COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Denmark Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Denmark
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Denmark, budget policy, economic policy, economic recovery, economic reform, employment policy, reduction of gas emissions, social policy, stability pact, sustainable agriculture

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 604 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Denmark Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Denmark {COM(2024) 604 final} - {SWD(2024) 600 final}  
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Slower growth, lower inflation 

The  Danish  economy  has  weathered  the 
economic  challenges  of  recent  years 
well (1).  After  a  robust  recovery  in  2021  and 
2022,  economic  growth  moderated  in  2023. 
Denmark’s  real  GDP  grew  by  1.9%  in  2023, 
down from 2.7% in 2022. GDP growth in 2023 
was  driven  by  strong  net  exports,  while 
domestic demand weakened as higher interest 
rates  weighed  on  investment,  and  consumer 
spending was impacted by the erosion of real 
incomes. Exports continued to grow throughout 
2023  despite  lower  demand  from  several 
major  export  markets,  including  Sweden  and 
Germany.  An  exceptionally  strong  activity  in 
the  pharmaceutical  industry,  which  sells  most 
of  its  products  abroad,  played  a  significant 
role in the strong export performance. Without 
the  pharmaceutical 
industry’s  contribution, 
GDP  would  have  stagnated  in  2023.  Looking 
ahead,  GDP  growth  is  expected  to  expand  by 
2.6%  this  year  and  by  1.4%  in  2025.  GDP 
growth is set to benefit from continued growth 
in  exports  of  pharmaceuticals,  strengthening 
in 
consumer  spending,  and  a 
investment  helped  by  rising  real  wages  and 
declining interest rates. Government spending, 
including  military  expenditure,  is  expected  to 
further contribute to economic growth. 

rebound 

Denmark  has  a  large  and  persistent 
current  account  surplus. 
In  2023,  the 
current  account  surplus  was  10.9%  of  GDP, 
down  from  13.2%  of  GDP  in  2022  (see 
Annex 20).  This  is  significantly  above  the 
average  of  8.6%  of  GDP  over  2019-2021. 
While  the  large  surplus  in  2022  was  mainly 
due  to  an increase in  sea  freight  rates,  which 
have since normalised, the continued very high 

export 

industry 

pharmaceutical 
the  pharmaceutical 

level  in  2023  can  be  partly  attributed  to  the 
boom. 
continued 
Overall, 
is 
estimated to have increased its contribution to 
the trade surplus by almost 3pp of GDP in the 
period Q4-2022 to Q3-2023 compared to the 
same 
The 
Commission’s  spring  2024  forecasts  expect 
the  current  account  surplus  to  remain  below 
its 2022 peak, at 11.3% in 2025. 

earlier (2). 

period 

year 

a 

Graph 1.1: Growth outside the pharmaceutical 
industry has moderated 

(1) GDP excl. pharma is GDP net of gross value added 
(GVA) in the pharmaceutical industry. The pharmaceutical 
industry’s GVA for 2021-2023 is a special extraction of 
unpublished figures from Statistics Denmark and is 
therefore subject to greater uncertainty. 
Source: Statistics Denmark 

The Danish labour market has performed 
in  recent  years  with  high 
strongly 
employment  and 
low  unemployment 
rates.  Employment  has  been  growing 
noticeably  across  most  sectors  following  the 
pandemic,  and  total  employment  reached  a 
record  high  in  2023.  The  employment  rate  of 

(1)  The  cut-off  date  for  the  data  used  to  prepare  the  27 

(2)  Danish  Ministry  of  Economic  Affairs,  Economic  Report, 

Country Reports was 15 May 2024.  

2023.   

2 

9095100105110115120125201520162017201820192020202120222023GDPGDP excl. pharma2015 = 100 
 
 
  
 
in  employment 

in 
people  aged  20-64  stood  at  79.9% 
Q3-2023,  which  is  above  the  EU  average  of 
75.3%.  The  growth 
is 
supported by the increase in both the inflow of 
foreign  labour  and  the  number  of  seniors 
staying longer in the labour market. The latter 
is due to the rising state pension age, which is 
tied  to  average  life  expectancy  (Annex  14). 
Growth  in  employment  has,  however,  slowed 
down 
the 
unemployment  rate  increased  slightly  from 
4.5% in 2022 to 4.8% in Q3-2023, compared 
to an EU average of 6.0%. This has started to 
ease pressures in the labour market, although 
shortages  of  skilled  workers  remain  the 
biggest 
and 
competitiveness,  affecting  also  the  green  and 
digital transition.  

autumn  2022 

challenge 

growth 

since 

and 

for 

Graph 1.2: Inflation dynamics 

Source: Eurostat 

After  reaching  a  peak  in  2022,  inflation 
in Denmark decreased rapidly in 2023. On 
the back of lower energy prices, a temporarily 
reduced  electricity  levy  in  the  first  half  of 
2023  and  stabilising  food  prices,  annual 
inflation  fell  from  8.5%  in  2022  to  3.4%  in 
2023.  Annual  consumer  price  inflation  in 
Denmark was well below the EU and euro area 
average of 6.4% and 5.4%, respectively. Amid 
the  continued  fall  in  international  energy 
prices,  annual  inflation  is  projected  to  further 
ease to 2.0% in 2024 and 1.9% in 2025. While 
for  several  categories  of  goods  inflation  is 
expected to be limited, services are set to hold 
up inflation, reflecting the higher wage growth 
resulting  from  collective  wage  bargaining 

rounds  in  the  private  sector  in  2023.  Wages 
are expected to grow fast also in 2024 before 
easing back to slower growth in 2025. This will 
help restore real wages to levels before 2021, 
while also keeping up inflationary pressures. In 
recent  years,  the  cost  of  labour  has  grown 
more slowly in Denmark than in the euro area 
and 
cost 
indicating 
the  EU, 
competitiveness. 

improved 

Competitiveness remains strong 
but productivity growth is slowing 

in 

larger 

is  high,  but 
Denmark’s  productivity 
productivity  growth  is  slowing.  Denmark’s 
labour productivity level per hour worked (GDP 
per  hour  worked,  in  PPS) (3)  is  among  the 
highest in the EU, at 141% of the EU average 
in  2022.  Over 
the  2012-2022  period, 
annualised  growth  in  labour  productivity  was 
around  1%,  but  over  2019-2022, 
labour 
productivity  growth  came  to  a  halt.  Over  the 
last  decade,  productivity  growth  has  mainly 
been  driven  by  total  factor  productivity (4), 
more 
particularly 
internationalised firms. Productivity is strong in 
Denmark’s  manufacturing  sector  and  higher 
than  in  other  sectors  and  in  most  Member 
States.  Productivity  in  services,  however,  has 
been  stagnating.  Business  dynamism  and  the 
rate  of  high-growth  firms  –  which  are  major 
drivers  of  productivity  growth  and  favour 
to  more  productive 
resource 
activities  –  are  well  above  the  EU  average. 
However,  start-ups  and  small  and  innovative 
companies  often  struggle  to  grow  and  scale 
in 
up.  Access  to  capital  and  challenges 
recruiting staff are crucial factors for start-ups 
and  may  determine  if  firms  stay  in  Denmark 
or relocate elsewhere (see Annex 12). 

reallocation 

and 

and 

Research 
(R&D) 
intensity  remains  high, but business  R&D 
intensity is decreasing. Denmark’s R&D  

development 

(3)  Purchasing power standard, see Eurostat Glossary. 

(4)  A  measure  of  productivity  accounting  for  changes  in 
total  output  not  caused  by  changes  in  labour  and 
capital inputs. 

3 

-202468101220202021202220232024Headline inflationInflation excluding energy and unprocessed food% 
   
 
Box 1: 

Denmark is among the top performers in many dimensions of competitiveness. 
This  includes  the  labour  market,  the  business  environment,  and  efficient  public 
institutions.  Denmark  also  performs  well  on  indicators  related  to  trade  integration, 
public  investment  and  infrastructure,  research  and  innovation,  digitalisation,  and 
compliance with single market directives.   

However, competitiveness challenges remain:  

• 

labour and skills shortages, which may be amplified by a low wage trap (5), 
hinder productivity and growth of Danish businesses, and risk slowing down the 
green and digital transitions; and 

•  decreasing  business  R&D  intensity,  and  a  widening  productivity  gap 

between large and small companies. 

intensity (R&D expenditure as a percentage of 
GDP)  stood  at  2.89%  in  2022,  significantly 
above the EU average. However, business R&D  

intensity  declined  from  1.9%  of  GDP  in  2015 
to  1.8%  in  2022  (see  Annex  11).  It  is  also 
increasingly  concentrated  in  large  companies 
and a few sectors, whereas innovation activity 
among  small-  to  medium-sized  enterprises  is 
modest.  The  pharmaceutical  sector  alone  is 
responsible  for  almost  60%  of  total  R&D 
expenditure. 

Good performance on social 
issues, with some areas for 
improvement 

Denmark  performs  very  well  on  most 
indicators  for  employment  and  health-
related policies under the European Pillar 
of  Social  Rights.  Denmark  ranks  above  the 
EU average on 12 out of 16 indicators on the 
social scoreboard, including six  where it ranks 
among the top performers. It fares particularly 
well  on  indicators  related  to  social  protection 
and  inclusion,  with  low  rates  of  both  children 
and  adults  at  risk  of  poverty  and  a  strong 

(5)  Where  moving  from  not  working  or  working  part  time 
and  receiving  benefits  to  working  full  time  on  a  low 
wage results in little to no increase in income 

impact of social transfers on poverty reduction 
(see Annex 14).  

Housing  affordability  remains  an  issue. 
After a decline in 2022, the percentage of the 
population  living  in  a  household  where  the 
total  housing  costs  represent  more  than  40% 
of  the  total  disposable  household  income 
increased  from  14.7%  in  2022  to  15.4%  in 
2023. 

Early  school  leaving  and  declining  basic 
skills  are  also  a  concern.  The  rate  of 
students  leaving  education  and  training  early 
remains  high  and  has  increased  in  recent 
years,  to  10%  in  2022  (EU  average:  9.6%). 
Given  the  very  high  demand  for  workers,  this 
only  translated  into  a  slight  increase  in  the 
in  education, 
rate  of  young  people  not 
employment  or  training 
(see  Annex  14). 
Retaining students in education and training is 
important  to  improve  competitiveness  in  the 
longer term as early school leavers are at risk 
of  exclusion  due  to  insufficient  skills  for  the 
latest  results  of  the 
labour  market.  The 
Programme 
Student 
International 
Assessment  of  the  Organisation  for  Economic 
Co-operation  and  Development  show  a 
decrease  in  basic  skills:  20%  of  pupils  do  not 
reach minimum standards in mathematics and 
reading  skills 
(see  Annex 15).  There  are 
significant  underperformance  gaps  linked  to 
socio-economic  and  migrant  backgrounds,  as 
well  as  gender.  An  expert  group  on  gender 
delivered recommendations to the government 

for 

4 

 
 
 
Box 2: 

Denmark  performs  well  on,  and  is  progressing  towards  achieving,  most  of  the  SDGs 
related  to  environmental  sustainability  (SDGs  2,  6,  7,  9,  11,  12,  13,  14),  but  is 
moving away from the targets for, needs to catch up with the EU average on, SDG 15. 
Denmark also performs well on almost all indicators related to productivity (SDGs 4, 
8,  9)  and  to  macroeconomic  stability  (SDGs  8,  16,  17).  Denmark  is  moving  away 
from  the  targets  for  SDG  3  (Good  health  and  well-being),  but  performance  is  already 
above  the  EU  average  (see  Annex  1).  Out  of  the  17  SDGs,  Denmark  performs  better 
than the EU average on 15 SDGs. Performance is particularly strong on SDG 4 (Quality 
education),  SDG  7  (Affordable  and  clean  energy),  SDG  9  (Industry,  innovation  and 
infrastructure) and SDG 10 (Reduced inequalities).  

on  how  to  reduce  the  gap  between  girls’  and 
boys’ academic results. 

Towards a more stable housing 
market 

The  housing  market  is  stabilising.  The 
house price increases since the second half of 
2020 were rapidly reversed in the second half 
of  2022,  reflecting  the  successive  rises  in 
interest  rates.  In  2023,  the  housing  market 
stabilised,  with  both  house  sales  and  house 
prices  increasing  despite  higher  interest  rates 
and  tighter  credit  conditions.  In  Q4-2023, 
house  prices  were  2.5%  higher  than  in  Q4-
2022. Residential construction activity declined 
in 2023, due to significant increases in interest 
rates and building costs.  

A new property tax system including new 
housing valuations entered into effect on 
1 January 2024.  The  new  system  ends  the 
long-standing  cap  on  recurrent  property  taxes 
and  is  expected  to  improve  resilience  and 
taxation  fairness.  It  could  lead  to  higher 
property  taxes  in  the  largest  urban  areas, 
where  house  prices  have  increased  the  most, 
while the opposite could hold for less densely 
populated  areas.  This  would  help  reduce  the 
substantial  price  differences  between  small 
towns and large cities.  

benchmarks. 

fundamentals-based 
After 
declining  in  2022,  both  ratios  are  forecast  to 
have largely stabilised in 2023 (6). The Danish 
banking  sector  is  well  capitalised  and  has  a 
strong  liquidity  position.  It  has  weathered  the 
uncertainties  of  the  past  few  years  relatively 
well,  but  some  vulnerabilities  remain,  mainly 
linked to credit quality risks (see Annex 18). 

General government surplus 
declining 

Over recent years, Denmark has recorded 
general  government  budget  surpluses  as 
well  as  a  fall  in  the  government  debt 
rate. In 2023, the general government budget 
surplus  remained  high  at  3.1%  of  GDP.  The 
outlook  for  2024  and  2025  is  for  continued, 
but falling, budget surpluses.  

Denmark  is  considered  at  low  risk  as 
regards the longer-term sustainability of 
government  debt  (see  Annex  21).  The  debt 
ratio decreased to 29.3% of GDP in 2023 and 
is  expected  to  fall  further.  A  pension  reform 
links  the  future  minimum  statutory 
that 
life 
to  developments 
pension  age 
expectancy  helps  respond  to  the  budgetary 
challenges of an ageing population.  

in 

Private sector indebtedness remains very 
high,  although  some  debt  reduction  has 
and 
Both 
taken 
non-financial corporate debt-to-GDP ratios are 
among  the  highest  in  the  EU  and  above 

household 

place. 

(6)  European  Commission  staff  working  document  Alert 

Mechanism Report 2024. 

5 

 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility  (RRF)  and  cohesion  policy  are 
mutually reinforcing Denmark’s efforts to 
boost  its  competitiveness  and  stimulate 
In  addition  to  the 
sustainable  growth. 
EUR 1.6 billion  of  RRF  funding  described  in 
provides 
Annex 
EUR 455.7 million 
the 
for 
2021-2027  period.  Combined  support  from 
instruments  represents  around 
these  two 
0.56%  of 
in  2023, 
the  country’s  GDP 
compared  to  an  EU  average  of  5.38%  (see 
Annex 4). 

policy 
to  Denmark 

cohesion 

3, 

resilience. 

Under  its  recovery  and  resilience  plan 
(RRP),  Denmark  has  implemented  policy 
reforms  expected  to  further  improve  its 
competitiveness 
In 
and 
particular,  action  has  been  taken  in  the  areas 
of  industry  decarbonisation  and  digitalisation, 
energy  efficiency,  healthcare,  sustainable 
transport,  and  cybersecurity.  Denmark  made 
investments  in  the  roll-out  of  broadband  in 
underserved  remote  areas,  energy  efficiency 
of  industry  and  green  heating,  telemedicine 
and  healthcare  system  resilience,  industry 
decarbonisation,  sustainable  transport,  and 
R&D activities for the green transition.  

The  implementation  of  Denmark’s  RRP  is 
well  underway.  Denmark  submitted  two 
to  43 
requests,  corresponding 
payment 
milestones  and  targets 
in  the  plan  and 
resulting  in  an  overall  disbursement  of  EUR 
964  million  on  22  April  2024  (see  Annex  3). 
Beyond  the  second  payment  request,  the 
implementation of the plan is broadly on track. 

Cohesion  funding  contributes  to  tackling 
Denmark’s  growth  and  competitiveness 
challenges  and  to  support  the  country’s 
territorial  and  social  cohesion.  During  the 
2014-2020  cohesion  policy  programming 
period,  support  focused  on  strengthening 
Denmark’s  competitiveness  by  investing  in 

6 

green  technologies, by improving employment 
conditions  through  upskilling  and  reskilling 
programmes, and by helping small to medium-
-sized enterprises to market their products and 
2021-2027 
In 
services. 
programming 
to 
accelerate  the  green  and  digital  transition  of 
Danish businesses, improve climate adaptation 
of town centres and tourism sites, foster green 
upskilling, and get vulnerable groups into work 
or training.  

support  aims 

the 
period, 

current 

Supporting the green transition 
and sustainable growth 

Several  measures  of  the  national  RRP 
that  have  already  been 
implemented 
support  the  green  transition  of  the 
Danish  economy.  The  RRP 
includes  a 
comprehensive green tax reform consisting of 
four  elements  that  will  drive  the  green 
transition  of  the  Danish  industry.  Elements 
that  have  already  been  agreed  or  adopted 
include: (i) an investment window to incentivise 
businesses to invest in green technologies and 
hardware; 
(ii)  accelerated  depreciation  of 
investments in fixed assets; and (iii) higher CO2 
emissions taxes for the industry.  

Denmark  is  using  various  EU  funds  to 
drive  investments  in  green  R&D.  The  RRP 
includes  investments  in  R&D  in  sustainable 
agriculture  and  food  production,  green  fuels 
for transport and industry, carbon capture and 
storage, and circular economy, with a focus on 
plastics  and  textiles.  Additional  measures 
the 
supporting 
agricultural  sector  have  also  been  set  in 
motion.  The  government  has,  for  example, 
completed  calls  for  applications  for  several 
including  biorefineries  converting 
projects, 
agricultural  by-products  into  biofuels  and  the 
re-wetting  of  carbon-rich  soils.  The  European 

transition  of 

the  green 

 
 
(ERDF)  will 
Regional  Development  Fund 
complement  the  RRP-funded  measures  by 
supporting  9 000  businesses  to  innovate  and 
adapt  to  the  green  transition.  The  Just 
Transition  Fund  (JTF)  will  support  the  green 
transition  of  3 500  businesses  in  North  and 
South  Jutland,  while  an  additional  1 100 
businesses  are  expected  to  receive  support  in 
reducing their carbon footprint (see Annex 4). 

an 

help 

Denmark’s RRP also includes measures to 
promote  sustainable  transport.  These 
estimated 
achieve 
measures 
2.1 megatonnes  greenhouse  gas  emissions 
reduction  from  the  road  transport  sector  by 
2030.  Implemented  measures  in  the  RRP 
lowering 
legislative  amendment 
include  a 
registration  taxes  for  zero  and  low-emission 
vehicles,  a  political  agreement  on  a  test 
scheme  for  road  pricing,  an  analysis  to 
optimise heavy haulage, and an agreement for 
a  subsidy  scheme  for  low-emission  ferries. 
Denmark  also  implemented  an  information 
campaign  to promote  car sharing  and  pooling 
and a scheme to support the scrapping of old 
diesel  cars.  Upcoming  investments  will  help 
incentivise the transition towards green modes 
of  transport,  including  investments  in  bike 
lanes and electric bike charging stations. These 
investments  should  help  decarbonise  the 
transport  sector  in  Denmark,  with  expected 
benefits  in  terms  of  competitiveness  and 
alignment with green transition objectives. 

The implementation of the RRP also helps 
improve  energy  efficiency  and  boost 
green  heating.  Political  agreements  were 
reached to fund subsidy schemes for replacing 
oil  and  gas  burners  with  greener  heating 
systems and for boosting the energy efficiency 
and  green  heating  of  public,  private  and 
industrial  buildings.  The  annual  application 
rounds  for  subsidies  under 
the  scheme 
to 
supporting 
achieve energy savings and thus reduce costs 
have  also  been  completed.  The  Commission 
will  assess  the  further  implementation  and 
the 
success  of 
corresponding 
are 
submitted. 

private-owned  businesses 

schemes  when 

payment 

requests 

these 

Higher ambitions for a greener, 
cleaner economy – powered by 
REPowerEU  

RRP 

now 

includes 

Denmark’s 
a 
REPowerEU  chapter  comprising  various 
energy-  and  climate-related  measures.  A 
national  energy  crisis  task  force  seeks  to 
simplify  and  speed  up  administrative  and 
permitting procedures for the green transition. 
The  task  force  brings  together  stakeholders 
from  the  central  and  local  administrations, 
businesses,  civil  society  organisations  and 
social  partners.  A  centralised  steering  group 
assisted  by  a  secretariat  in  the  Ministry  for 
Climate,  Energy  and  Utilities  coordinates  the 
work  of  smaller  focus  groups.  The  first  27 
recommendations  on  onshore  solar  and  wind 
energy were published in February 2024 (7). A 
second  set  of  recommendations  focusing  on 
the  roll-out  of  green  heating  solutions  was 
published  in  March  2024 (8).  Efficient  and 
effective implementation of recommendations 
will be essential to the task force’s success.  

The  REPowerEU  chapter  also  covers 
investments in the wind energy sector, in 
carbon capture and storage technologies, 
green  heating,  and  green  upskilling.  A 
swift  implementation  of  these  investments 
would  boost  the  sustainable  growth  and 
resilience  of 
the  Danish  economy.  The 
complementarity  and  synergies  between  the 
REPowerEU  chapter  and  other  EU  funds  are 
most  evident  in  the  areas  of  green  upskilling 
and  reskilling  of  workers;  the  measure  on 
green  upskilling  included  in  the  REPowerEU 
chapter  is  complemented  by  investments  in 
green  upskilling  and  reskilling  under  the 
European  Social  Funds  Plus  (ESF+)  and  the 
JTF.  These  measures  are  expected  to  address 
skills  mismatches  in  specific  sectors  and 
further enable the country’s green transition. 

(7)  Mere sol og vind på land (kefm.dk). 

(8)  Farvel til gas i danske hjem (kefm.dk). 

7 

 
 
Box 3: 

Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  Denmark’s  RRP  includes 
reforms that support investments under other EU instruments, creating significant synergies and 
complementarities  between  the  various  funds.  For  example,  the  green  tax  reform  includes 
increased tax  deductions and accelerated depreciation, providing an incentive  for  companies to 
invest  in  modernising  their  equipment  and  new  technology  and  software.  Measures  envisaged 
under  the  reform  will  also  enable  companies  to  save  energy  and  costs  and  to  reduce  CO2 
emissions. Measures under the ERDF and the JTF complement the green tax reform. The ERDF is 
supporting  businesses  to  innovate,  digitalise  and  adapt  to  the  green  transition,  not  least  by 
developing green technologies. The JTF also supports businesses in their green transition and in 
reducing  their  carbon  footprint.  Moreover,  both  the  JTF  and  the  ESF+  finance  upskilling  and 
reskilling of workers, thus ensuring that the required green skills are present to make the most 
out of the new equipment, and of green solutions and technologies. 

Accelerating the digital transition 

A more resilient and digitalised 
healthcare system 

new 
over 

The  RRP  and  the  cohesion  policy  funds 
support the digital transition in Denmark. 
The digital strategy, which aims to improve the 
digitalisation  of  the  public  administration, 
businesses,  services  and  jobs,  was  adopted 
and  set  in  motion  under  the  second  RRP 
payment  request,  together  with  an  ambitious 
to  better  prepare 
cybersecurity  strategy 
challenges. 
digital 
society 
for 
Furthermore, 
additional 
3 500 
households and businesses in rural areas have 
been covered with very high-speed broadband. 
Thanks  to  the  RRP  measure  and  previous 
national  measures, 
all  Danish 
households  are  now  covered  by  very  high-
capacity  networks.  The  RRF-funded  measures 
are  complemented  by 
the  ERDF,  which 
supports the development and implementation 
in  the  corporate 
of  digital 
sector,  particularly  in  small  to  medium-sized 
enterprises, in line with the Digital Strategy. In 
addition,  both  the  ESF+  and  the  JTF  support 
the development of skills needed for the green 
and  digital 
transition  by  upskilling  and 
reskilling workers. 

improvements 

almost 

of 

the 

(GPs) 

Denmark 

resilience 

provision. 

taken  measures 

to 
Denmark  has 
the 
strengthen 
healthcare  system,  which  have  helped  to 
close  the  gap  between  rural  and  urban 
healthcare 
has 
implemented  digital  solutions 
successfully 
allowing  general  practitioners 
to 
optimise  the  anamnesis (9)  process  by  asking 
patients  to  fill  out  digital  questionnaires  on 
pneumococcus,  influenza  and  pregnancy  via 
the  MinLæge  (‘My  Doctor’)  app.  This  solution 
gives  GPs  quick  access  to  information  on 
vaccinations and specific medical conditions of 
their  patients.  The  overall  aim  is  to  increase 
the  use  of  telemedicine  to  connect  people 
better  to  the  healthcare  system.  Furthermore, 
Denmark has set up an IT system for reporting 
side  effects  of  COVID-19  vaccines  and  other 
medicines,  available  to  all  GP  clinics  in  the 
country.  

(9)  Medical  history  needed  to  identify  the  problem  to  be 

dealt with and guiding the clinical examination. 

8 

 
 
 
FURTHER PRIORITIES AHEAD 

the 

circularity 

Denmark  faces  additional  challenges 
related  to  energy,  the  decarbonisation 
and 
economy, 
of 
sustainable  agriculture,  labour  shortages 
and  skills,  R&D  and 
innovation,  the 
housing market and private debt.  Tackling 
these  challenges  will  benefit  Denmark’s  long-
term  competitiveness  and  socio-economic 
resilience.  

Renewable energy and electricity 
grid 

Denmark  is  a  frontrunner  in  renewable 
energy  (see  Annex  7).  Under  the  Climate 
Agreement  on  Green  Power  and  Heat  of  June 
2022,  Denmark  aims  to  reach  a  fourfold 
increase in the production of renewable energy 
on-land (10).  Furthermore,  the  supplementary 
agreement on tender frameworks for 6 GW of 
offshore  wind  energy  and  the  Energy  Island 
Bornholm  lays  down  the  framework  for  an 
expansion  of  9  GW  (potentially  up  to  14  GW) 
in offshore wind energy production by 2030. 

on 

task 

force 

action 

political 

the 
Swift 
recommendations  of  the  national  energy 
crisis 
(NEKST)  will  be 
paramount.  The  task  force,  currently  set  up 
for 2023 and 2024 and partly financed by the 
EU  through  the  Recovery  and  Resilience 
Facility, 
is  working  on  developing  and 
implementing  recommendations  to  simplify 
and  speed  up  administrative  and  permitting 
procedures for the green transition. Its first 27 
recommendations  on  onshore  solar  and  wind 
energy  were  published  in February  2024.  One 
has  already  been  implemented  and  several 
others  are  already  at  an  advanced  stage.  A 
second set of recommendations – focusing on 

the  roll-out  of  green  heating  solutions  –  was 
published in March 2024.  

