comparison of macroeconomic developments and forecasts 

The  macroeconomic  scenario  of  the  recovery  and  resilience  plan  is  cautious  compared  to 
the Commission 2021 spring forecast. The plan forecasts a weaker recovery in 2021 than the 
Commission  forecast,  while the figures  are more aligned for 2022. For 2021, the plan forecast 
assumes  a  weaker  release  of  pent-up  demand  pushing  private  consumption  and  a  weaker 
improvement  in  the  external  environment,  resulting  in  less  robust  investment  growth.  As  a 
further consequence, the plan projects less favourable labour market developments and slightly 
lower  inflation  in  2021,  compared  with  the  Commission  forecast.  For  the  general  government 
deficit and debt, the Danish authorities forecast a budget deficit of 3.3% of GDP for 2021 (above 
the  3%  threshold  and  above  the  Commission  forecast  of  2.1%  of  GDP).  Due  to  the  less 
favourable  outlook  for  private  consumption  and  employment,  as  well  as  less  optimistic 
assumptions  as  regards  pension  yield  tax  revenues,  Denmark  forecasts  lower  tax  revenues  in 
2021 than the Commission. The macroeconomic and fiscal outlook continues to be affected by 
high uncertainty related to the COVID-19 pandemic and its economic consequences.  

2.2  Challenges  related  to  sustainable  growth,  cohesion,  resilience  and  policies  for 

the next generation  

Smart, sustainable and inclusive growth 

inclusive 
The  Danish  economy 
growth. However,  despite  its  overall  good  performance,  the  Danish  economy  faces  a  set  of 
challenges across several policy areas.  

in  terms  of  smart,  sustainable  and 

is  advanced 

The current  account  surplus  remains  high,  but  this  is  mainly  due  to  high  savings  rather 
than low investment. Declining corporate savings are compensated by increasing household and 
government  savings.  Corporate  investment,  driven  by  large  companies,  is  well  above  the  euro 
area  average,  but  investment  by  smaller  companies  remains  relatively  subdued.  In  addition, 
consecutive  surpluses  have  led  to  an  important  positive  net  international  investment  position, 
generating positive net primary income, which have in turn fuelled current account surpluses.  

8 

 
 
 
 
 
 
 
 
 
Productivity  growth  has  been  sluggish for  a  prolonged period.  High  productivity  growth  is 
fundamental  to  support  economic  growth,  maintain  the  relatively  high  level  of  welfare  in 
Denmark and ensure the country’s competitiveness. While Denmark’s productivity level is high 
compared to  other EU Member States, productivity  growth has been on the weak side.  Labour 
productivity  growth  has  picked  up  since  2015  due  to  the  strong  performance  of  the 
manufacturing sector, while remaining moderate in the domestically oriented services sector3.   

While  many  companies  are  created  in  Denmark,  start-ups  and  small  and  innovative 
companies  struggle  to  scale  up  and  grow.  A  smaller  share  of  businesses in  Denmark 
survives over the 1-, 3- and 5-year mark than in most Member States. In addition, young, high-
growth  innovative  companies  often  leave  Denmark  as  they  scale  up.  Equity  financing  is 
relatively low and venture capital expenditure is among the lowest in the EU at 0.1% of GDP in 
2019.  

R&D  activity  remains  concentrated  in  a  small  number  of  large  firms  in  a  few  sectors, 
notably pharmaceuticals and biotechnology4. Increasing productivity gaps between large and 
small  firms  suggest  weaknesses  in  the  diffusion  of  technological  advance,  meaning  that  high 
R&D spending is not sufficiently translated into productivity gains.  Incentivising investment in 
intangible  assets  could  boost  the  innovation  capacity  of  small  and  young  firms.  Investments 
broadening  the  innovation  base  and  knowledge  spill-overs  from  large  companies  to  SMEs  and 
support to innovative start-ups remain insufficient.    

Social and territorial cohesion   

The  Danish  labour  market  faces  sector-specific  labour  supply  and  demand  mismatches. 
While less evident during the pandemic, these appear to be structural. In particular, the supply of 
graduates from vocational education and training (VET) remains low as VET programmes fail to 
attract  sufficient  numbers  of  young  people.  The  share  of  young  people  starting  a  VET 
programme  directly  after  compulsory  school  has  stagnated  at  around  20%,  significantly  below 
the  government´s  2025  target  of  30%.  Regional  differences  are  also  significant, with  young 
people  in  larger  cities  participating  less  in  VET  programmes  than  those  in  other  parts  of  the 
country.   

Lower  skill  levels  of  people  on  the  margins  of  the  labour  market  hamper  better  labour 
market outcomes. Re- and upskilling are important to ensure the cohesion and resilience of the 
labour market, including for people with migrant backgrounds. The COVID-19 crisis has forced 
some firms to abolish several apprenticeship places, which may make it harder for these students 

3  See  for  instance  Denmark  Country  Report  2020  SWD(2020)  903  final  or  De  Økonomiske  Råd  (2021). 

Produktivitet 2021. Rapport fra produktivitetsråddet.https://dors.dk/vismandsrapporter/produktivitet-2021. 

4  Grassano,  N.,  Hernandez  Guevara,  H.,  Tuebke,  A.,  Amoroso,  S.,  Dosso,  M.,  Georgakaki,  A.  and  Pasimeni,  F. 
(2020) The 2020 EU Industrial R&D Investment Scoreboard, EUR 30519 EN, Publications Office of the European 
Union, Luxembourg, ISBN 978-92-76-27418-6, doi:10.2760/203793, JRC123317. 

9 

 
 
 
 
 
 
                                                           
 
to complete their VET studies. Improving employment rates among young people and vulnerable 
groups remains a challenge. The total number of marginalised persons has decreased. Still, lower 
than  average  employment  rates  can  be  observed  for  young  people,  migrants  and  people  with 
disabilities.  Some  groups  prove  difficult  to  integrate  in  the  labour  market  with  standard  policy 
tools.  

Health, and economic, social and institutional resilience 

Denmark’s  effective  handling  of  the  COVID-19  pandemic  is  testimony  to  its  well-
functioning  health  system.  The  health  system  is  characterised  by  well-developed  e-health 
services  and  broad  use  of  data  for  care  provision  and  policymaking.  This  has  proved  useful 
during  the  pandemic.  Nevertheless,  the  system  faces  challenges  that  predate  the coronavirus 
outbreak,  for  instance  a  shortage  of  health  workers,  in  particular  nurses.  Patient  overload 
prevents some general practitioners from admitting new patients. Hospitals, general practitioners 
and municipalities use different digital solutions, which are not always fully interoperable.   

Despite substantial deleveraging in recent years, gross debt of Denmark’s household sector 
is higher than the economic fundamentals would imply. Danish households have one of the 
highest levels of spending on mortgage debt services in the EU. The household sector’s debt is 
offset  by  substantially  higher,  albeit  largely  illiquid,  financial  assets,  notably  real  estate  and 
pension savings. The last decade has seen some deleveraging on the side of households, in part 
spurred  by  low  interest  rates.  In addition,  several  policy  measures  have  been  put  in  place  to 
address this underlying risk in recent years, but it takes time for their positive effects to be visible 
in  the  overall  mortgage  stock  and  for  related  financial  risks  to  be  effectively  reduced. 
Notwithstanding  the  positive  trends,  the  proportion  of  variable-interest-rate  and  interest-only 
loans  in  the  overall  mortgage  stock  remains  high.  House  price  rises  accelerated  during  the 
pandemic  due  to  increased  housing  demand  and  lower  supply.  Risks  of  house  price 
overvaluation,  particularly  in  urban  areas,  have  increased. High  house  prices  combined  with 
large household gross debt in Denmark constitute a macroeconomic risk. 

Denmark is taking action to address risks of money laundering. Following a major incident 
involving  a  Danish  bank’s  foreign  subsidiary  in  2018,  Denmark  has  taken  several  measures  to 
strengthen  its  anti-money  laundering  (AML)  framework.  Legislative  steps  included  the 
transposition of the 4th  and the 5th  AML Directives. The Financial Supervisory Authority and 
the  Financial  Intelligence  Unit  have  been  reinforced  by  increasing  budget  and  adding  staff. 
However,  the  effectiveness  of  the  enhanced  AML  framework  in  terms  of  supervision  and 
enforcement  still  needs  to  be  demonstrated.  Procedures  applying  the  risk-based  approach, 
adequate training and qualification of new staff and better cooperation between relevant Danish 
and international AML authorities are currently being implemented.   

Policies for the next generation, children and young people, including education and skills 

Young  people  in  Denmark  benefit  from  a  well-performing  education  system,  but  the 
educational outcomes of pupils with a migrant background remain a challenge. Educational 
outcomes  are  generally  above  the  EU  average.  However,  outcomes  of  pupils  with  a  migrant 
background remain a challenge despite relatively high participation in early childhood education 

10 

 
 
 
 
 
 
 
and care (compared to other EU countries) and early school leaving rates being no higher than 
those among Danish-born pupils. For all Danish pupils, the early school leaving rate fell to 7.5% 
in 2015, but increased again to 9.3 % in 2020, just below the 10% national target.  

The education system managed to adapt rather well to the consequences of the COVID-19 
crisis. Well-developed ICT infrastructure and digital competences of teachers and pupils allowed 
a  quick  adaptation  to  distance  learning.  Digital  competences  among  students  are  on  average 
higher  than  in  other  countries.  However,  according  to  the  digital  economy  and  society  index 
(DESI) 5 out of 10 students score at ‘basic use’ level or lower. This indicates that there is still a 
need for them to upgrade their skills. Moreover, social educators and teachers need to improve 
their generally good digital skills to use specific digital resources. 

2.3  Challenges related to the green and digital transitions  

Green dimension  

The recovery and resilience plan should contribute to the green transition and at least 37% 
of the financial allocation should contribute to climate objectives. The measures in the plan 
should  contribute  to  achieving  the  2050  climate  neutrality  objective,  and  the  2030  energy  and 
climate  targets,  taking  into  account  Denmark’s  national  energy  and  climate  plan  (NECP).  The 
plan should also contribute to meeting environmental targets for waste, water, pollution control, 
sustainable mobility, biodiversity protection and restoration, and marine and water resources, and 
support the transition to sustainable food systems and a circular economy as appropriate, while 
ensuring that nobody is left behind.  

Denmark  aims  to  combine  sustained  economic  growth  with  lowering  GHG  emissions. 
Between  1990  and  2019,  Denmark’s  GHG  emissions  fell  by  34%[1],  while  per  capita  GDP 
increased by 63%. This has been supported by ambitious climate policies5. 

Greenhouse gas (GHG) emissions 

Denmark has set an ambitious GHG emissions reduction target of 70% by 2030 relative to 
the 1990 level, and climate neutrality by 2050 at the latest. Achieving this target will require 
significant  investments  and  reforms  across  the  economy,  especially  in  installation  of  new 
renewable-energy  capacity,  in  households  (energy  efficiency  and  conversion  of  heat  supply), 
industry,  biogas,  and  district  heating.  Successful  GHG  reduction  would  give  the  country  an 
opportunity to improve economic growth, job creation and health benefits6, while building on its 

5Climate  Action 

2020, 
https://ec.europa.eu/clima/sites/clima/files/strategies/progress/docs/com_2020_777_en.pdf 

by  DG  CLIMA 

Progress  Report 

published 

in  November 

2020. 

6 Shnapp, S., Paci,  D. and Bertoldi,  P.,  Untapping multiple benefits: hidden values in environmental and building 
policies,  EUR  30280  EN,  Publications  Office  of  the  European  Union,  Luxembourg,  2020,  ISBN  978-92-76-
19983-0, doi:10.2760/314081, JRC120683. 

11 

 
 
 
 
   
                                                           
 
existing position in the development and marketing of carbon-neutral technologies, which could 
further strengthen its competitiveness. Following the assessment of its NECP7, Denmark is likely 
to  meet  its  EU  commitments  (see  Table  2.3)  but  will  need  to  take  additional  policy  action  to 
achieve its own national objectives, especially in non-ETS sectors, as they account for the largest 
share (69%) of GHG emissions4.   

Denmark has a national binding reduction target of 39% for GHG emissions not covered 
by the EU emissions trading system, in line with the Effort Sharing Regulation.  Presently, 
buildings, transport and agriculture are the largest GHG-emitting sectors, and the latter two with 
the  lowest  marginal  abatement  costs  (i.e. cost  of  reducing  one  more  unit  of  pollution).  As  of 
2019, Denmark had reduced its effort-sharing sector emissions by 19% compared to 2005. The 
NECP  contained  limited  information  on  how  Denmark  plans  to  meet  its 2030  non-ETS  target. 
Specifically,  the  plan  presents  only  a  scenario,  in  which  the  2030  non-ETS  target  would  be 
missed by 13 percentage points (i.e. 28.3 million tonnes of CO2 equivalent).  For the non-ETS 
emission  reduction  target,  Denmark  confirmed  that  it  will  make  use  of  available  2%  ETS 
flexibility  (i.e.  8  million  t  CO2e  eq)  and  generate  over  14.6  million  land-use,  land-use  change 
and forestry (LULUCF) credits to comply with the Effort Sharing Regulation.  

As  regards  investments,  the  NECP  estimates  that  the  cumulated  public  and  private 
investment needs would amount to DKK 100-180 billion in 2020-2030. This is equivalent to 
approximately  DKK  10  billion  investment  annually  (around  0.4%  of  GDP).  Of  the  total 
investment  figure,  the  NECP  indicates  that  public  sources  of  annual  funding  (i.e. future  state 
budget laws) will increase gradually to DKK 2.8 billion in 2025 (EUR 375 million, roughly 0.1% 
of GDP).  

Energy efficiency  

Energy  consumption  increased  in  the  years  up  until  2020,  which  highlights  the  need  for 
additional policy and measures. Denmark forecasts an increase in final energy consumption by 
2030 compared with 2018, having achieved annual reductions from 2005 to 2018. Reducing total 
consumption  thus  requires  additional  steps,  notably  increasing  energy  efficiency  in  industry, 
services, buildings and (road and air) transport. 

Increasing investment in the energy efficiency of buildings would significantly reduce GHG 
emissions. In the NECP, Denmark indicates a contribution for 2030 of 18.3 million tonnes of oil 
equivalent (Mtoe) for primary energy consumption and 15.8 Mtoe for final energy consumption, 
which  the  Commission  assessed  as  a  very  low  ambition  given  that  latest  data  indicate  a 
consumption  of  16.8  Mtoe  for  primary  energy  consumption  and  14.3  Mtoe  for  final  energy 

7  Economidou,  M.,  Ringel,  M.,  Valentova,  M.,  Zancanella,  P.,  Tsemekidi  Tzeiranak,  S.,  Zangheri,  P.,  Paci,  D., 
Ribeiro Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the 
EU Energy Union, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-
76-27013-3, doi:10.2760/678371, JRC122862. 

12 

 
 
 
 
 
 
                                                           
 
consumption  in  2019.  Denmark  has  already  reduced  the  energy  consumption  of  the  building 
stock  in  the  last  30  years,  but  a  significant  share  of  the  building  stock  complies  only  with 
minimum  energy  efficiency  standards.  In  its  long-term  renovation  strategy,  Denmark  indicates 
that the final energy consumption for heating in housing per square metre of area heated has been 
reduced by almost 45% compared to 1975, and net heat consumption per square metre has been 
reduced by almost 30% over the same8 period. Denmark aims to reduce the energy consumption 
of  the  existing  building  stock  by  50%  on  average,  in  order  to  reach  the  target  of  a  fossil-free 
society in 2050, triggered by a fossil-free energy supply in 2050. To achieve this, more than 30% 
of the building stock needs to be renovated by 2050 – and 80-85% of this potential is in buildings 
built before 1980. Therefore, special focus should be put on the worst-performing sector of the 
building  stock  and  the  renovation  depth,  in  line  with  the  Renovation  Wave  initiative  and  the 
national long-term renovation strategy9.   

Ensuring  a  socially  fair  transition  to  a  low-carbon  society  is  a  challenge.  Anticipating  and 
mitigating negative social impacts will be crucial, for instance by ensuring that affected groups 
can benefit from re- and up-skilling and by monitoring distributional effects.  

Share of renewables in energy mix 

Denmark’s  climate  objectives  will  require  additional  investments  in  renewable  energy 
generation,  notably  offshore  wind.  Denmark  is  highly  energy-independent,  notably  due  to  a 
high share of renewable energy, at 35.4% in 2018, which is well above the EU average (18.9%) 
and aims to generate more than 100% of its electricity consumption by renewables by 2030. This 
will require significant investments in renewable energy generation, notably offshore wind. In its 
NECP, Denmark estimates that the public and private investment flows from 2018 to 2030 will 
reach DKK 60-90 billion (around 3-4% of GDP) for new renewable energy capacity installed. 

