Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Denmark
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Denmark, circular economy, economic recovery, economic reform, energy policy, fiscal policy, property tax, stability pact, stability programme, waste management

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  COM(2023) 604 final  Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Denmark {SWD(2023) 604 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2023 National Reform Programme of Denmark 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 9(2) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

1 
2 

3 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council2,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021. The Recovery and Resilience Facility provides financial support to the Member 
States  for  the  implementation  of  reforms  and  investments,  entailing  a  fiscal  impulse 
financed  by  the  EU.  In  line  with  the  European  Semester  priorities,  it  contributes  to 
economic  and  social  recovery  and  to  the  implementation  of  sustainable  reforms  and 
investments,  in  particular  to  promote  the  green  and  digital  transition  and  make  the 
Member States’ economies more resilient. It also helps strengthen public finances and 
boost  growth  and  job  creation  in  the  medium  and  long  term,  improve  territorial 
cohesion  within  the  EU  and  support  the  continued  implementation  of  the  European 
Pillar of Social Rights. The maximum financial contribution per Member State under 
the Recovery and Resilience Facility was updated on 30 June 2022 in accordance with 
Article 11(2) of Regulation (EU) 2021/241.  

On 22 November 2022, the Commission adopted the 2023 Annual Sustainable Growth 
Survey3,  marking  the  start  of  the  2023  European  Semester  for  economic  policy 
coordination. The European Council endorsed the priorities of the  survey  around the 
four  dimensions  of  competitive  sustainability  on  23  March  2023.  On  22  November 

OJ L 209, 2.8.1997, p. 1. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 
COM(2022) 780 final. 

EN 

1 

  EN 

                                                 
2022,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted 
the 2023 Alert Mechanism Report, in which it did not identify Denmark as one of the 
Member States that may be affected or may be at risk of being affected by imbalances, 
and for which an in-depth review would be needed. The Commission also adopted a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which the Council adopted on 16 May 2023, as well as the proposal for the 2023 
Joint  Employment  Report  analysing 
the  Employment 
the 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  the 
Council adopted on 13 March 2023.  

implementation  of 

(3)  While the  EU  economies are showing remarkable resilience, the  geopolitical  context 
continues  to  have  a  negative  impact.  As  the  EU  stands  firmly  with  Ukraine,  the  EU 
economic  and  social  policy  agenda  is  focused  on  reducing  the  negative  impact  of 
energy shocks on both vulnerable households and companies in the short term, and on 
keeping  up  efforts  to  deliver  on  the  green  and  digital  transition,  support  sustainable 
and inclusive growth, safeguard macroeconomic stability and increase resilience in the 
medium  term.  It  also  focuses  heavily  on  increasing  the  EU’s  competitiveness  and 
productivity. 

(4) 

(5) 

On  1  February  2023,  the  Commission  issued  the  Communication  A  Green  Deal 
Industrial  Plan  for  the  Net-Zero  Age4  to  boost  the  competitiveness  of  the  EU’s  net-
zero  industry  and  support  the  fast  transition  to  climate  neutrality.  The  plan 
complements  ongoing  efforts  under  the  European  Green  Deal  and  REPowerEU.  It 
aims to provide a more supportive environment for scaling up the EU’s manufacturing 
capacity  for  the  net-zero  technologies  and  products  required  to  meet  the  EU’s 
ambitious climate targets, as well as ensuring access to relevant critical raw materials, 
including  by  diversifying  sourcing,  properly  exploiting  geological  resources  in 
Member States and maximising the recycling  of raw materials. The plan  is  based on 
four pillars:  a predictable and simplified regulatory  environment,  speeding up access 
to finance, enhancing skills, and open trade for resilient supply chains.  On 16 March 
2023,  the  Commission  also  issued  the  Communication  Long-term  competitiveness  of 
the EU: looking beyond 20305, structured along nine mutually reinforcing drivers with 
the objective to work towards a growth enhancing regulatory framework. It sets policy 
priorities  aimed  at  actively  ensuring  structural 
improvements,  well  focused 
investments and regulatory measures for the long-term competitiveness of the EU and 
its Member States. The recommendations below help address those priorities. 