In 

to 
the 

incentives 

the  measures 

to  be 
Building  on 
implemented  under 
its  recovery  and 
resilience  plan  (RRP)  to  accelerate  the 
deployment  of 
renewables,  Denmark 
would  benefit  from  providing  further 
improve 
regulatory 
investment  certainty. 
field  of 
permitting,  Denmark  would,  for  example, 
benefit  from  introducing  urgent  and  targeted 
the  pace  of 
measures 
deployment  of  renewable  energy  sources,  in 
accordance  with  the  Emergency  Regulation 
laying  down  a  framework  to  accelerate  the 
deployment  of  renewable  energy (11).  The 
government  has  put  forward  a  law  proposal 
that,  if  approved,  would  allow  making  use  of 
some  of  the  provisions  of  the  Emergency 
Regulation and introduce legislation needed to 
transpose 
revised  Renewable  Energy 
Directive.  

to  accelerate 

the 

its 

but 

increased 
in 

cross-border 
Denmark 
capacity 
planning 
2023 
appropriate grid expansion and upgrading 
transmission  and  distribution  networks 
would be beneficial. Following the entry into 
operation  of  the  Viking  Link  interconnector  (a 
project of common interest co-financed by the 
EU  through  the  Connecting  Europe  Facility), 
Denmark  is  interconnected  with  Germany,  the 
(since 
Netherlands,  Sweden,  Norway  and 
December  2023) 
is 
further  projects  of  common 
developing 
interest  with  a  strong  cross-border  and 
connectivity component, such as the Bornholm 
Energy  Island  hybrid  offshore  interconnector 
with  Germany,  the  Triton  Link  offshore  hybrid 
interconnector  with  Belgium,  and  the  North 
Sea  Wind  Power  Hub  for  interconnectors  with 

the  UK.  Denmark 

(10)  Klimaaftale om grøn strøm og varme 2022. 

22 December 2023. 

(11)  Council 

Regulation 

(EU) 

2024/223 

of 

9 

 
 
 
 
the  Netherlands  and  Germany  (see  Annex  7). 
These  projects  help  make  Denmark  an 
increasingly  relevant  exporter  of  renewable 
electricity. Against  this background,  integrated 
system planning for future grid expansion and 
upgrading will be crucial to respond to demand 
and flexibility needs at both transmission and 
distribution level.  

Agriculture and circular economy 

Policies  in  the  agricultural  sector  play  a 
key  role  for  Denmark’s  path  towards 
sustainable  growth.  The  Danish  agricultural 
sector, on par with the transport sector, is the 
country’s  largest  source  of  greenhouse  gas 
emissions  covered  by  the  EU  Effort  Sharing 
Regulation (12)(38%,  more  than  twice  the  EU 
average; see Annex 6). The Danish government 
has  politically  committed 
introducing 
taxation  of  greenhouse  gas  emissions  from 
the  agricultural  sector (13).  In  February  2024, 
the  Expert  Group  for  a  Green  Tax  Reform 
published  its  proposals  for  three  different 
models.  The  government  has 
tasked  a 
stakeholder committee led by the Ministry for 
Economic  Affairs  with  evaluating  the  models 
and  agreeing  on  one  possible  solution.  The 
government  proposal  will  be  presented  to 
Parliament possibly by the end of 2024. 

to 

to 

crucial 

restore 

A sustainable agri-food sector is not only 
key  to  achieving  climate  objectives,  but 
also 
degraded 
biodiversity  and  ecosystems (14).  Intensive 
agriculture  practices  are  causing  excessive 
nutrient leaching and run-off from fields, with 
serious  repercussions  on  soil  health  and  on 
aquatic and marine ecosystems leading to the 

(12)  For  each  EU  Member  State,  the  Effort  Sharing 
Regulation  sets  a  national  target  for  the  reduction  of 
greenhouse  gas  emissions  by  2030  in  the  following 
sectors:  domestic 
(excluding  aviation), 
transport 
buildings, agriculture, small industry and waste. 

(13)  Ansvar for Danmark (regeringen.dk).  

(14)  OECD, 

Assessing 

financial 
risks: Navigating 
existing 
approaches, OECD Environment Policy Papers, 2023, No. 
36, https://doi.org/10.1787/d52137a5-en. 

biodiversity-related 
of 
landscape 

the 

deterioration of the natural capital (see Annex 
6) (15). Building on the measures under the RRP 
and  planned  national  initiatives  that  help 
address  these  issues,  Denmark  would  benefit 
from accelerating the transition to sustainable 
agriculture  and  organic  farming,  in  particular 
by  taking  further  action  to  reduce  nutrient 
leaching  and  run-off  from  the  fields.  There 
would also be merit in strengthening action in 
the  land-use,  land-use  change  and  forestry 
(LULUCF) sector, including by restoring natural 
water properties in low--lying carbon-rich soils 
and  expanding  forested  and  protected  areas. 
Planned governmental action in this respect is 
projected to  be  insufficient  to meet  the  2030 
LULUCF carbon removal target (16).  

has 

improved 

Denmark 
waste 
management,  but  additional  action  is 
needed  to  reduce  the  country’s  material 
(municipal) 
footprint 
waste 
and 
generation,  and 
to  decrease  waste 
incineration  rates.  According  to  preliminary 
data  for  2022,  municipal  waste  production 
decreased in comparison to previous years but 
was still above the EU average (787 kg/capita 
against  513 kg/capita).  Municipal  waste 
recycling  rate  stood  above  the  EU  average  in 
2022,  but  figures  are  provisional  and  subject 
to fluctuation. In 2022, waste incineration was 
still  well  above  the  EU  average  (despite  a 
decrease  between  2020  and  2022)  and  the 
country  had  the  EU’s  second-highest  material 
footprint. The action plan for circular economy 
adopted  in  2021  includes  a  wide  range  of 
initiatives,  including  measures  for  a  green 
waste  sector (17).  However,  additional  action 
could  be  beneficial  to  reduce  the  amount  of 
waste  produced  and 
incinerated,  and  to 
incineration  with  greener 
replace  waste 
sources  of  heat  generation  in  the  national 
Increasing 
district 

systems. 

heating 

(15)  Benoît Dessirier et al., A century of nitrogen dynamics in 
agricultural  watersheds  of  Denmark,  Environmental 
Research  Letters,  2023;  EEA,  Soil  monitoring  in  Europe 
— Indicators and thresholds for soil health assessments, 
2022;  European  Commission,  SWD(2023)  417  final, 
2023. 

(16)  Projections  submitted 

in  Denmark’s  draft  updated 

national energy and climate plan for 2023. 

(17)  Ministry  of  the  Environment,  2021,  Handlingsplan  for 

cirkulær økonomi. 

10 

 
 
 
investments  in  environmental  protection  and 
sustainable water and soil management could 
further  support  the  transition  to  a  circular 
economy.  Denmark  is  the  only  EU  Member 
its  final 
State 
for 
framework 
investments 
(see 
Annex 6). 

of 
priority  measures 
in  Natura  2000  sites 

that  has  not  submitted 

Shortages of workers and skills 

Shortages  of  workers  have  become  less 
acute  but  remain  a  major  challenge  for 
many  Danish  businesses.  While  the  labour 
market can still be considered tight, with high 
employment  levels  and  low  unemployment 
(see  Annex  14),  the  demand  for  workers  is 
starting  to  abate.  The  number  of  vacant 
positions fell in Q4-2023 for the sixth quarter 
in  a  row  since  the  peak  in  Q2-2022.  In 
Q4-2023,  the  vacancy  rate  stood  at  2.6%. 
Despite  the  easing  in  the  labour  market, 
shortages  are  still  a  challenge  for  many 
businesses 
in 
construction,  healthcare,  and  hospitality 
In  the  service  and  construction 
services. 
sectors, between 25% and 30% of companies 
considered  that  shortages  of  workers  were 
limiting  their  business (18).  Addressing  labour 
shortages  is  hampered  by  a  significant  low 
wage  trap  and  related  low  incentives  to  take 
up activity for potential  low--wage earners, in 
particular for second earners (see Annex 19).  

especially 

sectors, 

and 

the  general 

Beyond 
labour  supply, 
shortages  of  skills  are  also  a  serious 
concern  in  several  sectors,  particularly 
those  where  the  needs  for  green  and 
digital  skills  are  the  greatest.  Danish 
businesses report high levels of unsatisfactory 
recruitments,  with  a  quarter  of  recruitment 
attempts resulting in no new hires (12%) or in 
the  hiring  of  suboptimal  profiles,  where  the 
company  recruited  an  employee  who  did  not 
have  the  expected  experience,  education  or 

(18)  European  Commission,  2024  Q1,  DG  ECFIN  Quarterly 

Business Survey. 

(12%) (19). 
Unsatisfactory 
qualification 
recruitments  are  most  prevalent  in  hospitality 
services, agriculture, construction, and support 
services.  According  to  the  European  Labour 
Authority,  labour  shortages  were  reported  in 
2023 for a number of occupations that require 
specific  skills  or  knowledge  for  the  green 
transition,  including  civil  engineers,  electrical 
technicians  and  building  and 
engineering 
related  electricians.  The  need  for  green  skills 
and  digital  skills  will  only  become  more 
prevalent  with 
of 
necessary  investments  in  the  twin  green  and 
digital transitions. 

implementation 

the 

is 

(ii) 

pension 

too  early 

to  assess 

The Danish government has taken several 
initiatives  to  increase  labour  supply  and 
promote  upskilling  and  reskilling,  though 
it 
their 
effectiveness.  This  includes  initiatives  to: 
(i) incentivise  older  workers  to  stay  in  the 
workforce  (abolishment  of  means  testing (20) 
for  own  and  partner’s  labour  income  in  the 
facilitate 
system); 
public 
recruitment  of  international  employees  (‘Fast 
track  scheme’  and  ‘Supplementary  Pay  Limit 
Scheme’);  and  (iii)  address  challenges  in  the 
most  affected  sectors.  In  the  public  sector, 
social partners and the government agreed on 
an 
of 
EUR 912 million  (DKK 6.8 billion)  for  wages 
and  working  conditions  to  be  implemented by 
2026. To address shortages of skills, including 
green skills, the Danish government has put in 
place  some  schemes. Unemployed  people  can 
receive 110% of the unemployment support if 
they  participate  in  a  training  for  a  profession 
that 
list’  of 
in  the 
professions  with  the  most  acute  labour  and 
skills  shortages.  Green  upskilling  is  supported 
through  dedicated 
for  vocational 
education and training (VET), as included in the 
REPowerEU component of the Danish RRP. VET 
committees  have  identified  the  future  skills 

extraordinary 

framework 

included 

‘positive 

funds 

is 

(19)  STAR 

/  Danish  Agency  for  Labour  Market  and 

Recruitment, December 2023 recruitment survey. 

(20)  Means-tested  social  benefits  are  social  benefits  that 
are  explicitly  or 
the 
implicitly 
beneficiary’s  income  and/or  wealth  falling  below  a 
level.  See  Eurostat  Glossary  for  further 
specified 
information. 

conditional  on 

11 

 
 
 
of 

technological 

advances. 
diffusion 
Addressing  this  gap  requires  broadening  the 
innovation base and involving more companies 
innovation 
in  R&D  activities 
in  the 
diffusion.  Raising  additional  funds 
market  could  also 
increase  the  available 
financing resources. 

to  promote 

Making the housing market more 
resilient 

Affordable  housing  remains  a  challenge 
for  many  households.  The  key  issues  are 
high  prices  for  owner-occupied  housing,  a 
highly  regulated  rental  market,  and 
long 
waiting  times  for  social  housing  in  the  main 
urban  areas  like  the  Copenhagen  region.  The 
percentage  of  households  who  report  that 
housing  costs  pose  a  burden  increased  by 
7 pps between 2022 and 2023, reaching 51% 
of  households  –  the  highest  level  since  the 
start  or  the  survey  in  2004 (21).  A  political 
agreement  was  reached  in  2021  to  further 
increase  the  construction  of  affordable  rental 
housing,  primarily  social  housing,  with  a  total 
budget  of  EUR 1.35 billion  for  2022-2035. 
Since  the  autumn  of  2022,  several  support 
schemes  to  promote  the  construction  of 
been 
affordable 
operational.  The  Danish  government  has 
announced 
a 
comprehensive  housing  policy  proposal  for  a 
housing market with a mixed supply of owner-
occupied  housing,  social  housing,  cooperative 
housing and private letting. 

it  will 

housing 

present 

rental 

have 

that 

Danish  households’  mortgage  debt  levels 
in relation to GDP are decreasing, but are 
still  the  highest  in  the  EU.  This  is  due  to 
several  factors,  including  an  effective  and 
specific  mortgage  financing  system  (under 
certain  conditions,  mortgage  owners  have  the 
possibility  to  choose  interest-only,  deferred 
amortisation  mortgages).  In  addition,  the  tax 
for 
tax  deductions 
system  allows  high 
mortgage 
payments.  However, 
variable-rate  mortgages  as  well  as  interest-

interest 

(21)  Statistics Denmark, Housing Burden. 

needs  for  the  green  transition.  This  work  will 
be used to target the funds efficiently. 

The  attractiveness  of  VET  could  be 
further strengthened, for both initial and 
continued  VET.  In  recent  years,  the  rate  of 
early  school  leavers  has  been  increasing.  The 
share  of  adults  participating  in  education  and 
training  is  high  compared  to  the  EU  average 
but  has  been  steadily  decreasing  since  2016 
(Annex  14).  Additional  action  could  help 
increase the quality and attractiveness of VET. 
The  Danish  VET  system  is  tripartite  and 
includes  social  partners,  which  ensures  that 
the  needs  of  the  labour  market  can  be  taken 
into account at the educational level. However, 
the system could benefit from more flexibility 
to adapt curricula faster. 

and 

retaining 

Attracting 
qualified 
education  staff  is  key  to  successfully 
addressing  skills  gaps  and  shortages. 
There  are  shortages  of  qualified  teachers  at 
all  levels  of  education  (see  Annex  15).  While 
the recent political agreement on primary and 
includes  some 
lower  secondary  schools 
initiatives,  additional  measures 
targeting 
training  and  working  conditions  could  be 
considered  not  only 
the 
qualifications of existing staff in all education 
sectors but also to improve the attractiveness 
of teaching. 

to  upgrade 

Broadening innovation 

Denmark’s  strong  R&D  system  makes  it 
the EU’s top innovator, but business R&D 
intensity is declining and the productivity 
gap  between  large  and  small  companies 
is  growing.  The  2023  European  Innovation 
Scoreboard identifies Denmark as the EU’s top 
innovator.  Investment  in  innovation  is  high, 
including  a  comparatively  high  level  of  R&D 
expenditure  and  a  high  share  of  R&D 
personnel  in  total  employment.  Investment  in 
intangibles  and  patent  applications  are  also 
well above the EU average. However, business 
R&D  intensity  is  declining  and  is  increasingly 
concentrated  (see  Annex  11).  The  growing 
productivity  gap  between  large  and  small 
the 
companies  suggests  weaknesses 

in 

12 

 
 
Graph 3.1: Mortgage lending by type 

(1) Distribution of annual growth in mortgage lending to 
households at nominal value 
Source: Danmarks Nationalbank 

only  or  deferred  amortisation  mortgages may 
constitute  risks  to  financially  vulnerable  and 
highly  indebted  households.  Overall,  Danish 
households  are  already  the  most  indebted  in 
the  EU,  which  implies  the  need  for  prudent 
credit 
deferred 
in 
amortisation  mortgages.  Higher  interest  rates 
have  led  to  significantly  higher  debt  service 
costs  for  some  houseowners,  with  a  negative 
impact  on  their  payment  capacity,  adding  to 
their vulnerability. 

standards 

granting 

The  Systemic  Risk  Council  recommends  a 
sector-specific  risk  buffer  for  corporate 
exposures  to  commercial  real  estate 
companies.  Credit  institutions  have  large 
exposures  to  the  commercial  real  estate 
market.  In  December  2023,  lending  to  real 
estate  firms  amounted 
to  EUR 72 billion, 
equivalent to some 38% of credit institutions’ 
corporate exposures (22), which have increased 
further  in  recent  years (23).  However,  most  of 
the  lending  is  granted  to  real  estate  that 
residential 
nevertheless 
purposes, and at end 2023 only 21.5% of the 
business  loan  book  is  linked  to  commercial 
real-estate  property,  in  line  with  the  EU 
average  and  lower  than  the  year  before. 
Higher  interest  rates  that  cannot  be  passed 
through and a weakening of economic growth 
could  nonetheless  constitute  risks  to  real 
estate companies’ ability to service their loans. 
Acknowledging 
the 
government  has  committed  to  following  the 
Systemic Risk Council’s recommendation. 

the  potential 

ultimately 

risks, 

has 

(22)  High  earnings  can  counteract  increased  risks  for  the 

banks (nationalbanken.dk). 

(23)  However,  most  lending  is  granted  to  real  estate  that 
ultimately has residential purposes, and at end of 2023, 
only  21.5%  of  the  business  loan  book  is  linked  to 
commercial  real  estate  property,  in  line  with  the  EU 
average and lower than a year ago. 

13 

-12-10-8-6-4-20246810Q1-2017Q3-2017Q1-2018Q3-2018Q1-2019Q3-2019Q1-2020Q3-2020Q1-2021Q3-2021Q1-2022Q3-2022Q1-2023Q3-2023Q1-2024Variable rate w/o amortisationVariable rate w/ amortisationFixed rate w/o amortisationFixed rate w/ amortisationTotal%, y-o-y 
 
  
 
Box 4: 

The mid-term review of cohesion policy funds for Denmark 

The  mid-term  review  of  cohesion  policy  funds  is  an  opportunity  to  assess  cohesion 
policy  programmes  and  tackle  emerging  needs  and  challenges  in  EU  Member  States 
and their regions. Member States are reviewing each programme taking into account, among 
other things, the challenges identified in the European Semester, including in the 2024 country-
specific recommendations. This review forms the basis for a proposal by the Member State for 
the definitive allocation of 15% of EU funding included in each programme.   

Denmark  has  made  progress  in  implementing  cohesion  policy  programmes  and  the  European 
Pillar of Social Rights, but challenges remain as outlined in this report, including in Annexes 14 
and 17. In particular, there are still significant disparities between the capital region and the rest 
of  the  country  in  GDP  per  capita  and  share  of  R&D  expenditure.  Against  this  background,  it 
remains important to  continue to implement the  planned  priorities, with particular attention to: 
(i) encouraging  innovation  to  support  the  further  greening  and  digitalisation  of  society,  while 
continuing  to  address  regional  economic  and  social  disparities  and  factoring  in  demographic 
challenges;  (ii) promoting  VET  and  its  attractiveness;  and  (iii)  upgrading  the  basic  skills  of  the 
adult population, including migrants.  

Denmark could also benefit from the opportunities available under the Strategic Technologies for 
Europe Platform (STEP) (24) initiative to boost further investments in technologies supporting the 
twin transition, as well as related necessary investment in skills and labour shortages. Denmark 
could  consider  focusing  on  clean  and  resource-efficient  technologies  and  related  value  chains, 
particularly in the energy sector, and digital technologies to benefit people and small to medium-
sized  enterprises  (SMEs).  This  would  supplement  the  measures  already  taken  by  Denmark  to 
support large firms in developing clean technologies and to raise the co-financing rate for SMEs. 

(24)  Regulation (EU) 2024/795. 

14 

 
 
 
KEY FINDINGS 

Denmark’s  recovery  and  resilience  plan 
(RRP)  includes  measures  to  tackle  a 
series of structural challenges, in synergy 
with  other  EU  funds,  including  cohesion 
policy funds, by:  

•  Stimulating  business  investments  in 
R&D,  particular  for  small  to  medium-
sized  enterprises,  and  broadening  the 
innovation  base  to  reduce  the  productivity 
gap between large and small companies; 

•  Improving the provision of basic skills, 
including  by  attracting  and 
retaining 
qualified teachers and by paying particular 
attention  to  underachievement  gaps  linked 
to socio-economic background and gender; 

in 

•  Addressing labour and skills shortages, 
investing 
reskilling  and  upskilling 
workers,  and  increasing  participation  in 
vocational education and training, including 
to support the green and digital transition; 

•  Decarbonising  the  economy  by  further 
improving  the  regulatory  framework  for 
renewable  energy  deployment  and  by 
towards 
accelerating 
sustainable 
by 
stepping  up  action  to  curb  all  types  of 
greenhouse  gas  emissions  and  addressing 
nutrient  leaching  and  run-off  from  the 
fields;  

the 
agriculture, 

transition 

including 

•  Making 

in 

the 
further  progress 
transition to a circular economy and in 
waste  management, 
in 
prevention,  recycling  and  less  incineration 
of  (municipal)  waste  –  this  also  includes 
reducing  reliance  on  waste  incineration  for 
heat generation. 

in  particular 

•  Accelerating  the  green  transition  by 
implementing a green tax reform, boosting 
investments  in  energy  efficiency  and  in 
clean  energy,  funding  measures  to  reduce 
greenhouse  gas  emissions  from  transport, 
agriculture 
and 
incentivising  additional  investment  from 
the market;  

sectors, 

other 

and 

•  Accelerating 

the  digital 

transition 
following  the  adoption  of  the  new  digital 
strategy, modernising public administration, 
and  helping  businesses  invest  in  digital 
technology;  

•  Promoting  green  R&D  investment  and 
involving  more  companies 
in  research 
activities, as well as supporting green  R&D 
projects;  

•  Strengthening  the  healthcare  system 
by  advancing  the  digitalisation  of  the 
health  system,  including  telemedicine,  as 
well as logistics support for critical medical 
products. 

Continued  efforts  are  key  for  a  successful 
implementation  of  all 
the  measures  of 
Denmark’s RRP by August 2026. 

In  addition  to  implementing  the  reforms 
and  investments  in  the  RRP,  Denmark 
could  further  strengthen  its  long-term 
competitiveness by: 

•  Addressing  shortages 

in  affordable 
housing  in  urban  areas  and  increasing 
the  financial  resilience  to  vulnerabilities 
arising  from  the  housing  market  and 
household debt; 

15 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Danish RRP 

19 

21 

21 

23 

27 

29 

32 

34 

34 

39 

45 

48 

48 

50 

52 

54 

58 

60 

60 

62 

64 

66 

69 

69 

71 

74 

75 

24 
27 

 
 
 
Support from EU instruments in Denmark 
Resilience indices across dimensions for Denmark and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key energy indicators 
Key indicators for a fair transition in Denmark 
Circularity indicators 

A3.2.  Measures in Denmark's RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Denmark 
A14.2.  Situation of Denmark on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Denmark 
A18.1.  Financial Soundness Indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Denmark 
A21.2.  Heatmap of fiscal sustainability risks - Denmark 

LIST OF GRAPHS 

Progress towards the SDGs in Denmark 
Denmark's progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Denmark 
Distribution of RRF funding by pillar in Denmark 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
Denmark's energy retail prices for households and industry & service 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Denmark's installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in Denmark 
Job vacancy rate in transforming sectors and mining and quarrying 
Treatment of municipal waste 
ETS emissions by sector since 2013 

A1.1. 
A2.1. 
A3.1. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  Business enterprise expenditure on R&D (BERD) as % of GDP 
A12.1.  Total factor productivity 
A12.2.  Productivity by sector 
A13.1.  Government effectiveness 
A13.2.  Share of women and men in management positions 
A15.1.  Underachievement rates by field, PISA 2012, 2018 and 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  Evolution regional GDP per capita in Denmark 
A17.2.  Real gross value added per worker 
A17.3.  Greenhouse gas emissions per capita in Denmark in 2022 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023 
A19.2.  Tax revenues from different tax types, % of total revenue 

LIST OF MAPS 

A17.1.  Regional Competitiveness Index 

20 

28 
31 
32 
38 
43 
46 
49 
51 
53 
57 
59 
60 
61 
63 
65 
67 
70 
73 
74 
77 
77 

21 
23 
28 
30 
30 
34 
37 
37 
39 
40 
41 
45 
47 
48 
48 
52 
54 
54 
58 
58 
62 
64 
64 
66 
66 
68 
71 
71 

67 

 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Denmark’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

Denmark  performs  well  and  is  progressing 
towards  most  of  the  SDGs  related  to 
environmental sustainability (SDGs 2, 6, 7, 9, 
11,  12,  13,  14).  However,  its  performance  is 
moving  away  from  the  targets  for  SDG  15 
and it needs to catch up with the EU average 

Graph A1.1: Progress towards the SDGs in Denmark 

for  this  SDG.  The  share  of  renewable  energy  in 
gross  final  energy  consumption  (SDG 7) increased 
from 34.4% in 2017 to 41.6% in 2022, well above 
the  EU  average  (23%  in  2022).  Net  greenhouse 
gas  emissions 
(SDG 13)  decreased  from  9.2 
tonnes per capita in 2017 to 7.4 tonnes per capita 
in  2022,  moving  closer  to  the  EU  average  (7.3 
tonnes  per  capita  in  2022).  Net  greenhouse  gas 
emissions  from  land  use  and  forestry  (SDG 13) 
decreased  significantly  from  16.7  tonnes  CO2  eq. 
per  km²  in  2017  to  -8.9  tonnes  in  2022,  a  figure 
which  is  however  higher  than  the  EU  average  (-
56.0 tonnes CO2 eq. per km² in 2022). The share of 
green  bonds  in  total  issuance  (SDG 13)  in  2022 
was higher than the EU average (13.9% vs 8.9%). 
On  waste  generation  and  management  (SDG 12), 
the  circular  material  use  rate  decreased  from 
7.9%  to  7.4%  between  2017  and  2022  and  is 
below  the  EU  average  (11.5%  in  2022).  However, 
the  recycling  rate  of  municipal  waste  (SDG 11) 
improved between 2020 (45%) and 2022 (52.3%) 
and is above the EU average (48.6% in 2022). By 
contrast, the material footprint (SDG 12) increased 

Notes:  For  detailed  datasets  on  the  various  SDGs,  see  the  annual  Eurostat  report  ‘Sustainable  development  in  the  European 
Union’; for details on extensive country-specific data on the short-term progress of Member States:  Key findings – Sustainable 
development indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but 
signals that it is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends 
over the past 5 years. The calculation does not take into account any target values as most EU policy targets are only valid  for 
the aggregate EU level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

21 

 
 
 
 
 
 
 
from 22.9 tonnes per inhabitant to 34.4 tonnes per 
inhabitant  between  2017  and  2022  and  is  more 
than  double  the  EU  average  (14.9  tonnes  per 
inhabitant  in  2022).  In  terms  of  SDG 14  (Life 
below  water),  Denmark  is  performing  slightly 
better  than  the  EU  average  on  several  indicators. 
The  share  of  terrestrial  protected  areas  (SDG 15) 
in  Denmark  is  significantly  below  the  EU  average 
(14.9% of total area, vs 26.0% in 2021). Measures 
included in Denmark’s recovery and resilience plan 
(RRP) 
and 
green 
decarbonisation  priorities  by 
incentivising  the 
in  district  heating, 
phase-out  of  fossil  fuels 
accelerating  the  deployment  of  renewable  energy 
sources, promoting sustainable transport, fostering 
green 
taxing 
greenhouse gas emissions. 

innovation  and 

research  and 

transition 

support 

the 

with  a  high-speed  internet  connection  (SDG 9) 
skyrocketed between 2017 and 2022 (from 62.7% 
to  96.3%)  and  is  well  above  the  EU  average 
(73.4% 
in  2022).  Denmark’s  gross  domestic 
expenditure  on  R&D  (SDG 9)  slightly  decreased 
from 2.93% of GDP in 2017 to 2.89% in 2022, but 
it remains above the EU average (2.24% of GDP in 
2022).  On  SDG 4  (Quality  education),  Denmark 
performs  better  than  the  EU  average  on  all 
indicators  but  one:  early  leavers  from  education 
and  training  as  a  percentage  of  the  population 
between  18  and  24  remained  stable  at  10.4% 
between  2018  and  2023;  the  situation  is  slightly 
worse  than  the  EU  average  (9.5%  in  2023).  The 
RRP 
the 
remaining digitalisation challenges and to promote 
green upskilling. 

includes  measures 

to  help 

tackle 

Denmark  performs  well  on  SDGs  related  to 
macroeconomic stability (SDGs 8, 16, 17) and 
is  moving  towards  the  targets  for  these 
SDGs.  The  country  performs  very  well  on  peace 
and justice indicators, with a high level of trust in 
its  institutions  (SDG 16).  In  2023,  86%  of  the 
population  perceived  the  independence  of  the 
justice system to be very or fairly good, against an 
EU  average  of  53%  for  the  same  year.  Denmark 
performs  above  the  EU  average  on  almost  all 
indicators  related  to  SDG 8  (Decent  work  and 
economic  growth).  The  long-term  unemployment 
rate  as  a  percentage  of  population  in  the  labour 
force is well below the EU average (0.5% vs 2.1% 
in  2023).  Real  GDP  per  capita  (EUR 52 270  in 
2023) 
the  EU  average 
(EUR 28 940  in  2023).  General  government  gross 
debt  (SDG 17)  fell  from  34%  of  GDP  in  2018  to 
29.3% in 2023 (EU average: 81.7% in 2023). 

is  almost  double 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

Denmark  performs  well  on,  and  is  well 
progressing  towards,  most  SDGs  related  to 
fairness  (SDGs 1,  4,  5,  7,  8,  10).  Denmark  is 
moving  away  from  the  targets  for  SDG 3 
(Good  health  and  well-being),  but 
its 
is  already  above  the  EU 
performance 
average  for  this  SDG.  The  country  performs 
above  the  EU  average  on  most  indicators  related 
to poverty, quality education, clean and affordable 
energy, inclusive growth and inequality (SDGs 1, 4, 
7,  8,  10).  While  overall  performance  for  SDG 5 
(Gender equality) is slightly below the EU average, 
the  number  of  seats  held  by  women  in  the 
national  parliament  and  government  increased 
from  36.3%  in  2018  to  44.1%  in  2023  (EU 
average:  33.2%  in  2023).  The  representation  of 
women  in  senior  management  positions  has  also 
significantly increased. In 2018, women accounted 
for 27.7% of board members, while the figure for 
2023  reached  41.4%,  well  above  the  EU  average 
of  33.8%. 
(Reduced 
inequalities),  the  gap  for  the  employment  rate 
between  people  with  EU  citizenship  and  people 
with  non-EU 
(expressed  as  a 
percentage point difference and calculated for the 
population  aged  20-64)  significantly  decreased 
between  2018  and  2023  (from  19.2  to  11.7, 
below the EU average of 13.2 in 2023). The share 
of  the  population  unable  to  keep  their  homes 
adequately warm (SDG 7) increased between 2017 
and  2022  but  is  still  significantly  below  the  EU 
average (5.1% vs 9.3% in 2022). 

terms  of  SDG  10 

citizenship 

In 

Denmark  performs  well  on  all  SDGs  on 
productivity  (SDGs 4,  8,  9)  and  is  moving 
towards SDGs 8 and 9. The share of households 

22 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

European 

Semester. 