Further investments in the grid network are necessary to ensure that the increasing share 
of renewable energy can be used efficiently. Investments in the grid, as well as energy system 
integration,  such  as  linking  the  various  energy  carriers  with  each  other  and  with  the  end-use 
sectors, such as buildings, transport or industry, will be necessary to increase the penetration of 
renewables in the energy system and the electrification of the energy mix. Exploiting Denmark’s 
full  renewable  energy  potential  will  require  additional  specific  measures,  including  on  system 
flexibility, smart grids and storage.  

Biodiversity and zero pollution 

8  Castellazzi,  L.,  Zangheri,  P.,  Paci,  D.,  Economidou,  M.,  Labanca,  N.,  Ribeiro  Serrenho,  T.,  Zancanella,  P.  and 
Broc, J., Assessment of second long-term renovation strategies under the Energy Efficiency Directive, EUR 29605 
ISBN  978-92-79-98727-4, 
EN,  Publications  Office  of 
doi:10.2760/973672, JRC114200. 

the  European  Union,  Luxembourg,  2019, 

9  Zangheri,  P.,  Armani,  R.,  Kakoulaki,  G.,  Bavetta,  M.,  Martirano,  G.,  Pignatelli,  F.  and  Baranzelli,  C.,  Building 
energy  renovation  for  decarbonisation  and  Covid-19  recovery,  EUR  30433  EN,  Publications  Office  of  the 
European Union, Luxembourg, 2020, ISBN 978-92-76-24766-1, doi:10.2760/08629, JRC122143. 

13 

 
 
 
 
 
 
                                                           
 
While  environmental  policy  implementation  in  Denmark  is  generally  of  a  high  standard, 
some EU environmental objectives are not yet fully met. As an intensely farmed country with 
relatively  high  population  density,  Denmark  is  facing  pressures  from  agriculture,  transport, 
building  and  production  infrastructure.  The  main environmental challenges  are  to  improve  the 
status  of  natural  habitats  and  biodiversity  protection,  air  and  water  quality  and  the  waste 
management system. Investments from national and EU programmes need to focus particularly 
on diminishing the pressures on natural habitats and species from intensive agriculture, including 
a  decrease  in  the  use  of  pesticides  and  nutrients, increasing  restoration  efforts and  cutting 
pollution  in  Danish  waters  and  in  the  Baltic  Sea. Further  reducing  waste  and  ensuring 
compliance with the recycling targets for the post-2020 period remain a challenge.  

Sustainable transport   

Sustainable transport is a cornerstone of the green transition. Fighting road transport 
bottlenecks, electrification of the railways, building the Fehmarn tunnel and other infrastructure 
encouraging electricity-based transport, are priority areas in which investments and reforms may 
be needed, for instance in the form of tax incentives to encourage consumers to choose electric 
vehicles. Sustainable fuels for road, maritime and air transport are essential for the green 
transition. Denmark is currently exploring the feasibility of establishing a large-scale plant to 
convert electricity from sustainable sources such as wind power to renewable fuel (notably 
hydrogen), in turn allowing ships to use green energy, for example. Additional projects on CCS 
and ‘power to –X’ are pivotal in achieving the 100% renewable energy share and reducing GHG 
emissions.  

The  table  below  gives  an  overview  of  Denmark’s  objectives,  targets  and  contributions 
under  Regulation  (EU)  2018/1999  of  the  European  Parliament  and  of  the  Council  on  the 
Governance of the Energy Union and Climate Action. 

Table 2.3. Overview of Denmark’s objectives, targets and contributions under Regulation 
(EU) 2018/1999 

Latest 
available 
data  

2020  

2030   

Assessment of 
2030 ambition 
level  

-19%  

-20%  

-39%   As in ESR 

37.2%  

30%  

55%  

National targets and 
contributions   

Binding target for GHG 
emissions compared to 2005 
under the Effort Sharing 
Regulation (ESR)   
National target/contribution 
for renewable energy:  
share of energy from 
renewable sources in gross 
final consumption of energy   
National contribution for 
energy efficiency:  

Primary energy consumption   

16.8 Mtoe   17.5 Mtoe  

18.3 Mtoe  

Final energy consumption   

14.3 Mtoe   15.2 Mtoe  

15.8 Mtoe  

14 

Sufficiently 
ambitious (46% 
is the result of 
RES formula)  

Very low 
ambition  

Very low 
ambition  

 
 
  
   
  
  
  
  
  
  
  
  
  
  
  
Level of electricity 
interconnectivity   

51%  

N.A.  

N.A  

N.A.  

Source: Assessment of Denmark’s final NECP (SWD (2020) 926 final) 

Digital dimension  

The  recovery  and  resilience  plan  should  contribute  to  the  digital  transition  and  at  least 
20% of the financial allocation needs to contribute to digital objectives. The measures in the 
plan  should  contribute  to  the  digital  transformation  of  all  sectors,  (including  public 
administration, public services, and the justice and health systems. The aim should be to improve 
not only the competitiveness, but also the resilience, agility and security of companies and public 
actors, while ensuring inclusiveness. 

Denmark ranked third in the Commission’s 2020 Digital Economy and Society Index. The 
‘strategy  for  Denmark’s  digital  growth’,  adopted  in  2018,  sets  an  ambitious  objective  for 
Denmark to be a digital frontrunner by integrating the use of new technologies, enhancing digital 
skills and thereby improving growth and prosperity. 

Denmark remained a leader in connectivity in 2020, improving its performance at a faster 
pace  than  the  EU  average.  5G  and  fixed  very  high-capacity  network  coverage,  mobile 
broadband  take-up  and  5G  readiness  are  among  the  best  in  the  EU.  The  take-up  of  fixed 
broadband  focuses  on  high  bandwidths  and  is  complemented  by  extensive  mobile  broadband 
services. As fibre roll-out continues, a high share of households is covered with FTTP (fibre-to-
the-premises) in Denmark (70% against the EU average of 42.5%).    

As  regards  the  human  capital  dimension,  Denmark  performs  above  the  EU  average  on 
digital skills. 70% of the population have at least basic digital skills, which is well above the EU 
average  of  56%,  and  49%  have  above-basic  digital  skills  (EU  average  31%).  Danish  firms  are 
among  the  European  leaders  in  the  uptake  of  several  of  the  most  common  digital  services  and 
technologies  and  investing  in  training  their  employees  for  acquiring  and  improving  their 
information and communication technology (ICT) skills.  

The  low  share  of  ICT  specialists  in  the  workforce  remains  a  challenge.  In  2020  ICT 
specialists accounted for 5.5% of total employment and only 22% of those jobs were occupied by 
females.  ICT  graduates  accounted  for  4.8%  of  all  graduates  in  Denmark10.  In  2020,  58.1%  of 

10  Gómez  Losada  et  al.  (2020)  estimate  an  unmet  demand  for  tertiary  study  places  of  advanced  digital  skills  in 
Denmark  across  technological  domain,  scope  of  specialization,  and  level  of  studies.  Gómez  Losada,  Á.,  López-

15 

 
 
  
 
 
                                                           
 
 
 
enterprises were looking for  ICT specialists reported hard-to-fill  vacancies, which is  above the 
EU average (55.4%). Denmark has allocated EUR 16.1 million to create more study places; of 
this, a significant proportion will be allocated to programmes in science, technology, engineering 
and  mathematics  (STEM)  subjects,  including  IT11.  This  comes  on  top  of  the  extra  EUR  13.7 
million allocated to create more STEM study places in December 201912. As a result, the intake 
in STEM education programmes increased by 9% (1 380 study places) in summer 202013. 

A key challenge is the inclusion of women in digital jobs, careers and entrepreneurship to 
increase the total share of ICT specialists in the workforce. In 2019, the Ministry of Higher 
Education  and  Science  launched  a  ‘national  action  plan  for  digital  skills’  based  on  ideas  and 
experiences  from  higher  education  institutions.  This  prepared  institutions  for  the  COVID-19 
pandemic. Lockdowns forced many education institutions to move to distance learning activities 
and the use of digital tools increased by a factor of up to 200 within a short time span. In 2020, 
the Ministry allocated EUR 6 million to nine projects to strengthen digital competencies among 
teachers in higher education14. 

SMEs  face  a  growing  shortage  of  talent  with  advanced  digital  skills  in  areas  such  as 
artificial  intelligence,  high-performance  computing,  cybersecurity  and  machine  learning. 
The 2020 digital programme for SME development provides public subsidies for strengthening 
small  businesses’  trading  capabilities,  digital  transformation  and  e-commerce  activities,  in  turn 
strengthening  digital  skills  in  SMEs.  Over  900  enterprises  benefited  from  the  programme  in 
2020. The programme has received additional government funds to advance the digital transition 
and improve e-commerce capabilities. 

Danish  firms  continue  to  have  one  of  the  highest  digital  intensities  in  the  EU.  When 
measured  against  the  12  key  digital  technologies  covered  by  the  Digital  Intensity  Index,  more 
than  45%  of  companies  in  Denmark  are  highly  or  very  highly  digitalised,  significantly  higher 
than the EU average of 15.4%. Furthermore, 57% of enterprises use cloud (EU average: 26%), 
27%  big  data  (EU:  14%)  and  22%  artificial  intelligence  (EU:  25%).  Online  sales  are  also 
increasing, pushed by the lockdown, with 20% of turnover generated by online sales. With 38%, 

Cobo, M., Samoili, S., Alaveras, G., Vázquez-Prada Baillet, M., Cardona,M., Righi, R., Ziemba, L., and De Prato, 
G.  (2020)  Estimation  of  supply  and  demand  of  tertiary  education  places  in  advanced  digital  profiles  in  the  EU. 
Focus on  Artificial Intelligence, High Performance  Computing, Cybersecurity and Data  Science, EUR30377EN, 
Publications Office of the European Union, Luxembourg, JRC121683. 

11 https://ufm.dk/aktuelt/pressemeddelelser/2020/rekordmange-er-optaget-pa-en-videregaende-uddannelse  
12 https://ufm.dk/aktuelt/pressemeddelelser/2019/udsigt-til-oget-optag-pa-stem-uddannelser  
13 https://ufm.dk/aktuelt/pressemeddelelser/2020/rekordmange-er-optaget-pa-en-videregaende-uddannelse  
14 https://ufm.dk/aktuelt/pressemeddelelser/2020/fremtidens-undervisere-skal-mestre-de-digitale-muligheder  

16 

 
 
                                                                                                                                                                                           
 
the share of SMEs selling online is significantly above the EU average of 17%, and 10% sell to 
other EU countries. 

While the digitalisation of Danish firms is progressing steadily overall, this is less the case 
for SMEs. 85.3% of large firms had high levels of digital intensity in 2020, but this applied to 
only 43.8% of SMEs.  Only 2.7% of large firms  had very low digital  intensity, while this ratio 
was 11.6% for SMEs. 62.2% of large firms sold online, but only 37.7% of SMEs. 

In digital public services, Denmark ranks well above the EU average. The share of citizens 
interacting  with  public  authorities  online  and  submitting  online  forms  (92%)  is  well  above  the 
EU average (64%). Denmark  is  also  a leader in  the EU on digital  public services  provided for 
businesses.  The  2016-2020  digital  strategy  promoted  the  digitalisation  of  Danish  public 
administrations at all levels of government, i.e. local, regional and central.  

Cybersecurity  constitutes  a  key  challenge  for  the  continued  digital  transformation.  It  is 
therefore  imperative  to  achieve  an  adequate  level  of  security  to  manage  and  reduce  financial, 
operational, reputational and legal risks. The 2018-2021 cyber and information security strategy 
helps operators in the Danish healthcare sector to step up joint and coordinated actions to predict, 
prevent, detect and respond to cyber and information security incidents.  

Denmark  has  a  good  R&D  ecosystem,  and  the  government  has  taken  steps  to  foster 
digitally-related investment in R&D. In 2020, the government decided to allocate an additional 
DKK  3.2  billion  to  green  digital  research  and  innovation  projects  in  areas  including  artificial 
intelligence,  robot  technology  and  digitalisation  in  the  agricultural  sector.  As  regards  the 
development and deployment of advanced technologies, Denmark has signed the Declaration on 
Cooperation on Artificial Intelligence (AI). In March 2019, the Danish government launched its 
national  strategy  for  AI.  The  aims  of  the  strategy  are  for  Denmark  to  be  a  front-runner  in  the 
responsible  development  and  use  of  AI,  and  to  benefit  individuals,  businesses  and  society  at 
large. For this, Denmark needs to invest even more to build further technological capacity (e.g. 
supercomputers,  quantum  computing,  AI,  cybersecurity, 
things  and  new 
communication services such as edge computing).  

internet  of 

As regards the greening of the digital sector, Denmark is moving forward in green public 
procurement. The green digital public procurement plan adopted in 2020 could make a positive 
contribution  to  a  greener  economy,  notably  through  assessing  offers  on  a  lifetime  cost  basis. 
Denmark  has  a  challenge  with  high  amounts  of  e-waste,  which  is  addressed  inter  alia  through 
municipal sorting requirements. 

17 

 
 
Graph 2.3.  Denmark’s ranking in the Digital Economy and Society Index 202015 

https://ec.europa.eu/digital-single-market/en/scoreboard/denmark 

Box 2.3: Progress towards the UN sustainable development goals  

Sustainable Development Goals and the four dimensions underpinning the Annual 
Sustainable Growth Strategy.  

15 EU aggregate corresponds to EU28, based on 2020 DESI report. 

18 

 
 
 
 
                                                           
 
The  objectives  of  the  sustainable  development  goals  have  been  integrated  in  the  European 
Semester  since  the  2020  cycle.  This  provides  a  strong  commitment  to  sustainability  in  the 
coordination of economic and employment policies in the EU. In that respect, this Box outlines 
Denmark’s performance with respect to SDGs with particular relevance for the four dimensions 
underpinning the 2021 annual sustainable growth strategy and of relevance to the recovery and 
resilience  plans 
transition  and  productivity,  and 
fairness,  digital 
macroeconomic stability), indicating possible areas where investments and reforms in line with 
the objectives of the RRF could further accelerate progress on the SDGs. 

transition, 

(green 

Green transition 

Denmark  performs  well  on  many  SDGs  related  to  the  green  transition.  It  is  an  international 
leader in climate action (SDG13) and has made good progress on this SDG. It performs well on 
affordable and clean energy (SDG7). It has a high share of renewable energy in its energy mix, 

19 

 
 
 
making it highly energy independent.  Its share of renewable energy was 35.4 % in 2018, well 
above the EU average (18.9%). However, little progress was made in reducing emissions from 
fuels  and  cars.  CO2  emissions  from  new  passenger  cars  increased  slightly  in  2018,  to  109.5g 
CO2/km, continuing an upward trend from 2016. On waste generation and recycling, Denmark 
is slightly below the EU average. However, the country scores lower than the EU average on the 
use  of  circular  material  (SDG11,  sustainable  cities  and  communities  and  SDG12,  responsible 
consumption and production). 

Fairness 

Denmark  has  generally  high  rankings  on  indicators  assessing  the  fairness  of  society  and  the 
economy. For instance, it performs well on all the indicators pertaining to SDG1 (no poverty), 
SDG5  (gender  equality)  and  SDG10  (reducing  inequalities).  Its  results  on  quality  education 
(SDG4) are high (with the exception of young with migrant background) and recovering from a 
slightly downward trend.  

Digital transition and productivity 

Denmark performs well on indicators related to industry, innovation and infrastructure (SDG9), 
It ranked first among EU Member States on R&D personnel as a share of the active population 
in 2020 (2.1%, EU average 1.4%). 

Macroeconomic stability 

Denmark  performs  well  on  indicators  measuring  ‘peace,  justice  and  strong  institutions’ 
(SDG16),  where  it  scores  high  in  a  global  context  on  the  perceived  absence  of  corruption. 
According to the 2021 EU Justice Scoreboard, 74% of the general public perceive the level of 
independence  of  courts  and  judges  to  be  ‘fairly  or  very  good’.  In  a  similar  vein,  Denmark 
performs  well  on  SDG8  (decent  work  and  economic  growth),  where  it  is  among  the  best 
performers.  The  employment  rate  is  above  the  EU  average,  reaching  77.8%  in  2020  (EU 
average 72.4).  

20 

 
 
 
 
 
3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1  Overall strategy of the plan  

The Danish plan supports the massive investments in the green transition that are necessary 
to reach the target of lowering GHG emissions in Denmark by 70% by 2030, a target agreed by a 
broad majority in the Danish Parliament. Since the government came into office almost 2 years 
ago, decisions and political agreements have been made to reduce Denmark’s GHG emissions by 
9.1 megatons by 2030, of which the initiatives in the plan contribute 2.8 megatons. 