In 2023, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  Fully 
implementing  the  recovery  and  resilience  plans  remains  essential  for  delivering  the 
policy priorities under the European Semester, as the plans address all or a significant 
subset  of  the  relevant  country-specific  recommendations  issued  in  recent  years.  The 
2019, 2020 and 2022 country-specific recommendations remain equally relevant also 
for  recovery  and  resilience  plans  revised,  updated  or  amended  in  accordance  with 
Articles 14, 18 and 21 of Regulation (EU) 2021/241.  

4 
5 

COM(2023) 62 final.  
COM(2023) 168 final.  

EN 

2 

  EN 

                                                 
(6) 

(7) 

(8) 

6 

7 
8 

The REPowerEU Regulation6 adopted on 27 February 2023 aims to rapidly phase out 
the  EU’s  dependence  on  Russian  fossil  fuel  imports.  This  will  contribute  towards 
energy security and the diversification of the EU’s energy supply, while increasing the 
uptake of renewables, energy storage capacities and energy efficiency. The Regulation 
enables  Member  States  to  add  a  new  REPowerEU  chapter  to  their  national  recovery 
and  resilience  plans  in  order  to  finance  key  reforms  and  investments  that  will  help 
achieve the REPowerEU objectives. They will also help boost the competitiveness of 
the EU’s net-zero industry as outlined in the Green Deal  Industrial Plan for the Net-
Zero Age and address the energy-related country-specific recommendations issued to 
the  Member  States  in  2022  and,  where  applicable,  in  2023.  The  REPowerEU 
Regulation  introduces  a  new  category  of  non-repayable  financial  support,  made 
available  to  Member  States  to  finance  new  energy-related  reforms  and  investments 
under their recovery and resilience plans.  

On 8 March 2023, the Commission adopted a communication providing fiscal policy 
guidance for 2024. It aims to support the preparation of Member States’ stability and 
thereby  strengthen  policy  coordination7.  The 
convergence  programmes  and 
Commission recalled that the general escape clause of the Stability and Growth Pact 
will be deactivated at  the end of 2023.  It  called  for fiscal  policies in  2023-2024 that 
ensure  medium-term  debt  sustainability  as  well  as  raise  potential  growth  in  a 
sustainable manner. Member States were invited to set out in their 2023  stability and 
convergence programmes how their fiscal plans will ensure that the 3% of GDP deficit 
reference value is adhered to as well as plausible and continuous debt reduction, or for 
debt  to  be  kept  at  prudent  levels,  in  the  medium  term.  The  Commission  invited 
Member States to phase out national fiscal measures introduced to protect households 
and  firms  from  the  energy  price  shock,  starting  with  the  least  targeted  ones.  It 
indicated that, if support measures needed to be extended because of renewed energy 
price  pressures,  Member  States  should  target  such  measures  much  better  than  in  the 
past  towards  vulnerable  households  and  firms.  The  Commission  proposed  that  the 
fiscal  recommendations would be  quantified and differentiated  and be  formulated on 
the basis of net primary expenditure, as proposed in its Communication on orientations 
for  a  reform  of  the  EU  economic  governance  framework8.  It  recommended  that  all 
Member States should  continue to  protect  nationally  financed investment and ensure 
the  effective  use  of  the  Recovery  and  Resilience  Facility  and  other  EU  funds,  in 
particular  in  light  of  the  green  and  digital  transition  and  resilience  objectives.  The 
Commission  indicated  that  it  will  propose  to  the  Council  to  open  deficit-based 
excessive deficit procedures in spring 2024 on the basis of the outturn data for 2023, in 
line with existing legal provisions. 

On  26  April  2023,  the  Commission  presented  legislative  proposals  to  implement  a 
comprehensive reform of the EU’s economic governance rules. The central objective 
of the proposals is to strengthen public debt sustainability and promote sustainable and 
inclusive growth in all Member States through reforms and investments. The proposals 
aim at providing Member States with more control over the design of their medium-
term plans, while putting in place a more stringent enforcement regime to ensure that 

Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27  February  2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1). 
COM(2023) 141 final. 
COM(2022) 583 final. 