The Commission has assessed the 2019-2023 
country-specific 
recommendations 
(CSRs) (25)   addressed  to  Denmark  as  part  of 
These 
the 
recommendations  concern  a  wide  range  of  policy 
areas that are related to 12 of the 17 Sustainable 
Development  Goals  (see  Annexes  1  and  3). The 
assessment  considers  the  policy  action  taken  by 
Denmark  to  date (26)and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP)  (27).  At  this 
stage  of  RRP  implementation,  83 %  of  the  CSRs 
focusing  on  structural  issues  from  2019-2023 
have recorded at least ‘some progress’, while 14 % 
recorded  ‘limited  progress’  (see  Graph  A2.1).  As 
the  RRP  is  implemented  further,  considerable 
progress in addressing structural CSRs is expected 
in the years to come.  

(25)  2023  CSRs:  EUR-Lex  -  32023H0901(12)  -  EN  -  EUR-Lex 

(europa.eu) 

      2022  CSRs:  EUR-Lex  -  32022H0901(12)  -  EN  -  EUR-Lex 

(europa.eu) 

      2021  CSRs:  EUR-Lex  -  32021H0729(12)  -  EN  -  EUR-Lex 

(europa.eu)  
2020  CSRs:  EUR-Lex  -  32020H0826(12)  -  EN  -  EUR-Lex 
(europa.eu) 
2019  CSRs:  EUR-Lex  -  32019H0905(12)  -  EN  -  EUR-Lex 
(europa.eu) 

(26)  Including  policy  action  reported  in  Recovery  and  Resilience 
Facility (RRF) reporting (twice a year reporting on progress in 
implementing milestones and targets and resulting from the 
payment requests assessment). 

(27)  Member  States  were  asked  to  effectively  address  in  their 
RRPs  all  or  a  significant  subset  of  the  relevant  country-
specific  recommendations  issued  by  the  Council.  The  CSR 
assessment  presented  here  considers 
the  degree  of 
implementation of the measures included in the RRP and of 
those  carried  out  outside  of  the  RRP  at  the  time  of 
assessment.  Measures  laid  down  in  the  Annex  of  the 
adopted  Council  Implementing  Decision  on  approving  the 
assessment of the RRP, which have not yet been adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
can 
Once 
to 
‘some/substantial 
implementation’, 
progress 
depending on their relevance. 

these  measures 
or 

implemented, 

lead 

full 

Graph A2.1: Denmark's progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission 

23 

No progress3%Limited progress14%Some progress35%Substantial progress32%Full implementation16% 
 
 
 
 
 
 
 
     
 
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

24 

DenmarkAssessment in May 2024*RRP coverage of CSRs until 2026**Relevant SDGs2019 CSR 1Some ProgressFocus investment-related economic policy on education and skills,Some ProgressRelevant measures being planned as of 2024SDG 4researchandinnovationtobroadentheinnovationbasetoincludemorecompanies, Some ProgressRelevant measures being implemented as of 2021 and 2022SDG 9and on sustainable transport to tackle road congestion.Some ProgressRelevant measures being implemented as of 2021 and 2022, planned as of 2024SDG 112019 CSR 2Substantial ProgressEnsure effective supervision and the enforcement of the anti-money laundering frameworkSubstantial ProgressSDG 8, 162020 CSR 1Substantial ProgressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability, while enhancing investment. Not Assessed / No Input to AddNot applicableSDG 8, 16Enhancetheresilienceofthehealthsystem,includingbyensuringsufficientcriticalmedicalproductsandaddressingtheshortageofhealth workers. Substantial ProgressRelevant measures being implemented as of 2021SDG 32020 CSR 2Substantial ProgressFront-load mature public investment projects andSubstantial ProgressRelevant measures being implemented as of 2021 and 2022SDG 8, 16promote private investment to foster the economic recovery. Substantial ProgressRelevant measures being implemented as of 2021 and 2022, planned as of 2023SDG 8, 9Focus investment on the green and digital transition, in particular on clean and efficient production and use of energy,Substantial ProgressRelevant measures being implemented as of 2021, planned as of 2024 and 2025SDG 7, 9, 13sustainable transport Substantial ProgressRelevant measures being implemented as of 2021 and 2022, planned as of 2024SDG 11as well as research and innovation. Substantial ProgressRelevant measures being implemented as of 2021, planned as of 2025SDG 9Supportanintegratedinnovationstrategywithabroaderinvestmentbase. Some ProgressRelevant measures being implemented as of 2021 and 2022SDG 92020 CSR 3Substantial ProgressImprove the effectiveness of anti-money laundering supervision and effectively enforce the anti-money laundering framework. Substantial ProgressSDG 8, 162021 CSR 1Not Assessed / No Input to AddIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment.Not Assessed / No Input to AddNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not Assessed / No Input to AddNot applicableSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,bothontherevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasures,toensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,notablysupporting the green and digital transition. Not Assessed / No Input to AddNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,includingbystrengtheningthecoverage,adequacy,and sustainability of health and social protection systems for all.Not Assessed / No Input to AddNot applicableSDG 8, 16 
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

25 

2022 CSR 1Some ProgressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspending to the evolving situation.No ProgressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandotherUnionfunds.Full ImplementationNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudent medium-term fiscal positions.Full ImplementationNot applicableSDG 8, 16Implementthenewpropertytaxsysteminordertorestorethelinkbetween market prices and taxes and ensure fairer taxation.Substantial ProgressSDG 8, 10, 12Stimulateinvestmentinconstructionofaffordablehousingtoalleviatethe most pressing needs.Limited ProgressSDG 8Increase the financial resilience of highly indebted borrowers.Limited ProgressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 13 July 2021.SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesion policy programmes and proceed with their implementation.2022 CSR 3Strengthencirculareconomyandwastemanagementpoliciesincludingbypromotingwastepreventionandreuse,increasingrecycling,andgraduallyshiftingawayfromincinerationofmunicipalwastetogreenersources of heat generation.Some ProgressRelevant measures being implemented as of 2021SDG 6, 12, 152022 CSR 4Some ProgressReduceoverallrelianceonfossilfuels.FurtherdiversifyenergysupplyandLimited ProgressRelevant measures being implemented as of 2021, planned as of 2024SDG 7, 9, 13helpdecarbonisetheeconomybyacceleratingthedeploymentofrenewables,includingbyintroducingreformstosimplifyandexpediteadministrative and permitting procedures,Some ProgressRelevant measures planned as of 2024 and 2026SDG 7, 8, 9, 13upgradingenergytransmissionnetworks,increasinginterconnectionswith neighbouring countriesSubstantial ProgressSDG 7, 9, 13and improving energy efficiency.Some ProgressRelevant measures being implemented as of 2021, planned as of 2025SDG 72023 CSR 1Substantial ProgressWind 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.Full ImplementationNot applicableSDG 8,16While maintaining a sound fiscal position in 2024,Full ImplementationNot applicableSDG 8,16preserve 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.Full ImplementationNot applicableSDG 8,16Fortheperiodbeyond2024,continuetopursueinvestmentandreformsconducivetohighersustainablegrowthandpreserveaprudentmedium-term fiscal positionFull ImplementationNot applicableSDG 8,16Implement the new property tax system in order to restore the link between market prices and taxes and ensure fairer taxation.Substantial ProgressNot applicableSDG 8, 10, 12Accelerateinvestmentintheconstructionofaffordablehousingtoalleviate the most pressing needs.Limited ProgressNot applicableSDG 82023 CSR 2Continuethesteadyimplementationofitsrecoveryandresilienceplanand,followingtherecentsubmissionoftheaddendum,includingtheREPowerEUchapter,rapidlystarttheimplementationoftherelatedmeasures.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecoveryand resilience plan.2023 CSR 3Some ProgressStrengthencirculareconomyandwastemanagementpolicies,includingbyacceleratingtheimplementationofDenmark’snationalactionplanforcirculareconomy,promotingwastepreventionandreuseofmunicipalandotherwaste,increasingrecyclingrates,reducingfoodwaste,andshiftingawayfromtheincinerationofmunicipalwastetogreener sources of heat generation.Some ProgressRelevant measures being implemented as of 2021SGD 12, 6, 15RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
 
  
 
Table (continued) 

Note:  
* See footnote (27).  
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP may be necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being 
implemented' are only those included in the RRF payment requests submitted and positively assessed by the European 
Commission.  
Source: European Commission 

26 

2023 CSR 4Some ProgressReduce reliance on fossil fuels andLimited ProgressRelevant measures being implemented as of 2021, planned as of 2024SDG 7, 9, 13increase the share of renewables in the energy supply.Some ProgressRelevant measures being planned as of 2024 and 2026SDG 7, 9, 13Address increasing demand and flexibility needs by incentivising the necessary electricity network developments at transmission and distribution level.Substantial ProgressSDG 7, 9, 13Streamline the applicable permit-granting rules for renewable energySome ProgressRelevant measures being planned as of 2024SDG 7, 8, 9, 13Implementadditionalmeasuresthatsupportenergyefficiencyinprivateand public buildings to reduce energy bills and energy system costs.Some ProgressRelevant measures being implemented as of 2021, planned as of 2025SDG 7Ensure a better roll-out of decarbonised heating sources.Some ProgressRelevant measures being implemented as of 2021 and planned as of 2024SDG 7, 9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionoftheskillsneeded for the green transition.Some ProgressRelevant measures being planned as of 2024SDG 4 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

This Annex provides a snapshot of Denmark’s 
implementation of its recovery and resilience 
Plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
developments and strengthening resilience against 
future  shocks.  The  RRF  is  also  helping  implement 
the  UN  Sustainable  Development  Goals  and 
address  the  country-specific  recommendations 
(see Annex 2).   

The  RRP  paves  the  way  for  disbursing  up  to 
EUR  1.6  billion  in  grants  under  the  RRF  over 
the 2021-2026 period, representing 0.4 % of 
Denmark’s  GDP (28).  As  of  mid-May  2024,  EUR 
0.96  billion  in  grants  has  been  disbursed  to 
Denmark under the RRF. 

Denmark  still  has  EUR  0.67  billion  available 
in  grants  from  the  RRF.  This  will  be  disbursed 
after  the  assessment  of  the  future  fulfilment  of 
the  remaining  50  milestones  and  targets (29) 
included  in  the  Council  Implementing  Decision (30) 
(CID), ahead of the 2026 deadline established for 
the RRF. 

Denmark’s progress in implementing its plan 
is  recorded  in  the  Recovery  and  Resilience 
Scoreboard (31). The scoreboard gives an overview 
of the progress made in implementing the RRF as 
a  whole.  Graph  A3.1  shows  the  current  state  of 
play as reflected on the Scoreboard. 

Denmark’s  RRP 
includes  a  REPowerEU 
chapter to phase out dependency on Russian 
fossil  fuels,  diversify  energy  supplies  and 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 

(28)  GDP 

information 

is  based  on  2023  data.  Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en   

(29)  A milestone or target is satisfactorily fulfilled once a Member 
State  has  provided  evidence  to  the  Commission  that  it  has 
reached  the  milestone  or  target  and  the  Commission  has 
assessed it positively in an implementing decision. 

(30)  https://data.consilium.europa.eu/doc/document/ST-10154-

2021-ADD-1/en/pdf  

launch 

reforms 

relevant 

implementation,  EUR  39.3  million  was  disbursed 
as  pre-financing  on  21  December  2023.  This 
helped 
the 
simplification  of  administrative  and  permitting 
procedures  for  the  roll-out  of  district  heating 
projects  and  the  deployment  of  wind  and  solar 
energy  on  land  as  well  as  the  deployment  of 
offshore  wind  energy  and  the  green  upskilling  of 
the labour force.  

like 

The  plan  has  a  strong  focus  on  the  green 
transition,  dedicating  69%  of  the  available 
funds  to  measures  that  support  climate 
objectives and 27% of its total allocation to 
support the  digital  transition.  It  also  retains  a 
strong  social  dimension  with  measures  especially 
related to the healthcare system.   

Table A3.1:  Key facts of the Danish RRP 

Source: RRF Scoreboard 

With  two  payment  requests  completed, 
Denmark’s implementation of its RRP is well 
underway.  The  Commission  gave  a  positive 
assessment  of  Denmark’s  first  payment  request, 
taking  into  account  the  opinion  of  the  Economic 
and  Financial  Committee.  This  led  to  EUR  301 
million  being  disbursed  in financial  support  on  27 
April  2023 (32).  The  related  25  milestones  and 
targets  covered  reforms  and  investments  such  as 
the  green tax  reform in  support  of the  green  and 
digital transition of businesses and a reform for a 
more  digital  health  system.  Several  milestones 
and  targets  also  concerned  major  investments  in 
the  fields  of  green  transition  of  agriculture  and 

(31)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

(32)  When  requested  payments  are  disbursed,  the  pre-financing 
is cleared proportionally. The net amounts are quoted here.  

27 

Initial plan CID adoption date13 July 2021Scope Revised plan with REPowerEU chapterLast major revision9 November 2023Total allocation EUR 1.6 billion in grants (0.4% of 2023 GDP)Investments and reforms 37 investments and 7 reforms Total number of milestones and targets93Fulfilled milestones and targets43 (46.2% of total) 
 
 
 
  
 
 
 
  
environment, energy efficiency, clean vehicles and 
ferries, and research.   

The most recent payment request, which the 
Commission  assessed  positively  on  29 
February  2024,  led  to  the  disbursement  of 
EUR  422  million  on  22  April  2024.  The 
disbursement reflected the positive assessment of 
18  milestones  and  targets  covering  several 
reforms in the areas of digitalisation of healthcare 
administration,  energy  efficiency,  cybersecurity, 
healthcare, as well as research and innovation for 
the green transition. 

Graph A3.1: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants, including pre-
financing,  disbursed  so  far  under  the  RRF.  Grants  are  non-
repayable financial contributions. The total amount of grants 
given  to  each  Member  State  is  determined  by  an  allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

As  of  15  May  2024,  Denmark  is  working 
towards its third payment request. Table A3.2 
highlights  some  relevant  measures  achieved  so 
far,  and  some  that  will  be  implemented  before 
2026 to keep making Denmark’s economy greener, 
more digital, inclusive, and resilient. 

Table A3.2:  Measures in Denmark's RRP 

Source: FENIX 

28 

EUR 0.964billion (59%)Total allocation: EUR 1.626billionReforms and investments implemented• Green Tax Reform• New National Cybersecurity Strategy• Development of facilities for telemedicine consultationUpcoming reforms and investments• New bike paths, zero-emmission cars and green ferries• Green upskilling funds• Setup of a full-scale biorefinery 
     
 
   
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member States. In addition to the EUR 1.6 billion 
of  Recovery  and  Resilience  Facility  (RRF)  funding 
described in Annex 3, EU cohesion policy funds (33) 
provide  EUR 455.7 million  to  Denmark  for  the 
2021-2027  period (34).  Support  from  these  two 
instruments combined represents around 0.56% of 
the  country’s  2023  GDP,  compared  to  an  EU 
average  of  5.38%  of  GDP (35).  Cohesion  policy 
supports  regional  development,  economic,  social 
and  territorial  convergence  and  competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

market  new  products  and  processes;  creating 
almost  18 700  jobs;  and  reducing  GHG  emissions 
by  almost  640 000  tonnes  of  CO2 equivalent. 
During the same period, the European Social Fund 
(ESF)  helped 
increase  the  number  of  self-
employed,  helped  people  at  the  margins  of  the 
labour market get into jobs, and supported people 
in  up-  and  reskilling  and  in  participating  in 
vocational  education  and  training  (VET).  Up  until 
now,  the  ESF  in  Denmark  has  supported  the 
participation  of  more  than  18 000  people  in 
entrepreneurship 
the 
participation  of  more  than  20 000  people  in  up- 
and reskilling courses. 

courses  as  well  as 

of 

gas 

greenhouse 

During  the  2014-2020  programming  period, 
cohesion  policy  funds  boosted  Denmark’s 
competitiveness, with  tangible achievements 
notably  in  competitiveness  of  businesses, 
(GHG) 
reduction 
emissions,  employment  and  skills.  By  the  end 
of  the  eligibility  period 
in  December  2023, 
2014-2020  cohesion  policy  funds (36)  had  made 
EUR 630.1 million  available  to  Denmark (37),  of 
which  EUR 330.6 million  has  been  disbursed  since 
March  2020,  when  the  COVID-19  pandemic 
began (38).  REACT-EU  supported  Danish  SMEs  in 
their  dual  transition  and  in  developing  the  skills 
required  for  it.  It  also  started  to  support  Danish 
regional strongholds and the development of new, 
green  technologies,  building  the  bridge  to  2021-
2027  programmes.  Achievements  of  cohesion 
policy  funds  over  the  entire  programming  period 
include providing support to 5 500 SMEs, aiming to 
make  them  more  competitive  and  allow  them  to 

(33)  In  2021-2027,  cohesion  policy  funds  include  the  European 
Regional  Development  Fund,  the  European  Social  Fund  Plus 
and the Just Transition Fund. 

(34)  European  territorial  cooperation 

excluded  from 
investment, 
EUR 993.8 million. 

the  figure. 
including  national 

In  2021-2027, 

(ETC)  programmes  are 
total 
to 

financing,  amounts 

the 

(35)  RRF  funding 

loans,  where 
includes  both  grants  and 
applicable. The EU average is calculated  for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2023. 

(36)  In 2014-2020, cohesion policy funds included the European 
Regional  Development  Fund  and  the  European  Social  Fund. 
REACT-EU allocations are included but ETC programmes are 
excluded. 

(37)  In  2014-2020,  the  total  investment,  including  national 

financing, amounted to EUR 1.0 billion. 

(38)  Cut-off date: 14 May 2024. 

29 

Denmark’s 

facilitating 

In  2021-2027, 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  Denmark’s  competitiveness,  to  the 
green  transition  and  to  social  cohesion, 
improving  the  living  and  working  conditions 
the 
of  Denmark’s  people. 
European  Regional  Development  Fund  (ERDF)  will 
support  over  9 000  businesses  to  cooperate, 
innovate,  digitalise  and  adapt  to  the  green 
transition.  This  business  support  also  aims  to 
boost  the  development  of  green  and  welfare 
technologies, 
green 
transition and responding to challenges related to 
scarcity  of  workforce.  Moreover,  20  small-  and 
medium-sized  town  centres  and  10  tourism  sites 
will be  supported to boost the local economy and 
allowing them to adapt to climate challenges. The 
Just  Transition  Fund  (JTF)  will  support  3 500 
businesses  in  North  and  South  Jutland  in  their 
green  transition,  while  1 100  businesses  will 
receive  support  to  reduce  their  carbon  footprint. 
Overall,  the  JTF  supports  over  10 000  people 
develop  skills  that  facilitate  the  green  transition, 
involving  more  than  2 000  SMEs.  The  European 
Social  Fund  Plus  (ESF+)  will  facilitate  the  green 
and  digital  transitions  in  Denmark  by  allocating 
approximately EUR 111 million to the development 
of relevant skills. These resources will mainly serve 
to support the up- and reskilling of the workforce, 
and to help adapt VET and higher education to the 
demands  of  the  labour  market.  Around  15 000 
people are expected to improve their qualifications 
through  targeted  up-  and  reskilling  courses,  and 
around 2 500 people are expected to get closer to 
the  labour  market  or  into  jobs,  as  the  ESF+  will 
also support measures that help vulnerable groups 
get into jobs and away from homelessness. In this 
regard, cohesion policy substantially contributes to 
achieving  the  UN  Sustainable  Development  Goals 

 
 
 
 
 
(SDGs)  in  Denmark,  in  particular  SDG  9  (Industry, 
innovation,  infrastructure),  SDG  8  (Decent  work 
and  economic  growth)  and  SDG  4 
(Quality 
education). 

Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Denmark 

digital readiness of Danish legislation, to enable a 
systematic  review  of  existing  legislation.  The  TSI 
also supported the development of future-oriented 
talent  retention  policies  to  help  Denmark  attract 
and  retain  international  talent,  while  fostering 
talent mobility across the EU. 

Graph A4.2: Distribution of RRF funding by pillar in 
Denmark 

Source: European Commission 

(1)  Each  RRP  measure  helps  achieve  the  aims  of  two  of  the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Denmark. 
Source: European Commission 

Denmark also receives funding from several other 
EU 
in 
including 
Table A4.1. 

instruments, 

those 

listed 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Denmark.  The 
green  tax  reform  and  the  tax  incentives  to  boost 
research and development in companies envisaged 
in the RRP supplement the objectives of the ERDF 
and  JTF  by  providing  an  additional  incentive  for 
investing  in  solutions  or  developing  technologies 
that can reduce waste and emissions and improve 
the resource efficiency of businesses. The JTF and 
the ESF+ displays complementarity with regards to 
re- and upskilling of the workforce and students to 
facilitate 
in 
digitalisation,  the  RRP  supported  the  development 
of 
the  Danish  digitalisation  strategy,  which 
provides  the  framework  for  the  digitalisation  of 
businesses,  services  and  jobs,  while  the  ERDF 
supports  the  digital  transition  of  the  corporate 
sector,  and  both  the  ESF+  and  the  JTF  support 
the  same  area.  The 
re- and  upskilling 
contribution of cohesion policy and RRP funding by 
policy  objective  is  illustrated  by  Graphs  A4.1  and 
A4.2. 

transition.  Similarly, 

the  green 

in 

The Technical Support Instrument (TSI) helps 
Denmark  invest  in  its  public  administration 
and create a better enabling environment for 
EU  and  national  investment.  The  TSI  has 
funded  projects 
in  Denmark  to  design  and 
implement growth-enhancing reforms since 2019. 
The  support  provided  in  2023  included  action  to 
standardise product data in digital and automated 
processes,  thus  supporting  the  transition  to  the 
green  and  circular  economy.  The  TSI  also  helped 
Denmark  develop  a  framework  to  increase  the 

30 

PO1 Smarter EuropePO2 Greener EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilience 
        
     
 
Table A4.1:  Support from EU instruments in Denmark 

Notes:  
(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023). 
Source: European Commission 

31 

Amount 2021-2027 (EUR million)Cohesion policy455.7RRF grants (1)1 625.9Public sector loan facility (grant component) (2)6.8Common agricultural policy (3)4 806.0EMFF/EMFAF (4)201.0Connecting Europe Facility (5) 675.6Horizon 2020 / Horizon Europe (6) 940.5LIFE programme (7) 52.4Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8) 991.7InvestEU 2021-2027 (9) 230.3EU grantsAmount 2014-2020 (EUR million)630.1--8 600.0 291.5 134.7208.4 892.11 760.5 73.3EU guaranteesEU Guarantee (EUR million) 
 
 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Denmark and the EU-27 

(1) The synthetic indices aggregate the relative resilience situation of countries  across all considered indicators. For an indicator, 
each  country’s  relative  situation  in  the  latest  available  year  is  compared  with  the  collection  of  values  of  that  indicator  for  all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

resilience 

This  Annex  uses  the  Commission’s  resilience 
dashboards  (RDB) (39)  to  show  Denmark’s 
relative 
and 
vulnerabilities (40)  that  may  be  of  relevance 
for  societal,  economic,  digital  and  green 
transformations, and for dealing with future 
shocks and geopolitical challenges (41). 

capacities 

According  to  the  set  of  resilience  indicators 
in  the  RDB  and  in  line  with  the  EU  average, 
Denmark’s  overall  vulnerabilities  have 
remained  stable,  at  medium-low,  putting  it 
above  the  EU  average.  The  same  goes  for  its 
resilience  capacities,  also  in  a  stable  position,  at 
medium-high  overall,  putting  it  roughly  on  a  par 
with the EU average. The distribution of indicators 
across  the  various  resilience  categories  also 
reflects this situation: almost 60% of vulnerability 

(39)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability  not  only  to  withstand  and  cope  with  challenges  but 
also  to  undergo  transitions,  in  a  sustainable,  fair,  and 
democratic  manner.  2020  Strategic  Foresight  Report: 
Charting  the  course  towards  a  more  resilient  Europe 
(COM(2020) 493). 