The  basic  idea  behind  Denmark’s  recovery  and  resilience  plan  is  thus  to  use  economic 
stimulus  to  accelerate  investments  in  the  green  transition.  Funds  in  the  plan,  which  are 
roughly  matched  by  national  funds,  will  help  stimulate  the  economy  and  support  jobs  and 
companies in the short term while helping speed up the green transition in the medium to  long 
term. This effort is crucial to realising Denmark’s ambitious climate target and to underpinning 
the common EU climate targets. Getting all the way to a 70% reduction in GHG emissions by 
2030 will require large investments, in particular in research, technology and infrastructure. The 
plan therefore channels approximately 60% of the funds to green initiatives. 

The  plan  builds  on  the  input  from  eight  ‘restart  teams’  form  the  business  sector,  with 
participation  from  the  social  partners.  The  teams  investigated  possible  initiatives,  with  a 
special  emphasis  on  strengthening  Danish  trading  opportunities,  and  regularly  reported  to  the 
government on their conclusions. The plan has also benefitted from recommendations from the 
13  climate  partnerships  with  business  and  industry.  The  partnerships  were  tasked  with 
identifying and developing new green solutions, which would both reduce business and industry 
emissions and strengthen companies’ green competitiveness. 

The  plan  is  made  up  of  seven  components.  In  addition  to  its  contribution  to  reaching 
Denmark’s  climate  targets,  the  plan  promotes  digitalisation,  job  creation  and  resilience  of  the 
health care system. 

The plan does not explicitly include cross-border projects. However, it is noted that Denmark 
presents the carbon capture and storage project (‘CCS potential’) in component 3 as an important 
first step in view of the later creation of a European CO2 storage infrastructure. 

Table 3.1. Overview of plan: components and associated costs 

Component 
 Strengthening the resilience of the healthcare system 
 Green transition of agriculture and environment 
 Energy efficiency, green heating and carbon 
 capture and storage 
 Green tax reform 
 Sustainable road transport 
 Digitalisation 
 Green research and development 

Costs (EUR million) 
33 
178 
235 

580 
258 
89 
242 

21 

 
 
3.2  Implementation aspects of the plan 

Governance 

The Ministry of Finance will oversee coordination, monitoring and reporting on the plan’s 
implementation.  It  will  ensure  compliance  with  EU  regulations;  monitor  the  full  and  timely 
fulfilment  of  the  plan’s  strategic  and  operational  objectives  through  milestones  and  targets; 
prepare  and  submit  requests  for  disbursement  based  on  the  necessary  information  from  the 
competent authorities and reports to the Commission; ensure the evaluation of the results of the 
plan  and  the  dissemination  of  outputs;  and  provide  the  competent  authorities  with  technical 
assistance.  In  addition,  within  the  Ministry  of  Finance,  the  existing  internal  audit  unit  will  be 
assigned  the  task  of  coordinating  the  audit  systems  and  conducting  controls  on  the  line 
ministries’ application of funds and fulfilment of milestones and targets. While the Ministry will 
monitor  the  implementation  of  the  plan  and  be  responsible  for  exchanges  with  the  EU 
institutions,  responsibility  for  implementing  the  individual  components  lies  with  the  relevant 
ministries  (as  per  the  table  below).  This  ensures  that  the  plan  underpins  and  is  coherent  with 
national  strategies  in  the  various  policy  areas,  including  transport,  health,  climate  and  energy, 
environmental protection and digitalisation. 

Table 3.2. Ministries’ responsibility per component  

the 

the 

resilience  of 

Component 
Strengthening 
healthcare system 
Green  transition  of  agriculture  and  the 
environment 
Energy efficiency, green heating and CCS 
Green tax reform 
Sustainable road transport 
Digitalisation 

Green research and development 

Responsible ministry 

Ministry of Health 

Ministry of Food, Agriculture and Fishery and 
Ministry of Environment 
Ministry of Climate, Energy and Utilities 
Ministry of Taxation 
Ministry of Transport 
Ministry of Finance/ Agency of Digitalisation 
and Ministry of Industry, Business and 
Financial Affairs 
Ministry of Higher Education and Science 

Funding from the RRF and additional national or Union funds will be disbursed at central 
level. The funding for the plan  will be registered as revenue in  the Budget  Bill  for 2021 via  a 
supplementary appropriation to be adopted by the Danish Parliament's Finance Committee. This 
ensures  the  possibility  to  separate  RRF  funding  from  other  funding.  The  absence  of  double 
funding will be one of the application criteria when assessing applications for all funds under the 
plan. 

Equality 

22 

 
 
 
 
The plan describes national challenges in terms of gender equality and, to a lesser extent, 
challenges relating to equal opportunities for all. This description includes a wider reference 
to  several  legislative  or  policy  initiatives  which  are  due  to  complement  the  reforms  and 
investments  in  the  plan  in  their  efforts  to  overcome  the  identified  equality  challenges. 
Mechanisms are in place to ensure that equal opportunities will be considered when developing 
or implementing some projects. This involves, for instance, ensuring that equality considerations 
are integrated in the recommendations for the design of the new digital strategy.   

Consultation process 

The  plan  contains  information  on  the  consultation  processes  that  have  taken  place. 
Stakeholders  were  consulted  at  several  stages.  Most  of  the  consultation  processes  took  place 
prior  to  the  drafting  of  the  plan  and  in  the  context  of  the  national  ‘restart  teams’  and  climate 
partnerships. Their initiatives were fed into government initiatives that were then the subject of 
political  agreement  in  the  Danish  Parliament.    During  the  drafting  of  the  recovery  and  the 
resilience  plan,  the  Danish  authorities  consulted  individual  stakeholders  and  social  partners 
directly  and  participated  in  an  event  with  stakeholders  and  social  partners  that  was  organised 
with  the  help  of  the  local  Commission  Representation.  The  Commission  considers  that  the 
Danish authorities have fulfilled relevant obligations stemming from the RRF Regulation. 

Communication strategy 

Most  initiatives  in  the  plan  were  included  in  the  negotiations  on  the  2021  budget  or  the 
earlier  negotiations  on  economic  recovery  and  green  stimulus  in  2020.  The  inclusion  of 
projects under the plan in the national budget and in several broad political agreements (notably 
on the green tax reform and road transport) raised the profile of the RRF from the outset among 
the politically interested general public. 

In the run-up to the submission of the plan, the Danish authorities (in cooperation with the 
Commission Representation in Denmark) organised a stakeholder event. During the event, 
the  authorities  presented  the  outline  of  the  plan,  highlighting  the  associated  business 
opportunities  in  Denmark.  In  view  of  Denmark’s  position  in  green  and  digital  goods  and 
services, the event also focused on business opportunities abroad arising from the realisation of 
other Member States’ plans. 

The plan indicates a clear commitment by the authorities to meeting the RRF Regulation’s 
requirements  on  communication.  This  refers  in  particular  to  the  labelling  of  projects  as 
financed  by  the  RRF  (‘funded  by  the  European  Union  –  NextGenerationEU’).  The 
implementation of the plan could give rise to additional communication opportunities; it will be 
up to the Danish authorities, in cooperation with the Commission, to seize such opportunities. 

State aid 

State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience Facility. Union funds channelled through the authorities of Member States, like the 
RRF funds, become State resources and can constitute State aid if all the other criteria of Article 
107(1)  TFEU  are  met.  When  this  is  the  case  and  State  aid  is  present,  these  measures  must  be 

23 

 
 
notified and approved by the Commission before Member States can grant the aid, unless those 
measures are covered by an existing aid  scheme or comply  with  the applicable conditions  of a 
block  exemption  regulation,  in  particular  the  General  Block  Exemption  Regulation  (GBER) 
declaring certain categories of aid compatible with the internal market in application of Articles 
107 and 108 TFEU16.  

When State aid is present and it requires notification, it is the duty of the Member State to 
notify  State  aid  measures  to  the  Commission  before  granting  them,  in  compliance  with 
Article  108(3)  TFEU.  In  this  respect,  the  State  aid  analysis  carried  out  by  Denmark  in  the 
recovery  and  resilience  plan  cannot  be  deemed  a  State  aid  notification.  In  as  far  as  Denmark 
considers that a specific measure contained in the recovery and resilience plan entails de minimis 
aid  or  aid  exempted  from  the  notification  requirement,  it  is  the  responsibility  of  Denmark  to 
ensure  full compliance  with  the applicable rules.  Irrespective of  whether they comply with  the 
EU’s State aid regime, measures taken under this framework should be compatible with the EU’s 
international obligations, in particular under World Trade Organization rules. 

Security self-assessment 

The  Danish  plan  does  not  include  a  security  self-assessment.  However,  the  components 
“Strengthening the resilience of the healthcare system”, “Digitalisation” and “Green research and 
development”  each  include  a  section  that  explains  the  contribution  of  the  measures  to  the 
Union’s open strategic autonomy and security issues. Denmark also confirmed that any potential 
security  issues  regarding  investments  in  the  digital  trans-formation  will  be  duly  taken  into 
account  by  the  implementing  Danish  authorities  before  initiating  the  investment.  This  includes 
choosing suppliers and in cases of outsourcing of critical and sensitive activities for the strategic 
autonomy or security of Denmark. Furthermore, the new digital strategy will include a new cyber 
security strategy, which contributes to mitigating potential security risks.  

16 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1 

24 

 
 
 
                                                           
 
4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1 Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation  

The plan constitutes a balanced response to Denmark’s economic and social situation and, 
given the specific challenges and financial allocation, is an appropriate contribution to the 
six pillars referred to in Article 3 to the Regulation. The plan contains 39 measures (6 reforms 
and  33  investments)  divided  into  seven  components  focusing  on  the  following  three  main 
objectives: green transition, digitalisation and healthcare.  

Table 4.1 - Contribution to the six pillars 

Green 
transition 

Digital 
transform
ation 

Smart, 
sustainable 
& inclusive 
growth 

Social and 
territorial 
cohesion 

Strengthening the 
resilience of the 
healthcare system 
Green Transition of 
Agriculture and 
Environment 
Energy Efficiency, Green 
Heating and Carbon 
Capture and Storage 
Green Tax Reform 

Sustainable road 
transport 
Digitalisation 

● 

● 

● 

● 

○ 

● 

● 

● 

○ 

○ 

 ○ 

● 

● 

○ 

 ● 

○ 

○ 

Health, 
and 
economic, 
social and 
institution
al 
resilience 
● 

Policies 
for the 
next 
generati
on 

○ 

○ 

● 

Investing in Green 
Research and 
Development 
Key:  “●”  investments  and  reforms  of  the  component  significantly  contribute  to  the  pillar;  “○”  the  component 
partially contributes to the pillar 

● 

○ 

Pillar I: Green transition 

The plan’s main focus is on accelerating the green transition. The measures in the plan are 
aligned with the national energy and climate plan (NECP) for 2021-2030 and the government’s 

25 

 
 
 
 
 
 
 
  
 
  
  
 
  
 
  
  
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
overall objective of reducing GHG emissions by 70% by 2030 (compared to 1990) and becoming 
climate neutral by 2050 at the latest.  

The most important initiative in the plan is the promotion of the green tax reform. The plan 
is  expected  to  contribute  significantly  to  the  implementation  of  the  reform  by  financing  a  tax-
subsidised  ‘investment  window’  to  create  an  incentive  for  companies  to  accelerate  their  green 
investments. The rise in energy taxes as of 2023 will aim at reducing CO2 emissions from fossil 
fuels, thus providing a strong incentive for companies to reduce GHG emissions. In addition, an 
expert group will prepare a recommendation to introduce a uniform tax on GHG emissions as a 
subsequent step, paving the way for further ambitious reductions.  

The transport and agricultural sectors are the two largest contributors to Denmark’s non-
ETS sectors’ emissions17. Therefore, besides the general green tax reform, the plan contains 
additional measures targeting these two sectors. The ‘sustainable road transport’ component 
involves taxation changes, a beefed-up scrapping scheme for old diesel cars and investments to 
promote green transportation and infrastructure. The ‘green transition of agriculture and the 
environment’ component involves setting aside agricultural lands with high carbon soil content 
for environmental and climate purposes, and investment to promote (inter alia) organic farming, 
innovation and the rehabilitation of industrial sites and contaminated land.  

Increasing  investments  in  energy  efficiency  will  also  help  to  reduce  GHG  emissions. 
Denmark indicated a very low contribution to the EU energy efficiency 2030 targets in its draft 
NECP18.  The  ‘energy  efficiency,  green  heating  and  CCS’  component  contains  measures  to 
improve the energy efficiency of households, industry and public buildings. In addition, a CCS 
research project will explore the feasibility of storing CO2 (including from other Member States) 
in depleted oil and gas fields under the North Sea. 

Denmark’s recovery and resilience plan has a strong R&D focus, with more than 17% of 
the  total  spending  earmarked  for  (green)  R&D  projects.  Achieving  Denmark’s  ambitious 
GHG emissions reduction targets also requires incentives for research and innovation. Therefore, 
the  ‘green  research  and  development’  component  contains  a  temporary  increase  of  R&D  tax 
deductibility  for  all  companies,  while  the  mission-based  R&D  partnerships  will  focus  on  four 
solutions  to  address  the  challenges  to  achieving  Denmark’s  ambitious  climate  goals.  These 
include  CCUS,  green  fuels  for  transport  and  industry,  climate-  and  environment-friendly 
agriculture and food production and the reuse and reduction of plastic waste through the circular 
economy.  The  green  research  projects  could  lead  to  significant  GHG  reductions  in  the  near 

17 Denmark Country Report 2020 SWD/2020/503 final 
18 See  European Commission,  Assessment of the final  national energy and climate  plan  of Denmark.  SWD(2020) 

903 final 

26 

 
 
                                                           
 
future,  for  instance,  new  ‘power  to  X’  solutions  have  the  potential  to  reduce  Denmark’s  GHG 
emissions by 0.5 to 3.5 megatons CO2 per year by 2030. 

Pillar II: Digital transformation 

The  plan  extensively  covers  the  second  pillar,  with  several  components  targeting  the  digital 
transformation. 

Denmark  is  already  well  advanced  with  respect  to  digitalisation,  so  this  dimension  of  the 
twin transition is somewhat less pronounced in the plan. The digital component promotes a 
new digital strategy for all sectors of society, thus advancing welfare and equality, growth and 
employment,  and  the  green  transition.  It  shall  also  prepare  the  public  administration  for  the 
emerging  challenges  in  this  area.  The  government  has  established  a  ‘digitalisation  partnership’ 
consisting of top managers and experts from a wide range of stakeholders, including the Danish 
business community, municipalities and regions, academia and social partners. This expert group 
will make recommendations for the new digital strategy. Concrete measures will be announced 
by the end of 2021, and the adoption of the new strategy is provided for in the 2022 Finance Act. 
The future digital strategy will be framed by five objectives:  

1.  creating  the  digital  public  sector  of  the  future  by  continuous  modernisation  of 
Denmark’s digital infrastructure, meeting the needs of all citizens and businesses, and 
strengthening connectivity; 

2.  securing the digital professions and jobs of the future by strengthening digitalisation 
in business and industry, supporting growth and the trading of goods and services; 

3.  creating  better  opportunities  for  co-creation  and 

innovation  by  using  new 
technologies and public-private partnerships to streamline and improve public digital 
services,  accelerate  the  digital  transition  in  businesses  and  support  climate  change 
mitigation; 

4.  creating  a  data-driven  society  by  promoting  better  access  to  data,  secure  and 
interoperable  data  infrastructures,  and  a  digital-ready  regulatory  framework  to 
improve the digitalisation of SMEs, health systems and digital services; and 

5.  creating a framework for a Denmark fit for a digital future by enhancing cyber and IT 

security and digital skills. 

The digitalisation component also contains a measure to foster the digitalisation of SMEs. 
The  plan  facilitates  the  prolongation  of  an  existing  scheme  (SME:Digital),  which  provides 
subsidies for SMEs to  digitalise their business.  SMEs can  apply  for the  grant  on the  condition 
that their projects will increase their use of technology and contribute to their growth. 

The third measure proposed under the digitalisation component is the extension of the very 
high-speed  internet  broadband  coverage.  The  plan  allows  the  prolongation  of  an  existing 
scheme  for  the  intensified  roll-out  of  very  high-speed  internet  access  (minimum  100  Mbps)  to 
households and companies in rural areas. The scheme is an applicant-based funding scheme that 
provides grants for broadband projects in rural areas with poor coverage due to a lack of market 
incentives.  

27 

 
 
While substantial reforms are expected from the digital strategy, general tax schemes will 
contribute  importantly  to  the  digital  transformation.  Measures  to  increase  the  basis  for 
depreciation of investments and deducting R&D taxes are expected to boost private investments 
to  a  large  extent  in  innovation  and  digital  technology,  thereby  contributing  to  the  digital 
transition for all enterprises. 

Graph 4.1. The components’ contribution to climate and digital tagging 

Pillar  III:  Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs, 
productivity,  competitiveness,  R&D&I  and  a  well-functioning  internal  market  with  strong 
SMEs 

The plan extensively covers the third pillar, as all components directly contribute to smart 
and  sustainable  growth.  In  this  regard,  the  plan’s  focus  on  promoting  the  green  and  digital 
transitions will help the economy to grow on a more sustainable path. The initiatives funded by 
the plan are estimated to slightly increase GDP, employment and productivity over the medium 
and  long  term.  Denmark  is  already  among  the  best-performing  EU  countries  as  regards 
developing  and  taking  up  environmental  technologies,  and  its  competitiveness  and  trading 
performance can be further strengthened by the plan. 