EN 

3 

  EN 

                                                 
(9) 

Member  States  deliver  on  the  commitments  undertaken  in  their  medium-term  fiscal-
structural plans. The objective is to conclude the legislative work in 2023. 

On 30 April 2021, Denmark submitted its national recovery and resilience plan to the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On  6 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for Denmark9. The release of instalments is conditional on 
a decision by the Commission,  taken in  accordance with  Article 24(5) of  Regulation 
(EU)  2021/241,  that  Denmark  has  satisfactorily  fulfilled  the  relevant  milestones  and 
targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory  fulfilment 
presupposes  that  the  achievement  of  preceding  milestones  and  targets  has  not  been 
reversed. 

(10)  On  1  May  2023,  Denmark  submitted  its  2023  National  Reform  Programme.  In 
accordance with  Article  27 of Regulation  (EU) 2021/241,  the  2023 National  Reform 
Programme  also  reflects  Denmark’s  biannual  reporting  on  the  progress  made  in 
achieving its recovery and resilience plan. Given that Denmark did not submit its 2023 
Convergence Programme in a timely manner, the Commission was not able to assess 
it. 

(11)  The Commission published the 2023 country report for Denmark10 on 24 May 2023. It 
assessed  Denmark’s  progress 
relevant  country-specific 
in  addressing 
recommendations  adopted by  the Council  between 2019  and  2022 and  took stock of 
Denmark’s implementation of the recovery and resilience plan. Based on this analysis, 
the  country  report  identified  gaps  with  respect  to  those  challenges  that  are  not 
addressed  or  only  partially  addressed  by  the  recovery  and  resilience  plan,  as  well  as 
new and emerging challenges.  It  also  assessed  Denmark’s progress  on implementing 
the  European  Pillar  of  Social  Rights  and  on  achieving  the  EU  headline  targets  on 
employment, skills and poverty reduction, as well as progress in  achieving the UN’s 
Sustainable Development Goals.  

the 

(12)  Based  on  data  validated  by  Eurostat,11  Denmark’s  general  government  surplus 
decreased from 3.6% of GDP in 2021 to 3.3% in 2022, while general government debt 
fell from 36.7% of GDP at the end of 2021 to 30.1% at the end of 2022.  

(13)  The  general  government  balance  has  been  impacted  by  the  fiscal  policy  measures 
adopted to mitigate the economic and social impact of the increase in energy prices. In 
2022,  such  revenue-decreasing  measures  included  a  reduction  in  the  electricity  levy 
while expenditure-increasing measures included social benefits aimed at lower-income 
households  to  compensate  for  high  energy  costs.  The  Commission  estimates  the 
budgetary  cost  of  these  measures  at  0.1%  of  GDP  in  2022.  At  the  same  time,  the 
estimated cost of COVID-19 temporary emergency measures dropped to 0.0% of GDP 
in 2022, from 4.0% in 2021. 

9 

10 
11 

Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Denmark (10154/2021). 
SWD(2023) 604 final. 
Eurostat-Euro Indicators, 47/2023, 21.4.2023 

EN 

4 

  EN 

                                                 
(14)  On  18  June  2021,  the  Council  recommended  that  in  2022  Denmark12  maintain  a 
supportive  fiscal  stance,  including  from  the  impulse  provided  by  the  Recovery  and 
Resilience Facility, and preserve nationally financed investment. 