(40)  Vulnerabilities  describe  features  that  can  exacerbate  the 
negative  impact  of  crises  and  transitions,  or  obstacles  that 
may  hinder  the  achievement  of  long-term  strategic  goals, 
while  capacities  refer  to  enablers  or  abilities  to  cope  with 
crises and structural changes and to manage transitions. 

(41)  This  Annex  is  linked  to  Annex  1  on  SDGs,  Annex  6  on  the 
green  deal,  Annex  8  on  the  fair  transition  to  climate 
neutrality,  Annex  9  on  resource  productivity,  efficiency  and 
circularity,  Annex  10  on  the  digital  transition  and  Annex  14 
on the European pillar of social rights. 

indicators  are  medium-low  or  low,  while  most 
capacity indicators are medium-high or high. 

In  the  social  and  economic  dimension, 
Denmark  stands  out  for  its  high  capacities 
low  vulnerabilities,  both  of  which 
and 
continue  to  be  above  the  EU  average.  That 
said,  the  country  has  many  jobs  at  risk  of 
automation  in  the  manufacturing  sector.  This 
would suggest that the digital transition is going to 
have  a  significant  impact  on  society.  Despite  a 
slight  decrease 
in  the  ratio  of  non-financial 
corporate  debt  to  GDP,  it  continues  to  be  well 
above  the  EU  average.  As  far  as  capacity 
indicators  are  concerned,  healthy  life  years  in 
absolute  value  at  birth  remain  far  below  the  EU 
average. 

the 

green 

In 
dimension,  Denmark’s 
vulnerabilities have increased to medium and 
capacities  remained  medium-high,  putting 
them at the level of the EU average. Increased 
raw material consumption per capita is one reason 
for 
this  weakening  of  Denmark’s  position. 
Consumption footprint per capita continues to be a 
high  vulnerability  (second  highest).  On  capacities, 
the  CO2  absorption  of  its  forests  and  its  resource 
productivity have increased.    

In  the  digital  dimension,  Denmark  has 
managed  to  keep  its  strong  position,  with 
very  high  capacities  but  slightly  increased 
vulnerabilities  to  medium-low,  both  still 
performing  better  than  the  EU  average.  For 
Denmark, ICT security incidents in enterprises and 
ICT  trade  deficit  in  both  goods  and  services  fall 

32 

DKDKEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowDimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.760.690.50Capacities0.740.750.67VulnerabilitiesSocial and economicVulnerabilities0.840.850.47Capacities0.810.850.670.890.850.65GreenVulnerabilities0.600.500.44Capacities0.750.750.70CapacitiesGeopoliticalVulnerabilities0.560.530.41Capacities0.490.500.65DigitalVulnerabilities0.840.780.52Capacities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(63 indicators) 
 
 
 
   
 
 
above  the  EU  average.  The  country  remains  in  a 
strong  position  in  terms  of  digital  capacities,  but 
the level of young people doing any online learning 
activity  and  the  value  of  e-commerce  sales  have 
decreased.   

geopolitical 

Denmark’s 
situation,  with 
medium  vulnerabilities  and  capacities,  has 
not changed. Its capacities continue to be  below 
the EU average. Intra-EU trade in energy improved 
with  respect  to  the  2023  RDB,  but  the  rate  of 
change  in  supplier  diversification  of  both  energy 
carriers  and  base  metals  remains  negative, 
weakening Denmark’s position in this dimension.  

33 

 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Denmark  has  made  progress  in  the  green 
transition, with more action needed to specify 
the funding framework for the climate and energy 
transition  and  the  policies  needed  to  reach  the 
2030  effort  sharing  target,  as  well  as  on 
sustainable  water 
soil  management, 
and 
biodiversity protection, and other areas. This Annex 
provides  a  snapshot  of  climate,  energy  and 
environmental  aspects  of 
in 
Denmark (42). 

transition 

the 

lacks 

(NECP) 

climate  plan 

Denmark’s  draft  updated  national  energy 
and 
key 
information on investment needs and funding 
sources  to  achieve  its  2030  climate  and 
energy  targets.  The  plan  neither  identifies  the 
total  needs  nor  the  needs  for  private  and  public-
sector investments, which means it is not possible 
to  identify  any  funding  gaps.  The  draft  updated 
plan  mentions  the  key  sources  of  finance,  but  it 
does not distinguish between different policies and 
measures nor between private and public sources. 
The plan lacks an overview with all the budgetary 
information 
the  different  policies  and 
measures,  although  it  gives  a  relatively  good 
picture  of  the  measures  in  place  and  the  budget 
required. According to the draft plan, Denmark will 
mainly  draw  on  national 
(Danish 
Innovation 
Technology 
the 
Development and Demonstration programme, and 
ELFORSK) (43). 

funding 

Energy 

Fund, 

for 

Current  policies  and  measures  in  Denmark 
are  insufficient  to  reach  its  2030  effort 
sharing  target (44)  and  it  has  yet  to  specify 
further  action.  Denmark  expects 
its  2022 
greenhouse  gas  emissions  from  its  effort  sharing 

(42)  This  Annex 

is  complemented  by  Annex  7  on  energy 
autonomy  and  competitiveness,  Annex  8  on  the  fair 
transition  to  climate  neutrality,  Annex  9  on  resource 
efficiency, circularity, and productivity, and relevant topics in 
other annexes to this country report. 

(43)  See  the  Commission’s  (2023)  assessment  of  the  draft 

national energy and climate plan of Denmark. 

(44)  The  national  greenhouse  gas  emission  reduction  target  is 
laid  down  in  Regulation  (EU)  2023/857  (the  Effort  Sharing 
Regulation), to align action in the sectors concerned with the 
objective  to  reach  the  EU-level  economy-wide  target  of 
greenhouse  gas  reductions  of  at  least  55%  compared  to 
1990  levels.  The  target  also  applies  to  sectors  outside  the 
current  EU  Emissions  Trading  System,  notably  buildings 
(heating and cooling), road transport, agriculture, waste, and 
small industry (known as the effort sharing sectors). 

levels,  by  10.5  percentage  points. 

sectors  to  come  in  at  28.8%  below  2005  levels. 
Current policies are projected to reduce emissions 
from  Denmark’s  effort  sharing  sector  by  39.5% 
from  2005  levels  by  2030 (45).  Denmark  has  not 
provided  a  scenario  ‘with  additional  measures’. 
This is problematic as it is projected to fall short of 
its  effort  sharing  target,  to  reduce  by  50%  from 
It 
2005 
highlights 
importance  of  planning  and 
implementing  more  ambitious  climate  action.  The 
transport  and  agricultural  sectors  are  still  by  far 
the  greatest  sources  of  emissions  in  the  effort 
sharing  sectors,  each  generating  38%  of  total 
emissions.  Based  on  the  information  provided  in 
its draft  updated  NECP,  Denmark  intends  to  bring 
forward  its  goal  to  reach  climate-neutrality  from 
2050 to 2045. 

the 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

There  is  scope  for  increasing  Denmark’s 
target  for  energy  efficiency  in  its  final 
updated  NECP (46). 
efficiency 
contribution  of  15.69  Mtoe  in  primary  energy 
consumption  is  slightly  less  ambitious  than  the 
one required under the Energy Efficiency Directive, 

energy 

Its 

(45)  The  effort  sharing  emissions  for  2022  are  based  on 
inventory  data.  The  final  data  will  be 
approximated 
established 
review. 
Projections  on  the  impact  of  current  policies  (‘with  existing 
measures’, WEM) as per Denmark’s draft updated NECP. 

in  2027  after  a  comprehensive 

(46)  The  EU  target  set  out  in  the  revised  Renewable  Energy 
Directive is to have 42.5% of gross final energy consumption 
coming  from  renewable  energy  sources  by  2030,  with  the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Denmark at 15.5 Mtoe for primary energy consumption and 
13.7  Mtoe  for  final  energy  consumption,  Commission 
Recommendation of 18/12/2023 Denmark. 

34 

05101520253035404520052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
       
 
 
 
 
while the 13.73 Mtoe in final energy consumption 
for  2030  is  aligned  the  required  contribution. 
Denmark’s renewable energy contribution set in its 
draft  updated  NECP,  71%  by  2030,  is  ambitious 
and exceeds the requirement under the Renewable 
Energy Directive. 

Although  Denmark 
is  one  of  the  EU's 
frontrunners on sustainable transport, it has 
scope  for  further  improvement (47).  In  2023, 
5.7%  of  its  car  passenger  fleet  were  battery 
electric  vehicles.  In  2023,  it  had  18 670  publicly 
accessible  charging  points,  one  for  every  10  e-
vehicles  (in  line  with  the  EU  average).  However, 
only  32%  of  its  rail  network  has  been  electrified 
(against  the  EU  average  of  56%).  Freight  is 
predominantly transported by road, at 88%. 

to  achieve 

Denmark’s  action 
carbon 
removals  in  the  land  use,  land-use  change 
and  forestry  sector  (LULUCF)  is  projected  to 
be  insufficient  to  meet  its  2030  target. 
Denmark’s net LULUCF greenhouse gas emissions 
are mainly a result of its relatively small forested 
area and high emissions from agricultural soil. To 
reach 
target,  additional 
removals  of  441  kt CO2eq  are  needed (48).  To 
achieve  this,  it  is  crucial  for  Denmark  to  protect 
the  carbon  stored  in  soils  and  expand  forested 
areas. According to the latest projections for 2030, 
carbon removals risk falling short of the target (49). 

the  2030  LULUCF 

Denmark  continues  to  face  climate  change 
risks,  including  heavier  rainfall,  droughts, 
more  intense  storms,  and  storm  surges.  On 
the positive side, it has a high share of insurance 
coverage for all climate-related risks, resulting in a 
narrow  climate  protection  gap (50).  Denmark  is 
updating  its  national  adaptation  strategy  and 
to 
adaptation 

committed 

plan 

and 

is 

(47)  Unless  otherwise  indicated,  data  in  this  section  refer  to 
2021.  See  European  Commission,  2023,  EU  transport  in 
figures, transport.ec.europa.eu. 

(48)  National  LULUCF  targets  of  the  Member  States  in  line  with 

Regulation (EU) 2023/839. 

(49)  Projections  submitted  in  Denmark’s  draft  updated  national 

energy and climate plan, 2023. 

(50)  On the climate protection gap, see the annotations to  Table 

A6.1. 

35 

mainstreaming 
legislation (51).  

climate 

adaptation 

through 

critical 

The decline in biodiversity remains a serious 
concern  in  Denmark.   Biodiversity  underpins  all 
economic  activities  and  human  wellbeing  by 
providing 
ecosystem 
services, including food and clean water, and also 
invisible  services  such  as  nutrient  cycling (52).  The 
agri-food  sector  would  benefit  from  becoming 
circular  (see  Annex  9)  and  sustainable  to  reduce 
pressure on nature and greenhouse gas emissions. 

life-supporting 

For  the  first  time  since  2008,  2023  saw 
widespread oxygen depletion in southern and 
central  Kattegat.  The  most  affected  areas  in 
inland  Danish  waters  were  Limfjorden,  Mariager 
Fjord,  the  southern  Little  Belt,  the  south-east 
Jutland  fjords,  the  South  Funen  Archipelago  and 
Fehmarn Belt. In many of these areas, the bottom 
water was anoxic, and toxic sulphide was released 
from  the  seafloor.  Dead  fish  were  found  in 
Limfjorden, and a shroud appeared on the bottom 
in  several  areas.  The  situation  was  highly  critical, 
especially  for  benthic  animals,  fish  and  plants  in 
several  areas (53).  Oxygen  depletion  is  a  result  of 
eutrophication caused by nutrient pollution, mainly 
from  agricultural  sources.  A  broad  political 
agreement reached in 2021 (54) sets out a required 
reduction  in  nitrogen  emissions  by  2027,  but  the 
agreed  measures  fall  short  of  this  objective. 
Decisions  on  measures  to  lower  nitrogen  loads 
from  agriculture  are  expected  in  2024,  with 
implementation  in  2026  at  the  earliest.  Reducing 
farmland  nitrogen  leaching  by  35%  to  ten  local 
water  bodies  in  catchments  covering  37%  of 
Denmark’s  land  area  would  improve  water  clarity 
and generate benefits of EUR 92 million a year (55). 

(51)  See  also 

the  Commission’s  2023  assessment  and 
recommendation  on  Denmark’s  progress  on  climate 
adaptation. 

(52)  OECD, Biodiversity,  natural  capital  and  the  economy,  May 
2021; Assessing  biodiversity-related  financial  risks,  April 
2023. 

(53)  Ministry  of  Environment  of  Denmark, Markant  forværret 

iltsvind, September 2023. 

(54)  Danish  Government, Aftale  om  grøn  omstilling  af  dansk 

landbrug, October 2021. 

(55)  2019  monetary  value.  10  catchment  areas  featuring 
estuaries: Roskilde fjord, Isefjord, Helnæs bugt, Odense fjord, 
Horsens fjord, Randers fjord, Mariager fjord, Ringkøbing fjord, 
Nissum  fjord,  Skive  fjord.  A  study  on Economic  benefits  of 
reducing  agricultural  N  losses  to  coastal  waters  for  seaside 
recreation and real estate value in Denmark, Table 6.  

 
 
 
is  exposed 

The  estimated  annual  costs  of  water  pollution, 
caused among other things by excessive nutrients, 
increased  to  EUR  1.7  billion  in  2020 (56).  Heavy 
rainfalls  exacerbate  nutrient  run-off  from  the 
fields.  Most  cropland 
to  heavy 
precipitations and around half of the population to 
storms.  The  country  is  relatively  exposed  to  long-
term  adverse effects  of  climate  change, including 
extreme  weather  events  and  sea  level  rises,  with 
high  flooding  risks  due  to  its  low  elevation (57). 
Denmark  has  reported  the  second  Flood  Risk 
Management  Plan  under  the  Floods  Directive  and 
it is currently under assessment (58). 

Good  environment  status  was  only  achieved 
for  parts  of  Denmark’s  marine  waters  based 
on  the  2018  assessment  under  the  Marine 
Strategy  Framework  Directive  (MSFD).  Several 
criteria  were  not  assessed  or  not  in  a  good 
environmental  status (59).  Denmark  communicated 
its  programme  of  measures  under  the  MSFD  in 
March  2024,  this  programme  was  due  to  be 
submitted  in  March  2022.  Only  28%  of  all 
country’s  surface  water  bodies  reached  good  or 
high  ecological  status  and  0.8%  reached  good 
chemical  status  according  to  the  second  River 
Basin Management Plan (60). In Denmark, only 5% 
of  habitats  and  20%  of  species  are  in  a  good 
conservation  status,  with  35%  of  habitats  and 
species  in  decline (61).  The  conservation  status  of 
all  agricultural  habitats  (grassland)  was  assessed 
in 2018 as inadequate or bad (62). Agriculture and 
mixed-source pollution (including nutrient leaching) 
are  a  significant  pressure  for  most  protected 
habitats  and  species.  Specifically,  agriculture 

(56)  InforEuro exchange rate of December 2023. DKK 12.5 billion 
measured in 2023 prices. Årg. 97 Nr. 1 (2024): Økonomi og 
Politik 
|  Økonomi  &  Politik  –  Danmarks  grønne 
nationalprodukt. 22 April 2024. 

(57)  Organisation  for  Economic  Co-operation  and  Development, 
OECD  Economic  Surveys  –  Denmark,  January  2024  at 
Denmark Economic Snapshot.  

(58)  European Commission, Flood Risk Management Plans. 

(59)  Denmark  —  Marine  (europa.eu).  The  next  reporting  on  the 
state  of  the  marine  environment  is  due  in  October  2024. 
Commission Notice 2022/C 118/01 of 14 March 2022 (OJ C 
118, 14.3.2022, p. 1–3).  

(60)  Assessment  of  second  RBMP  of  Denmark  (SWD(2019)38). 
The  third  RBMP  plan  has  been  received  and  it  is  currently 
under assessment. European Commission, Water Framework 
Directive. 

(61)  EEA, Conservation status and trends of habitats and species. 

(62)  European Commission, Biodiversity. 

affected 72% of habitats and 78% of species and 
mixed-source  pollution  affected  73%  of  habitats 
and 48% of species (63). The estimated annual cost 
of  the  threat  to  biodiversity  attains  EUR  8  billion 
and  the  loss  of  species  almost  EUR  7  billion (64). 
Denmark is the only EU Member State that has not 
submitted  its  final  framework  of  priority  actions 
for investments in Natura 2000 sites. Natura 2000 
land accounted for 8.3% (3 594 km2) of Denmark, 
the smallest share in the EU (65). Only 13% (about 
5700  km2)  of  Denmark’s  territory  is  covered  by 
woodland (66). 

Most  of  Denmark's  peatlands  have  been 
for  agriculture (67).  The 
drained,  mainly 
national ambition of taking 100 000 ha of carbon-
rich  low-lying  soils  and  buffer  areas  out  of 
production  by  2030  could  be  accelerated  given 
Denmark’s climate targets and the current state of 
aquatic  environment.  At  a  recent  status,  187  ha 
have  been  set  aside  since  2021.  However, 
feasibility studies are ongoing for 45 019 ha and 
implementation  is  ongoing  for  another  10  999 
ha (68). The subsidy scheme of EUR 4.4 million was 
the 
opened 
progress (69).  Protecting  and  rewetting  carbon-rich 
low-lying  soils  will 
reduce  greenhouse  gas 
emissions,  reduce  nitrogen  leaching  into  water 
bodies  and  in  the  long  term,  increase  terrestrial 
and marine biodiversity. Agriculture takes up more 
than  half  of  the  land  area  in  Denmark.  Utilised 
agricultural area (to be) fully converted to organic 
farming  accounted  for  11.6%  of  agricultural  land 
in  Denmark  in  2021,  against  the  EU  average  of 
9.1%  in  2020  and  the  EU  goal  of  25%  by 

in  spring  2024 

to  speed  up 

(63)  EEA, Main pressures and threats. 

(64)  InforEuro  exchange  rate  of  December  2022.  DKK  60  billion 
(biodiversity)  and  DKK  50  billion  (species).  Årg.  97  Nr.  1 
(2024):  Økonomi  og  Politik  |  Økonomi  & Politik  – Danmarks 
grønne nationalprodukt. 22 April 2024. 

(65)  European Environmental Agency, Natura 2000 Barometer. 

(66)  Statistics Denmark, Land use accounts, January 2023. 

(67)  UNEP, Global  Peatlands  Assessment:  The  State  of  the 

World’s Peatlands, November 2022. 

(68)  Ministry  of  Food,  Agriculture  and  Fisheries  of  Denmark, 
Status  på  fremdriften  i  udtagningen  af  lavbundsjorder, 
15 May 2024. 

(69)  InforEuro  exchange  rate  of  April  2024.  DKK  32.8  million. 
Ministry  of  Environment  of  Denmark,  Akutpakke 
for 
vandmiljøet. 22 April 2024. 

36 

 
 
 
2030 (70). Denmark had the fifth highest  livestock 
density (1.59%) in the EU in 2020 (71). 

the second highest volume of food waste in the EU 
at  230  kg/person,  above  the  EU  average  of  131 
kg/person (78). 

Graph A6.2: Changes in livestock density and 
organic farming 

Graph A6.3: Environmental investment gap, annual 
average 

Livestock  unit  (LSU)/ha  of  UAA:  it  measures  the  stock  of 
animals  (cattle,  sheep,  goats,  equidae,  pigs,  poultry  and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

In  Denmark,  76%  of  soil  is  in  an  unhealthy 
state,  the  principal  cause  being  nutrient 
(50%)  the  main 
surplus,  and  nitrogen 
contributor.  Nitrogen  excess  highly  affects  soil 
health  of  73%  of  agricultural  land (72).  The  gross 
nitrogen balance on agricultural land was 80 kg/ha 
in 2015 in Denmark, above the EU average of 44.4 
kg/ha  (2014  data) (73).  Using  sustainable  soil 
management  practices  effectively, 
including 
regular  use  of  organic  fertilisers  in  the  form  of 
quality  compost  from  manure  and  bio-waste 
recycling,  could  improve  soil  health  in  the  long 
term (74), (75). Applying organic fertilisers could also 
reduce  the  need  for  chemical  fertilisers (76).  In 
Denmark,  the  composting  and  digestion  rate  of 
municipal  waste  was  185  kg/person  (provisional 
data)  in  2022  (i.e.  24%  of  all  municipal  waste  – 
see  Annex  9) (77).  In  2022,  the  country  produced 

(70)  Statistics | Eurostat, May 2024. 

(71)  Statistics | Eurostat, January 2024. 

(72)  SWD (2023)417, PART4/5. Not all soil degradation processes 
could  be  quantified  for  all  land  uses.  This  number  simply 
indicates an order of magnitude. 

(73)  The data for 2016-2019 is lacking for Denmark. The EUA for 

2015 is lacking. Statistics | Eurostat, July 2023. 

(74)  ECN Response on Roadmap - European Compost Network 

(75)  SWD (2023)417, part 3/5 

(76)  SWD (2023)417, part 3/5 

The  numbers  are  computed  by  the  European  Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

There  is  scope  to  increase  environmental 
investments.  Over  the  2014-2020  period,  the 
environmental  investment  gap  was  estimated  at 
EUR 1.8 billion per year. A similar gap  at EUR 1.9 
billion  per  year  is  estimated  for  the  2021-2027 
period.  Denmark  would  benefit  from  investing  in 
sustainable water management, as the investment 
gap has considerably widened for water (EUR 443 
million per year). The share of environmental taxes 
in  GDP  is  steadily  decreasing  in  Denmark,  it 
reached  2.44%  in  2022.  Environmentally  harmful 
subsidies  such  as  favourable  taxation  of  fuel  use 
in  agriculture  could  be  considered  for  reform (79). 
Denmark  considers  a  green  tax  reform  in  the 
agriculture sector, the expert report was published 
in January 2024 (80).  

(78)  Statistics | Eurostat, January 2024. 

(79)  Organisation  for  Economic  Co-operation  and  Development, 
OECD  Economic  Surveys:  Denmark  2024  at  Denmark 
Economic Snapshot.  

(80)  The Danish Ministry of Taxation, Grøn skattereform - endelig 

(77)  Statistics | Eurostat, February 2024. 

afrapportering, 21 February 2024.  

37 

0120510152020162020% LSU per hectare% of total utilised agricultural areaLivestock density index Denmark (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Denmark (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area)752194590193876443621002004006008001,0001,2001,400Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
           
 
           
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

38 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp40,368.1-20%-23%-20%-21%-50%-10n/aNet greenhouse gas removals from LULUCF (2)Kt CO2eq4 9711 5311 292198.000-381.0005,338n/an/aShare of energy from renewable sources (1) (3)%16%37%32%41%42%60%--Energy efficiency: primary energy consumption (3)Mtoe19.416.915.516.416.015.5Energy efficiency: final energy consumption (3)Mtoe15.514.313.113.913.313.7Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---12.112.1769.0786.610.0Share of zero-emission vehicles in new registrations (4)% 0.72.47.213.420.7912.1n/aNumber of publicly accessible AC/DC charging points --3607584410843299178446956n/aShare of electrified railways%29.4%28.8%31.2%32.3%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---3.93.9537.0486.71.3Final energy consumption in buildings2015=100101.3%99.4%96.0%103.7%93.7%104.0%97.2% Climate adaptation         Climate protection gap (5)score 1-4--0.01.01.31.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater4.42.7---3.6--Circular economy | Material footprint (7)tonnes per person23.224.223.023.330.414.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants405323194223-545584-Biodiversity | Habitats in good conservation status (9)%5.414.7                       Common farmland bird index (10)2000=100757183--78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area9.7511.0911.4511.58-9.1--Nitrates in groundwatermg NO3/litre17.9817.6718.71--20.42--Food waste per capitaKg per capita221230-130131-Share of soil in poor health (11)%7641Soil organic matter in agricultural land (12)Mt per ha167----7,904--DistanceEU-27 
 
        
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

any amount exceeding the level of their bills from 
autumn 2022. 

Graph A7.1: Denmark's energy retail prices for 
households and industry & service 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

have 

consumers 

In  relative  terms,  electricity  prices  for  non-
household 
increased 
compared  to  the  US  and  Japan  up  until  the 
second  half  of  2022.  However,  they  have  since 
registered  a  sharp  decline,  nearly  reaching  the 
levels seen in the US and Japan by the first half of 
2023.  This  shift  indicates  a  potential  rebound  in 
the 
international  competitiveness  of  energy-
intensive industries in Denmark. 

This  Annex (81)  sets  out  Denmark’s  progress 
and  challenges  in  accelerating  the  net-zero 
energy  transition  while  bolstering  the  EU’s 
competitiveness 
energy 
sector (82). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECP) for 2030 (83).  

clean 

the 

in 

Denmark  shows  progress  in  further  securing 
gas  security  of  supply  and  a  relatively  high 
number of renewables in heating and cooling, 
with  an  ambitious  look  on  to  2030.  Topics 
requiring  further  attention  include  offshore  wind 
deployment and increasing market surveillance on 
products with ecodesign and energy labelling. 

Aligning with the prevailing trends witnessed 
across  the  EU,  energy  retail  prices 
in 
Denmark  fell  significantly  in  2023.  Between 
the second semester of 2023 and the first half of 
the  year,  household  gas  prices 
in  Denmark 
experienced  a  26%  reduction.  In  the  same  way, 
household  electricity  prices  witnessed  a  7% 
decrease in the same period. For the industrial and 
services  sector,  both  gas  and  electricity  prices 
decreased  by  13%  in  the  second  half  of  2023, 
remaining  16%  and  42%  below  the  EU  average, 
respectively.  

(around  15%  of 

Direct  energy  assistance  to final  consumers, 
implemented  since  the  outset  of  the  energy 
crisis,  has  been  offered  in  the  form  of  a 
“heat-cheque”. This measure benefited 400 000 
households 
total  Danish 
households) and consisted of a single payment of 
around  EUR  800  to  consumers  who  meet  certain 
conditions related to income and gas supply. Also, 
Denmark introduced a measure providing loans to 
allow  consumers  to  delay  payment  on  their 
upcoming  energy  bills  over  a  5-year  period,  for 

(81)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition and by Annex 8 on the 
action  taken  to  protect  the  most  vulnerable  groups, 
complementing  ongoing  efforts  under  the  European  Green 
Deal, REPowerEU and European Green Deal Industrial Plan. 