The plan opens new possibilities for SMEs to participate in climate-related R&D activities 
and  involve  more  SMEs  in  research  activities,  thereby  broadening  the  innovation  base. 
Investments in R&D are expected to have a positive spill-over effect on productivity. In addition, 
the  construction  projects  envisaged  under  the  plan  (such  as  building  renovations)  potentially 
support  SMEs  and  local  jobs.  The  SME  digital  support  scheme  can  help  them  to  overcome 

28 

 
 
 
 
 
barriers  to  investment  and  expand  the  use  of  new  and  advanced  technology  and  e-commerce 
solutions.  Extending  high-speed  internet  broadband  coverage  to  areas  where  such  connections 
have not existed before has the potential to link new SMEs into the digital economy.  

The measures in the plan are expected to have a positive effect on the internal market and 
SMEs.  A  modernised  and  interoperable  digital  infrastructure  will  give  people  and  businesses 
better  access  to  public-sector  digital  infrastructure.  The  plan  also  includes  measures  to  help 
businesses, in particular SMEs, to grow and to trading goods and services in the internal market.  

Pillar IV: Social and territorial cohesion 

The plan’s coverage of the fourth pillar of social and territorial cohesion contributes to its 
overall  balance.  It  provides  cross-sectoral  and  cross-territory  support  for  employment.  In 
particular, measures to improve energy efficiency in industry and in public and private buildings 
are expected temporarily to boost local jobs and investments. Moreover, renovations will reduce 
energy bills, which absorb a larger proportion of less wealthy households’ income. The measure 
to replace oil burners and gas furnaces will be particularly relevant for households with limited 
financing  opportunities.  Measures  in  the  digitalisation  component  will  also  help  to  enhance 
social  cohesion.  The  aim  of  the  digital  strategy  is  to  promote  a  just  and  inclusive  digital 
transformation that will support better welfare services and social cohesion, for instance through 
education and enhanced digital skills and competencies. 

The  measures  under  the  plan  are  also  expected  to  contribute  positively  to  territorial 
cohesion. The telemedicine initiative has the potential especially to benefit people living in less 
densely  populated  areas,  who  often  have  to  travel  further  to  access  medical  treatment.  The 
broadband  initiative,  which  promotes  high-speed  internet  access  in  rural  areas,  will  also 
contribute  to  this  objective.  The  measures  aimed  at  helping  farmers  to  adopt  more  ecological 
methods may also improve territorial cohesion. The measures will rehabilitate contaminated land 
and permanently improve local environments while generating economic activity in rural areas.  

Pillar V: Health, and economic, social and institutional resilience, with the aim (inter alia) of 
increasing crisis preparedness and crisis response capacity 

The plan’s coverage of the fifth pillar contributes appropriately to its overall balance. The 
plan  includes  a  dedicated  component  to  strengthen  the  resilience  of  the  healthcare  system. 
Measures will support investments in infrastructure and logistics in order to ensure a sufficient 
supply  of  critical  medical  products.  Digitalisation  in  this  area  will  ensure  that  the  new 
technologies and digital solutions discovered during the COVID-19 pandemic are used to create 
a  more  resilient  and  sustainable  healthcare  system,  which  is  more  coherent  and  closer  to  the 
people.  The  investments  in  infrastructure  and  logistics  that  are  supported  under  the  plan  will 

29 

 
 
 
 
ensure  the  availability  of  critical  medical  products,  stronger  monitoring  of  supply  chains, 
coordination between the primary and secondary sectors, and a balanced national distribution of 
critical  medical  products  in  times  of  crisis.  The  clinical  study  on  effects  and  side  effects  on 
COVID-19  vaccines  will  improve  the  evidence  base  for  health  policy,  allowing  for  the 
implementation of more efficient vaccination programmes in the future. 

The plan addresses the strengthening of the institutional capacity and resilience of public 
administration through the adoption of digital technologies. One of the main objectives of the 
digital strategy is to prepare the public administration for future challenges. In this regard, it will 
strengthen the resilience of the public administration. This will be done through modernising the 
digital  infrastructure  and  capabilities  of  the  public  sector,  enhancing  cyber  and  information 
security in the public administration and promoting better access to data and interoperable data 
infrastructures. 

Pillar  VI: Policies  for the next  generation (children and young people), including education 
and skills 

The plan covers the sixth pillar to some extent, notably through the digital component. The 
digital strategy aims to promote accessible and interoperable digital public services, for instance 
supporting digital skills and training. However, given the challenges that Denmark is facing and 
the size of its financial contribution, the less extensive coverage of this pillar through the RRF 
appears to be justified. 

Taking into consideration all reforms and investments envisaged by Denmark, its recovery and 
resilience plan represents, to a large extent, a comprehensive and adequately balanced response 
to the economic and social situation, thereby contributing appropriately to all six pillars referred 
to in Article 3 to the RRF Regulation, taking the specific challenges and the financial allocation 
of Denmark into account. This warrants a rating of A under assessment criterion 2.1 in Annex V 
to the RRF Regulation. 

4.2 Link with country-specific recommendations and the European Semester  

The  plan  is  ambitious  in  providing  a  response  to  a  large  set  of  challenges  faced  by  the 
Danish  economy.  It  introduces  reforms  and  investments  aimed  at  addressing  the  green  and 
digital  transitions,  the  resilience  of  healthcare,  and  research  and  development.  Some  CSRs, 
namely  investment-related  economic  policy  on  education  and  skills  (CSR  1.1  of  2019,  some 
progress),  measures  to  address  the  shortage  of  health  workers  (CSR  1.2/2020,  some  progress) 
and  ensuring  effective  supervision  and  the  enforcement  of  the  anti-money  laundering  (AML) 
framework (CSR 2/2019, some progress, and CSR 3/2020, some progress), have been addressed, 
so measures in these areas were not incorporated in the plan. 

The plan contains measures to increase the resilience of the healthcare system (CSR 1.2 of 
2020, some progress). It involves infrastructure and logistics support to ensure stocks of critical 

30 

 
 
 
drugs  and  the  emergency  management  and  monitoring  of  critical  medical  products.  Greater 
digitalisation and use of telemedicine would ensure better and more equitable access to certain 
healthcare services. The COVID-related research study will examine the degree and duration of 
immunity and establish whether the effectiveness of vaccines differs across different population 
groups. These measures will help to create a more resilient and sustainable healthcare system.  

The plan includes several  general  and targeted measures to support  the digital transition 
(CSR 2.3 of 2020). The depreciation schemes under the green tax reform are expected to foster 
in  particular  digital  investments.  Targeted  subsidy  schemes  will  support  SMEs’  digitalisation 
efforts  and  help  extend  rural  ultra-fast  internet  broadband  coverage  to  previously  non-covered 
areas.  Substantial  reforms  are  expected  from  the  new  digital  strategy  aiming  to  improve  the 
digitalisation of public administration (for instance through the use of artificial intelligence) and 
prepare  society  for  the  new  challenges  (by  adopting  a  new,  more  ambitious  cybersecurity 
strategy).  

The main objective of the plan is to accelerate the green transition (CSR 2.3 of 2020, some 
progress). The most significant reform initiative in the plan is its contribution to the green tax 
reform.  First,  this  will  finance  a  tax-subsidised  ‘investment  window’  to  create  an  incentive  for 
companies to accelerate their green investments before energy taxes are raised significantly from 
2023.  Secondly,  an  expert  group  will  prepare  recommendations  to  introduce  a  uniform  tax  on 
GHG emissions as a next step – paving the way for further ambitious GHG reductions. 

The plan contains measures to improve efficiency in the clean and efficient production and 
use of energy (CSR 2.3 of 2020, some progress). As regards energy efficiency and conversion 
of heat supply, energy efficiency and new technology, biogas and new district heating capacity, 
the  NECP  estimates  additional  investment  needs  of  DKK  10-30  billion  for  each  of  these  three 
sectors  in  the  period  to  2030.  The  ‘energy  efficiency,  green  heating  and  CCS’  component 
contains measures to increase the energy efficiency of households, industry and public buildings. 
Based on the  recommendations from  the Danish  climate partnerships, Denmark will accelerate 
the  conversion  from  oil  and  gas  furnaces  to  electrical  heat  pumps,  district  heating  and  energy 
renovations  in  private  and  public  buildings.  Furthermore,  the  component  contains  subsidy 
schemes  that  target  green  renovations  of  buildings  with  poor  energy  performance  and  private 
households.  In  addition,  a  CCS  research  project  will  explore  the  feasibility  of  storing  CO2 
(including from other Member States) in depleted oil and gas fields under the North Sea. CCS is 
a key tool in Denmark’s efforts to achieve its reduction targets. 

The  transport  sector  is  the  largest  contributor  in  Denmark  to  the  non-ETS  sectors’ 
emissions. This is why two CSRs were addressed to Denmark in order to focus investment on 
sustainable transport and tackle road congestion (CSR 2.4 of 2020, some progress, and CSR 1.3 
of  2019,  some  progress).  In  addition,  road  congestion  around  larger  cities,  combined  with  the 
need  to  decarbonise  the  transport  sector,  points  to  investment  opportunities  in  transport 
infrastructure  (Denmark  Country  Report,  2019).  The  plan  contains  a  specific  ‘sustainable  road 
transport’ component, including reforms and investments supporting the transition to the use of 
sustainable  energy  sources  in  the  road  transport  sector.  One  of  the  reforms  increases  the 

31 

 
 
incentive to choose green cars by means of a lower registration tax and a low tax on electricity to 
charge zero- and low-emission cars. The plan involves expanding the scrapping scheme for old 
diesel  cars,  in  order  to  reduce  the  number  of  most-polluting  cars.  The  component  contains 
another  measure  paving  the  way  for  further  reforms  in  this  area  through  analyses,  tests  and 
campaigns that could  support a further reduction in  GHG emissions from  road transport in  the 
long  term.  Finally,  it  contains  initiatives  that  promote  and  support  green  transportation  and 
infrastructure, such as investments in bike paths.  

The plan has a strong R&D focus, with more than 17% of the total spending earmarked for 
(green)  R&D  projects.  This  addresses  CSR  2.5  of  2020,  some  progress.  However,  although 
overall  R&D  spending  is  high  in  Denmark,  this  has  not  translated  into  higher  productivity 
growth. R&D&I investment is concentrated in a small number of large companies. Broadening 
this investment to a wider range of companies would promote innovation diffusion. The growing 
productivity  gaps  between  large  and  small  companies  suggest  weaknesses  in  this  diffusion  of 
technological advances. 

The plan contains measures for broadening the innovation base to involve more companies 
(CSR 2.6 of 2020, some progress, and CSR 1.2 of 2019, limited progress). First, the measure 
on  temporarily  raising  the  general  threshold  for  R&D  tax  deductibility  has  the  potential  to 
incentivise  more  companies  to  engage  in  R&D  activities,  thereby  broadening  the  innovation 
base.  Secondly,  the  green  research  partnerships  will  open  new  possibilities  for  SMEs  to 
participate  in  climate-related  R&D  activities,  involve  more  SMEs  in  research  activities  and 
promote innovation diffusion. 

Ensuring  the  supply  of  labour  in  times  of  demographic  and  technological  change  and 
addressing  labour  shortages  are  key  to  fostering  sustainable  and  inclusive  growth  in 
Denmark.  Reforms  and  investments  improving  the  attractiveness  and  relevance  of  vocational 
education and training (VET) and thereby increasing VET participation rates are likely to have a 
positive  impact  on  the  supply  of  skilled  workers.  Increasing  ongoing  investments  in  adult  and 
lifelong learning and digital  skills  could  also  help  in  addressing this challenge. Furthermore, it 
would be beneficial to focus on a better integration of marginalised and disadvantaged groups in 
the  labour  market.  In  particular,  this  concerns  young  people  with  low  educational  attainment, 
people  with  a  migrant  background,  and  people  with  reduced  work  capacity  and  disabilities.  In 
addition,  the  educational  performance  of  children  with  a  migrant  background  remains  a 
challenge. 

The  plan  has  no  specific  measure  on  skills  and  competences  (CSR  1.1  of  2019,  some 
progress), but paves the way for future measures in this area. The aim of the digital strategy 
is to promote a just and inclusive digital transition that will support better welfare services and 
social  cohesion,  for  instance  through  education  and  enhancing  digital  skills  and  competencies. 
Therefore,  the  Danish  authorities  expect  that  the  Digital  Partnership  expert  group  will  propose 
specific measures, which will be implemented after the digital strategy has been agreed later in 
2021.  

Taking into consideration the reforms and investments envisaged by Denmark, its recovery and 
resilience  plan  is  expected  to  contribute  to  effectively  addressing  all  or  a  significant  subset  of 

32 

 
 
challenges  identified  in  the  country-specific  recommendations,  or  challenges  in  other  relevant 
documents  officially  adopted  by  the  Commission  under  the  European  Semester,  and  the  plan 
represents  an  appropriate  response  to  the  country’s  economic  and  social  situation.  This 
warrants a rating of A under assessment criterion 2.2 in Annex V to the RRF Regulation. 

33 

 
 
 
Table  4.2  Mapping  of  country  challenges  identified  in  2019-20  country-specific  recommendations 
and the Denmark RRP components19 

Country 
challenges 

(as identified in 
Section 2) 

Education and 
skills 

Research and 
development 

Sustainable 
transport 

Anti-money 
laundering 

Health care 

Frontload 
public 
investment 
Promote 
private 
investment 

Green and 
digital 
transition 

Associated CSR (2019-2020) and 
European Semester recommendations 

2019 CSR 1.1 Focus investment-related 
economic policy on education and skills20 
2019 CSR 1.2 research and innovation to 
broaden the innovation base to include 
more companies,  
2019 CSR 1.3 and on sustainable 
transport to tackle road congestion.  
2019 CSR 2 Ensure effective supervision 
and the enforcement of the anti-money 
laundering framework21. 
2020 CSR 1.2 Enhance the resilience of 
the health system, including by ensuring 
sufficient critical medical products and 
addressing the shortage of health workers. 

2020 CSR 2.1 Front-load mature public 
investment projects and 

2020 CSR 2.2 promote private investment 
to foster the economic recovery. 

2020 CSR 2.3 Focus investment on the 
green and digital transition, in particular 
on clean and efficient production and use 
of energy, 

Sustainable 
transport 
Research and 
development 

2020 CSR 2.4 sustainable transport 

2020 CSR 2.5 as well as research and 
innovation. 

h
t
l
a
e
H
e
h
t

f
o
e
c
n
e
i
l
i
s
e
R

m
e
t
s
y
S
e
r
a
C

e
h
t

g
n
i
n
e
h
t
g
n
e
r
t
S

-
1
t
n
e
n
o
p
m
o
C

e
r
u
t
l
u
c
i
r
g
A

f
o
n
o
i
t
i
s
n
a
r
t

t
n
e
m
n
o
r
i
v
n
E
e
h
t
d
n
a

g
n
i
t
a
e
h
n
e
e
r
g

,
y
c
n
e
i
c
i
f
f
e

y
g
r
e
n
E

-
3
t
n
e
n
o
p
m
o
C

n
e
e
r
G

-
2
t
n
e
n
o
p
m
o
C

x
a
T
n
e
e
r
G

-
4
t
n
e
n
o
p
m
o
C

S
C
C
d
n
a

m
r
o
f
e
R

e
l
b
a
n
i
a
t
s
u
S
-
5
t
n
e
n
o
p
m
o
C

t
r
o
p
s
n
a
r
T
d
a
o
R

n
o
i
t
a
s
i
t
i
g
i
D

-
6
t
n
e
n
o
p
m
o
C

n
e
e
r
G

-
7
t
n
e
n
o
p
m
o
C

d
n
a
h
c
r
a
e
s
e
R

t
n
e
m
p
o
l
e
v
e
D

● 

● 

○ 

● 

○ 

 ○ 

 ○ 

○ 

○ 

○ 

○ 

○ 

● 

● 

● 

● 

● 

● 

● 

19 The recommendations related to the immediate fiscal policy response to the pandemic can be considered as being 
addressed outside the plan. Denmark has generally responded adequately and sufficiently to the immediate need to 
support  the  economy  through  fiscal  means  in  2020  and  2021,  in  line  with  the  provisions  of  the  General  Escape 
Clause.  