(15)  According 

to 

the  fiscal  stance13 

the  Commission  estimates, 

in  2022  was 
contractionary, at 0.6% of GDP which was appropriate in a context of high inflation. 
As  recommended  by  the  Council,  Denmark  continued  to  support  the  recovery  with 
investments  to  be  financed  by  the  Recovery  and  Resilience  Facility.  Expenditure 
financed by Recovery and Resilience Facility grants and other EU funds amounted to 
0.3%  of  GDP  in  2022  (0.3%  of  GDP  in  2021).  Nationally  financed  investment 
provided a contractionary contribution of 0.2 percentage points to the fiscal stance.14 
Denmark therefore did not preserve nationally financed investment, which was not in 
line  with  the  Council  recommendation.  At  the  same  time,  the  growth  in  nationally 
financed  primary  current  expenditure  (net  of  new  revenue  measures)  provided  a 
contractionary  contribution  of  0.7  percentage  points  to  the  fiscal  stance.  Denmark 
therefore  sufficiently  kept  under  control  the  growth  in  nationally  financed  current 
expenditure. 

(16)  The  Commission  2023  spring  forecast  projects  a  real  GDP  growth  of  0.3%  in  2024 

and 1.5% in 2024.  

(17)  The Commission 2023 spring forecast projects a government surplus of 2.3% of GDP 

for 2023 and a general government debt-to-GDP ratio of 30.1% at the end of 2023. 

(18)  The government balance in 2023 is expected to continue to be impacted by the fiscal 
measures adopted to mitigate the economic and social impact of the increase in energy 
prices.  They  consist  of  measures  extended  from  2022  (in  particular  certain  social 
benefits  aimed  a  low-income  households)  and  new  measures  such  as  a  temporarily 
lower electricity levy. The net budgetary cost of the support measures is projected in 
the  Commission  2023  spring  forecast  at  0.3%  of  GDP  in  202315.  Most  measures  in 
2023  do  not  appear  targeted  to  the  most  vulnerable  households  or  firms,  and  do  not 
preserve the price signal to reduce energy demand and increase energy efficiency. As a 
result,  the  amount  of  targeted  support  measures,  to  be  taken  into  account  in  the 
assessment of compliance with the fiscal recommendation for 2023, is estimated in the 
Commission 2023 spring forecast at 0.1% of GDP in 2023 (compared to 0.1% of GDP 
in 2022). 

(19)  On 12 July 2022, the Council recommended16 that Denmark take action to  ensure in 
2023 that the growth of nationally financed primary current expenditure is in line with 

12 

13 

14 

15 

16 

Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Convergence 
Programme of Denmark, OJ C 304, 29.07.2021, p 14. 
The  fiscal  stance  is  measured  as  the  change  in  primary  expenditure  (net  of  discretionary  revenue 
measures), excluding Covid-19 crisis-related temporary emergency measures but including expenditure 
financed  by  non-repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds, 
in 
the Fiscal Statistical Tables.   
Other  nationally  financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.3 percentage points of GDP.  

growth. For  more 

to  medium-term 

see  Box 1 

potential 

relative 

details 

The  figure represents the level of annual budgetary cost of those  measures, including current revenue 
and expenditure as well as – where relevant – capital expenditure measures. 
Council  Recommendation  of  12  July  2022  on  the  National  Reform  Programme  of  Denmark  and 
delivering a Council opinion on the 2022 Convergence Programme of Denmark OJ C 334, 1.9.2022, p. 
27.  

EN 

5 

  EN 

                                                 
(20) 

an  overall  neutral  policy  stance17,  taking  into  account  continued  temporary  and 
targeted support to households and firms most vulnerable to energy price hikes and to 
people fleeing Ukraine. Denmark should stand ready to adjust current spending to the 
evolving situation. Denmark was also recommended to expand public investment for 
the  green  and  digital  transitions,  and  for  energy  security  taking  into  account  the 
REPowerEU  initiative,  including  by  making  use  of  the  Recovery  and  Resilience 
Facility and other Union funds. 