(82)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(83)  Denmark  submitted  its  draft  updated  NECP  in  June  2023; 
the  Commission  issued  an  assessment  and  country  specific 
recommendations  on  18  December  2023.  Commission 
Recommendation,  Assessment  (SWD)  and  Factsheet  of  the 
draft updated National Energy and Climate Plan of Denmark 
- European Commission (europa.eu) 

39 

0.000.100.200.300.400.500.600.70€/KWhGas (industry & service) - DKGas (industry & service) - EUGas (households) - DKGas (households) - EUElectricity (industry & service) - DKElectricity (industry & service) - EUElectricity (households) - DKElectricity (households) - EU 
 
 
     
 
 
Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

to 

(1) For Eurostat data (EU and DK), the band consumption is ID 
referring 
large-sized  consumers  with  an  annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight 
competitiveness 
international 
(2) JP = Japan 
Source: Eurostat, IEA 

into 

Consumer  empowerment  in  the  electricity 
and gas markets is supported in Denmark by 
promoting  individual  and  collective  self-
consumption of renewable energy as well as 
renewable  energy  communities.  The  draft 
updated  NECP  in  2023  presents  some  measures, 
such  as  the  rollout  of  smart  meters  for  all 
consumers and the opportunity to seek funding for 
local  energy  initiatives,  which  include  renewable 
energy  communities.  However,  Denmark  has  not 
implemented  any  new  measures  aimed  at 
ensuring  a  renewable  energy  community  in  all 
municipalities  with  a  population  of  more  than 
10 000 citizens. Also, the draft updated NECP does 
self-
targets 
not 
consumption or energy communities. 

include  quantitative 

for 

While  already  being  one  of  the  EU  countries 
with  the  lowest  exposure  to  Russian  gas, 
Denmark  has  increased  its  security  of  gas 
supply  by  boosting 
its  own  production 
capacity  and  set  itself  the  bold  ambition  of 
phasing  out  natural  gas  by  2030.  While 
indigenous  gas  production  has  been  strongly 
reduced 
in  the  past  years,  the  progressive 
reopening of the Tyra field, started in March 2024, 
will  make  Denmark  a  net  exporter  of  gas  again 
(annual production should reach 2.8 bcm a year by 
2O26, according to TotalEnergies (84).  

to 

to 

gas 

gas 

thanks 

security, 

replace 

natural 

Furthermore,  Denmark  is  making  significant 
by 
efforts 
electrification  and  gas  of  biogenic  origin  by 
2030  and  has  a  political  ambition  to  phase 
out  gas  for  households  heating  by  2035.  In 
2023,  biomethane  already  accounts  for  nearly 
30%  of  domestic  gas  demand.  Also,  Denmark's 
gas  infrastructure  plays  a  crucial  role  in  regional 
the 
natural 
interconnections  with  the  Dutch,  German,  Polish 
and  Swedish  gas  systems.  Denmark  has  a  gas 
storage  facility  at  Lille  Torup  and  another  one  at 
Stenlille  managed  by  Gas  Storage  Denmark.  It 
operates  with  a  combined  capacity  of  0.85  bcm, 
corresponding  to  approximately  36%  of  Danish 
consumption (2.37 bcm). Denmark fulfilled its gas 
storage obligations last winter, reaching 96.4% by 
1  November  2023,  and  ended  the  winter  season 
with  a  storage  filled  at  58.67%  by  1  April  2024. 
Finally,  Denmark  managed  to  reduce  its  gas 
demand  between  August  2022  and  December 
2023  by  42%  in  comparison  with  the  average  of 
the previous five years, the highest reduction rate 
among EU Member States.  

As  for  security  of  electricity  supply,  there 
were no adequacy issues recorded during the 
first  half  of  2023,  according  to  ENTSO-E 
analysis,  nor  are  any  adequacy 
issues 
expected  for  winter  2023/24.  European 
Resource  Adequacy  Assessment  (ERAA)  2023 (85) 
shows  that  in  the  longer  term  (i. e.  target  year 
2030  and  2033),  significant  numbers  of  thermal 
generation plants in Europe are at risk of economic 
decommissioning. 
significant 
potential  new  investment  (mostly  natural  gas 
power  plants)  has  been  triggered  by  the  high 
market prices that occur at some times of the day.  

Simultaneously 

In 2033 scenarios, significant adequacy risks 
can be observed in many European countries 
and Denmark is one of them. The electrical grid 
in Denmark is characterised by a very high level of 
security  of  supply,  with  an  electricity  consumer in 
Denmark  experiencing  an  average  of  only  20 
minutes of interruption annually.  

Denmark  has  furthermore  postponed  the 
closure  of  three  oil  and  coal-fired  power 
plants until summer 2024, to ensure capacity 

(84)  https://tyra2.dk/en/opstart-af-tyra-feltet-forsinket-til-

(85)  ENTSO-E  (2023).  European  Resource  Adequacy  Assessment 

vintersaesonen-2023-24/ 

(ERAA) 2023. 

40 

050100150200250300350Index ( 2018 S2 = 100)JPUKUSDKEU 
  
 
 
in  both  east and  west Denmark  in  the  event 
of low wind production and high consumption 
in  the  winters  of  2023  and  2024.  However, 
Denmark is particularly reliant on biomass imports, 
given its own low production levels.  

in 

the  highest 

Denmark  has 
share  of 
renewables  in  its  energy  mix,  as  well as  the 
highest  share  of  electricity  generated  from 
renewable  sources.  Further  uptake 
the 
deployment  of 
renewable  energy  has  been 
recorded in 2023 with 0.68 GW of newly installed 
capacity (86),  and  a  share  of  renewables 
in 
electricity  generation  standing  at  87.6% (87).  The 
increase in installed capacity was mainly driven by 
the  uptake  in  solar  photovoltaics  which  in  2023 
accounted  for  3.5 GW (0.46  GW  annual  increase), 
and  wind,  standing  at  7.3  GW  (0.2  GW  annual 
increase).  This  included  both  new  offshore  (168 
MW) and onshore (54 MW) capacity.  

Graph A7.3: Denmark's installed renewable 
capacity (left) and electricity generation mix 
(right) 

for 

regulatory 

framework 

Bornholm  (3  GW)  were  agreed  –  all  to  be 
commissioned  by  2030.  Denmark  also  intends  to 
introduce  a 
the 
increased  uptake  of  flexibility  solutions,  to  ensure 
flexibility  for  both  power  and  grid  adequacy.  The 
updated  draft  national  energy  and  climate  plan 
(NECP)  clarifies  the  effort  made  by  Denmark  on 
giving  clear  national  targets  for  offshore  wind. 
Alongside  domestic action, Denmark is pursuing a 
regional 
multilateral  approach,  stepping  up 
cooperation  in  the  North  and  Baltic  Seas  and 
paving  the  way  for  further  offshore  wind  power 
expansion.  Among  other  benefits,  this  is  expected 
to  contribute  to  large-scale  onshore  and  offshore 
production of renewable hydrogen. 

is 

to  simplify 
taking  steps 
Denmark 
renewable energy permitting procedures. The 
National  Energy  Crisis  Taskforce  (NEKST),  set  up 
for  2023  and  2024,  is  currently  working  on 
developing  solutions  to  speed  up  administrative 
procedures  for  the  expansion  of  district  heating, 
the  electrical  grid  and 
the  deployment  of 
renewable  energy.  The  work  of  NEKST  is  partially 
funded  by  the  EU  through  the  Recovery  and 
Resilience  Facility  (RRF).  However,  to  improve  the 
predictability  of  planned 
renewable  energy 
deployments, certain instruments in the legislative 
toolbox  (e.g.  the  emergency  regulation  related  to 
permit-granting  for  renewable  energy  projects) 
could  be 
the 
deployment of renewable energy. 

to  accelerate 

implemented, 

(1) "Other" includes solid biofuels, renewable municipal waste, 
liquid biofuels and biogas. 
Source: Commission estimate based on IRENA, Ember 

in  total  solar  and 

The  Danish  Climate  Agreement  on  Green 
Power  and  Heat  aims  to  enable  a  four-fold 
increase 
land-based 
electricity  production  by  2030.  Furthermore, 
with 
the  Additional  Agreement  on  Tender 
Frameworks  for  6  GW  Offshore  Wind  and  Energy 
Island  Bornholm  of  May  2023,  the  tenders  of  6 
GW  offshore  wind,  as  well  as  Energy  Island 

(86)  Commission estimate derived from the data provided  in the 
IRENA’s Renewable Capacity Statistics 2024 report. The total 
installed  renewable  capacity  of  13,024  MW  for  the  year 
2023,  as  indicated  in  the  report,  includes  the  "Vesterhav 
Nord" offshore wind farm (176 MW), which came online with 
some delay in February 2024 while being initially planned for 
December 2023. 

(87)  Ember, Yearly electricity data 

Denmark  has  a  relatively  high  share  of 
renewables in heating and cooling (50.11% in 
2022 (88).  According  to  its  draft  NECP,  this  is 
expected  to  increase  to  77%  in  2030.  Almost 
90 000  heat  pumps  were  sold  in  2022,  an 
increase  of  20%  compared  to  2021,  reaching  a 
total  stock  of  around  620 000  installed  heat 
pumps in the residential sector. (89)  

Denmark  is  one  of  the  EU  countries  leading 
the  drive  to  achieve  climate  neutrality  by 
2045  and  reduce  70%  of  greenhouse  gases 
by  2030.  To  meet  these  objectives,  Denmark 
plans  to  become  a  hub  for  carbon  capture  and 
storage, and as of early 2023 it had awarded the 
first  exploration  permits  for  projects  in  the  North 
Sea. 

(88)  Eurostat 

(89)  EHPA, 2023  

41 

 
 
 
 
Denmark  increased  its  cross-border  capacity 
in  2023,  while  additional  investment  needs 
to  be  made  on  transmission,  to  enable 
greater  uptake  of  renewable  electricity. 
Denmark  is  interconnected  with  Germany,  the 
Netherlands,  Sweden,  Norway  and 
(as  of 
December  2023)  the  UK,  following  the  entry  into 
operation  of  the  interconnector  Viking  Link,  a 
Project of Common Interest co-financed by the EU 
through the Connecting Europe Facility. Denmark is 
further  developing  Projects  of  Common  Interest, 
Island  hybrid 
including  the  Bornholm  Energy 
the  hydrogen 
offshore 
interconnector  HyperLink  III  with  Germany,  the 
Triton  Link  offshore  hybrid  interconnector  with 
Belgium,  the  North  Sea  Wind  Power  Hub  for 
interconnectors with the Netherlands and Germany 
as  well  as  a  Danish  Hydrogen  Storage.  In  2023, 
Energinet  announced  an  investment  plan  of  DKK 
41  bn  (EUR  5.5  bn)  for  2023-26,  with  100-200 
foreseen  grid  expansions  to  adapt  the  network  to 
the large uptake of new solar PV and onshore and 
offshore wind. 

interconnector  and 

Denmark  has  shown  progress  on  energy 
efficiency. In 2022, Denmark exhibited promising 
trends with a primary energy consumption of 16.0 
Mtoe,  marking  a  2.2%  reduction  compared  to 
2021 and a noteworthy 9.8% decrease from 2012 
levels. Similarly, final energy consumption stood at 
13.3  Mtoe,  reflecting  a  3.8%  decrease  from  the 
previous  year  and  a  6.6%  decline  since  2012. 
Examining  sectoral  performance,  the  residential 
sector  had  a  significant  12.7%  reduction  in  final 
energy  consumption.  Conversely,  the  transport 
sector  witnessed  a  6.1%  increase  in  final  energy 
consumption during the same period. The observed 
decrease  in  energy  consumption  may  partly  be 
attributed to transient factors such as the spike in 
energy prices in 2022. The Danish national energy 
saving campaign, launched in summer 2022, may 
also have contributed to this positive trajectory.  

However,  there  is  scope  for  Denmark  to 
improve the  clarity and  completeness  of the 
strategy  for  energy  efficiency  in  the  longer 
term,  particularly  in  light  of  the  revised  Energy 
Efficiency  Directive  in  force  since  October  2023. 
Such  a  strategy  can  support  the  achievement  of 
national  contributions  towards  the  EU’s  new 
energy efficiency targets and can provide a stable 
regulatory 
incentivises  and 
facilitates investment in energy efficiency. 

framework 

that 

In relation to buildings, Denmark should keep 
up the positive contribution of the residential 
sector  to  its  2030  reduction  target  for 
energy  consumption  by  buildings. 
Indeed, 
residential  final  energy  consumption  declined  by 
around 5.22% between 2018 and 2022.  

In  the  REPowerEU  Chapter  of  its  recovery 
and  resilience  plan,  Denmark  described  its 
plans  for  reforms  and  investment  to  reduce 
fossil  fuel  dependence.  The  key  measures 
planned  are  increasing  the  share  of  renewables, 
increasing 
simplifying  permit-granting 
energy 
promoting 
efficiency 
decarbonised  heating  and  addressing  energy 
poverty  by  installing  more  efficient  and  cost-
effective heating solutions.  

rules, 
buildings, 

in 

Most  of 
the  public  support  schemes 
addressing  energy  efficiency  are  grant-
based,  whereas  high  energy  and  CO2 
taxation  also  encourages  consumers  carry 
out  energy  efficiency  measures.  In  Denmark, 
there  is  a  well-functioning  financial  market  for 
energy  efficiency  measures,  such  as  purchasing 
electric  cars,  energy-efficient  renovations,  and 
more.  Most  financial  institutions,  including  all  the 
major  ones,  offer  green  loans  at  a  particularly 
attractive interest rate. Green loans are considered 
a  competitive  parameter  for  financial  institutions. 
Danish  pension  funds  and  others  also  participate 
continuously in projects involving energy efficiency 
by  pooling  projects  in  collaboration  with  other 
actors 
schemes. 
Municipalities,  regions,  and  the  utility  sector  can 
take  out  loans  on  highly  attractive  terms  through 
Kommunekredit. 

through  ESCO  and  OPP 

Regarding  market  surveillance  activities, 
Denmark  is  carrying  out  a  low  number  of 
activities  on  products  covered  by  ecodesign 
and  energy  labelling.  This  creates  concerns 
about compliance levels.  

Denmark  has  an  attractive  and  well 
performing innovation ecosystem. The country 
is  an  innovation  leader  and  became  the  new  top 
innovator  in  2023,  with  the  best  performance  in 
the EU, overtaking Sweden after it had spent a few 
years in the leading position.  

Denmark  is  a  global  leader  in  producing 
wind-based electricity, and aims to remain at 
the  forefront  of  the  development  of  clean 

42 

 
system 

installed 

technologies.  Generally,  it  has  a  traditionally 
low-carbon 
strong  manufacturing  base  of 
technologies  and  components,  especially  in  the 
wind  energy  sector,  where  it  continues  to  be  the 
global  leader  in  integrating  wind  power  into  the 
electricity  grid.  Denmark  is  home  to  one  of  the 
world’s leading HVDC cable manufacturers and the 
country  has  the  highest  number  of  wave  energy 
device  developers  in  the  EU.  Despite  not  having 
domestic  producers  of  large  solar  collectors,  the 
country  is  the  leading  player  in  the  large-scale 
solar district heating market in the EU, in terms of 
size. 
capacity  and 
total 
Favourable  policy  and market  conditions  have  led 
to  booming  sales  of  heat  pumps,  a  trend  that  is 
likely  to  continue  with  the  implementation  of  the 
REPowerEU  plan.  Denmark  is  home  to  promising 
initiatives  in  the  green  hydrogen  supply  chain, 
including  a  400  MW/y  alkaline  electrolyser 
manufacturing  plant  in  Kolding  and  a  large-scale 
refuelling 
manufacturing  unit 
stations,  operated 
leading 
Norwegian player. Supported by an EUR 94 million 
grant  from  the  EU  Innovation  Fund,  a  Danish-
operated  500  MW/y  Solid  Oxide  Electrolyzer  Cell 
(SOEC) manufacturing facility is expected to come 
online in Herning in 2024. The reported expansion 
plans  of  both  companies  could  raise  Denmark's 
electrolyser  manufacturing  capacity  to  over  1.5 
GW per year by 2030. 

for  hydrogen 
in  Herning  by  a 

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A7.1:  Key energy indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

44 

20192020202120222019202020212022Import Dependency [%] 38.9%44.9%32.3%42.9%60.5%57.5%55.5%62.5%of Solid fossil fuels 145.3%67.4%10.9%105.5%43.3%35.8%37.3%45.8%of Oil and petroleum products 44.8%55.3%30.6%52.8%96.7%96.8%91.7%97.7%of Natural Gas -7.2%37.4%27.8%28.0%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%39.7%41.3%41.1%21.0%of Crude Oil6.4%12.2%16.4%1.6%28.8%26.7%26.4%19.5%of Hard Coal87.9%96.6%89.5%14.0%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)3.3                   3.3                   3.2                   3.1                 2.9                 3.1                 2.4                 Gas Consumption year-on-year change [%]2.0%-1.4%-2.2%-2.8%-8.3%8.4%-23.0%Gas Imports - by type (in bcm)0.7                   0.5                   0.4                   1.1                 2.7                 2.5                 2.7                 Gas imports - pipeline0.7                   0.5                   0.4                   1.1                 2.7                 2.5                 2.7                 Gas imports - LNG0.00.00.00.00.00.00.0                 Gas Imports - by main source supplier (in bcm) (1)Germany0.2                   0.1                   0.1                   1.0                 2.7                 2.5                 1.9                 Norway0.5                   0.4                   0.3                   0.1                 -                 -                 0.8                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals00000LNG Storage capacity (m3 LNG)00000Underground StorageNumber of storage facilities2                      2                      2                      2                    2                 Technical Capacity (bcm)0.9                   1.0                   0.9                   0.8                 0.9              20162017201820192020202120222023Gross Electricity Production (GWh) (2)30,538            31,023            30,370            29,517          28,729          33,051          35,129          -              Combustible Fuels16,994         15,473         15,500         12,387       11,201       15,671       13,884       -              Nuclear0000000-              Hydro19                 18                 15                 17               17               16               15               -              Wind12,782         14,780         13,902         16,150       16,330       16,054       19,028       -              Solar744               751               953               963             1,181         1,309         2,203         Geothermal0000000-              Other Sources-0 00-0 0-0 -0 -              Gross Electricity Production [%]Combustible Fuels55.6%49.9%51.0%42.0%39.0%47.4%39.5%-              Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Hydro0.1%0.1%0.0%0.1%0.1%0.0%0.0%-              Wind41.9%47.6%45.8%54.7%56.8%48.6%54.2%-              Solar2.4%2.4%3.1%3.3%4.1%4.0%6.3%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Net Imports of Electricity (GWh)5,057               4,563               5,224               5,811             6,883             4,869             1,363             -              As a % of electricity available for final consumption 15.8%14.1%16.4%18.1%21.9%14.4%4.2%-              Electricity Interconnection [%]-                50.6%49.7%49.0%51.0%45.8%42.7%41.3%Share of renewable energy consumption - by sector [%]Electricity53.7%59.9%62.4%65.3%65.3%72.9%77.2%-              Heating/cooling41.1%44.1%45.0%47.3%51.1%49.2%50.1%-              Transport6.7%6.9%6.9%7.1%9.7%10.5%10.2%-              Overall31.7%34.4%35.2%37.0%31.7%41.0%41.6%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)39.54           74.93           63.08           178.51          245.46          as a % of total VC investment (3) in Denmark start-ups and scale-ups4.7%6.9%2.9%10.2%15.1%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)89.8              108.4           169.2           -              -              Public R&I (% GDP)0.03%0.03%0.05%-              -              Private R&I (EUR mln)1,126.4           968.4               -                   -              -              Private R&I (% GDP)0.36%0.31%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYDIVERSIFICATION OF GAS SUPPLIESDenmarkEUENERGY DEPENDNCE 
 
 
  
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Denmark’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
situations.  Denmark’s  green 
vulnerable 
economy  is  expanding.  Between  2015  and 
2021,  total  jobs  in  the  environmental  goods  and 
services sector grew by 16.9% (to around 86 000) 
(EU:  18.2%),  reaching  3%  of  total  employment 
(EU:  2.7%).    The  number  of  jobs  in  the  green 
economy  is  rising  as  Denmark  aims  to  reach  a 
70% reduction in greenhouse gas (GHG) emissions 
by  2030.  Between  2015  and  2022,  the  GHG 
emission  intensity  of  Denmark’s  workforce  (see 
Graph A8.1 and Table A8.1) fell from 29.0 to 24.6 
tonnes per worker. Although this is still well above 
the  EU  average  (14.3  tonnes  per  worker  in 
2022)  (90), it indicates a positive trend in the green 
transition.  To  be 
the  Council 
Recommendation  of  2022 on  ensuring  a  fair 
transition  towards  climate  neutrality (91),  and 
ensure  the  successful  implementation  of  the 
REPowerEU plan, the participation of the country’s 
workforce in upskilling and reskilling is key and has 
been picking up again recently. Under the country’s 
recovery  and  resilience  plan  (RRP),  a  green  tax 
reform  –  one  of  the  plan’s  landmark  initiatives  – 
the 
will  accelerate 
economy.  The  Cohesion  Policy  Funds  contribute 
further  to  creating  new  jobs,  in  particular  the 
European  Social  Fund  Plus 
(ESF+)  and  Just 
Transition Fund (JTF), which focus on skills for the 
green transition and circular economy. 

the  decarbonisation  of 

line  with 

in 

In  2023,  employment 

Employment  in  Denmark’s  sectors  that  are 
most  affected  by  the  green  transition 
remains  stable. 
in 
industries  (92) 
Denmark’s 
comprised 1.4% of total employment (3.5% in the 
EU).  Employment  in  mining  and  quarrying  has 
fallen  by  17%  since  2015  (to  around  4 400 
workers  in  both  2023).  The  job  vacancy  rate  in 

energy-intensive 

construction (see Graph A8.2), a key sector for the 
green  transition,  is  lower  than  the  EU  average 
(2.4%  vs  3.6%  in  EU  in  2023).  However,  the 
perception of small and medium-sized enterprises 
(SMEs)  in  the  sector  is  somehow  different,  where 
58%  reported  that  skills  shortages  are  holding 
in  general  business  activities  (93). 
them  back 
According  to  the  European  Labour  Authority 
(ELA)  (94), labour shortages were reported in 2023 
for a number of occupations that required specific 
skills  or  knowledge  for  the  green  transition  (95), 
including  civil  engineers,  electrical  engineering 
technicians and building and related electricians. In 
this  context,  the  Danish  Construction  Federation 
estimates  that  6 000  jobs  in  the  construction 
sector  remain  unfilled,  although  many  companies 
the  green 
have  changed  strategy 
transition (96). 

towards 

Graph A8.1: Fair transition challenges in Denmark 

Source:  Eurostat,  EU  Labour  Force  Survey,  EMPL-JRC  GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

Upskilling  and  reskilling  in  energy-intensive 
industries  is  comparatively  high.  In  energy-
intensive industries, after a decrease over previous 
years,  workers’  participation  in  education  and 
training  again  reached  25.6%  in  2023  (vs  EU: 
10.9%).  In  Denmark,  38%  of  SMEs  think  that  the 
skills  required  for  greening  business  activities  are 
becoming  more  important  (EU:  42%).  If  Denmark 

(90)  Workforce-related  calculations  are  based  on  the  EU  Labour 
Force Survey. Note, in the 2023 country report for Denmark, 
such  indicators  were  calculated  based  on  employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(91)  The Council Recommendation of 16 June 2022 on ensuring a 
fair  transition  towards  climate  neutrality  (2022/C  243/04) 
covers  employment,  skills,  tax-benefit  and  social  protection 
systems, essential services and housing. 

(93)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(94)  Based on the European Labour Authority 2024 EURES Report 
on labour shortages  and  surpluses  2023, i.e. data  submitted 
by the EURES National Coordination Offices. 

(95)  Skills  and  knowledge  requirements  are  based  on  the 
(ESCO) 

European  Skills  Competences  and  Occupations 
taxonomy on skills for the green transition. 

(92)  Mining  and  quarrying  (NACE  B),  chemicals  (C20),  minerals 

(96)  Virksomheder  i  fuld  gang  med  grøn  omstilling  mangler 

(C23), metals (C24) and automotive (C29). 

10.000 medarbejdere - DI (danskindustri.dk) 

45 

0.00.51.01.52.02.5Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalityDK Latest vs EU LatestEU LatestDK 2015 vs EU Latest 
 
 
 
 
  
 
 
Table A8.1:  Key indicators for a fair transition in Denmark 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

and 

level  of 
education/training 

matches  its  projected  contribution  to  the  EU’s 
2030  renewable  energy  target,  between  200  and 
800  additional  skilled  workers  will  be  needed  for 
the  deployment  of  wind  and  solar  energy,  which 
may  require  an  investment  in  skills  of  EUR  9.7-
12.1  million (97).  The  ESF+,  together  with  national 
financing,  supports  measures  targeting  upskilling 
and  reskilling  and  lifelong  learning.  Raising  the 
the  workforce 
formal  education 
(vocational 
higher 
targeting  unemployed  and 
education)  and 
employed  people  will  help  increase  the  supply  of 
skilled  workers.  The  2022  Green  Tax  reform 
allocated  DKK  100  million  yearly  in  2025  and 
2026  for  training  and  upskilling  to  support  the 
green  transition.  Those  measures  are  financed 
through  the  Recovery  and  Resilience  Facility  and 
the  national  RRP.  Around  15 000  people  are 
expected to acquire further qualifications relevant 
to  the  green  transition  through  ESF+  support. 
Furthermore,  the  national  JTF  supports  training 
and  the  upskilling  and  reskilling  of  workers, 
the 
focusing  on 
transitions. 

regions  most  affected  by 

In  recent  years,  before  the  spike  in  energy 
prices,  energy  poverty  indicators  improved 
slightly.  The  share  of  the  population  unable  to 
keep  their  homes  adequately  warm  decreased 
from  3.6%  in  2015  to  2.8%  in  2021,  but  this 
almost doubled to 5.1% in 2022 (vs EU: 9.3%) (98). 
This increase was due to the energy crisis caused 
by  COVID-19  supply  constraints  and  Russia’s  war 
despite 
against 
of 
implemented emergency measures. In 2022, 9.4% 
of  the  population  at  risk  of  poverty  (AROP)  and 
6.5%  of  lower  middle-income  households  (in 
deciles  4-5)  were  unable  to  keep  their  homes 
adequately  warm.  On  the  other  hand,  in  January 

aggression 

Ukraine, 

(97)  EMPL-JRC AMEDI+ project. 

(98)  The  energy  poverty  indicator  focuses  on  the  outcome  of 
energy  poverty  –  further  indicators  are  available  at  the 
Energy Poverty Advisory Hub. 

46 

2023,  22.5%  of  the  population  at  risk  of  poverty 
spent  a  considerable  share  of  their  budget  (more 
than  6%)  on  private 
(EU: 
37.1%) (99).  In  the  draft  updated  National  Energy 
and Climate Plan submitted in 2023 Denmark did 
not  identify  the  number  of  households  in  energy 
poverty  nor  implemented  measures  which  would 
help tackle this issue. 

transport 

fuels 

Despite  being  below  the  EU  average,  in 
Denmark  environmental  inequalities  remain 
an issue. In 2021, the consumption footprint  for 
20%  of  the  population  with  the  highest  income 
was 1.2 times higher than of the poorest 20% (100) 
(EU:  1.8).  For  both  groups,  the  consumption 
footprint  is  highest  for  housing  and  food.  The 
average levels of air pollution in 2021 stood below 
the  EU  average  (8.0  vs  EU:  11.4  µg/m3  PM2.5), 
with all regions below critical levels (101). However, 
there  have  been  an  estimated  1 200  premature 
deaths  annually  due 
to  air 
pollution (102). 

to  exposure 

(99)  Affordability of private transport fuels is one key dimension 
of transport poverty. The indicator has been developed in the 
the  EMPL-JRC  GD-AMEDI/AMEDI+  projects. 
context  of 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(100) Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology  explained  in  Joint  Research  Centre,  2024. 
Carbon  and  environmental  footprint  inequality  of  household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

(101) Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

(102) EEA - Air Quality Health Risk Assessment 

IndicatorDescriptionDK 2015DKEUGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes29.024.6 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29)1.4%1.4% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries23.8%25.6% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm3.6%5.1% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport16.5%22.5% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.21.2 (2021)2.7 (2021) 
 
 
 
 
  
 
Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

Denmark  is  taking  measures  to  increase 
quality  employment  and  skills,  but  more 
efforts  are  needed  to  address  the  green 
transition  challenges.  Upskilling  and  reskilling 
policies  as  well  as  the  expansion  of  the  curricula 
for  vocational  education  and  training  in  this  field 
are  positive  developments.  The  RRP 
includes 
several investments supporting its green targets in 
many  areas 
(green  taxation  policies,  energy 
efficiency  for  SMEs).  However,  policies  to  develop 
an  adequately  skilled  labour  force  for  green  jobs 
need to be further developed (103). 