20 This CSR was addressed outside the plan. 
21 This CSR was addressed outside the plan. 

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                           
 
Research and 
development 

Anti-money 
laundering 

2020 CSR 2.6 Support an integrated 
innovation strategy with a broader 
investment base. 
2020 CSR 3 Improve the effectiveness of 
anti-money laundering supervision and 
effectively enforce the anti-money 
laundering framework.22 

Key: “●” investments and reforms of the component significantly address the 
challenge; “○” the component partially addresses the challenge 

● 

4.3 Growth  potential,  job  creation, economic, institutional  and social resilience, European 
Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion 
and convergence  

Fostering economic growth and jobs 

Overall, the plan is expected to contribute positively to GDP growth and is in line with the 
EU update of the 2020 new industrial strategy23. In 2021-2023, the positive impact is stronger 
as  firms  are  expected  to  bring  forward  their  investments  to  benefit  from  the  tax  rebates  of  the 
investment  window.  From  2024  onwards,  the  GDP  growth  effect  of  the  green  tax  reform  is 
expected  to  be  slightly  negative,  due  to  the  discontinuation  of  the  investment  window  and  the 
increase in taxes on energy consumption that are part of the second stage of the green tax reform. 
Over the medium and longer term, the plan is expected to enhance productivity. The long-term 
GDP effect is 0.12%, according to national estimates. The plan is also expected to contribute to 
employment, notably in 2021-2022, driven by the investment window. While the net effect of the 
green tax reform  on employment turns negative  from  2024 onwards, this is  outweighed by the 
positive impact of the other components, notably energy efficiency, green heating and CCS, and 
the sustainable road transport component. 

22 This CSR was addressed outside Plan. 
23 See European Commission, Updating the 2020 New Industrial Strategy, COM(2021) 350 final, 05.05.2021 

35 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
                                                           
 
Box 2 – Stylised NGEU impact simulations with QUEST - Denmark 

Model simulations conducted by the Commission using the QUEST model show that the 
economic impact of the NGEU in Denmark could lead to an increase of GDP of between 
0.4% and 0.6% by 2024.24After 20 years, GDP could be 0.1% higher. Spill-overs account 
for a large part of such impact.  

According  to  these  simulations,  this  would  translate  into  up  to  8,000  additional  jobs.  Cross 
border  (GDP)  spill-overs  account  for  0.5  pps  in  2024,  showing  the  value  added  of 
synchronised  expenditure  across  Member  States  (line  2).    Even  in  a  scenario  with  a  lower 
productivity of NGEU funds, it would still lead to a significant impact (line 3).25 

Table: QUEST  simulation  results  (%-deviation  of  real  GDP  level from  non-NGEU  case,  linear 
disbursement assumption over 4 years) 

Scenario 

Baseline 

   of which spillover 

Low productivity 

2021  2022  2023  2024  2025  2026  2027  2028  2029  2030  2040 

0.5 

0.5 

0.3 

0.7 

0.5 

0.3 

0.7 

0.5 

0.4 

0.6 

0.5 

0.4 

0.5 

0.4 

0.3 

0.4 

0.3 

0.2 

0.3 

0.2 

0.2 

0.3 

0.2 

0.1 

0.2 

0.1 

0.1 

0.2 

0.1 

0.1 

0.1 

0.0 

0.0 

This stylised scenario does not include the possible positive impact of structural reforms, 
which  can  be  substantial.  A  model-based  benchmarking  exercise  shows  that  undertaking 
structural  reforms  that  would  result  in  halving  the  gap  vis-à-vis  best  performers  in  terms  of 
indicators of structural reforms could raise Denmark GDP by up to 7% within 20 years' time, 
in line with findings for the EU average26.  
Due  to  the  differences  in  the  assumptions  and  methodology,    the  results  of  this  stylised 
assessment  cannot  be  directly  compared  to  the  numbers  reported  in  chapter  4  of 
Denmark’s plan. 

24  RRF  amounts  to  roughly  90%  of  NGEU,  which  also  includes  ReactEU,  Horizon,  InvestEU,  JTF,  Rural 

Development and RescEU. 

25 Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 
26  Varga,  J,  in  't  Veld  J.  (2014),  “The  potential  growth  impact  of  structural  reforms  in  the  EU:  a  benchmarking 

exercise", European Economy Economic Papers no. 541.  

http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf . 

36 

 
 
 
 
 
 
  
 
 
 
 
                                                           
 
Strengthening social resilience 

The plan is expected to contribute to maintaining a high degree of social cohesion through 
increased  employment  in  rural  areas  and  by  extending  digital  services.  As  regards 
component  2  (focusing  on  the  agricultural  sector),  the  initiatives  aim  to  provide  farmers  with 
economic  incentives  to  reduce  GHG  emissions,  while  taking  account  of  their  particular 
circumstances  and  to  ensure  social  and  territorial  cohesion  and  convergence.  The  agricultural 
reform  also  involves  R&D  investments  that  promote  sustainable  growth  in  the  sector  and  the 
creation of high-quality employment. As regards component 3 (energy efficiency, green heating 
and  CCS),  renovation  and  measures  to  ensure  energy  efficiency  are  expected  to  temporarily 
boost local jobs and investments. Moreover, the investment in renovation will also reduce energy 
bills,  which  account  for  a  larger  proportion  of  less  wealthy  households’  income.  As  regards 
component  6,  which  focuses  on  digitalisation,  the  broadband  initiative  promotes  high-speed 
internet  access  in  rural  areas.  The aim of the digital  strategy is  to  promote a just and inclusive 
digital  transition  that  will  support  better  welfare  services  and  social  cohesion,  for  instance 
through education and enhancing digital skills and competencies. 

Reducing vulnerability and increasing resilience 

The  plan  contributes  to  strengthening  Denmark’s  economic,  institutional  and  social 
resilience.  Economic  resilience  is  notably  strengthened  by  the  green  tax  reform  depreciation 
schemes, which will support Danish companies, and SMEs in particular. More generally, several 
digital  and  R&D-related  measures  could  help  to  strengthen  economic  resilience.  Institutional 
resilience is considered high in Denmark, with well-functioning institutions. The implementation 
of  the  plan  could  improve  it  further,  with  a  focus  on  strategy,  implementation,  delivery  and 
results. The first component, relating to healthcare contributes to social resilience. It comprises 
new initiatives strengthening the resilience of the healthcare systems in Denmark. This includes 
investments  in  infrastructure  to  ensure  critical  medical  supplies  and  in  IT  solutions  so  as  to 
maintain broad access to healthcare. 

The  measures  should  reinforce  the  resilience  of  Denmark  and  its  capacity  to  absorb 
economic and social shocks. This is notably ensured by the measures in the healthcare system 
and the digital partnership. The plan includes measures supporting SMEs, such as a digitalisation 
fund to strengthen SMEs’ digital transition and trade. 

The objectives of the initiatives in the plan reflect both short- and long-term perspectives, 
with the aim of supporting the Danish  economy in the recovery from the pandemic, as well as 
supporting  Denmark’s  long-term  growth  and  the  green  transition.  For  instance,  several  of  the 
initiatives  can  be  expected  to  have  a  positive  effect  on  the  long-term  growth  potential  of  the 
Danish  economy.  Public  investment  in  energy  efficiency,  green  heating  and  CCS,  and 
sustainable road transport are expected to increase long-term productivity and potential GDP. 

Cohesion and convergence 

37 

 
 
Taken together, several components and measures elaborated in this section are expected 
to  support  social  and  territorial  cohesion  and  convergence.  For  instance,  the  strategic 
digitalisation effort in the component ‘strengthening the resilience of the healthcare system’ will 
ensure that the new technologies  and digital  solutions  discovered  and increasingly used during 
the  COVID-19  pandemic  can  be  used  to  create  a  more  resilient  and  sustainable  healthcare 
system, which is more coherent and closer to the patient. To address the structural challenges of 
the  agricultural  sector,  the  measures  in  the  component  ‘green  transition  of  agriculture  and 
environment’ aim to provide farmers with economic incentives to reduce GHG emissions, taking 
into  account  their  particular  circumstances.  This  is  expected  to  ensure  social  and  territorial 
cohesion and convergence, in particular given that employment and social cohesion in especially 
rural areas are dependent on the ongoing competitiveness of the sector. 

The  component  ‘energy  efficiency,  green  heating  and  CCS’  will  support  social  coherence 
and  resilience  by  maintaining  adequate  infrastructure  to  deliver  high-quality  public 
services. Moreover, the energy-saving renovations will temporarily increase the number of local 
jobs and investments, and permanently reduce energy bills, which account for a larger proportion 
of less wealthy households’ income. Improving energy efficiency contributes to a cost-efficient 
way of realising the target of climate neutrality by 2050. 

Initiatives to create the digital public sector of the future by a continuous modernisation of 
the digital infrastructure are conducive to territorial cohesion.  In particular, the broadband 
pool will promote high-speed internet access for individuals, shouseholds and companies in less 
densely  populated  areas  across  the  country,  which  will  enable  everyone  to  take  part  in  the 
upward social  and economic convergence driven by digitalisation. This  will be further ensured 
by  determining  the  distribution  of  funds  and  drafting  the  digital  strategy  in  close  collaboration 
with a broad range of actors in civil society. 

Equality 

The  plan  contains  some  measures  that  are  expected  to  help  address  the  country’s 
challenges  in  the  area  of  gender  equality  and  equal  opportunities  for  all.  While  equality 
considerations could have been mainstreamed more prominently, a number of specific measures 
address  these  considerations.  These  include  measures  promoting  the  use  of  digital  solutions  in 
the healthcare sector and supporting the health of vulnerable (e.g. older) people. Provisions are 
also  made  to  integrate  the  gender  balance  and  diversity  of  research  teams  in  the  overall 
assessment  of  applications  for  the  green  R&D  programme.  Equality  considerations  are  also 
expected to be integrated in the design of the new digital strategy and any subsequent legislative 
changes.  The  expected  contribution  to  equal  opportunities  for  specific  groups,  in  particular 
people  with  a  minority  racial  or  ethnic  background,  is  not  further  elaborated  in  the  plan. 
Maximising  synergies  between  the  plan  and  several  equality-related  legislative  and  policy 
actions  referred  to  in  the  plan  will  be  essential  for  a  comprehensive  response  to  the  identified 
challenges. 

Taking into consideration all reforms and investments envisaged by Denmark, its recovery and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 

38 

 
 
creation, and economic, social and institutional resilience of the Member State, on contributing 
to the implementation of the European Pillar of Social Rights, including through the promotion 
of  policies  for  children  and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the 
COVID-19 crisis, thereby enhancing economic, social and territorial cohesion and convergence 
within the Union. This warrants a rating of A under assessment criterion 2.3 in Annex V to the 
RRF Regulation. 

39 

 
 
 
 
 
Box 4.3:  Employment and social challenges in light of the Social Scoreboard 

accompanying the European Pillar of Social Rights 

The  Social  Scoreboard  supporting  the  European  Pillar  of 
Social Rights points to a well-performing labour market and 
good social outcomes in Denmark. The Danish labour market 
was performing well prior to the outbreak of COVID-19 and has 
shown  resilience to  the  pandemic.  The  employment  rate is  still 
relatively  high,  at  77.8%,  with  a  comparatively  low  gender 
employment 
and 
accommodation  and  food  service  activities  are  the  areas  most 
affected  by  the  crisis.  However,  the  government’s  wage 
compensation  scheme  prevented  a  surge  in  the  unemployment 
rate.  The  long-term  unemployment  rate  remains  lower  than  the 
EU average. 

gap.  Wholesale 

trade, 

retail 

and 

The  share  of  the  population  reporting  unmet  needs  for 
medical  care  has  increased  in  recent  years.  The  Danish 
population  reports  a  good  health  status,  with  small  differences 
nationally for services covered by public health insurance. Self-
reported  unmet  needs  for  medical  care  have  nonetheless 
increased.  This  could  be  related  to  a  potential  shortage  of 
physicians  in  primary  care  and  care  coordination,  with  general 
practitioners’  availability  to  take  in  new  patients  varying 
between regions. 

Denmark  is  among  the  best  performers  in  terms  of  formal 
childcare participation and equal access to the labour market. Around 66% of children aged under 
3 are in formal childcare (compared to the EU average of 35.3%). Subsidised childcare provision is 
among  the  factors  supporting  the  relatively  high  female  employment  rate  (74.1%  against  an  EU 
average of 66.3%).  

Denmark’s recovery and resilience plan prioritises a green recovery, job creation, digitalisation 
and  health,  addressing  some  employment  challenges  relevant  for  the  implementation  of  the 
Pillar. The plan has a clear focus on green reforms and envisages the strengthening of the digital skills 
and  competencies  necessary  for the  future,  both  for the  private  and  public  sectors.  Furthermore,  the 
digital  component  of  the  plan  includes  a  focus  on  closing  the  digital  divide  and  ensuring  inclusive 
access to digital public services for all. Concrete initiatives to reach these objectives are to be based on 
the findings of a recently launched Digital Partnership, consisting of experts and stakeholders.  

40 

 
 
 
 
4.4 The principle of ‘do no significant harm’  

The  plan  assesses  compliance  with  the  ‘do  no  significant  harm’  (DNSH)  principle.  The 
assessment  follows  the  methodology  set  out  in  the  Commission’s  technical  guidance  on  the 
application  of  the  principle  under  the  RRF  Regulation  (2021/C  58/01).  It  covers  the  six 
environmental  objectives  referred  to  in  Article  17  to  Regulation  (EU)  2020/85227,  namely 
climate  change  mitigation,  climate  change  adaptation,  sustainable  use  and  protection  of  water 
and  marine  resources,  circular  economy,  pollution  prevention  and  control,  and  protection  and 
restoration of biodiversity  and ecosystems.  The environmental impact  is  assessed in  relation  to 
each  reform  or  investment,  so  the  6  reforms  and  33  investments  in  the  plan  translate  into  39 
DNSH assessments.  

Each DNSH assessment follows a two-step approach. The first step assesses whether there is a 
risk  that  a  measure  could  do  significant  harm  to  one  or  more  of  the  environmental  objectives. 
When there is no risk of significant harm, the measure assessed complies with the objective of 
the Regulation. When a risk of significant harm is identified, a more detailed assessment follows 
in step two, in which Denmark demonstrates the absence of significant harm. Results of the two-
step approach are often conflated into one table for conciseness. 

The  plan  puts  a  particular  focus  on  agriculture  and  environment  (component  2).  The 
proposed  measures  have  a  positive  impact  on  emission  reductions.  Denmark  ensures  no 
significant harm to biodiversity and ecosystems  by  recalling the strict regulatory obligations in 
terms of environmental protection (i.e. Nature Protection Act and other relevant legislation) and 
targeted  analysis  attributed  to  each  project.  In  this  way,  the  plan  ensures,  for  instance,  that 
rewetting carbon-rich soils, or the rehabilitation of industrial sites and contaminated land will not 
undermine existing habitats. 

The  plan  dedicates  one  component  to  energy  renovation  measures  (component  3).  While 
these have a positive impact on emission reductions, the measures also need to ensure the energy 
efficiency  of  retrofitted  equipment  and  prevent  burden  to  circular  economy.  For  example, 
Denmark confirms that the ‘replacement of oil burners and gas furnaces’ in terms of effects on 
circular  economy  and  zero  pollution  would  be  aligned  with  the  standards  set  out  in  the  EU 
taxonomy  Climate  Delegated  Act.  As  regards  ‘energy  saving  in  public  buildings’,  it  confirms 
that  the  measure  will  respect  the  DNSH  requirements  on  the  sustainable  use  of  water,  circular 
economy  and  zero  pollution.  Concerning  CCS,  Denmark  provided  a  more  detailed  assessment 

27 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of 
a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, 
p. 13). 

41 

 
 
                                                           
 
 
for three of the six environmental objectives and confirmed that the measure will not lead to new 
oil/hydrocarbon extraction and that it will achieve compliance with the CCS Directive28. 

The plan includes a  measure relating to green tax  reforms (component 4).  In this context, 
Denmark confirms that the investment window would not support fossil-fueled machineries. In 
addition, fossil-fuel vehicles will not be benefit from national support. 

The  plan  focuses  on  sustainable  road  transport  (component  5).  Denmark  confirms  that  no 
support  would  be  given,  through  the  lower  registration  tax,  to  cars  emitting  more  than  50g  of 
CO2  per  km,  thus  respecting  the  climate  change  mitigation  objective.  It  confirms  that  the 
acquisition of green ferries supported by the RRF would be aligned with the standards detailed in 
the  draft  EU  taxonomy  Climate  Delegated  Act,  including  EU  law  and  International  Maritime 
Organization rules.  

Another  focus  area  in  the  plan  is  digitalisation  (component  6).  The  component  mostly 
involves a set of five reforms consisting of implementing a digital partnership, with little risk of 
impairing  any  of  the  six  environmental  objectives.  SMEs  will  receive  consultancy  support  to 
promote  their  digital  transition  and  trading  activity.  In  this  context,  Denmark  has  satisfactorily 
demonstrated that the component will meet the DNSH requirements. 