In  2023,  the  fiscal  stance  is  projected  in  the  Commission  2023  spring  forecast  to  be 
expansionary  (-0.4%  of  GDP),  in  a  context  of  high  inflation.  This  follows  a 
contractionary fiscal stance in 2022 (0.6% of GDP). The growth in nationally financed 
primary  current  expenditure  (net  of  discretionary  revenue  measures)  in  2023  is 
projected to provide an expansionary contribution of 0.6% of GDP to the fiscal stance. 
The expansionary contribution of nationally financed net primary current expenditure 
is not due to the targeted support to households and firms most vulnerable to energy 
price  hikes  and  to  people  fleeing  Ukraine.  It  is  also  due  to  the  cost  of  untargeted 
energy  measures  and  permanent  increases  in  public  sector  wages  and  social  benefits 
and higher spending on healthcare. In sum, the projected growth of nationally financed 
primary  current  expenditure  is  not  in  line  with  the  Council  recommendation. 
Expenditure financed by Recovery and Resilience Facility grants and other EU funds 
amounted to 0.3% of GDP in 2023, while nationally financed investment provided an 
expansionary  contribution  to  the  fiscal  stance  of  0.1  percentage  points18.  Therefore, 
Denmark plans to finance additional investment through the Recovery and Resilience 
Facility  and  other  EU  funds,  and  it  is  projected  to  preserve  nationally  financed 
investment. It plans to finance public investment for the green and digital transitions, 
and  for  energy  security,  such  as  energy  efficiency  measures,  a  green  tax  reform  and 
green  mobility  measures,  which  are  partly  funded  by  the  Recovery  and  Resilience 
Facility and other EU funds. 

(21)  Based on policy measures known at the cut-off date of the forecast, the Commission 
2023  spring  forecast  projects  a  government  surplus  of  1.3%  of  GDP  in  2024  and  a 
debt-to-GDP  ratio  of  28.8%  at  the  end  of  2024.  The  Commission  currently  assumes 
full phasing out of energy support measures in 2024. This hinges upon the assumption 
of no renewed energy price increases. 

(22)  Denmark is likely to continue to meet the minimum medium-term budgetary objective 
of -1.0% of GDP, as estimated by the Commission for the period 2023-2025, in 2023 
and  2024.  Based  on  the  Commission  2023  spring  forecast,  the  structural  balance  is 
forecast at 3.5% of GDP in 2023 and 2.1% of GDP in 2024, above the medium-term 
budgetary objective. 

(23)  Assuming  unchanged  policies,  the  Commission  2023  spring  forecast  projects  net 

nationally financed primary expenditure to grow at 4.6% in 2024.  

(24)  At present, recurrent property taxes in Denmark are capped, which means they do not 
increase with market prices. They are therefore unable to dampen house price cycles 
and  entail  adverse  distributional  effects.  The  Danish  Parliament  approved  a  new 
property tax system  to  abolish the cap in  2017,  which  is  now  expected  to come into 

17 

18 

Based  on  the  Commission  spring  2023  forecast,  the  medium-term  (10-year  average)  potential  output 
growth of Denmark, which is used to measure the fiscal stance, is estimated at 1.9% in nominal terms. 
Other nationally financed capital expenditure is projected to provide a contractionary contribution of 0.2 
percentage points of GDP. 

EN 

6 

  EN 

                                                 
(25) 

operation from 1 January 2024. Finding affordable housing remains a major challenge 
for  many  people.  The  combination  of  high  house  prices  and  long  waiting  times  for 
social  housing  has  led  to  a  shortage  of  affordable  housing  in  major  urban  areas. 
Denmark  shows  an  increasing  share  of  variable-rate  and  deferred  amortisation 
mortgages, which increases the vulnerability of heavily indebted mortgage holders to 
further potential declines in house prices and/or hikes in interest rates.  

In accordance with Article 19(3), point (b) and Annex V, criterion 2.2 of Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. The implementation 
of Denmark’s recovery and resilience plan is well underway. Denmark submitted one 
payment request, corresponding to 25 milestones and targets in the plan and resulting 
in an overall disbursement of EUR 301 million. Beyond the first payment request, the 
implementation  of  the  plan  is  on  track,  with  an  expected  submission  of  the  second 
payment  as  scheduled  by  the  end  of  2023.  The  preparation  of  a  new  REPowerEU 
chapter  is  underway  with  a  view  to  submitting  it  in  May.  The  swift  inclusion  of  the 
new  REPowerEU  chapter  in  the  recovery  and  resilience  plan  will  allow  additional 
reforms and investments to be financed in support of Denmark’s strategic objectives in 
the field of energy and the green transition. The systematic and effective involvement 
of  local  and  regional  authorities,  social  partners  and  other  relevant  stakeholders 
remains  important  for  the  successful  implementation  of  the  recovery  and  resilience 
plan,  as  well  as  other  economic  and  employment  policies  going  beyond  the  plan,  to 
ensure broad ownership of the overall policy agenda.  