(103) Based  on 

the  monitoring 

the  Council 
Recommendation  on  ensuring  a  fair  transition  towards 
climate neutrality, which took place in October 2023. 

review  of 

47 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%BCDEFHEU 2023DK 2023DK 2015 
       
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

circularity, 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
Denmark’s 
essential 
competitiveness (104). In this regard, priorities for 
Denmark  are 
circularity  of 
construction  and  industry,  including  the  agri-food 
sector,  as  well  as  reducing  the  country’s  reliance 
on incineration to produce district heating. 

improving 

boost 

the 

to 

Improving  the  circularity  of  the  Danish 
economy would boost the country’s industrial 
efficiency.  Denmark  has  a  high  material 
footprint,  it  stood  at  23-24  tonnes/capita,  above 
the  EU  average  of  14-15  tonnes/capita  in  2015-
2021.  The  country  had  the  second  highest 
material  footprint,  30  tonnes/capita,  in  the  EU, 
exceeding the EU average of 14.9 tonnes/capita, in 
2022.  The  three  biggest  sectors,  representing 
more than half of Denmark’s material and carbon 
footprints,  are  construction,  manufacturing,  and 
agri-food.  Only  4.7%  of  jobs  in  the  agriculture, 
forestry  and  fishing  industries  play  a  role  in  the 
transition to a circular economy, and all are doing 
so  indirectly (105).  The  national  action  plan  for 
circular economy for prevention and management 
of  waste  for  2020-2032  includes  129  initiatives 
focusing  on  three  areas:  biomass,  construction, 
and plastics (106).  

(ETS) 

system 

trading 

In  2023,  the  sectors  covered  by  the  EU 
emissions 
in 
Denmark (107)  emitted  23%  less  greenhouse 
gases (GHG) than in 2019. In 2023, about 37% 
of the GHG emitted by Denmark’s ETS installations 
came  from  power  generation.  Of  the  total 
emissions  from  all  industry  sectors,  29%  came 
from  cement  and  lime,  16%  from  refineries,  and 
55% from other industries (108). Between 2019 and 

(104) See  also  Annexes  6,  7  and  12.  This  annex  is  based  on 

Eurostat data published before May 2024. 

(105)The Circularity Gap Report – Denmark. 

(106) Danish  Ministry  of  Environment,  Circular  Economy.  79 
initiatives have been completed, 20 are on schedule, 29 are 
delayed and 1 is cancelled. 

(107) This  analysis  excludes  air  travel.  For  more  details  and  the 
data  sources,  see  Weitzel,  M;  van  der  Vorst,  C.  (2024), 
Uneven  progress  in  reducing  emissions  in  the  EU  ETS,  JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

(108) This  relates  to  extraction  and  treatment  and  disposal  of 

hazardous waste, among other things. 

48 

2023,  GHG  emissions  from  the  power  sector 
declined by 31%, compared with a 18% decline for 
the  industry  sectors.  Since  2013,  GHG  emissions 
have declined by 77% in the power sector and by 
15%  in  the  industry  sectors.  Nearly  all  emission 
decreases  have  taken  place  since  2018,  while  in 
the  5 years  before  2018,  GHG  emissions  in  the 
industry sectors grew by about 10%. 

Graph A9.1: Treatment of municipal waste 

Source: Eurostat 

Graph A9.2: ETS emissions by sector since 2013 

Source: Eurostat 

it  stood  below 

Denmark  has  room  to  improve  the  use  of 
circular  material.  It  has  barely  changed  during 
recent years (7.6% in 2019, 7.4% in 2022) and in 
2022, 
the  EU  average  of 
11.5%. Although  resource  productivity  is  steadily 
increasing,  Denmark  has  to  improve  the  use  of 
material  resources  to: 
(i)  minimise  negative 
impacts  on  the  environment  (including  nutrient 
reduce 
pollution 
dependence  on  volatile  raw  material  markets, 
including  for  imported  chemical  fertilisers  (see 
Annex 6).  In  2022,  resource  productivity  stood  at 

from  agriculture);  and 

(ii) 

814844814769787010020030040050060070080090020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-2700.20.40.60.810510152020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherDenmark (both axes) 
 
 
 
            
 
  
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

In  2022, 

the  country 

1.8 PPS/kg, and remained below the EU average of 
2.5 PPS/kg. 
relied  on 
importing  36.6%  of  materials  to  meet  its  needs, 
versus  an  EU  average  of  22.4%.  Still,  Denmark  is 
among  the  leaders  in  terms  of  eco-  innovation:  it 
ranked  fourth  with  a  score  of  167.5  on  the  Eco-
Innovation Scoreboard in 2022. As of March 2024, 
116 EU Ecolabel licences and 5 625 products with 
the EU Ecolabel had been awarded (109). 

Denmark’s  municipal  waste  per  capita  and 
incineration  rates  are  among  the  highest  in 
the  EU.  Municipal  waste  production  amounted  to 
769  kg/capita,  above 
the  EU  average  of 
532 kg/capita, 
in  2021,  and  787 kg/capita 
(provisional  data),  above  the  EU  average  of 
513 kg/capita,  in  2022.  Incineration  decreased 
from  435 kg/capita  in  2020  to  318  kg/capita  in 
2021  to  306 kg/capita  (provisional  data)  in  2022. 
it  remained  above  the  EU  average  of 
Yet, 
133 kg/capita  in  2022.  Municipal  waste  recycling 
rate  increased  from  45.0%  in  2020  to  57.6%  in 
2021, before dropping to 52.3% (provisional data) 
in  2022  (still  above  the  EU  average  of  48.6%). 
According  to  the  2023  early  warning  assessment 
report, Denmark is on track to meet the municipal 
waste recycling target for 2025 but at risk to meet 
plastic 
the 
packaging (110).   Denmark’s e-waste  collection rate 
attained  54.6%  remaining  below  the  target  of 
85%  in  2021.  Between  2012  and  2020,  80%  of 
the collected e-waste was recycled, but it dropped 
to 79.9% in 2021, against an 81.1% EU average. 

recycling 

target 

2025 

for 

Construction  waste  management  could  be 
improved.  More  than  40%  of  the  country’s  total 
waste is construction and demolition waste, and it 
mostly  has  lower-value  use  such  as  backfilling  – 
than  1%  of  building  materials  and 
less 
reused (111). 
components  are 
the 
proportion  of  mineral  fraction  used  for  backfilling 
was  71%  in  Denmark,  above  the  EU  average  of 
10%. For example, Denmark’s annual potential for 
reuse  of  brick  waste  is  estimated  at  47  million 
bricks,  versus  an  estimated  3  million  bricks 
actually  reused (112).   The  certification  system  for 
sustainable  buildings  (DGNB),  used  since  2011 
considers the whole life cycle of the building. 

In  2020, 

Achieving  resource  efficiency  in  the  Danish 
built environment remains challenging. Due to 
the  increased  floor  space,  space  heating  and  hot 
water  account 
for  about  25%  of  energy 
consumption. In 2020, Denmark’s residential floor 
area  per  capita  was  the  EU’s  fifth  largest,  with 
69 m2/capita 
of 
average 
54 m2/capita.  Furthermore,  Denmark  has 
the 
third-largest  non-residential  floor  area  per  capita: 
29 m2/capita 
of 
18 m2/capita.  Buildings  and  built-up  areas  cover 
7.6%,  roads,  railroads  and  runways  5.6%  and 
other artificial surfaces 1.0% of the land (113). 

average 

versus 

versus 

EU 

EU 

an 

an 

(109) European Commission, Ecolabel facts and figures. 

(110) COM(2023) 304 final. European Environmental Agency, Early 
warning  assessment  related  to  the  2025  targets  for 
municipal waste and packaging waste.  

(111) The Circularity Gap Report - Denmark, August 2023. 

(112) European Commission, JRC technical report, 2024. 

(113) Land use accounts - Statistics Denmark, January 2023. 

49 

201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)1.61.61.71.81.8-2.52022Circular material use rate (%)8.07.67.68.07.4-11.52022Eco-innovation index (2013=100)156.5157.4164.1160.9167.5-121.52022Recycling of plastic packaging (%)31.337.422.923.2--40.72021Cost of air emissions from industry (EUR bn)2.32.01.92.1--352.72021Built environmentRecovery rate from construction and demolition waste (%)97.0-97.096.0--89.02020Soil sealing index (base year = 2006)103.0-----103.42018Non-residential floor area (m2 per capita)28.128.629.0---18.02020Waste backfilled (%)66.3-71.2-56.3-9.92020 
 
 
 
            
 
ANNEX 10: DIGITAL TRANSFORMATION 

infrastructure/connectivity 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes Denmark’s performance on digital skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP). Denmark allocates 27% of its total Recovery 
and  Resilience  Facility  budget  to  digital  (EUR  382 
million) (114).  Under  Cohesion  Policy,  an  additional 
EUR  67  million  (15%  of  the  country’s  total 
Cohesion  Policy  funding) 
is  allocated  to  the 
country’s digital transformation (115).  

and 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  Denmark's  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The first Report on the State of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (116).  Among  others,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (117). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependencies,  cybersecurity 
and climate change. 

increases 

Digital 

(114) The  share  of  financial  allocations  that  contribute  to  digital 
objectives  has  been  calculated  using  Annex  VII  to  the 
Recovery and Resilience Facility Regulation. 

(115) This amount includes all investment specifically aimed at or 
substantially  contributing  to  digital  transformation  in  the 
2021-2027 cohesion policy programming period. The source 
funds  are  the  European  Regional  Development  Fund,  the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(116) European  Commission  (2023):  Report  on  the  state  of  the 
Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(117) See  for  example  OECD  (2019):  OECD  Economic  Outlook, 
Digitalisation and productivity: A story of complementarities, 
OECD  Economic  Outlook,  Volume  2019  Issue  1  |  OECD 
iLibrary  (oecd-ilibrary.org)  and  OECD  (2019):  Going  Digital: 
Shaping 
Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

Improving 

Policies, 

Lives 

– 

The shortage of ICT specialists is a persistent 
challenge  for  Denmark  in  relation  to  digital 
skills.  The  country  has  a  much  higher  rate  than 
the EU level in basic digital skills (69.6% compared 
to  55.6%)  and  above  basic  digital  skills  (39.4% 
compared  to  27.3%).  While  the  percentage  of  ICT 
specialists (5.9%) is above the EU average (4.8%), 
Danish  enterprises  still  report  difficulties  in  hiring 
ICT specialists (118). 

remains  a 

leader  on  digital 
Denmark 
infrastructure/connectivity, 
ensuring  wide 
coverage  of  fast  broadband  internet.  It  scores 
significantly  above  the  EU  average  in  terms  of 
fixed very high capacity network (VHCN) coverage, 
with  97.2%  of  households  covered  compared  to 
78.8% in the EU, and fibre to the premises (FTTP), 
with  84%  of  households  covered  compared  to 
64%  in  the  EU.  Moreover,  in  2023,  the  country 
reached full 5G coverage. 

Overall,  Danish  companies  embrace  digital 
technologies, with 75.3% of SMEs having at least 
a  basic  level  of  digital  intensity,  which  is  almost 
20 percentage points higher than the EU average. 
66.2%  and  49.5%  of  enterprises  use  cloud 
technologies  and  data  analytics,  compared  to  an 
EU  average  of  38.9%  and  33.2%  respectively. 
Danish  enterprises  remain  the  EU  leader  in  using 
artificial  intelligence,  with  15.2%  of  them  using 
In  2022,  4.8%  of 
the  technology 
ICT  service 
in  Denmark  reported 
enterprises 
outage  due  to  cyberattacks  (e.g.  ransomware 
attacks,  denial  of  service attacks).  Over  the  same 
year, 37.4% of enterprises developed or reviewed 
their  ICT  security  policy  within  the  previous  12 
months. 

in  2023. 

Denmark  is  one  of  the  leading  countries  in 
the EU in terms of ensuring wide availability 
of  digital  public  services.  The  country  scores 
above the EU average for digital public services for 
both  citizens  and  businesses.  Denmark  has  two 
electronic  identification  (eID)  schemes  notified 
under the eIDAS Regulation and scores well above 
the  EU  average  regarding  access  to  electronic 
health records. 

(118) Eurostat:  Eurostat  –  European  Union  Survey  on  ICT  Usage 

and e-Commerce in Enterprises. 

50 

 
 
 
 
 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence. 
Source: Digital Economy and Society Index 

51 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills69%69%70%56%80%% individuals20212021202320232030ICT specialists (1)5.6%5.7%5.9%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage95%96%97%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)74%78%84%64%-% households2021202220232023Overall 5G coverage98%98%100%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity79%NA75%58%90%% SMEs2021202320232030Data analyticsNANA50%33%-% enterprises20232023Cloud62%62%66%39%-% enterprises2021202120232023Artificial intelligence24%24%15%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA77%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens83848479100Score (0 to 100)20212022202320232030Digital public services for businesses89898985100Score (0 to 100)20212022202320232030Access to e-health recordsNA969879100Score (0 to 100)2022202320232030Denmark 
 
 
      
 
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  Denmark’s  research  and 
innovation  system,  which 
is  essential  for 
delivering  the  twin  transition  and  ensuring  long-
term competitiveness. 

Denmark’s very strong R&D system places it 
first  among  Europe’s  ‘innovation  leaders’. 
According  to  the  2023  edition  of  the  European 
Innovation Scoreboard, its innovation performance 
increased by 16 percentage points since 2016, at 
a  higher  rate  than  the  EU’s  (8.5pp).  Its  overall 
performance is far above the EU average (137.6% 
of the EU performance) (119). 

Denmark’s 

investment. 

The  strong  R&D  system  is  underpinned  by 
R&D 
significant 
intensity  (R&D  expenditure  as  a  percentage  of 
GDP), at 2.89% in 2022, is significantly above the 
EU  average.  The  R&D  system  delivers  excellent 
scientific,  technological  and  innovation  outputs.  In 
particular,  its  solid  public  science  base  is  a  key 
asset  and  Denmark  continues  to  rank  high  in  the 
EU  in  terms  of  both  public  R&D  intensity  (public 
expenditure on R&D as a percentage of GDP) and 
the  share  of  scientific  publications  that  are  most 
frequently  cited,  an 
indicator  of  scientific 
excellence.  Despite  this  excellent  performance,  a 
new  national 
innovation  strategy  could  help 
address  important  challenges  such  as  the  decline 
in business R&D intensity and the productivity gap 
between large and small companies (see below). 

Denmark’s recovery and resilience plan (RRP) 
enables  it  to  further  mobilise  the  strengths 
of  its  R&D  system  to  accelerate  the  twin 
transitions.  The  Danish  RRP  has  a  strong  R&D 
focus,  with  nearly  19%  of  the  total  spending 
earmarked for R&D projects. In the plan, green R&I 
investments  account  for  56.2%  of  overall  R&I 
investment, while 19.4% of total R&I investment is 
directed  towards  digital-related  R&I  areas.  The 
implementation  of  the  RRP  measures  aimed  at 
mobilising R&I for the twin transition has reached 
key  milestones, 
including  the  setting  up  of 
mission-based  R&D  partnerships  with  a  focus  on 
solutions  for  achieving  Denmark’s  ambitious 

climate  goals.  This  will  enable  Denmark  to 
continue  developing  its  existing  strength  in  green 
the  share  of 
innovation,  as 
environment-related  patents 
total  patent 
applications  –  at  25%  nearly  double  the  EU 
average. 

reflected 

in 

in 

position 

to  Denmark’s 

The decline in business R&D intensity is a key 
as 
challenge 
innovation  leader.  Since  2016,  business  R&D 
intensity  has  been  on  a  decreasing  trend  (from 
1.94%  of  GDP  in  2015  to  1.78%  in  2022).  As 
noted  in  the  Horizon  Policy  Support  Facility  (PSF) 
review of the Danish R&I system (120), strengths in 
science  could  be  leveraged  more  by  attracting 
foreign  companies  to  tap  into  existing  knowledge 
pools  through  R&D  investments  in  Denmark.  This 
is currently happening only to a limited degree and 
could allow Denmark to take full advantage of the 
globalisation of R&D. 

Graph A11.1: Business enterprise expenditure on 
R&D (BERD) as % of GDP 

Source: Eurostat 2023 

and 

small 

companies 

Addressing  the  productivity  gap  between 
large 
requires 
broadening  the  innovation  base.  The  growing 
productivity  gap  between 
large  and  small 
companies  suggests  weaknesses  in  the  diffusion 
of  technological  advances.  The  PSF  review  of  the 
Danish  R&I 
the  high 
concentration  of  R&D  investment  in  a  small 
number  of  large  companies  and  the  need  to 
broaden  the  innovation  base  and  involve  more 
companies in R&D activities to promote innovation 
diffusion (121). The measures in the revised Danish 

pinpointed 

system 

(119) 2023  European  Innovation  Scoreboard  (EIS),  country  profile: 
Denmark  ec_rtd_eis-country-profile-dk.pdf  (europa.eu).  The 
innovation 
EIS  provides  a  comparative  analysis  of 
performance  in  the  EU  countries,  including  the  relative 
strengths  and  weaknesses  of  their  national  innovation 
systems (also compared to the EU average). 

(120) Peer  review  of  Danish  R&I  system,  Horizon  2020  Policy 
Support  Facility,  2019  (p.  55)  PSF  Denmark_Final  report 
(europa.eu) 

(121) Peer  review  of  Danish  R&I  system,  Horizon  2020  Policy 
Support Facility, 2019 (pp. 30-33, p. 54) PSF Denmark_Final 
report (europa.eu) 

52 

11.21.41.61.822.220102015201720182019202020212022EUDK 
 
 
     
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the latest available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical Database), Invest Europe 

supporting 

to  exploit 

smart specialisation strategy (RIS3) (122), under the 
Business  Promotion  Board,  help  address  these 
the 
challenges 
include 
and 
transformation  of  businesses 
the 
potential  of  new  trends  and  technologies  and 
strengthening  their  international  competitiveness 
innovative  and  sustainable  solutions. 
through 
Moreover, 
to  boost  business  R&D 
investment,  the  Danish  RRP  contains  a  temporary 
increase in R&D tax deductibility for all companies. 
While these individual measures are welcome, the 
planned  new  Danish  entrepreneurial  strategy  will 
be important to set up a comprehensive approach 
to 
entrepreneurship, 
overall 
including its innovation dimension. 

strengthening 

in  order 

(122) Danmarks 

Virksomhedsudvikling 
https://erhvervsfremmebestyrelsen.dk 

i 

Erhvervsfremmebestyrelse, 

2024, 
hele  Danmark  2024-2027, 

53 

R&D intensity (GERD as % of GDP)2.923.052.972.762.892.24Public expenditure on R&D as % of GDP0.951.111.131.031.110.73Business enterprise expenditure on R&D (BERD) as % of GDP1.961.941.831.721.781.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 14.714.312.3::9.6Patent Cooperation Treaty patent applications per billion GDP (in PPS)6.36.36.7::3.4Public-private scientific co-publications as % of total publications12.512.513.313.513.37.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0280.0270.029::0.054New graduates in science & engineering per thousand pop. aged 25-3415.817.118.920.1:16.9Total public sector support for BERD as % of GDP0.070.089:::0.204R&D tax incentives: foregone revenues as % of GDP0.0030.020.094::0.104Share of environment-related patents in total patent applications filed under the Patent Cooperation Treaty (%)23.321.724.8::14.7Venture capital (market statistics) as % of GDP0.0450.0280.0940.1470.1390.085Employment share of high growth enterprises measured in employment (%):19.0612.98::12.51EU average (1)Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2022Denmark2010201520202021 
 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

the  2023 

environment 
In 

Denmark  continues  to  demonstrate  a  high 
level  of  competitiveness,  driven  by  a 
favourable  business  environment  and  focus 
on  digitalisation  and  sustainability.  The 
country has maintained a strong position in global 
competitiveness,  driven  by  a  combination  of 
factors such as innovation, education, a favourable 
and  well-functioning 
business 
IMD  World 
infrastructure. 
Competitiveness Ranking (123), Denmark ranks first 
for  the  first  time,  overtaking  Switzerland,  in 
particular  thanks  to  its  good  performance  in 
digitalisation,  but  also  thanks  to  a  clear  focus  on 
sustainability and an agile and innovative business 
sector.  Denmark  is  the  top  innovator  in  the  2023 
European  Innovation  Scoreboard  (see  Annex  11) 
and  ranked  second  in  the  EU  in  the  2022  Digital 
Economy  and  Society  Index  (see  Annex  10).  The 
Danish  industrial  strategy  is  characterised  by  a 
strong  focus  on  supporting  the  green  transition, 
targeting  the  energy  and  transport  sector  in 
particular (124). 

with 

sector, 

2022, but productivity growth is slowing down (see 
Graph  A12.1).  The  manufacturing  industry,  ICT 
services,  financial  services  and  wholesale  and 
retail  trade  have  accounted  for  a  large  share  of 
productivity  growth  in  the  last  two  decades. 
Productivity  growth  was  mainly  driven  by  total 
factor  productivity,  in  particular  by  larger  and 
more  international  firms.  Denmark  has  a  strong 
manufacturing 
productivity 
considerably  above  the  EU  average  and  also 
ahead  of  some  of  the  other  Nordic  countries, 
including  due  to  its  strong  performance  in  the 
pharmaceuticals  industry.  On  the  other  hand, 
productivity  in  services  is  stagnating  (see  Graph 
A12.2).  Overall,  the  country  performs  well  on 
indicators  related  to  innovation  and  diffusion  of 
new technologies (among others R&D expenditure 
and  staff,  patents,  higher  education).  In  addition, 
both  business  churn  and  the  rate  of  high-growth 
firms  are  well  above  the  EU  average,  which  are 
signs  of  a  business  environment  that  promotes 
resource reallocation to more productive activities. 

Graph A12.1: Total factor productivity 

Graph A12.2: Productivity by sector 

Source: AMECO 

Source: AMECO 

The  productivity  level  in  Denmark  is  among 
the  highest  in  the  EU,  but  productivity 
growth is slowing down. The country’s emphasis 
on  R&D,  coupled  with  investments  in  education 
and  technology,  has  contributed  to  sustained 
productivity 
labour 
productivity  level  per  hour  worked  is  among  the 
highest  in  the  EU,  at  141%  of  the  EU  average  in 

growth (125).  Denmark’s 

(123) International Institute  for  Management  Development,  2023, 

World Competitiveness Ranking, imd.org 

(124) OECD, Quantifying industrial strategies, 2023, oecd.org 

Denmark’s  industry  has  proven  resilient,  but 
shortages  of  skilled  workers  increasingly 
dampen 
the  growth  of  firms.  Positive 
employment  figures  combined  with  a  significant 
drop  in  inflation  over  2023  have  underlined  the 
resilience 
The 
the  Danish 
of 
manufacturing  business 
indicator 
recovered  gradually  last  year,  and  views  on  the 
less 
production 
pessimistic (126).  However,  higher  interest  rates 
weighed  on  investment  and  shortages  of  skilled 
workers  have  become  a  major  obstacle  to  the 

confidence 

economy. 

become 

outlook 

have 

(126) Statistics Denmark, 2024, Sentiment indicators for business, 

(125) Danish Economic Council, 2023, Productivity 2023, dors.dk 

dst.dk 

54 

909510010511011506081012141618202224*2010=100DKDESENLEU2780901001101201301402015201620172018201920202021202220232015 = 100Agriculture, forestry and fishingIndustry (except construction)ConstructionWholesale and retail trade, transport, accommodation and food service activitiesInformation and communicationFinancial and insurance activitiesProfessional, scientific and technical activities; administrative and support service activities 
 
       
 
      
 
growth  of  firms,  which  affects  nearly  all  industry 
and service sectors (see also Annex 14 and Annex 
15). Among the long-term impediments to Danish 
firms’ investment,  the  most  frequently  mentioned 
are  energy  costs  (79%),  the  availability  of  skilled 
staff  (72%)  and  uncertainty  about  the  future 
(71%) (127).  Insolvencies  increased  in  2023  by 
8.6%,  including  in  particular  in  the  construction 
sector, after relatively low levels of insolvencies in 
previous years (128). 

is 

is 

the 

but 

R&D 

business 

Denmark  is  an  innovation  leader  in  the  EU, 
increasingly 
but  business  expenditure 
concentrated.  The  2023  European  Innovation 
Scoreboard 
top 
identifies  Denmark  as 
innovator  in  the  EU.  Investment  in  innovation  is 
increasingly 
high, 
concentrated in  large  companies  and  few  sectors, 
whereas  innovation  activity  among  small  and 
medium-sized  enterprises  (SMEs)  is  modest.  The 
eight largest  companies alone account for almost 
40%  of  total  private  R&D  expenditure,  and  the 
pharmaceutical  sector  is  responsible  for  almost 
60% of total R&D expenditure (see also Annex 11). 
The recently updated strategy ‘Business Promotion 
in  Denmark  2024-2027’  aims  to  strengthen 
innovation  and 
entrepreneurship  and 
internationalisation 
companies, 
particularly  SMEs (129). 
In  February  2024,  the 
Expert  Group  for  the  Future  of  Business  Support 
presented  its  recommendations  on  principles  for 
the  future  of  business  support  in  Denmark  and 
recommendations for improving its efficiency (130). 

increase 

Danish 

in 

of 

net-zero 

The  Danish 
industrial  strategy  actively 
supports  the  green  transition.  Denmark  has 
emerged as a front runner in the development and 
manufacturing 
technologies, 
particularly  wind  energy,  but  is  also  performing 
well  in  other  areas,  such  as  solar  photovoltaic 
technologies,  sustainable  biogas  production  and 
carbon  capture  and  storage  solutions.  Denmark’s 
recovery  and 
(RRP)  contains 
resilience  plan 
in  some  of  these  areas, 
relevant  measures 
including  investments  in  additional  wind  energy 

(127) EIB, 2024, Investment Survey 2023: Denmark, eib.org 

(128) Statistics Denmark, 2024, Bankruptcies, dst.dk 

(129) Danmarks 

Virksomhedsudvikling 
https://erhvervsfremmebestyrelsen.dk 

i 

Erhvervsfremmebestyrelse, 

2024, 
hele  Danmark  2024-2027, 

capacity, green upskilling and a feasibility study on 
possible  carbon  capture  storage  sites  (see  also 
Annex 7).  