Denmark proposes a component aiming to boost green R&D (component 7). The component 
does not significantly jeopardise the six environmental objectives. The plan clarifies that projects 
under the ‘green partnerships’ will be subject to selection criteria to ensure compliance with the 
DNSH  principle.  The  Danish  authorities  have  confirmed  that  no  private  R&D  investments 
benefitting  from  the  tax  deduction  will  conflict  with  the  DNSH  principle.  Any  that  do  will  be 
screened out from the application process. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation  of  reforms  and  investment  projects  included  in  Denmark’s  recovery  and 
resilience plan is expected to do significant harm to environmental objectives within the meaning 
of  Article  17  to  Regulation  (EU)  2020/852  (the  principle  of  ‘do  no  significant  harm’).  This 
warrants a rating of A under assessment criterion 2.4 in Annex V to the RRF Regulation. 

28 Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage 
of  carbon  dioxide  and  amending  Council  Directive  85/337/EEC,  European  Parliament  and  Council  Directives 
2000/60/EC,  2001/80/EC,  2004/35/EC,  2006/12/EC,  2008/1/EC  and  Regulation  (EC)  No  1013/2006  (OJ  L  140, 
5.6.2009, p. 114). 

42 

 
 
 
                                                           
 
 
4.5 Green transition  

Denmark has satisfactorily met the requirements of the Regulation in terms of tagging and 
green  transition.  The  components  relating  to  energy  efficiency  (component  3),  the  green  tax 
reform (component 4) and sustainable road transport (component 5) will account for 75% of the 
climate tracking.  

Climate target 

Table 4.5 Climate tagging by component, percentage 

In  component  3  (energy  efficiency),  extensive  use  is  made  of  intervention  field  025  bis, 
relating  to  the  replacement  of  oil  burners.  This  is  accompanied  by  a  confirmation  that  the 
investments will lead to at least 30% of ‘primary energy saving’. This commitment has also been 
reflected in the relevant milestone of the component. 

In  component  4  (green  tax  reform),  intervention  field  027  is  used  for  the  investment 
window and the accelerated depreciation. This follows a thorough justification of the share of 
green investments in the measures and is based on analysis of similar measures approved in the 
past.  

In component 5 (sustainable road transport), intervention field 074 is used for the measure 
relating  to  lower  registration  (applied  only  to  zero-emission  vehicles).  Denmark  has 
explained  that  the  RRF  would  support  exclusively  zero-emission  vehicles,  while  the 
complementary  national  support  would  also  target  such  vehicles  (for  instance  less  than  50g  of 
CO2 emission by km and by vehicle). Denmark has confirmed that the intervention field used for 
green ferries will apply only to zero-emission ferries. 

43 

Overall climate tagging by componentEUR in thousandsCostClimate tag%1.Strengthening the Resilience of the Health Care System32,816        -         0%2.Green transition of Agriculture and the Environment177,532      139,873   9%3.Energy efficiency, green heating and CCS234,691      234,691   15%4.Green Tax Reform580,474      196,495   13%5.Sustainable Road Transport258,228      241,685   16%6.Digitisation89,438        -         0%7.Green Reseach and Development242,088      109,343   7%Total1,615,268    922,088   n.a.Financial contribution allocated to Denmark1,551,401  922,088 59% 
 
 
 
 
Green transition 

The  plan  will  include  a  significant  number  of  measures  with  a  clear  contribution  to  the  green 
transition, including biodiversity. 

The sustainable agriculture component (‘green transition of agriculture and environment’) 
is key for the green transition. The Danish farm sector is responsible for about a third of the 
country’s  GHG  emissions.  Investments  in  R&D  projects  are  expected  to  deliver  reductions  in 
GHG  emissions  by  an  estimated  0.1  megatons  by  2030,  while  minimising  the  reduction  in 
production  output.  New  technologies  in  the  agricultural  sector  –  notably  brown  bio-refining 
utilising pyrolysis technology – are estimated to hold a technical potential for further reductions 
by 2 megatons in 2030. Furthermore, taking carbon-rich soils out of production and promoting 
the  transition  to  organic  farming  are  expected  to  lead  to  significant  reductions  of  nitrogen 
emissions in agriculture. Funds will be allocated to rehabilitate industrial sites and contaminated 
lands,  thereby  removing  dangerous  substances  and  hazardous  waste  from  natural  ecosystems. 
The proposed measures should positively contribute to the improvement of the ecological status 
of water bodies in the targeted areas and further support biodiversity. 

The  energy  efficiency  component  (‘energy  efficiency,  green  heating  and  CCS’)  will 
contribute to significant decreases in energy consumption and GHG emissions. Through this 
component,  Denmark  seeks  to  prioritise  additional  initiatives  based  on  the  recommendations 
from the Danish climate partnerships to generate social, environmental and economic benefits by 
stimulating  job-creation  and  raising  the  growth  potential,  while  contributing  to  the  green 
transition by reducing GHG emissions by 0.1 Mt in 2030. Proposed initiatives target the green 
energy renovation of buildings with poor energy performance and the replacement of oil burners 
and  gas  furnaces  with  electric  heat  pumps  and  district  heating  in  order  to  reduce  energy 
consumption and GHG emissions.  

The green tax reform will accelerate the decarbonisation of the economy. The impact of this 
component  is  twofold.  First,  in  order  to  provide  companies  with  the  incentive  and  the 
opportunity to accelerate the green transition and prepare for the carbon tax, the reform includes 
tax deductions for frontloading investments. This is mainly aimed at giving companies incentives 
to  invest  in  green  and  digital  technologies,  while  simultaneously  helping  Denmark  to  recover 
from the COVID-19 recession. These measures are expected to lead to increased demand, a rise 
in  employment,  lower  GHG  emissions  and  further  digitalisation.  Against  this  background,  the 
first phase of the green tax reform will lower GHG emissions by 0.5 megatons by 2030. For the 
second  phase  of  the  reform,  an  expert  group  will  draw  up  a  roadmap  for  CO2e  taxation  in  a 
manner  consistent  with  protecting  competitiveness,  social  balance  and  minimal  leakage.  The 
long-term ambition is to make a comprehensive tax reform with a high, uniform CO2e tax on all 
emissions.  

The  sustainable  road  transport  component  will  accelerate  the  decarbonisation  of  the 
transport sector. It is composed of four elements. Firstly, a lower registration tax will give more 
consumers  an  incentive  to  choose  zero-  and  low-emission  cars.  More  specifically,  the  tax  on 

44 

 
 
 
electricity for zero- and low-emission vehicles will be lowered. This first subset of measures also 
includes  a  premium  for  scrapping  old  diesel  cars  in  order  to  ensure  that  older  cars  are  rapidly 
exchanged for new and less polluting cars. Moreover, a series of studies and tests will be carried 
out in order to accelerate the decarbonisation of roads (promotion of car-pooling, optimisation of 
heavy  haulage  transportation,  optimisation  of  road  pricing).  The  component  also  contains 
investments aimed at expanding the use of bicycles, through the construction of charging stations 
or cycle paths, as well as a measure subsidising the purchase of zero- or low-emission ferries. 

Lastly,  a  component  will  be  dedicated  to  the  promotion  of  R&D  projects  aimed  at 
accelerating  the  green  transition.  As  explained  in  section  4.1,  the  component  will  fund  four 
R&D missions and support for private R&D. The four missions focus on CCS and use of CO2, 
green fuels, climate-friendly agriculture and circular economy. These areas have shown potential 
to reduce GHG emissions. It follows the Danish climate partnerships’ recommendations to target 
research,  development  and  demonstration  efforts  within  these  four  missions.  Lastly,  the 
component includes a tax incentive for companies to focus their investments in R&D, of which 
10% will be dedicated to green R&D projects. 

In  conclusion,  Denmark  presents  an  ambitious  green  plan  with  59%  climate  tagging. 
Moreover,  Denmark’s  recovery  and  resilience  plan  is  in  line  with  the  objective  and  targets 
indicated in its National Energy and Climate Plan, and even goes further in some areas, notably 
in the promotion of energy efficiency. 

Taking into consideration the assessment of all the measures envisaged, the Danish recovery and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition  or  to  address  the  related  challenges  and  ensures  that  at  least  37%  of  its  total 
allocation  contribute  to  the  climate  target.  This  warrants  a  rating  of  A  under  criterion  2.5  in 
Annex V to the RRF Regulation. 

4.6 Digital transition  

Digital tagging 

Reforms and investments contributing to digital objectives account for 24.5% of the plan’s 
total  allocation.  The  most  important  contribution  to  this  target  are  the  depreciation  schemes 
under component 4 (green tax reform), component 6 (digitalisation component) and component 7 
(green R&D tax incentive).   

Table 4.6. Overall digital tagging per component 

45 

 
 
 
The plan follows the methodology for digital tracking set out in the Regulation. The choice 
of  intervention  fields  for  the  digital  transition  is  well  justified  and  reflects  the  nature,  focus, 
objective  or  expected  outcome  of  the  investments  included  in  the  component.  For  some 
measures,  the  plan  applies  the  digital  tag  at  the  sub-level  of  a  measure.  This  is  the  case  for 
general measures such as tax schemes, which by nature do not include a specific digital objective 
but which by design will contribute to the digital transition. In those cases, the tagging is applied 
to a conservatively estimated share of expenditure. Finally, the plan does not propose increasing 
the digital coefficient for any measure.  

Digital transition 

The plan contains several measures to support the digital transition, notably for SMEs, and 
address  challenges  resulting  from  it.  The  digital  component  aims  to  support  the  digital 
transformation  across  all  sectors  of  the  Danish  economy  and  society.  The  main  reform  is  the 
adoption  and  implementation  of  a  new  and  ambitious  digital  strategy,  building  on  the 
recommendations of an expert group (‘digitalisation partnership’). The main deliverables of this 
reform will be adopted at the end of 2021, including possible reforms and investments to boost 
the  digital  transition.  As  the  strategy  covers  both  the  public  and  private  sectors  and  aims  to 
increase  substantially  the  resources  given  to  the  public  administration  and  private  actors,  it  is 
considered to contribute substantially to the digital transformation of the society and economy. In 
addition, the component includes investment to support the digitalisation of SMEs and to extend 
rural ultrafast internet broadband coverage where such networks are still not available. This will 
help close the digital divide by improving connectivity also in remote regions.  

The  measures  in  the  plan  are  expected  to  contribute  to  the  three  key  objectives  of  the 
Commission’s digital strategy, ‘Shaping Europe’s digital future’. As regards the objective of 
developing  technology  that  works  for  people,  Denmark’s  new  digital  strategy  will  implement 
solutions  to  digitalise the public sector by ensuring interoperability.  It  will also  develop  a new 
cybersecurity strategy and invest in digital human capital through actions to provide people with 
digital skills. Measures to increase the basis for depreciation of investments and deducting R&D 
from taxes will also boost private investments in innovation and digital technology. The plan will 
also  contribute  to  the  objective  of  creating  a  fair  and  competitive  economy.  The  SME:Digital 
programme  will  provide  support  to  digitalise  SMEs.  This  will  strengthen  their  position  on  the 
internal  market  and  allow  them  to  compete  on  equal  terms  with  other  companies.  It  will 
contribute to their ability to develop, market and use digital technologies, products and services 
at  a  scale  that  boosts  their  productivity  and  competitiveness.  Finally,  measures  in  the  digital 

46 

 
 
 
strategy  may  also  contribute  to  the  objective  of  creating  an  open,  democratic  and  sustainable 
society by implementing e-ID, which will provide people with access to their data. 

The  general  tax  measures  combined  with  targeted  SME  support  schemes  will  foster  the 
digitalisation of businesses. Measures to increase the basis for depreciation of investments and 
deducting  R&D  taxes  account  for  almost  50%  of  the  plan’s  total  budget  and  boost  private 
investments in innovation and digital technology. The plan allows the scaling-up of the existing 
SME:Digital  support  scheme,  which  supports  inter  alia  implementation  of  new  e-commerce 
solutions,  technical  support  for  start-ups,  development,  integration  of  digital  sales  for  new 
international markets and the purchase of new technologies and digital solutions, e.g. automation 
technology  and  software.  The  plan  provides  for  a  DKK  65  million  budget  for  this  measure, 
complemented  with  significant  national  resources.  With  SMEs  receiving  DKK  100  000 
subsidies,  this  will  allow  support  for  an  additional  550  SMEs.    Extending  high-speed  rural 
broadband  coverage  to  areas  where  such  connection  was  not  available  before  on  market  terms 
will allow the digitalisation of several new SMEs and help them to upscale their operation. The 
plan is expected to provide DKK 100 million under the ‘broadband pool’, which could finance 
the connection of approximately 3 500 - 5 000 households and/or companies.  

The  digital  strategy  also  embeds  important  reforms  in  business  digitalisation.  The  expert 
group suggesting new measures includes representatives of SMEs. The objective of the ‘securing 
digital professions and the digital jobs of the future’ sub-reform is to strengthen the digitalisation 
and  digital  readiness  of  Danish  companies,  in  particular  SMEs,  and  to  support  their  access  to 
employees with adequate digital and technological skills, and the use of advanced technologies. 
This  will  help  ensure  that  the  digital  transition  is  used  to  support  good  and  well-paid  jobs, 
increase Danish companies’ productivity and competitiveness and ensure a readiness for change 
and robust business. Examples of possible measures securing digital professions and the digital 
jobs of the future could include: 

(1)  strengthening the standardisation and automation of key bookkeeping and accounting 

processes in SMEs;  

(2)  developing and implementing a national electronic platform for public procurement; 

and 

(3)  focusing  on  getting  more  people  in  the  workforce  with  science,  technology, 

engineering and mathematics (STEM), including IT, competencies.  

Additional reforms under the digital strategy will establish a framework for addressing numerous 
important  challenges  as  regards  digitalisation,  including  data  usage,  artificial  intelligence  and 
cybersecurity, to guide and support Danish companies’ digitalisation efforts.  

The  plan  focuses  on  important  future  reforms  when  it  comes  to  digitalising  the  public 
administration. The main reform in this respect will be implemented through the digital strategy 
in  the  digitalisation  component,  while  the  health  component  includes  additional  measures 
focusing on the health sector.  

The new digital strategy sets out five sub-reform areas, of which  four involve digitalising 
the public administration and preparing it for future challenges, thereby creating a long-

47 

 
 
lasting impact. These measures will help further to strengthen the interoperability capacities of 
the public administration’s digital services. The digital strategy is currently under development. 
It is being developed through a bottom-up approach whereby it is possible to gather experiences 
and input from key business stakeholders. The final strategy will be presented at the end of 2021 
and  does  not  contain  concrete  measures  at  this  stage.  However,  to  ensure  its  successful 
implementation and impact, it is anchored in ambitious milestones and targets.  

The  objective  of  the  ‘creating  the  digital  public  sector  and  services  of  the  future’  sub-
reform  is  to  modernise  digital  infrastructure,  public  services  and  public  administration, 
and  address  interoperability  between  central,  regional  and  local  administrations,  the 
acceleration  of  administrative  processes  and  the  improvement  of  the  digital  interaction 
between  administrations,  citizens  and  businesses.  The  modernisation  of  the  national  digital 
infrastructure  will  also  support  the  development  and  implementation  of  cross-border  and 
interoperable digital services, such as e-ID and the single digital gateway.  

The objective of the ‘better opportunities for co-creation, public-private partnerships and 
innovation’  sub-reform  is  to  contribute  to  the  modernisation  of  the  economy,  digital 
infrastructure, digital public services and public administrations. It will do so by investing 
in  innovation  and  development,  and  upscaling  new  technologies  and  solutions,  including 
artificial intelligence deployed in the public and private sectors. This could help improve public 
services  and  the  competitiveness  of  businesses  and  contribute  to  the  green  transition  using 
advanced digital technologies.  

The  objective  of  the  ‘creating  a  data-driven  society’  sub-reform  is  to  provide  a  better 
overview of data, including public data, and to improve the accessibility of data on climate, 
environment,  geography  and  health  to  support  businesses  and  researchers  in  the 
development  of  new,  better  and/or  citizen-centred  solutions.  Measures  could  include 
strengthening  coherence  between  IT  and  legislation  to  secure  the  translation  of  legislation  into 
the  public  digital  administration  or  make  data  available  as  a  basis  for  the  development  of  new 
business models.  

The  objective  of  the  ‘Denmark  fit  for  a  digital  future’  sub-reform  is  to  prepare 
recommendations  and  initiatives  for  the  future  direction  of  Denmark’s  digitalisation. 
Possible  measures  could  include  a  new,  more  ambitious  strategy  for  cyber  and  information 
security that will: 

raise awareness and help citizens, businesses and authorities protect themselves digitally;  

 
  address the security and resilience of critical sectors of society; and  
  strengthen national coordination and cooperation on cyber and information security, the 
promotion  of  teaching  in  digital  skills  in  schools,  enrolment  in  higher  specialised  IT 
education  and  enhanced  digital  skills  among  public  employees  in  central  government, 
regions and municipalities.  