(26)  The Commission approved all of Denmark’s cohesion policy programming documents 
in 2022. Proceeding with the swift implementation of the cohesion policy programmes 
in  complementarity  and  synergy  with  the  recovery  and  resilience  plan,  including  the 
REPowerEU  chapter,  is  key  to  achieving  the  green  and  digital  transition,  increasing 
economic and social resilience as well as achieving balanced territorial development in 
Denmark. 

(27)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan,  Denmark  faces  a  number  of  additional  challenges  related  to  decarbonising  the 
economy and strengthening the circular economy to support the green transition.  

(28)  Denmark’s progress towards a circular economy is insufficient and needs accelerating 
to  meet  the  EU’s  circular  economy  goals.  Despite  some  policy  measures  that  were 
introduced  last  year  such  as  the  Climate  Plan,  progress  has  been  limited.  The  action 
plan  for  the  circular  economy  shows  that  of  the  129  initiatives  in  the  plan,  27  have 
been completed, 88 are on schedule and 14 have been delayed. The available statistics 
show that Denmark made no progress on waste generation, recycling and the circular 
economy in 2022. Its circular use of material barely declined, from 8% in 2016 to 7.8% 
in 2021, falling below the EU average of 11.7% in 2021. While the circular economy 
action  plan  aims  to  significantly  decrease  the  EU’s  material  footprint,  Denmark’s 
material  footprint  in  2020  was  25.6  tonnes/capita,  well  above  the  2020  EU  average 
(13.7  tonnes/capita).  Denmark  continues  to  underperform  in  several  aspects  of  the 
circular  economy,  in  particular  municipal  waste  generation,  recycling  rates  and  food 
waste. On municipal waste, Denmark still has the highest amount of municipal waste 
per head in the EU, with 786 kg/year/head in 2021 (EU average 530 kg/year/head in 
2021),  in  a  context  where  there  is  no  national  target  for  overall  waste  reduction.  On 
recycling, Denmark needs to make substantial efforts to meet the EU 2025 recycling 
target for municipal and packaging waste and ranks below the EU average of 49.6%, 
with  a  rate  of  34.3%  in  2021.  Lastly,  Denmark  performs  poorly  in  the  EU  on  food 

EN 

7 

  EN 

waste  indicators.  It  relies  heavily  on  waste  incineration,  with  over  50%  of  its 
municipal waste being incinerated compared to the EU average of around 26%.   

(29)  Denmark has committed to ambitious decarbonisation objectives and is a front runner 
in  the  uptake  of  renewable  energy,  in  particular  wind  production.  Denmark’s 
consumption of natural gas has dropped by 25.2% in the period between August 2022 
and March 2023, compared with the average gas consumption over the same period in 
the preceding 5 years, beyond the 15% reduction target. Denmark could keep pursuing 
efforts to temporarily reduce gas demand until 31 March 202419. In order to reach its 
decarbonisation  objectives  and  increase  the  share  of  renewables  in  the  energy  mix, 
faster  commissioning  of  projects  and  simplified  permitting  rules  are  essential  to 
achieve  national  ambitions  for  the  roll-out  of  offshore  and  onshore  wind  energy 
capacity.  Additional  capacities,  including  energy  islands  in  the  Baltic  Sea  and  North 
Sea,  will  require  sufficient  grid  expansion  planning  at  transmission  and  distribution 
level.  Meanwhile,  investments  in  energy  efficiency  can  reduce  the  need  for  energy 
infrastructure 
in  buildings, 
investments.  Boosting  energy  efficiency  measures 
combining insulation measures and the roll-out of decarbonised heating sources could 
further  reduce  dependency  on  fossil  fuels  and  reduce  energy  demand.  Energy 
efficiency improvements in  public buildings could  be further supported by  removing 
the  budget  limitations  on  green  projects  for  municipalities  and  regions.  Additional 
measures  that  support  energy  efficiency  in  private  buildings  would  help  reduce  high 
energy  costs  in  Denmark,  which  had  the  second  highest  average  household  energy 
bills  in  2022.  Domestic  industrial  activities  offer  potential  for  energy  efficiency 
improvements, especially by exploiting surplus heat in district heating. 