Denmark is dependent on foreign supplies of 
most  raw  materials.  On  critical  raw  materials, 
Denmark’s  import  concentration  index  is  in  line 
with the EU average, but dependencies exist for a 
broad  range  of  raw  materials  and  components, 
including  critical  raw  materials  necessary  for  the 
green  and  digital  transition.  In  2023,  24.8%  of 
firms  still 
important 
reported  shortages  of 
materials and primary products, which was above 
the  EU  average  of  17.2%.  Surveys  indicate  that 
most  manufacturing  companies  have  already 
made  changes  to  their  strategies  and  have 
the  number  of 
increased 
suppliers (131).  Further 
recycling 
performance  would  also  help  reduce  dependence 
on volatile raw material markets (see Annex 9). 

inventories  and 

improving 

its 

has  a 

favourable 

Denmark 
business 
environment,  with  a  particular  emphasis  on 
digital  public services. The  country  consistently 
in  global  competitiveness  and 
ranks  high 
governance indices. This reflects a robust business 
environment, efficient public institutions and focus 
on technological advancements. It is a front runner 
in  digital  public  services,  and  administrative 
procedures  are  usually  designed  as  ‘digital  by 
default’.  98%  of  all  public  services  are  offered 
online  (see  also  Annex  13).  It  is  also  performing 
well 
electronic 
procurement, and technical and policy support. 

electronic 

invoicing, 

on 

in 
While  many  companies  are  formed 
Denmark, start-ups and small and innovative 
companies  struggle  to  grow  and  scale  up. 
Denmark  has  a  favourable  business  environment 
for  firms  and  entrepreneurs  and  is  one  of  the 
countries  with  the  highest  share  of  green  start-
ups (132).  It  has  been  the  birthplace  for  11  new 
unicorns since 2010, but many  have since moved 
to  capital  and 
their  headquarters.  Access 
challenges  in  recruiting  qualified  staff  are  crucial 
factors for start-ups and often determine whether 
they  stay  in  Denmark  or  relocate  elsewhere (133). 

(131) Danish Industry, 2022, After two years of disruptions: Higher 

inventories and more suppliers, danskindustri.dk 

(132) OECD, 2022, The New Green Economy, oecd.org 

(130) Expert  Group  for  the  Future  of  Business  Support,  2024,  

(133) Danish  Chamber  of  Commerce,  2022,  ‘Denmark:  A  Unicorn 

econ.ku.dk  

Factory – but why do they leave?’, danskerhverv.dk  

55 

 
 
 
roll-out  of  digital  solutions  and  new  business 
models. (137) 

is 

in 

the  system  will  enable 

Denmark 
initial  stage  of 
the 
implementing  the  components  needed  to 
connect  to  the  Once-Only  Technical  System 
(OOTS) (138). As part of the Single Digital Gateway 
Regulation (139), 
the 
automated  cross-border  exchange  of  evidence 
between  competent  authorities,  improving  online 
access  to  information,  administrative  procedures 
and  assistance  within  the  EU.    The  onboarding  of 
Danish  competent  authorities  is  crucial  for  the 
system  to  function  smoothly  and  to  reduce 
administrative burden. 

Equity  financing  is  less  pronounced  than  in  some 
of  the  other  Nordic  countries,  but  has  improved 
and is better than the EU average.  

Denmark  performs well  in  the  Single Market 
Scoreboard (134),  but  there  is  still  scope  for 
further  improvement.  The  country  is  closely 
integrated 
Its  trade 
into  the  single  market. 
integration  for  both  goods  and  services  is  above 
the EU average. It consistently performs relatively 
well in the  Single  Market Scoreboard,  but there  is 
still  scope  for  further  improvement,  including  on 
ongoing infringement cases relevant for the single 
market,  e.g.  on  transport,  environment  or  energy. 
For 
fourth  consecutive  year,  Denmark 
managed to decrease its number of pending cases, 
and the average duration of cases is below the EU 
average (135).  In  2023,  Denmark  solved  91.4%  of 
the  SOLVIT  cases  it  handled  as  lead  centre  (33), 
which is above the EU average of 88.3%.    

the 

public 

commitment 

procurement 

system 
Denmark’s 
demonstrates  a 
to 
clear 
sustainability and innovation. It performs quite 
well  on  public  procurement  overall,  though  the 
share  of  bids  from  SMEs  is  relatively  low (136). 
Denmark  has  been  a  pioneer 
in  adopting 
sustainable and innovative procurement strategies, 
aligning  public  spending  with  environmental  and 
social objectives. It performs well on digital public 
services, including the use of e-procurement. 

Regulatory  restrictiveness  in  professional 
services  such  as  lawyers  could  affect  their 
potential  for  innovation  and  productivity 
growth.  For  regulated  professions,  regulatory 
restrictiveness  in  Denmark  is  in  line  with  the  EU 
average  except 
for  estate  agents,  where 
restrictiveness  is  above  the  EU  average.  The 
duration  of  mandatory  qualification  requirements 
for  estate  agents  could  be  reassessed.  Moreover, 
lawyers in Denmark are subject to legal form and 
shareholding  requirements,  incompatibility  rules 
and  multidisciplinary  restrictions,  which  could 
affect  the  potential  of  this  sector  for  innovation 
and  productivity  growth,  for  example  through  the 

(134)  European  Commission,  2024,  Single  Market  Scoreboard, 

Performance Overview, ec.europa.eu 

(135)  European  Commission,  2024,  Single  Market  Scoreboard, 

Country data: Denmark, ec.europa.eu 

(136)  European  Commission,  2024,  Single  Market  Scoreboard, 

(137)  European  Commission,  2021,  Communication  on  updating 
the  reform  recommendations  for  regulation  in  professional 
services, COM(2021)385, 
eur-lex.europa.eu; 
OECD,  2023, 
Indicators  of  Product  Market  Regulation, 
oecd.org;  International  Monetary  Fund,  2023,  Article  IV 
country report Denmark, imf.org 

(138) Implementing Regulation (EU) 2022/1463 

Public procurement, ec.europa.eu  

(139)  Regulation (EU) 2018/1724 

56 

 
 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index.  
* Own Commission calculations for the EU27 average  

57 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP13.63.84.74.52.63.8Net Public investment, level of public capital stock, net of depreciation, % GDP10.610.80.911.2Real labour productivity per person in industry (% yoy)20.90.1164.98.7-1.24Cost competitivenessNominal unit labour cost in industry (% yoy)21.72-11.30.1-4.49.83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP227.426.227.931.432.142.9Transposition deficit, % of all directives not transposed30.20.30.40.50.90.7Conformity deficit, % of all directives transposed incorrectly31.211.110.91.1SOLVIT, % resolution rate per country381.092.595.591.791.088.3Number of pending infringement proceedings3182119181625.9RestrictionsEEA Services Trade Restrictiveness Index40.040.040.040.040.040.05Single bids, % of total contractors3131518231628.6Direct Awards, %3466558.1Material Shortage (industry), firms facing constraints, %54.36.527.749.724.817.2Labour Shortage using survey data (industry), firms facing constraints, %58.24.223.734.517.123.3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)221.83.03.42.72.5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60.150.160.160.160.170.22Installed renewables electricity capacity, % of total electricity produced20.50.50.50.550Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle75.95.85.36.03.022.2Bankruptcies, Index (2015=100)2227.8154.4232.7219.4194.4105.6Business registrations, Index (2015=100)2141.1123.3119.3100.999.1120.2Payment gap - corporates B2B, difference in days between offered and actual payment8-2012111615Payment gap - public sector, difference in days between offered and actual payment8-2410141516Share of SMEs experiencing late payments in past 6 months, %938.724.935.139.344.248.7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100.180.200.230.18-0.49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0.230.290.460.20-0.17Access to financeDenmarkHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate payments 
 
 
 
 
  
 
ANNEX 13: PUBLIC ADMINISTRATION 

Denmark’s  public  administration  is  essential 
for  the  economy’s  competitiveness  by,  in 
particular,  shaping  the  conditions  for  the 
twin  transitions  and  creating  a  favourable 
business  environment.  It  remains  one  of  the 
most  effective  in  the  EU,  and  its  score  on 
perceived government effectiveness indicators has 
risen over the last 5 years (Graph A13.1). 

Graph A13.1: Government effectiveness 

digital  services (140).  Denmark  outperforms  the  EU 
average  in  providing  digital  services  for  all  life 
events.  In  addition  to  services,  Denmark  scores 
relatively  high  in  open  data  maturity,  and  the 
government  launched  a  digitalisation  strategy 
the  quality  and 
improve 
to  further 
aiming 
availability of public data (141). 

Graph A13.2: Share of women and men in 
management positions 

Average  value  over  2018-2022  and  change  over  2018-
2022.The  GDP  per  head  bar  shows  the  mean  value  of  the 
government  effectiveness  indicator  for  the  group  of  EU 
countries  belonging  to  the  same  GDP  per  head  cluster  as 
Denmark  (EU  countries  are  ranked  in  terms  of  their  GDP  per 
head and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators. 

Denmark  has  a  relatively  young  and  skilled 
civil  service.  There  is  a  lack  of  gender  parity  in 
senior  positions.  The  ratio  of  staff  aged  25-49 
compared  to  those  aged  50-64  is  above  the  EU 
average  and  has  remained  stable  in  the  last  4 
years.  The  share  of  civil  servants  with  a  higher 
education  is  also  above  the  EU  average  as  is  the 
those 
share  of 
learning.  However, 
in  adult 
Denmark 
is  among  those  EU  countries  with 
significant  potential  for  improvement  in  gender 
balance  in  senior  civil  service  positions  (Graph 
A13.2). 

Denmark  still  has  one  of  the  EU’s  best 
in  terms  of  digital  public 
performances 
administration.  100%  of  services  are  offered 
online (EU: 84%), and they have one of the highest 
levels  of  user  centricity  (98%  vs  90%  in  the  EU) 
and 98% of them accept eID-login (EU: 70%). The 
share  of  e-government  users  has  increased  to 
99%  (EU: 75%),  showing  a  general  acceptance  of 

(1) 2023 data. 
Source: European Institute for Gender Equality. 

Denmark  scores  below  the  EU  average  on 
regulatory  governance.  There  are  gaps  in  the 
use  of  ex  ante  evaluations  and  stakeholder 
consultations, which potentially affects the quality 
of  future  legislation.  Denmark,  however,  performs 
above  the  EU  average  in  ex  post  evaluation  of 
primary  and  secondary  legislation.  The  Danish 
government  has  indicated  its  plans  to  strengthen 
the 
increasing 
Parliament’s access to the government’s work and 
putting  a  greater  emphasis  on  the  public’s 
involvement in consultations (142). 

policymaking 

process 

by 

The 
justice  system  performs  efficiently 
overall.  However,  the  clearance  rate  for  litigious 
civil  and  commercial  cases  has  continued  its 
downward  trend  (97.6%  in  2021  and  93%  in 
2022).  The  quality  of  the  justice  system  is  good 
overall.  The  level  of  digitalisation  is  advanced. 
Digital  tools  are  used  in  courts,  including  an 

(140) E-government benchmark report, 2023. 

(141) Agency for Digital Government, 2023. 

(142) Ansvar for Denmark, 2022. 

58 

-0.50.00.51.01.52.0DKEU-27GDP perhead clusterChange 2018-22Average 2018-20220102030405060708090100DKEU-27DKEU-27DKEU-27Level 1administratorsLevel 2administratorsSenioradministratorsMenWomen 
 
   
   
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available is 
shown. (3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as 
the existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage 
positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source:  E-government  activities  of  individuals  via  websites,  Eurostat  (#  1);  E-government  benchmark  report  (#  2);  Open  data 
maturity report (# 3); Labour Force Survey, Eurostat (# 4, 5, 7); European Institute for Gender Equality (# 6); Fiscal Governance 
Database (# 8, 9); OECD Indicators of Regulatory Policy and Governance (# 10). 

women 

service 

senior 

men 

civil 

and 

of 

in 

electronic  case  management  system,  distance 
communication  technology  and  a  secure  remote 
work  environment  for  court  staff.  However,  some 
digitalisation gaps still need to be addressed, such 
as the digital solutions to conduct and follow court 
proceedings 
judicial 
independence, no systemic deficiencies have been 
reported (143). 

in  criminal  cases.  On 

(143) For  a  more  detailed  analysis  of  the  performance  of  the 
Danish  justice  system,  see  the  2024  EU  Justice  Scoreboard 
(forthcoming)  and  the  country  chapter  on  Denmark  in  the 
Commission’s 2024 Rule of Law Report (forthcoming). 

59 

DK20192020202120222023EU-27(2)1n/an/an/a98.998.775.02n/a85.484.385.185.375.830.81.00.90.90.90.8461.662.364.7 (b)67.367.452.9532.824.829.0 (b)32.938.017.9639.640.047.239.440.89.271.82.01.8 (b)1.81.81.580.60.60.60.6n/a0.790.90.90.90.9n/a1.410n/an/a1.61n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
 
 
          
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS 

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU. This Annex provides an overview of Denmark’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills and poverty reduction.  

Table A14.1:Social Scoreboard for Denmark 

Update  of  25  April  2024.  Member  States  are  categorised 
based  on  the  Social  Scoreboard  according  to  a  methodology 
agreed  with  the  EMCO  and  SPC  Committees.  Please  consult 
the Annex of the Joint Employment Report 2024 for details on 
methodology. 
Source: Eurostat 

record 

in  2023  with 

labour  market  continued  to 
The  Danish 
improve 
high 
employment  and  record  low  unemployment 
rates,  but  labour  and  skills  shortages  are  a 
matter  of  concern.  The  employment  rate  of 
people aged 20-64 stood at 79.8% in 2023, which 
is  above  the  EU  average  of  75.3%  and  only  0.2 
percentage  points  (pps)  below  the  national  2030 
target  of  80%.  In  2022,  the  employment  rate  for 
citizens  of  a  non-EU  country  aged  20-64  was 
70.6%,  and  80.8%  for  citizens  of  another  EU 
country. The unemployment rate increased slightly 
from 4.5% in 2022 to 5.1% in 2023, however it is 
still  low  compared  to  the  EU  average  of  5.9%.  In 
2022,  the  unemployment  rate  for  citizens  of  a 

factor 

non-EU  country  aged  15-75  was  9.8%,  and  8.3% 
for citizens of another EU country.  There has been 
a  rise  in  the  employment  rate  since  2020,  and 
some  of  the  reasons  for  this  are  an  increase  in 
people staying in work for longer and an increase 
in  workers  from  outside  Denmark.  The  Danish 
labour  market  is  still  characterised  by  a  lack  of 
skilled  labour  in  different  sectors.  In  Q4-2023, 
35.5%  of  employers  in  the  service  sector  and 
21.3%  in  industry  identified  labour  shortages  as 
the  main 
limiting  production.  Skills 
shortages  are  also  linked  to  what  is  offered  by 
vocational  education  and  training 
institutions, 
which  could  be  made  more  attractive.  There  has 
been  a  significant  increase  in  the  number  of 
people  benefitting  from  early  retirement  or  pre-
pension schemes in recent years, especially people 
under  40  years  of  age.  In  2019,  around  3 000 
people  under  40  took  early  retirement,  which 
increased to around 6 000 in 2023. The European 
Social  Fund  Plus  (ESF+)  will  continue  to  support 
the  upskilling  and  reskilling  of  the  workforce, 
including  migrants  and  people  at  the  margins  of 
the  labour  market.  As  part  of  its  recovery  and 
resilience  plan,  Denmark  has  measures  in  its 
REPowerEU chapter on green upskilling, which will 
allocate  DKK  103.9  million  (EUR  13.9  million) 
annually  in  2025  and  2026,  including  to  develop 
teachers’  skills  and  provide  green  equipment  for 
vocational  education  and  training  programmes. 
The  green  upskilling  measure  will  further  support 
Denmark in the green transition.  

The  rate  of  early  school  leavers  in  Denmark 
has increased in recent years. The rate of early 
school  leavers  from  education  and  training  stood 
at  10%  in  2022,  which  is  slightly  above  the  EU 
average  of  9.6%.  In  the  light  of  the  labour  and 
skills shortages, there is room for improvement as 
regards  keeping  students 
in  education  and 
training.  However,  in  the  context  of  exceptionally 
high  demand  for  labour  the  increasing  rate  of 
early school leavers did only translate into a slight 
increase  of 
in 
(NEETs). 
employment,  education  or 
Although  Denmark  has  a  relatively  high  rate  of 
people  with  basic  or  above  average  digital  skills 
(69.6%  vs  an  EU  average  of  55.5%  in  2023),  the 
latest  PISA  analysis  (2022)  shows  a  decrease  in 
pupils’ mathematics and reading skills (see Annex 
15).  

the  number  of  people  not 

training 

60 

47.110.469.68.65.64.0379.85.10.5118.817.113.850.409.914.774.72.1Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
      
 
 
The  rate  of  young  people  not  in  education, 
employment or training (NEETs) is still below 
the  EU  average,  although  there  is  potential 
for improvement. The NEET rate increased from 
7.9%  in  2022  to  8.6%  in  2023,  and  while  it  was 
below the EU average of 11.2% in 2023, there is 
room  for  further 
improvement.  The  Danish 
government has allocated DKK 55 million (EUR 7.3 
million)  yearly  from  2026  onwards  to  improve 
incentives for the employment of vulnerable young 
people, as around 43 000 young Danish people are 
still not in education or employment. The share of 
adults (aged 25-64) participating in education and 
training  stood  at  47.1% in  2022,  compared  to  an 
EU average of 39.5%, though this figure fell from 
50.4% in 2016. However, considerable efforts are 
needed  to  reach  the  national  target  of  60%  of 
adults participating in training every year by 2030. 
Also  in  this  context,  the  ESF+  is  a  key  element in 
increasing 
the  attractiveness  of  vocational 
education and training and of higher education, as 
well  as  in  providing  targeted  courses  for  the 
upskilling and reskilling of adults for the green and 
digital transition. 

agreement  from  2021 (144))  is  providing  DKK  10 
billion (EUR 1.341 billion) in 2021-2035 to support 
initiatives  that  will  increase  the  construction  of 
social  housing.  This  will  happen  by,  among  other 
things,  supporting 
the  construction  of  new 
buildings and by converting private rental housing 
or commercial buildings into social housing. 

The  share  of  people  at  risk  of  poverty  or 
social  exclusion  (AROPE)  is  below  the  EU 
average. The AROPE rate declined from 17.3% in 
2021 to 17.1% in 2022 against an EU average of 
21.6%.  The  rate  of  people  living  in  households 
with  very  low  work  intensity  fell  from  9.7%  in 
2021 to 8.8% in 2022, but this is still higher than 
the  EU  average  of  8.3%  in  2022.  The  ESF+  can 
support people at the margin of the labour market 
and  thereby  help  Denmark  reaching  its  national 
target  in  2030  of  30 000  fewer  people  living  in 
households with very low work intensity.    

Table A14.2:Situation of Denmark on 2030 
employment, skills and poverty reduction targets 

(1)  Adult  Education  Survey,  adults  in  learning  in  the  past  12 
months,  special  extraction  excl.  guided  on-the-job  training.. 
(2)  EU  headline  target  set  as  a  reduction  in  the  number  of 
persons  at  risk  of  poverty  or  social  exclusion  (AROPE), 
reference 
2019. 
(3)  Denmark  expresses  its  national  target  as  a  reduction  in 
the number of persons living in households with very low work 
intensity (VLWI), reference year 2019. 
Source: Eurostat, DG EMPL. 

year 

income 

tax  was 

introduced 

The  Danish  Government  has  continued  to 
implement  reforms  in  2023,  some  with  the 
aim  to  increase  the  supply  of  labour.  They 
include  a  removal  of  a  bank  holiday,  a  reform  of 
the cash benefit system and allocation of funds to 
improve  wages  and  working  conditions  for 
frontline personnel in the welfare sector. A reform 
of  personal 
in 
December  2023  providing,  among  other  things, 
financial  incentives  for  older  workers  to  stay 
longer  in  the  labour  market  and  an  increased 
employment 
deduction 
(beskæftigelsesfradrag), including for single parent 
families.  Furthermore,  the  government  introduced 
a  permanent  measure  to  provide  an  educational 
boost  to  sectors  with  shortages  of  skilled  labour.  
This  encourages  unemployed  people  or  people 
with  an  outdated  education  to  learn  or  train  in 
areas  where  there  are  shortages,  for  example  in 
the  areas  of  the  green  transition  and  in  the 
welfare  sector.  The  measure  provides  110%  of 
their  unemployment  benefits 
to  unemployed 
people  who  are  learning  skills  relevant  for  the 
sectors in question. 

allowance 

or 

Housing  affordability  remains  an  issue.  The 
housing  cost  overburden  rate  increased  from 
14.7%  in  2022,  to  15.4%  in  2023.      A  political 

(144) Aftale  om  fonden  for blandede  byer  –  flere  billigere  boliger 
og  en  vej  ud  af  hjemløshed  (Agreement  on  the  Fund  for 
Mixed  Cities  –  Cheaper  Housing  and  a  Way  out  of 
Homelessness). 

61 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 79.8(2023)47.1(2022)-29(2022)Poverty reduction2,3 (thousands)-30-15,000Employment (%)8078Adult learning1 (%)6060 
 
     
 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Denmark’s  education  and  training  system  based 
on  the  2023  Education  and  Training  Monitor  and 
the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results.  

Graph A15.1: Underachievement rates by field, 
PISA 2012, 2018 and 2022 

rates 

Danish  underachievement 
remain 
among  the  lowest  in  the  EU.  In  2022,  about 
one  in  five  of  15-year-olds  did  not  reach  a 
minimum  proficiency 
skills 
(mathematics  20.4%,  reading  19.0%  and  science 
19.5%).  These 
the  EU 
average (145),  but  higher  than  the  EU-level  target 
of  15%.  Shares  have  moderately  increased  since 
2012 (+3.6/+4.4/+2.8) less than the EU trend. 

rates  are  below 

in  basic 

level 

The influence of socio-economic and migrant 
background  on  educational  outcomes  has 
increased (146).  Although  the  underachievement 
rate  has  also  increased  by  3.0 pps  (EU:  2.2 pps) 
among students from the top quarter of the socio-
economic  distribution,  the  rise  among  students 
from  the  bottom  quarter  was  three  times  higher 
(9.0 pps  vs  9.8 pps  at  EU  level)  since  2018. 
Migrant  background  is  also  a  strong  indicator  for 
increasing  underperformance.  In  2022,  46.0%  of 
students  born  abroad  underachieved  compared 
with  17.3%  of  native-born  students  without  a 
migrant background. The gap somewhat shrinks to 
22.5 pps  for  native-born  students  with  parents 
born  abroad,  still  the  largest  gap  in  the  EU. 
Underperformance  among  foreign-born  students 
increased  since  2018  by  19.1 pps,  about  four 
times 
(+5.2 pps).  The 
performance  gap  of  students  with  a  migrant 
background  remains  significant  (21  score  points) 
even  after  accounting 
socio-economic 
background  and  language  spoken  at  home.  A 
recent study by VIVE, the Danish Center for Social 
Science  Research (147)  found  that  students  that 
underachieve 
in  mathematics  often  have  a 
disadvantaged  and/or  migrant  background.  The 
study  established  a  clear 
low 
achievement in mathematics, both on educational 
attainment  and  on  life  chances  and  well-being. 
Underperforming  students  are  significantly  less 
likely to pass upper secondary education and even 
to finish lower secondary school.  

that  of  native-born 

impact  of 

for 

Source: OECD (2023). 

Top performance in basic skills is rather low, 
around  the  EU  average  and  potentially 
limiting  the 
innovation  capacity  of  the 
country.  In  2022,  shares  of  top  performers  in 
mathematics  were  7.7%  (EU:  7.9%),  a  decline  of 
3.9 pps  since  2018  (EU  -3.1pps).  In  reading,  the 
rate has decreased by 2.1 pps (EU -1.6 pps).  

Denmark  continues to  lack  qualified  staff  in 
education.  In  early  childhood  education  and  care 
(ECEC),  approximately  one  third  of  the  currently 
employed ECEC staff does not have a pedagogical 
education  and  only  10%  of  ECEC  assistants  have 
had  training (148).  In  primary  and  lower  secondary 
schools 
(‘Folkeskole’)  shortages  of  qualified 
personnel  are  also  emerging (149).  Currently  about 
13%  of  primary  and  lower  secondary  (Folkeskole) 
teachers  lack  teacher  training,  with  significant 
variations  among  municipalities (150).  Salaries  and 
working conditions do not appear to be sufficiently 
attractive for young people to choose teaching as 
a career. 

and 

childhood 

education 

Denmark has a very high participation rate in 
early 
care, 
especially for children under 3 years. In 2021, 
the share of children between 3 years and the age 
of  compulsory  primary  education  in  ECEC  was 
97.0%,  above  the  EU-level  target  (96%)  and 
4.6 pps above the EU average of 93.0%. The share 
of children below the age of 3 in formal childcare 

(145) 26.2%/29.5%/24.2%.  

(148) EVA. (2020) 

(146) OECD PISA 2022 Results Volume I   

(149) Ministry of Finance. (2022) 

(147) VIVE (2023) 

(150) Education and Training Monitor 2023 (europa.eu) 

62 

0.05.010.015.020.025.030.035.0DKEUDKEUDKEUMathematicsReadingScience%2012201820222030 EU target 
 
 
  
 
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

the 

reducing 

(2) 
impact  of  social-economic 
background,  and  (3)  increasing  trust  and  well-
being  -  have  been  achieved.  Late  2023,  the 
government  started  negotiations  in  parliament  on 
the  first  actions  of  a  comprehensive  quality 
programme of 35 actions organised in 5 areas. 

tertiary 

attainment 

Denmark’s 
rate 
increased  significantly  in  the  past  decade 
and  is  now  well  above  the  EU-level  target. 
Since  2012,  tertiary  attainment  has  increased  by 
8.8 pps  to  reach  49.0%  in  2023.  In  2023,  57.9% 
of  women  had  a  tertiary  degree  compared  with 
only 40.4% of men, leading to a widening gender 
gap  of  17.5 pps  (7.2 pps  above  the  EU  average). 
The  government  is  working  on  improving  the 
quality  of  higher  education,  including  by  revising 
the structure of study programmes. 

Overall,  Denmark  has  very  good  systems 
both  for  vocational  education  and  training 
and  for  adult  learning,  but  skills  shortages 
do exist (see Annex 14). 

is the highest in the EU (74.7%) (151), far above the 
revised Barcelona target of 45%. 

The high rate of early leavers from education 
and  training  has  remained  largely  stable  in 
Denmark  over  the  past  decade.  At  10.4%  in 
2023, early school leaving remains above the 9% 
EU-level target. Despite Denmark’s comprehensive 
approach  to  preventing  early  school  leaving (152), 
the  rate  has  not improved  during  the last  decade 
(9.6% in 2012). The share of early leavers among 
non-EU  foreign-born  young  people  (16.4%)  is 
nearly  three  times  higher  than  that  of  their 
Danish-born peers (6.2%). 

The  national  Folkeskole  (primary  and  lower 
secondary  school)  reform  has  still  to  show 
results.  This  reform  entered  into  force  in  2014. 
The  latest  evaluation (153)  shows  that  none  of  the 
three  national  targets  -  (1)  supporting  all  talents, 

(151) Eurostat: ilc_cainformal. 

(152) Education and training monitor 2019 (europa.eu) 

(153) Ministry for Children and Education (2023). 