The new digital strategy is also expected to address the challenges of the digital transition, 
namely  by  investing  in  the  digitalisation  of  companies  and  in  digital  skills.  The  fifth  sub-
reform, ‘securing digital professions and the digital jobs of the future’, will strengthen the digital 

48 

 
 
readiness of companies, in particular SMEs, and provide employees with adequate digital skills. 
To  strengthen  companies’  digital  readiness,  the  sub-reform  will  include  solutions  to  facilitate 
their  access  to  digital  infrastructures,  such  as  increasing  the  standardisation  and  automation  of 
book-keeping and developing a national electronic platform for public procurement. To provide 
employees with digital skills, it will focus on getting more people in the workforce with STEM, 
including IT, competencies. 

Finally,  digital  measures  in  the  health  component  aim  to  make  the  sector  more  resilient. 
The component’s digitalisation measure will ensure that new technologies and digital solutions 
developed  during  the  COVID-19  pandemic  are  used  to  create  a  more  resilient  and  sustainable 
healthcare system.  

Taking into consideration the assessment of all the measures envisaged, the Danish recovery and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it, and ensures that at least 20% of its total 
allocation  contribute  to  digital  objectives.  This  warrants  a  rating  of  A  under  criterion  2.6  in 
Annex V to the RRF Regulation. 

4.7 Lasting impact of the plan  

One key objective of the plan is to reduce CO2 emissions. To this end, the Danish authorities 
have calculated the reduction of CO2 from the implementation of each measure. 

Table 4.7. CO2 emission savings by 2030 (Mt), by component 

Component 

Strengthening the resilience of the healthcare system 
Green transition of agriculture and environment 
Energy efficiency, green heating and CCS 
Green tax reform (phase 1) 
Sustainable road transport 
Digitalisation 
Green research and development 

CO2 emission savings by 2030 
(Mt) 
0 
0.1 
0.1 
0.5 
2.1 
0 
0 

Several of the initiatives financed by the RRF are the subject of political agreements that 
extend beyond 2025, for instance beyond the timeline of the RRF.  These include the  green 
tax  reform  and  the  Sustainable  Road  Transport  Agreement.  In  the  medium-to-long  term,  such 
initiatives will be financed within the overall fiscal framework in Denmark. Furthermore, many 
of the initiatives (for instance the green tax reform) are supported by a broad political coalition, 
which ensures political support beyond the current electoral period. Therefore, the initiatives are 
assessed to be sustainable well beyond 2025. 

The implementation  of the envisaged reforms and investments is  expected to bring about 
structural  changes  in  the  economy.  Raising  energy  taxes  (and  later  the  introduction  of  a 
uniform GHG emissions tax) should accelerate the green transformation of the economy, making 

49 

 
 
 
Denmark  one  of  the  frontrunners  in  reducing  GHG  emissions.  The  other  RRF  measures  and 
investments support these objectives coherently and efficiently, for instance by focusing funding 
on  sectors  with  the  largest  GHG  emissions  (transport  and  agriculture)  and  improving  energy 
efficiency  at  the  same  time.  The  plan’s  ambitious  R&D  projects  could  have  a  long-lasting 
positive  impact  on  climate  objectives  (for  instance  by  improving  CCS).  Stronger  management 
systems for critical supplies in the health sector should contribute to its long-term resilience. 

Several  components  in  the  plan  support  social  and  territorial  cohesion  and  convergence, 
which  is  expected  to  have  an  effect  also  in  the  long  term.  The  measures  to  strengthen  the 
resilience  of  the  healthcare  system,  which  include  integrating  new  technologies  and  digital 
solutions discovered during the COVID-19 pandemic into the healthcare system to make it more 
resilient  and  sustainable,  have  the  potential  to  become  long-lasting  solutions  and  to  meet  the 
increasing needs and pressures in the sector.   

The  Danish  agricultural  sector  faces  structural  challenges,  which  makes  it  vulnerable  to 
increases in costs as a result of the green transition and declines in earnings. Employment 
and social cohesion especially in rural areas are dependent on the continued competitiveness of 
the sector. Therefore, the initiatives aim to provide farmers with economic incentives  to reduce 
GHG emissions (while taking account of their particular circumstances) and to ensure social and 
territorial  cohesion  and  convergence.  The  agricultural  reform  also  involves  R&D  investments 
that  promote  sustainable  growth  in  the  agricultural  sector  and  the  creation  of  high-quality 
employment.  

Digitalisation: The initiatives aim to create the digital public sector of the future by a continuous 
modernisation of the digital infrastructure, meeting the needs of all citizens and businesses, and 
strengthening  connectivity.  In  particular,  the  broadband  pool  will  promote  high-speed  internet 
access for citizens, households and companies in less densely populated areas across the country, 
which will enable everyone to take part in the upward social and economic convergence driven 
by  digitalisation.  This  will  be  further  ensured  by  determining  the  distribution  of  funds  and  the 
drafting of the digital strategy in close collaboration with a broad range of actors in civil society.  

Taking into consideration all reforms and investments envisaged by Denmark in its recovery and 
resilience plan,  their  implementation  is  expected, to  a large extent, to  bring  about  a structural 
change  in  relevant  policies  and  to  have  a  lasting  impact.  This  warrants  a  rating  of  A  under 
criterion 2.7 in Annex V to the RRF Regulation. 

4.8 Milestones, targets, monitoring and implementation  

Adequacy of the structure tasked with the implementation of the plan, monitoring of progress 
and reporting 

Milestones and targets 

The  plan  includes  39  milestones  and  38  targets  that  reflect  the  lifecycle  of  the  measures. 
They  are  both  front-  and  back-loaded,  as  the  majority  of  the  milestones  concern  the  first  year  
and only targets apply for the later years. It should be noted that targets set at the beginning of 
the lifetime of the RRF  relate mainly to the topping-up of  existing successful  schemes.  In this 

50 

 
 
regard, the roll-out of the measure can be quick and the risk of non-completion of those targets is 
considered low. 

The milestones and targets in the plan are clear and realistic. The number of milestones or 
targets  per  measure  (between  one  and  three)  is  a  reasonable  reflection  of  the  lifecycle  of  a 
measure. The milestones and targets appropriately reflect the different stages of implementation 
of reforms and investments. In this regard, they often relate to the setting-up or entry into force 
of  a  measure  and  include  at  least  a  final  output  target  that  appropriately  and  realistically 
measures whether the objective of the measure has been achieved. The milestones and targets are 
therefore consistent with the long-term objectives of the measures.  

A  number  of  milestones  stem  from  political  agreements  between  minority  governments 
(which  are  common  in  Denmark)  and  the  majority  of  parties  in  the  parliament.  In  the 
specific  case  of  Denmark,  the  political  agreement  reflects  a  key  step  in  deciding  on  the  key 
parameters  of  a  measure  and  provides  sufficient  guarantee  that  it  will  be  implemented.  These 
political  agreements  have  been  translated  into  additional  milestones  specifying  the  relevant 
legislative action to be taken. 

The proposed indicators are relevant, acceptable and robust. They are easily measurable and 
relevant markers of progress in implementing the measures. Overall, the indicators are under the 
control  of  the  government,  as  they  either  reflect  an  input  provided  by  the  government  or,  for 
most targets, an output. Few indicators can be expected to be influenced by factors outside the 
government’s control. Given their limited number, the risk of non-completion is considered low.  

The  ambition  of  some  of  the  indicators  can  be  considered  modest.  However,  this  cautious 
approach will help ensure that the government reaches the milestone or target in cases where, for 
instance, the number of beneficiaries of a scheme is uncertain. This is the case for measures that 
are expected to be implemented by the end of the Facility and whose content has not  yet been 
decided, including in particular research projects under the green R&D component and projects 
under the digital strategy.  

The  verification  mechanisms,  data  collection  and  responsibilities  described  in  the  plan  appear 
sufficiently  robust  to  justify  the  disbursement  requests  once  the  milestones  and  targets  are 
completed. 

Overall organisational arrangements 

The  Ministry  of  Finance  will  oversee  coordination,  monitoring  and  reporting  on  the 
implementation of the plan. It will, among other things: 

  ensure compliance with EU regulations;  
  monitor  the  full  and  timely  fulfilment  of  the  plan’s  strategic  and  operational  objectives 

through milestones and targets;  

  prepare  and  submit  the  requests  for  disbursement  based  on  the  necessary  information 

from the competent authorities and reports to the Commission;  

51 

 
 
 
  ensure the evaluation of the results of the plan and the dissemination of outputs; and 
  provide technical assistance to the competent authorities.  

In addition, the Ministry’s internal audit unit will be assigned the task of coordinating the audit 
systems  and  conducting  controls  on  the  line  ministries’  application  of  funds  and  fulfilment  of 
milestones  and  targets.  The  Ministry  will  monitor  the  implementation  of  the  plan  and  be 
responsible for the exchanges with the EU institutions; responsibility for implementation will be 
divided per components among the relevant ministries. 

The arrangements proposed by Denmark in its recovery and resilience plan are expected to be 
the  minimum  to  ensure  effective  monitoring  and  implementation  of  the  plan,  including  the 
envisaged timetable, milestones and targets, and the related indicators. This warrants a rating of 
A under assessment criterion 2.8 in Annex V to the RRF Regulation.  

4.9 Costing 

Denmark has provided cost estimates for all investment measures in the plan. In most cases, 
no  detailed  costing  estimates  were  associated  with  the  reforms  in  the  plan  (such  as  the  digital 
strategy) or very novel projects (mission-based R&D projects). The reforms and investments in 
the  plan  comply  with  the  eligibility  criteria  set  out  in  the  Regulation.  All  measures  are 
implemented after 1 February 2020 and the relevant actions relating to their implementation are 
expected to be carried out by 31 August 2026 at the latest. Value-added tax (VAT) is not part of 
the cost estimates for which funding from the RRF is requested. 

The  cost  breakdown  is  well  detailed.  Estimates  are  for  the  most  part  based  on  comparisons 
with past investment schemes of a similar nature. The tables proposed in the standard template 
were  duly  completed  and  presented.  The  cost  estimates  were  not  validated  by  an  independent 
public body such as a national productivity board or an independent fiscal institution.   

The assessment of the cost estimates and the supporting documents demonstrates that most 
of the costs are well justified, reasonable and plausible. 

Reasonable costs 

Denmark provided detailed explanations to justify the reasonability of the cost estimates. 
The  analysis  of  the  supporting  evidence  is  not  consistent  throughout  the  plan.  The  cost  of  the 
general tax measures (such as the deprecation schemes under the green tax reform and the R&D 
tax  deduction  scheme)  were  estimated  by  models.  For  measures  where  similar  investment 
measures existed in the past, the cost estimates were clearly spelt out and it was possible clearly 
to  identify  the  methodology  used.  In  the  case  of  reforms,  novel  measures  or  measures  without 
similar past schemes, the cost estimates were less developed. Nevertheless, there is no evidence 
that would give rise to doubt as to the costing estimates provided. 

In  this  context,  it  is  deemed  that  the  reasonability  of  the  cost  estimates  is  fairly  well 
established. 

Plausible costs 

52 

 
 
Denmark used reference costs (with adjustments where needed) to justify the plausibility of 
its cost estimates. The analysis of the supporting evidence is not consistent throughout the plan. 
Typically,  for  measures  where  similar  investment  measures  existed  in  the  past,  historical  or 
comparative  data  for  the  key  cost  drivers  were  provided.    For  novel  projects  without  past 
precedent  (such  as  mission-based  R&D  projects),  Denmark  argued  that  no  comparative  cost 
estimates can be provided.  

Considering  the  limitations  of  an  ex  ante  assessment  of  cost  estimates,  the  amounts 
proposed for financing were deemed appropriate and the plausibility of the cost estimates 
is fairly well established. 

No double EU funding 

Double  funding  will  be  prevented  by  good  governance  and  control  systems.  As  the 
2021-2027  Partnership  Agreement  is  currently  under  negotiation,  a  proper  delineation  was  not 
possible at this stage. Therefore, Denmark focused on establishing and describing the governance 
and control systems to prevent double funding (see below).  

One of the main purposes of the control and audit arrangements is to ensure that no double 
funding  will  occur  when  the  funds  from  the  plan  are  disbursed  to  recipients.  Each 
responsible  implementing  authority  will  issue  new  management  declarations  through  which  it 
will commit to document continuously that double funding is prevented and that all funds have 
been implemented according to relevant national and EU regulations. 

To  obtain  knowledge  of  risk  and  specific  assurance  on  the  risk  of  double  funding,  the 
Department  of  the  Office  of  Audit  and  Supervision  (OAS)  will  perform  three  specific 
controls: 

  check and compare with the Ministry of Finance officials responsible for the ministry’s 
budget  to  ensure  that  the  project  in  the  relevant  ministry  receives  funds  from  one  EU 
source only; 

  check against the annual Budget Bill whether the relevant ministry receives other EU  –

funds (which would indicate a risk of double-funding); and 

  check on the basis of the annual report for each relevant ministry or agency, that funds 

are not received from any other sources, including sources other than EU funds. 

The  OAS  will  include  a  new  paragraph  in  the  ministry  management  declaration,  whereby  the 
management declares not to have received funding from other sources for the project in question. 

In  addition,  to  ensure  sufficient  controls  on  avoidance  of  double  funding,  Denmark 
committed to:  

  conduct periodic cross-checks on a sample basis, using the data in Denmark’s databases 

 

and ARACHNE, once Denmark starts using it;  
include  in  its  risk  assessment  relevant  to  the  strategy  of  cross-checks  of  avoidance  of 
double funding the funds of all relevant ministries involved in the implementation of the 
RRP; and  

53 

 
 
  carry out checks on double funding at least once before each payment request. 

At the grant recipient level, one of the application criteria is the absence of double funding. 
This will be a criterion when assessing applications for all funds under the plan and only projects 
respecting the rules on avoidance of double funding will be eligible for disbursements. 

According to the Danish authorities, the central distribution will help ensure that the same 
applicant cannot receive double funding for the same project. Initiatives financed by both the 
RRF and additional funding (e.g. national or EU funds) will be disbursed at central level, with 
budget  and  appropriation  authority  in  the  Budget  Bill  and  the  disbursement  of  funds  will  be 
handled  within  the  same  responsible  ministry  and  unit.  In  addition,  the  RRF  funding  will  be 
registered  as  revenue  in  the  Budget  Bill  for  2021  via  a  supplementary  appropriation  to  be 
adopted by the Danish  Parliament’s  Finance Committee, which will facilitate the separation of 
RRF funding from other funding. 

Commensurate and cost-efficient costs 

The  plan  is  expected  to  effectively  help  address  the  challenges  identified  in  the  CSRs  for 
Denmark. Furthermore, the reforms and investments in the plan are aligned with the ‘flagship 
initiatives’ of the 2021 annual sustainable growth strategy. More specifically, all seven flagship 
initiatives are addressed, albeit to varying degrees. 

Moreover,  the  plan  contains  significant  investments  and  reforms  to  accelerate  the  green 
transition. The measures will boost growth potential and productivity, stimulate job creation and 
mitigate  the  adverse  effects  of  the  crisis.  The  plan’s  clear  R&D  focus  could  support  the 
achievement  of  Denmark’s  ambitious  GHG  reduction  objectives,  with  potential  positive  spill-
over effects (for instance CCS capacity could be used by other countries).  

The justification provided by Denmark on the amount of the estimated total costs of the recovery 
and resilience plan is to a medium extent reasonable, plausible, in line with the principle of cost-
efficiency  and  is  commensurate  with  the  expected  national  economic  and  social  impact. 
Denmark provided sufficient information and evidence that the amount of the estimated cost of 
the reforms and investments of the recovery and resilience plan to be financed under the Facility 
is  not  covered  by  existing  or  planned  Union  financing.  This  warrants  a  rating  of  B  under 
assessment criterion 2.9 in Annex V to the RRF Regulation. 

4.10 

 Controls and audit 

Description 

The  Danish  arrangements  will  consist  of  two  levels  of  control  and  audit:  a  central  level, 
which is additional to the existing Danish control and audit mechanisms, and the existing 
decentralised  level.  The  Ministry  of  Finance  is  responsible  for  coordinating  and  ensuring  that 
the  line  ministries’  audits  and  controls  are  sound  and  well-functioning  with  regard  to  the 
implementation  of  the  plan.  It  will  also  serve  as  contact  point  for  the  Commission,  EU  audit 
institutions, the European Anti-Fraud Office (OLAF), etc. The Commission, the European Court 

54 

 
 
 
of Auditors, OLAF and the European Public Prosecutor’s Office will have access to all relevant 
data concerning control and audit. The Department of the Office of Audit and Supervision will 
ensure the high reliability of beneficiaries’ data provision on milestones and targets and that the 
data is stored in accordance with relevant regulations.  