(30)  Labour  and  skills  shortages  in  sectors  and  occupations  key  for  the  green  transition, 
including  manufacturing,  deployment  and  maintenance  of  net-zero  technologies,  are 
creating  bottlenecks  in  the  transition  to  a  net-zero  economy.  High-quality  education 
and  training  systems  that  respond  to  changing  labour  market  needs  and  targeted 
upskilling and reskilling measures are key to reducing skills shortages and promoting 
labour inclusion and reallocation.  To unlock untapped labour supply,  these measures 
need  to  be  accessible,  in  particular  for  individuals  and  in  sectors  and  regions  most 
affected by the green transition. In 2022, labour shortages were reported in Denmark 
for 60 occupations that required specific skills or knowledge for the green transition, 
including  environmental  engineers,  environmental  protection  professionals  and 
building architects. Although the demand for green skills is increasing, the number of 
workers  in  energy-intensive  industries  taking  part  in  education  and  training  has 
declined markedly over the past decade, from 24.6% in 2015 to 15.6% in 2021. 

HEREBY RECOMMENDS that Denmark take action in 2023 and 2024 to:  

1. 

Wind  down  the  energy  support  measures  in  force  by  the  end  of  2023.  Should 
renewed  energy  price  increases  necessitate  support  measures,  ensure  that  these  are 
targeted  at  protecting  vulnerable  households  and  firms,  fiscally  affordable,  and 
preserve incentives for energy savings. 

While  maintaining  a  sound  fiscal  position  in  2024,  preserve  nationally  financed 
public  investment  and  ensure  the  effective  absorption  of  RRF  grants  and  other  EU 
funds, in particular to foster the green and digital transitions.  

19 

Council Regulation (EU) 2022/1369 

EN 

8 

  EN 

                                                 
2. 

3. 

4. 

For the period beyond 2024, continue to pursue investment and reforms conducive to 
higher sustainable growth and preserve a prudent medium-term fiscal position.  

Implement the new property tax system in order to restore the link between market 
prices and taxes and ensure fairer taxation. Accelerate investment in the construction 
of affordable housing to alleviate the most pressing needs.   

Continue  the  steady  implementation  of  its  recovery  and  resilience  plan  and  swiftly 
finalise the REPowerEU chapter with a view to  rapidly starting its implementation. 
Proceed  with  the  speedy  implementation  of  cohesion  policy  programmes,  in  close 
complementarity and synergy with the recovery and resilience plan.  

Strengthen  circular  economy  and  waste  management  policies,  including  by 
accelerating  the  implementation  of  Denmark’s  national  action  plan  for  circular 
economy,  promoting  waste  prevention  and  reuse  of  municipal  and  other  waste, 
increasing  recycling  rates,  reducing  food  waste,  and  shifting  away  from  the 
incineration of municipal waste to greener sources of heat generation. 

Reduce  reliance  on  fossil  fuels  and  increase  the  share  of  renewables  in  the  energy 
supply.  Address  increasing  demand  and  flexibility  needs  by  incentivising  the 
necessary  electricity  network  developments  at  transmission  and  distribution  level. 
Streamline  the  applicable  permit-granting  rules  for  renewable  energy.  Implement 
additional measures that support energy efficiency in private and public buildings to 
reduce energy bills and energy system costs. Ensure a better roll-out of decarbonised 
heating sources. Step up policy efforts aimed at the provision and acquisition of the 
skills needed for the green transition. 

Done at Brussels, 

For the Council 
The President 

EN 

9 

  EN