Before each payment request, the Ministry of Finance will request and collect declarations 
from  the  management  in  each  line  ministry  that  receives  funding  from  the  RRF.  The 
declarations will be signed at management level and sent to the Ministry of Finance by members 
of  the  management  in  each  of  the  nine  responsible  line  ministries  (see  Table  3.1).  With  the 
declarations,  the  management  undertakes  to  comply  with  the  RRF  Regulation,  in  particular 
Article 22 on the protection of the Union’s financial interests. 

The Ministry of Finance will monitor and ensure that the ministries send the management 
declarations. After it has obtained sufficient assurance on the spending of funds, it will submit a 
single  management  declaration  to  the  Commission  on  behalf  of  Denmark.  The  single 
management  declaration  will  be  based  on  the  line  ministries’  declarations  and  the  Ministry  of 
Finance’s own controls and supervision of the implementation of the funds. 

Every  ministry  has  a  clear  and  legally  binding  responsibility  to  ensure  appropriate  audit 
and  control  systems.  Furthermore,  every  ministry  must  design  its  financial  accounts  in  a  way 
that makes it possible to segregate the RRF funding from its other expenditure. This will be done 
in the supplementary financial act implementing the RRF, in the official state accounts and in the 
annual budget bill. 

In addition, the National Audit Office may perform risk-based and random audits on the 
disbursement  of  RRF  funds.  However,  it  is  an  independent  entity  and  itself  responsible  for 
deciding whether or not to carry out an audit. If it performs audits relating to the disbursement of 
RRF  funds,  the  audit  summaries  will  be  provided  to  the  Commission  along  with  the  biannual 
management declarations. 

Robustness of internal control system and distribution of roles and responsibilities  

The  Danish  plan  presents  the  national  organisational  structure,  with  the  roles  and 
responsibilities  of  each  actor  clearly  set  out  in  the  system  for  the  implementation  of  the 
RRF. The Danish  arrangements  will consist of two levels  of control  and audit:  a central  level, 
which  is  additional  to  the  existing  Danish  control  and  audit  mechanisms,  and  the  existing 
decentralised level. In addition, the control and audit system is comprised of the National Audit 
Office,  the  Danish  Ombudsman,  the  Danish  Data  Protection  Agency  and  the  whistle-blower 
functions in all ministries. 

The  Ministry  of  Finance  is  responsible  for  coordinating  and  ensuring  that  the  line 
ministries’  audits  and  controls  are  sound  and  well-functioning  with  regard  to  the 
implementation  of  the  RRP.  Within  the  Ministry  of  Finance,  the  OAS  will  perform  controls 
regarding  both  the  ministries’  application  of  funds  and  the  documentation  and  fulfilment  of 
targets and milestones. It will also coordinate the audit systems and supervise line ministries in 

55 

 
 
 
their  implementation,  control  and  audit  of  the  funds,  thus  providing  additional  assurance  that 
implementing  ministries’  control  systems  are  able  to  meet  RRF  requirements.  The  OAS  will 
report biannually on the controls performed during the work with the management declaration. In 
the report, it will provide a summary of its controls on the implementing ministries’ control and 
audit reports, and will therefore conduct the audits that that will feed into the summary of audits 
that will be sent to the Commission by the Ministry of Finance. Each ministry is responsible for 
ensuring  sufficient  audit  and  control  on  the  completion  of  the  milestones  and  targets.  The 
ministries  will  have  the  flexibility  to  design  the  audits  and  controls  individually.  The  National 
Audit  Office  (Rigsrevisionen)  is  responsible  for  conducting  external  audits  on  government 
expenditures and revenues.  

The system presents a robust process and structure, where the roles and responsibilities are 
clearly defined and the relevant control functions are appropriately segregated. 

Adequacy of control systems and other relevant arrangements  

The plan sets out the procedures that are in place to ensure compliance with applicable EU and 
national  law,  throughout  the  implementation  of  all  measures.  Furthermore,  it  addresses  all 
serious irregularities (fraud, corruption, conflict of interest) and avoidance of double-funding by 
allowing for controls and audits to be implemented also at line-ministry level. Each of the nine 
responsible line ministries involved in the implementation of the components will address a RRF 
management declaration to the OAS which will be performing controls and supervision.  

When assigning funding from the RRF to relevant line ministries, it is a clear condition that the 
respective  ministry  implements  funds  according  to  the  Union’s  criteria  for  implementation  of 
funds  from  the  RRF.  Every  ministry  has  a  clear  and  legally  binding  responsibility  to  ensure 
appropriate audit and control systems in order to ensure that the funds are disbursed according to 
what has been approved by the Danish government and the Union. 

The proposed measures give assurance that there is an adequate level of control to prevent, 
detect and correct irregularities identified when using RRF funds. 

No specific risks to the individual components as a result of irregularities were identified. 

The plan will be implemented and tracked using a system that is specific to each line ministry, 
whereby the information will be sent to the OAS. The data will be collected and stored by the 
individual ministries, and it will be the OAS’ responsibility to collect and store the data on final 
recipients, as well as making it available to the Commission, OLAF and the Court of Auditors. 
The  specific  data  that  will  be  collected  from  the  projects  refer  to  final  recipients/beneficiaries, 
contractors and subcontractors. The collection of these data will serve the purpose of obtaining 
knowledge of risks, specifically regarding ‘concentration’ and ‘reputational’ risks. The OAS will 
ensure that these data can be made available to the EU-authorities upon their request. 

Adequacy of arrangements to avoid double EU funding  

56 

 
 
 
 
The  Danish  RRP  takes  account  of  funding  from  other  EU  funds  and  instruments  in  order  to 
ensure  complementarity  and  avoid  double  funding.  This  is  done  by  supplementing  the  current 
rigorous Danish control systems with new management declarations whereby the management in 
each  responsible  implementing  authority  pledges  to  be  able  to  always  document  that  double 
funding is prevented and that all funds have been implemented according to relevant national and 
EU regulations.  

Initiatives financed by both the RRF and additional funding (for instance national or EU funds) 
will receive disbursements issued at central level, with budget and appropriation authority in the 
Budget  Bill.  Denmark  indicates  that  the  central  distribution  ensures  that  the  same  applicant 
cannot receive double funding for the same project, as the disbursement of funds will be handled 
within  the  same  responsible  ministry  and  unit.  Furthermore,  every  ministry  has  to  design  its 
financial  accounts  in  a  way  that  makes  it  possible  to  separate  the  RRF  funding  from  other 
expenditure in the ministry. This will be done in the supplementary financial act implementing 
the RRF, in the official state accounts and in the annual budget bill. 

To obtain knowledge of risk and specific assurance on the risk of double funding, the OAS will 
perform three specific controls:  

(1) check  and  compare  with  the  Ministry  of  Finance  official  responsible  for  the  ministry’s 
budget to ensure that the project in the relevant ministry receives funds from one EU fund 
only; 

(2) check against the annual Budget Bill whether the relevant ministry receives other EU  –

funds (which would indicate a risk of double-funding); and 

(3) check on the basis of the annual report for each relevant ministry or agency that funds are 

not received from any other sources, including sources other than EU funds. 

The avoidance, detection and prevention of double-funding will be ensured at all stages of 
the projects’ lifecycle. In this respect, Denmark committed to:  

(1) OAS and the line ministries will conduct periodic cross-checks on a sample basis, using 

the data in Denmark’s databases and ARACHNE, once Denmark starts using it;  

(2) include  in  its  risk  assessment  relevant  to  the  strategy  of  cross-checks  of  avoidance  of 
double funding of all relevant ministries involved in the implementation of the RRP; and  

(3) carry out checks for double funding at least once before each payment request. 

Legal empowerment and administrative capacity of control function  

The  OAS  reports  directly  to  the  permanent  secretary  in  the  Ministry  of  Finance.  It  has  an 
individual description of its role and functions, in which its special independent status is secured. 
The  description  of  functions  has  been  amended,  in  particular  as  regards  the  new  mandate  for 
controls  on  the  use  of  RRF  funds.  That  amendment  is  approved  at  government  level.  The 
government’s  economic  committee  has  approved  the  extended  mandate.  The  OAS  currently 
consists  of  a  chief  auditor  with  13  years  of  experience  from  internal  audits  in  the  Ministry  of 
Finance. In addition, it has eight highly experienced employees, of whom four are specialised in 

57 

 
 
auditing, two in cybersecurity, one in legal affairs and one in financial affairs. Each of the OAS 
employees  has  more  than  15  years  of  experience.  All  employees  are  continuously  trained  and 
upskilled. The office will hire the number of additional employees needed to ensure proper and 
sufficient control of the RRF funds. The exact number of additional employees will be assessed 
continuously to ensure a sufficient workforce. 

Roles  and  responsibilities  of  the  actors  for  controls  and  audits  are  clear,  relevant  control 
functions are appropriately segregated and the independence of actors performing audits is 
ensured. 

 The  arrangements  proposed  in  the  plan  to  prevent,  detect  and  correct  corruption,  fraud  and 
conflicts  of  interest  when  using  RRF  funds,  including  the  arrangements  and  commitments 
relevant  to  the  avoidance  of  double  funding  from  the  Facility  and  other  EU  programmes,  are 
assessed as acceptable. This warrants a rating of A under assessment criterion 2.10 in Annex V 
to the RRF Regulation. 

4.11  Coherence  

Mutually reinforcing measures 

The  reforms  and  investments  in  the  plan  are  consistent  and  mutually  reinforcing.  Each 
component  is  coherent  in  the  sense  that  the  measures  therein  reinforce  each  other.  They  often 
aim at achieving the same or complementary objectives. The reforms included in the components 
underpin and complement the planned investments. One example is the first phase of a uniform 
tax  on  GHG  emissions  in  component  4,  which  is  underpinned  by  an  investment  window  to 
encourage companies to invest in climate-friendly assets and adapt to the second phase of the tax 
reform in the form of a uniform tax on GHG emissions.  

The  measures  relating  to  the  green  tax  reform  form  a  framework  for  a  number  of  other 
measures in the plan, thereby creating a coherent narrative. The measures in components 2 
(agriculture), 3 (energy efficiency) and 5 (sustainable transport) constitute a coherent response to 
the  challenges  that  Denmark  faces  in  reaching  its  climate  objectives.  In  particular,  they  are  in 
line  with  the  ambitious  Climate  Law  target that  Denmark  has  set  itself.  The  measures  in 
component  2  will  help  to  reinforce  GHG  emission  reductions  in  the  agricultural  sector.  The 
component contains coherent measures that target the improvement of soil quality and decrease 
related  pollution, which  is  one  of  the  main  environmental concerns  for  Denmark. The 
combination of measures can positively contribute to the green transition in the sector, subject to 
the long-term safeguarding of their results. Likewise, the  reforms and investments in component 
3 mutually reinforce GHG emission reductions in relevant sectors, while exploring new sources 
of CO2 emission reductions (CCS feasibility study). Finally, the measures in component 5 also 
make a coherent response to decarbonising transport by giving people incentives to commute by 
bike and move to zero- or low-emission vehicles.  

The measures to strengthen the Danish healthcare system are coherent, as they all have the 
overall  aim  of  increasing  the  resilience  of  the  healthcare  system  from  different  angles. 

58 

 
 
 
Investments  in  digital  solutions  to  access  healthcare  are  cross-cutting  and  interconnected, 
allowing greater access to vulnerable populations, patient involvement and effective monitoring. 
Measures  to  ensure  stocks  of  clinical  drugs  and  monitoring  of  critical  medical  products 
contribute to overall planning and robust management of critical medical products. The measure 
on  the  effects  of  COVID-19  vaccines  could  improve  the  efficiency  of  vaccines  and  help 
minimise  side  effects,  thus  improving  the  overall  health  of  the  population  and  trust  in 
vaccinations. 

The  measures  dedicated  to  digitalising  Denmark’s  society  and  economy  aim  to  address 
coherent challenges and objectives.  Although the Digital Partnership will decide the concrete 
measures at a later stage, it is clear that the different work streams to digitalise the economy and 
the public administration, and to provide workers with digital skills pursue complementary and 
mutually reinforcing aims. No cases have been observed of areas where the proposed measures 
contradict or negatively affect each other.  

Complementarity of measures 

The  components  embody  the  plan’s  consistent  vision  of leveraging  the  twin  transitions  in 
recovering  from  the  crisis.  Synergies  can  be  found  throughout  the  plan  between  different 
components,  in  particular  as  regards  their  objectives.  Several  components  contribute  to  the 
objective  of  reducing  GHG  emissions  and  the  measures  therein  complement  each  other.  For 
instance, component 4 (green tax reform) contributes to the first phase of a green tax reform by 
introducing a uniform tax on GHG emissions. It is complemented by four other components with 
similar  and  reinforcing  objectives,  namely  to  help  accelerate  the  green  transition  in  Denmark. 
Component  2  (green  transition  of  agriculture  and  environment)  aims  to  reduce  the  carbon 
footprint from the agricultural sector. Component 3 (energy efficiency, green heating and CCS) 
aims  to  ensure  energy  efficiency  and  contribute  to  the  Danish  emissions  reductions  targets. 
Component  7  (green  R&D)  aims  to  increase  investments  in  new  green  technologies  as  a 
complement  to  the  existing  and  new  policy  tools  for  achieving  carbon  neutrality.  Finally, 
component 5 (sustainable road transport) aims to reduce the emissions from the transport sector 
by 2.1 megatonnes by 2030.  

In  view  of  the  challenges  to  be  addressed,  the  Danish  recovery  and  resilience  plan 
constitutes  a  balanced  approach  between  reforms  and  investments.  In  order  to  promote 
wider  coherence  across  instruments,  notably  with  the  European  cohesion  policy  funds,  a 
balanced territorial allocation of resources is encouraged. 

Taking  into  consideration  the  qualitative  assessment  of  all  the  components  of  Denmark’s 
recovery  and  resilience  plan,  their  individual  weight  (importance,  relevance,  financial 
allocation) and their interactions, the plan contains measures for the implementation of reforms 
and  public  investments  which,  to  a  high  extent,  represent  coherent  actions.  This  warrants  a 
rating of A under assessment criterion 2.11 in Annex V to the RRF Regulation. 

59 

 
 
 
 
5.  ANNEX 

Measure/ 
Sub-
Measure 
ID 

1.2 

2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

3.1 

3.2 

Climate29

Digital 

Measure/Sub-Measure Name 

Budget 
(EUR 
m) 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

Digital solutions in the health care 
sector 

2 

095 

100% 

Organic farming 

11 

027 

100% 

Organic transition of public kitchens 

Organic Innovation Centre 

Plant based organic projects 

5 

5 

3 

027 

100% 

022 

100% 

027 

100% 

Climate technologies in agriculture 

27 

022 

100% 

Carbon rich soils 

89 

027 

100% 

Replacing oil burners and gas 
furnaces 

65 

025bis 

100% 

Energy efficiency in industry 

40 

024ter 

100% 

29  While  the  total  cost  of  the  Danish  recovery  and  resilience  plan  exceeds  the  total  allocation  of  non-repayable 
financial support to Denmark, Denmark will ensure that all spending related to the investments mentioned in this 
table  as  contributing  to  climate  objectives  are  fully  financed  by  the  funds  from  the  Recovery  and  Resilience 
Facility. 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
 
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR 
m) 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

Climate29

Digital 

3.3 

3.4 

3.5 

4.1.1 

4.1.2 

4.2.1 

4.2.2 

4.3 

5.1 

5.3 

5.5 

5.6 

Energy renovations in public 
buildings 

40 

026bis 

100% 

Energy efficiency in households 

63 

025bis 

100% 

CCS-storage potential 

27 

022 

100% 

Investment window – green share 

163 

027 

100% 

Investment window – digital share 

163 

010bis 

100% 

Accelerated depreciation – green 
share 

33 

027 

100% 

Accelerated depreciation – digital 
share 

69 

010 

100% 

Expert group to prepare proposals for 
a CO2e-tax 

Re-prioritisation of the registration 
tax of vehicles and low electricity tax 
on charging electric vehicles 

1 

01 

100% 

141 

074 

100% 

Development test of road-pricing 

3 

022 

100% 

Analysis of test scheme with double 
trailers 

Analysis of the regulation on weight 
and dimensions to optimise heavy 
haulage 

0,1 

022 

100% 

0,1 

022 

100% 

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR 
m) 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

Climate29

Digital 

5.7 

5.8 

5.9 

6.1 

6.2 

6.3 

7.1.1 

7.1.2 

7.2 

Scheme to infrastructure for electric 
bicycles 

Investments in bike paths in state 
roads and bicycle subsidy scheme for 
municipalities 

1 

075 

100% 

70 

075 

100% 

Subsidy scheme to green ferries 

27 

074 

100% 

Digital strategy 

Broadband pool 

67 

13 

011 

100% 

053 

100% 

SME's digital transition and export 

9 

010 

100% 

Incentives to boost R&D in 
companies – green share 

Incentives to boost R&D in 
companies – digital share 

15 

022 

100% 

59 

009bis 

100% 

Research in green solutions 

94 

022 

100% 

62