63 

96%97.6%201391.8%201399.5%92.2%97.0%202192.5%2021,dReading< 15%14.6% 18.0%16.0% 22.5%19.0%202226.2%2022Mathematics< 15%16.8% 22.1%14.6%22.9%20.4%202229.5%2022Science< 15%16.7% 16.8%18.7%22.3%19.5%202224.2%2022< 9 %9.6%12.6%10.4%10.5%10.4%9.5%Men11.2%14.5%12.7%12.1%11.8%11.3%Women7.9%10.6%8.0%8.7%9.0%7.7%Cities7.8%b11.2%7.1%9.4%6.7%8.6%Rural areas11.7%b14.0%14.2%11.0%15.0%9.9%5By country of birthNative9.5%11.3%10.4%9.2%10.2%8.2%EU-born:u26.2%:u22.4%:u21.0%Non EU-born12.1%u30.1%11.5%u23.0%16.4%u21.6%6Socio-economic gap (percentage points)25.9:18.729.524.7202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :70.6% 64.5%45%40.2%34.1%45.8%38.7%49.0%43.1%Men31.1%29.1%37.7%33.3%40.4%37.6%Women49.7%39.2%54.3%44.2%57.9%48.8%Cities53.8%b43.5%62.3%49.0%63.5%53.3%Rural areas25.3%b24.8%28.5%27.7%33.5%31.7%Native40.7%35.4%45.1%39.7%48.6%44.2%EU-born:u29.3%61.5%u36.7%65.0%40.2%Non EU-born:u24.2%44.5%u31.0%43.7%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::50.4%201637.4%201647.1%202239.5%202224.9%201322.7%201321.1%23.8%21.2%202124.5%2021201220182023IndicatorTargetDenmarkEU-27DenmarkEU-27DenmarkEU-271Participation in early childhood education (age 3+)2Low-achieving 15-year-olds in:Early leavers from education and training(age 18-24)3Total3By gender4By degree of urbanisationTertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over 
 
 
     
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
in 
population  health  and  the  health  system 
Denmark. 

Life  expectancy 
in  Denmark  decreased 
slightly but is still above the EU average. This 
decrease  may  be  partly  due  to  the  higher 
COVID-19  mortality  in  2022  compared  to  the 
previous  year (154).  The  treatable  mortality  rate  is 
well  below  the  EU  average.  In  2021,  cancer, 
diseases of the circulatory system (‘cardiovascular 
diseases’)  and  diseases  of  the  respiratory  system 
were the leading causes of death. Cancer mortality 
in  Denmark  was  271  per  100 000  population  in 
2021, above the EU average of 235. 

Graph A16.1: Life expectancy at birth, years 

Danish  population,  public  spending  on  health  is 
projected  to  increase  by  0.7 percentage  points 
(pps) of GDP by 2070, compared to 0.6 pps for the 
EU overall (see Graph A16.2 and Annex 21). 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Baseline scenario 
Source: European Commission / EPC (2024) 

Source: Eurostat 

In  2021,  health  spending 
in  Denmark 
amounted  to  10.6%  of  GDP,  slightly  below 
the  EU  average  of  10.9%.  Provisional  data 
suggest that in 2022 total healthcare spending fell 
back to 9.4% of GDP, ending the rising trend of the 
recent  years.  Per  capita  spending  (in  purchasing 
power  standards)  was  above  the  EU  average  in 
2021.  Outpatient  care  made  up  the  largest  part 
(around a third) of total current health expenditure. 
The  proportion  of  spending  on  outpatient 
pharmaceuticals  and  medical  devices  was  low, 
accounting 
total  health 
expenditure  in  2021,  much  lower  than  the  EU 
average. Public health expenditure as a proportion 
of  total  health  spending  continued  to  increase  to 
85.2%  (2021),  well  above  the  EU  average  of 
81.1%  (2021).  Based  on  the  age  profile  of  the 

for  only  10%  of 

(154) Based  on  data  provided  directly  by  Member  States  to  the 
European  Centre  for  Disease  Prevention  and  Control,  under 
the European Surveillance System. 

In  2021,  spending  on  prevention  in  Denmark 
amounted  to  8.9%  of  total  spending  on 
healthcare,  much  higher  than  the  6.0%  for 
the  EU  overall.  Between  2019  and  2021, 
spending  on  prevention  in  Denmark  increased  by 
around  300%,  surpassing  the  106%  increase  for 
the  EU  overall.  Proportionally,  budget  shares  for 
prevention  across  the  EU  increased  most  for 
emergency 
response,  disease  detection  and 
immunisation  programmes.  In  Denmark,  the  main 
factors  explaining 
in  spending  on 
preventive  care  in  2021  are  large  increases  for 
epidemiological 
immunisation 
programmes, 
surveillance  and 
control 
programmes. Provisional data for 2022 indicate a 
stark  drop  in  the  proportion  of  health  spending 
going  to  preventive  care,  down  to  5.1%.  The 
consumption of antimicrobials is well below the EU 
average. 

risk  and  disease 

rise 

the 

Denmark  has  more  doctors  and  nurses  than 
the  EU  average.  There  were  4.4  doctors  per 
1 000  population  in  2021,  more  than  the  EU 
average of 4.1. There were 10.2 nurses per 1 000 
population  (2020),  more  than  the  EU  average  of 
7.9  (2021).  The  Eurostat  Labour  Force  Survey 
shows  an  upward  trend  in  the  numbers  of  staff 
working  in  human  health  activities  between  the 
first  quarter  of  2020  and  the  second  quarter  of 
2023.  However,  more  than  a  quarter  of  the 
nursing  workforce  are  55  years  old  or  older 
(2017),  which  raises  some  concerns  about  the 
sustainability  of  workforce  numbers.  In  2022,  the 
Danish  government  agreed  on  a  reform  which 

64 

81.181.081.581.681.581.380.981.081.380.480.180.6201720182019202020212022DenmarkEU6.67.10.60.702468EUDenmark% of GDP20242070increase 
 
   
 
     
 
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia  (professionally  active). Nurses’  density  data  refer  to  practising nurses  in  all  countries except  Ireland,  France,  Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

Through  its  recovery  and  resilience  plan  (RRP), 
Denmark plans to invest EUR 33 million (2% of the 
RRP’s  total  value)  in  healthcare.  The  Danish  RRP 
contains investments aimed at ensuring sufficient 
stocks  of  critical  medicines  and  improving  the 
emergency  management  and  monitoring  of  these 
stocks.  Furthermore,  Denmark 
is  working  on 
strengthening  digital  solutions  in  the  healthcare 
sector. Still pending is a clinical study on the long-
term effect of COVID-19 vaccines. 

aims  to  strengthen  the  health  system,  including 
through  improved  medical  coverage  in  areas  with 
a  shortage  of  doctors (155).  The  government  also 
established  a  ‘Resilience  Commission’  to  look  at 
staff  shortages  and  recruitment  issues.  In  2023, 
the  government  announced  a  package  of 
measures  to  address  challenges  with  increasing 
waiting lists and shortages of key staff (156). 

Denmark  is  further  stepping  up  policies  to 
foster  access  to  healthcare.  Denmark  set  up 
‘health  clusters’  around  the  21  acute  care 
hospitals,  optimising  the  delivery  of  care  services 
based  in  the  community (157).  Health  is  amongst 
the  priority  areas  in  the  Danish  budget  2024, 
which  will  in  particular  provide  increased  funding 
for  psychiatric  care (158).  Already  in  2022,  the 
government  had  launched  a  10-year  plan  to 
improve psychiatry and mental health in Denmark, 
identifying  children  and  young  people,  and  adults 
with  severe  mental  health  issues,  as  particular 
target groups. 

(155)See: 

https://commission.europa.eu/system/files/2023-

05/2023-Denmark-NRP_en.pdf. 

(156)  See:  https://eurohealthobservatory.who.int/monitors/health-

systems-monitor/updates/hspm/denmark-2012/acute-
package-to-address-waiting-lists-and-staff-shortages. 

(157)  See:  https://eurohealthobservatory.who.int/monitors/health-
systems-monitor/updates/hspm/denmark-2012/health-
clusters-now-mandatory-across-denmark. 

(158)  See:  https://eurohealthobservatory.who.int/monitors/health-
systems-monitor/updates/hspm/denmark-2012/agreement-
on-the-enhancement-of-psychiatry-in-2024-to-ensure-
increased-capacity-and-better-assistance-for-children-and-
youth.  

65 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)73,066,263,564,3NA93.3 (2021)Cancer mortality per 100 000 population279,8282,5271,0270,6NA235.4 (2021)Current expenditure on health, % GDP 10,110,210,610,69,410.9 (2021)Public share of health expenditure, % of current health expenditure83,883,784,885,2NA81.1 (2021)Spending on prevention, % of current health expenditure 2,32,23,28,95,16.0 (2021)Available hospital beds per 100 000 population261259259251NA525 (2021)Doctors per 1 000 population4,24,34,44.4*NA4.1 (2021)*Nurses per 1 000 population10,110,110,2NANA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***15,615,314,314,415,219.4 (2022) 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  Denmark.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion in Danish regions and assesses emerging 
investment  needs  to  foster  economic  growth, 
social  development  and  competitiveness  in  the 
country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

Economic  and  social  disparities  between  the 
capital  region  and  the  other  Danish  regions 
increased  in  2000-2022.  The  capital  region 
(Hovedstaden)  continues  to  be  the  engine  of  the 
Danish  economy,  accounting  for  45%  of  national 
GDP  and  a  GDP  per  capita  of  191%  of  the  EU 
average  in  2021  (Graph  A17.1).  The  gap  with 
Denmark's  other  regions  has  widened  in  2023 
(Graph  A17.1).  Where  capital  regions  GDP  per 
regions  declined. 
capita 
Syddanmark  and  Midtjylland  had  similar  gap  to 
Hovedstaden  with  a  GDP  per  capita  between 
114%  and  119%  of  the  EU  average.  Nordjylland 
lags  more  behind  with  103%,  whereas  Sjælland 
has recorded a GDP per capita of only 85% of the 
EU average in 2022.  

raised,  all  other 

Graph A17.1: Evolution regional GDP per capita in 
Denmark 

(Graph  A17.2).  Annualised 

national  average  of  EUR  88  604  per  person 
real 
employed 
productivity  growth  in  Denmark  was  0.8%  in 
2013-2022,  slightly  above  the  EU  average.  This 
was  pulled  by  Hovedstaden  with  1.5%,  while  two 
Danish  regions  were  largely  below  EU  average, 
varying  from  0.1%  for  Nordjylland  to  0.2%  for 
Syddanmark (Table 1). 

Graph A17.2: Real gross value added per worker 

Source: Eurostat, DG REGIO elaboration 

In  2013-2021,  population  has  grown  in  all 
Danish  regions.  This  is  mainly  due  to  net 
migration  (+0.41%).  Population  growth  and  high 
employment  rates,  which  are  quite  similar  across 
the regions (>78.1%, in 2023) and exceed the EU 
average (75.3%), contributed to GDP growth. 

the 

Conditions  on  the  labour  market  remain 
favourable  nationwide.  In  2023,  the  average 
unemployment rate was 5.1%, a figure that varies 
little  between  regions,  and  is  in  all  regions  below 
EU  average  of  6.1%.  Despite 
lack  of 
divergence  in  unemployment  rates  across  the 
regions,  the  regional  employment  statistics in,  for 
example, high-tech sectors vary more widely, with 
the capital region performing better than the other 
In  Syddanmark,  only  2.4%  of  total 
regions. 
employment in 2022 was in the high-tech sectors, 
compared to 11.1% in the capital region. 57.2% of 
employment 
in 
the  capital 
knowledge-intensive  services  while  this  share  is 
around 12% lower in the other regions. 

region  was 

in 

Source: Eurostat, DG REGIO elaboration 

Labour productivity, measured as gross value 
added  per  worker,  has  recovered  after  the 
COVID-19  pandemic  in  all  Danish  regions.  It 
varies between EUR 101 000 per person employed 
in 2022 in the Hovedstaden capital region, to EUR 
74  000  in  the  region  of  Nordjylland,  with  a 

66 

75100125150175200200020022004200620082010201220142016201820202022GDP (pps) per head (EU = 100)HovedstadenMidtjyllandSyddanmarkNordjyllandSjælland 
 
   
 
 
 
Table A17.1:Selected indicators at regional level in Denmark 

Source: Eurostat, EDGAR database 

Map A17.1:  Regional Competitiveness Index 

(RCI) 

index 

competitiveness 

Despite  regional  differences,  all  Danish 
regions outperform  the  EU  average  in  terms 
of  regional  competitiveness  (Map  17.1).  The 
regional 
of 
Hovedstaden  was  137.7  (EU-27  =  100)  in  2022, 
which makes  it  the  eighth  best  performing  region 
in  the  EU.  The  RCI  of  the  other  regions  is  also 
consistently  above  the  EU  average.  The  capital 
region can count on the country’s highest share of 
highly  educated  people  aged  between  25  and  65 
(53.1%;  2022).  In  Sjælland,  Syddanmark  and 
Nordjylland,  these  shares  are  considerably  lower 
(32.9%,  34.7%  and  34.8%,  respectively),  and 
similar to the EU average of 34.3%.  

Source: DG REGIO, JRC 

All  Danish  regions  have  reduced  greenhouse 
gas emissions between 1990 and 2022 (Graph 
A17.3).  In  2022,  Denmark  had  already  produced 
33.7% less greenhouse gases than it did in 1990, 
with  an  average  emission  of  7.7 tonne  per  capita 
(Graph  A17.4).  There  is  still  substantial  variation 
among the regions linked to peak emissions from 
industry,  with  Syddanmark  and 
energy  and 
especially  Nordjylland  displaying  considerably 
lower overall reductions.   

The capital region stands out also in terms of 
R&D  expenditure,  which  amounted  to  4.6%  of 
GDP  in  2019,  compared  to  between  1.3%  and 
2.3%  in  the  other  regions  (the  EU  average  was 
2%).  Hovedstaden  ranks  first  among  all  NUTS2 
regions 
for  biotechnology  patents  with  90 
applications  per  million  inhabitants  (2018-2019). 
It ranked 9th for all types of patent applications at 
EU level (442 per million inhabitants). 

in 

Danish  regions  can  rely  on  highly-connected 
transport by car but there are wide regional 
transport 
gaps 
rail 
passenger 
performance. 
In  Hovedstaden,  51%  of  the 
population  is  in  a  120 km  radius  that  can  be 
reached by train within 1h30 (%). In Sjaelland, this 
share drops to 23% whereas in other regions it is 
below the EU average of 15.7%.  

67 

GDP per head (PPS)Real GVA per workerReal productivity growthGDP per head growthPopulation growthNet migrationUnemployment ratePopulation aged 25-64 with high educational attainmentR&D expenditureEmployment in high-technology sectorsEmployment in knowledge-intensive servicesBiotechnology patent applications to the EPOPassenger rail transport performanceEU Regional Competitiveness Index 2.0 - 2022 editionIndex, EU27 = 100 (2022)Thousands of EUR per person (2021)Average % change on the preceding year (2013-2022)Average % change on the preceding year (2013-2022)Average annual change per 1000 residents (2013-2021)Average annual change per 1000 residents (2013-2021)% of labour force (2023)% of population aged 25-64 (2023)% of GDP (regions 2019, nationwide and EU level 2021) % of total employment (2022)% of total employment (2022)per million inhabitants (2018-2019)% of population in a 120-km radius that can be reached within 1h30 (2021)tCO2 equivalent per head (2022)Percent change per head (%), 1990-2022Index, EU27 = 100European Union (27 MS)100560.71.441.92.96.135.12.34.940.85.615.78100Danmark137880.81.645.34.15.142.92.86.149.13323.17.7-42.8122.9Hovedstaden1911011.52.338.44.95.255.14.611.157.290.250.92.4-69.1137.7Sjælland85770.91.553.65.94.633.11.35.446.5322.98.2-62.1115.4Syddanmark114810.21.092.52.95.235.11.52.443.35.78.710.5-11.5113.6Midtjylland119800.71.585.93.85.441.22.33.745.111.89.88-40.4119.8Nordjylland103740.10.722.22.84.735.123.146.11.89.416.7-1.9113.2Greenhouse Gas EmissionsNUTS region name 
 
 
 
 
   
 
These differences are considerable at subnational 
level,  where  people  in  Vest-and  Sydsjaelland  wait 
the longest to access health services.   

Cohesion  policy  therefore  needs  continue 
supporting  innovative  projects  including  in 
SMEs  and  facilitate  investments  in  net-zero 
technologies 
to  a  more 
to  contribute 
sustainable  and  carbon  neutral  economy, 
especially  in  the  territories  and  sectors 
facing  the  most  challenges  as  regards  the 
green  transition.  The  transition  towards  a 
climate  neutral  economy  also  requires  creating 
new job profiles and improving the green skills of 
the existing workforce. 

Denmark  could  also  benefit  from  the 
opportunities  of  the  Strategic  Technologies 
for Europe Platform (STEP) initiative to boost 
investments in critical technologies to support the 
transformation of industry. 

To  mitigate  regional  differences,  the  region 
of Sjælland is classed as a transition region, 
and  as  such  receives  a  higher  level  of 
support. Also, the two regions of Nordjylland and 
Sydjylland are covered by the Just Transition Fund, 
which  provides  them  with  additional  cohesion 
policy  funds. 
In  addition,  a  high  degree  of 
complementarity  between  the  national  funding 
and  the  EU  funding  is  an  essential  element  in 
Denmark's  implementation  of  cohesion  policy. 
These factors are key to further decrease regional 
disparities.  National  Danish  policies  will  be  key  in 
balancing  regional  gaps,  as  EU  funding  in  this 
regard is, comparatively, modest.  

Graph A17.3: Greenhouse gas emissions per capita 
in Denmark in 2022 

Source: JRC (EDGAR) 

Investment  and  subnational  reform  needs 
ahead  

investments 

in  Denmark 
Cohesion  policy 
selected  areas  of  particular 
support 
relevance for the green and digital transition 
and  consider  sectors  and  areas  facing 
specific 
demographic 
challenges.   The  investment  strategy  agreed  in 
the programmes adopted in 2022 is still valid for 
the  current  economic  and  social  situation  in 
Denmark.  Considering  recent  developments,  focus 
would be beneficial on the following elements:    

climate 

and 

Innovation continues to be key to addressing 
the  challenges  related  to  the  green  and 
digital  transitions.  While  the  twin  transition  is 
particularly  burdensome  for  SMEs,  they  can  play 
an important role in the transition value chain and 
as innovators to find solutions for the challenges. 
They  also  play  an  important  role  in  the  areas 
burdened by climate and demographic challenges.  

Skilled  labour  shortages  are  an  obstacle  to 
regional  development.  There  are  clear  signs  of 
labour  shortages  across  the  country in  relation  to 
the  twin  transition  and  welfare  sector,  with  an 
overall planned shortfall of 70 000 skilled workers 
in  2035,  compared  to  2022.  Regarding  the 
healthcare  and  welfare  sector,  a  shortage  of  15 
000 workers in 2035 is projected. Although the per 
capita  density  of  healthcare  professionals  seems 
evenly  distributed  between  regions,  accessing 
healthcare services in terms of travel time differs 
between  the  capital  region  and  other  regions. 

68 

0510152025301990199520002005201020152020Greenhouse gas emissionstonne CO2 equivalent per personSjællandNordjyllandMidtjyllandSyddanmarkHovedstaden 
       
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

-

Denmark  has  a  well-capitalised  banking 
sector  with  a  strong  liquidity  position,  but 
pockets  of  vulnerability  exist.  The  Danish 
banking  sector  is  93%  domestic  and  its  total 
assets in mid-2023 were equivalent to 350.3% of 
the  country’s  GDP.  On  the  back  of  high  earnings 
and the regulatory tightening of the risk-weighted 
exposure  requirements,  the  total  capital  ratio  of 
Danish  banks  reached  23.3%  in  Q3-2023  (above 
the  EU  average  of  19.6%),  0.8  percentage  points 
more than in Q4-2022 and higher than the levels 
recorded  before  the  COVID-19  crisis.  The  CET  1 
ratio  has  continued  its  move  upward,  reaching 
19.4%  in  Q3-2023,  above  the  EU  average  of 
16.1%.  Despite  the  good  capital  positions,  the 
Danmarks  Nationalbank’s 
twice-yearly  stress 
test (159)  showed  that  in  a  severe  recession,  some 
credit institutions could come close to the capital-
conservation buffer or face difficulties in fulfilling 
their  overall minimum  requirement  for  own  funds 
and  eligible  liabilities.  In  September  2023,  the 
liquidity  coverage  ratio  of  Danish  banks  stood  at 
208.7%  and  the  net  stable  funding  ratio  was 
136.2%, 
regulatory 
comfortably  meeting 
requirements. However, while both ratios are good 
indicators of the sector’s liquidity position, they do 
not capture any liquidity risk that could stem from 
the  Danish  mortgage-credit  institutions  that  are 
dependent  on  their  affiliated  bank  to  acquire 
newly issued mortgage bonds. 

Danish  banks  are  profitable,  but  may  see 
their returns diminishing in the future. Banks’ 
profitability  improved  significantly  in  Q3-2023, 
following  growth  in  core  earnings  on  the  back  of 
the  highest  net  interest  income  since  2011 (160), 
low loan-impairment charges, and a positive value 
adjustment  of  securities  portfolios.  Return  on 
equity almost doubled, jumping from 1.3% in Q3-
2022 to circa 12% in Q3-2023. The increase in net 
interest  income  was due mainly  to  higher  deposit 
margins (161),  as  the  pass-through  of  higher 
interest  rates  on  customer  deposits  has  been 
lower than the money-market rates banks earn on 
their  excess  liquidity.  The  funding  structure  of 

(159) Danmarks Nationalbank, November 2023, Financial Stability, 
No. 20, High earnings can counteract increased risks for the 
banks. 

(160) Danmarks Nationalbank, data on systemic banks. 

mortgage  lending,  which  relies  more  on  bond 
investors  than  it  does  on  deposits,  has  played  a 
role in this as it reduces the incentive for banks to 
raise deposit rates. It also explains the high, albeit 
declining,  loan-to-deposit  ratio.  In  the  future,  it  is 
expected  that there will be lower deposit margins 
and  higher  impairment  charges,  and  that  this  will 
in turn reduce profitability. 

lending 

includes 

activities 

Asset  quality 
is  strong,  but  risks  of 
deterioration  are  looming.  Credit  quality  is 
strong,  with  the  lowest  non-performing  loan  ratio 
since  2016 (1.4%  in  September-2023),  below  the 
EU  average  of  1.8%.  Higher 
interest  rates 
increased the median debt-service-to-income ratio 
by more than  6 pps  since  the  beginning  of  2022, 
but  these  higher  rates  have  not  yet  been  fully 
passed  through  to  households,  with  only  about 
12% of existing mortgages expected to have their 
interest rate change before end-2025. As regards 
the  business  loan  book,  there  is  an  increased  risk 
of credit losses from loans to real-estate activities 
on 
(real-estate 
commercial  real  estate,  but  also  lending  to  real 
estate  investment  companies  and  funds  that 
invest in residential properties), which represented 
approximately  49.1%  of  the  corporate  loan  book 
as of September 2023 (162), 2.2 percentage points 
above  the  September  2022  level.  Only  25.5%  of 
the  business  loan  book  is  linked  to  commercial 
to  3.8%  of 
real-estate  property,  equivalent 
financial 
lending  exposure 
institutions’ 
(versus  4.1%  12  months  before),  as  most  of  the 
lending  is  granted  to  real  estate  that  ultimately 
has  residential  purposes.  Real-estate  companies 
are  now  exposed  to  higher  financing  costs  as  a 
result  of  higher  interest  rates,  the  economic 
slowdown, and lower real-estate prices, and these 
factors  may 
increase  banks’  share  of  non-
performing  loans,  albeit  from  low  current  levels 
(only  0.7%  as  of  September  2023).  Real-estate 
firms are mostly financed through mortgage loans 
granted  by  the  systemically 
important  credit 
institutions,  mainly  mortgage-credit  institutions, 
albeit  with  a  growing  share  of  financing  by 
the  collateral 
medium-sized  banks.  Due 
structure,  there  is  greater  risk  of  losses  for  the 
banks  than  for  the  mortgage-credit  institutions. 
This  is  because  mortgage-credit  institutions  tend 
to have a higher-ranking claim than banks on the 

total 

to 

(161) i.e. the interest premium that the banks can earn by placing 

their costumers’ deposits in the money market. 

(162) EBA Risk Dashboard Q3-2023. 

69 

 
 
 
 
 
 
Table A18.1:Financial Soundness Indicators 

(1) Last data: Q3 2023. 
(2) Data is annualized. 
(3) Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

to 

their 

lending 

mortgaged properties posted as collateral by real-
estate  firms.  As  a  result,  banks  have  only  around 
70%  of 
real-estate  firms 
collateralised  with properties,  while  the  remaining 
30% is collateralised with other types of collateral. 
Other  credit  or  company-related  characteristics 
(such  as  loan  structure,  level  of  indebtedness  or 
the  real-estate  portfolio)  pose  additional  risks, 
Council’s 
Systemic 
justifying 
recommendation  to  activate  a  sector-specific 
systemic  risk  buffer  of  7%  for  exposures  to  real-
estate businesses. 

Risk 

the 

Pension  and  life-insurance  companies  are 
solvent and well capitalised. In terms of assets, 
life insurers continue to dominate the market, with 
a 90% share of combined assets held by pension 
and  insurance  companies  in  Q4-2022.  In  2022, 
assets  held  by  non-life  insurers  declined,  and 
larger  bond  holders  were  particularly  affected  by 
sharp  interest-rate  increases.  Their  profits  shrank 
due  to  lower  investment  income  and)  higher 
claims costs, but were only marginally affected by 
the flood in autumn 2022, as natural catastrophes 
are  generally  covered  by  governmental  schemes. 
Negative 
the 
profitability  of  life  insurers  and  pension  funds, 
which  recorded  investment  losses  in  2022.  The 
solvency  ratio  for  the  entire  sector  remained 
robust,  albeit  slightly  declining  from  249%  in 
2021 to 241.1% in 2022. As the European Market 
Infrastructure  Regulation  (EMIR)  exemption  ended 
in 
life-insurance 
companies  settled  new 
interest-rate  hedging 
contracts via a central clearing house and boosted 

June  2023,  pension  and 

returns  affected 

investment 

cash  deposits  in  the  event  of  significant  interest-
rate  fluctuations.  This  led  several  companies  to 
increase  their  number  of  repo  counterparties  and 
strengthen their access to liquidity.  

70 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)363.0349.4384.6402.5363.9347.9346.0257.0184.6Share (total assets) of the five largest banks (%)65.764.566.267.165.665.8--69.6Share (total assets) of domestic credit institutions (%)193.093.092.993.493.093.893.8-62.9NFC credit growth (year-on-year % change)1.14.13.21.96.58.33.1-2.4HH credit growth (year-on-year % change)0.41.31.71.22.8-0.4-0.5-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)2.52.31.91.91.81.51.41.81.8- capital adequacy ratio (%)22.121.622.423.222.822.523.319.620.1- return on equity (%)210.88.08.74.58.23.811.99.913.2Cost-to-income ratio (%)151.257.761.063.358.371.345.652.844.9Loan-to-deposit ratio (%)1228.7240.7248.9215.8222.3209.6205.993.380.2Central bank liquidity as % of liabilities0.10.10.00.10.1---0.7Private sector debt (% of GDP)216.7215.3221.2217.1206.9188.0-133.0118.4Long-term interest rate spread versus Bund (basis points)15.95.86.915.131.333.520.3107.7104.2Market funding ratio (%)44.842.441.440.238.235.2-50.839.8Green bonds outstanding to all bonds (%)3-------4.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
 
 
 
 
 
 
  
 
ANNEX 19: TAXATION 

This  annex  provides  an 
indicator-based 
overview of Denmark’s tax system. It includes 
information on the tax structure (the types of tax 
that  Denmark  derives  most  of  its  revenue  from), 
the  tax  burden  on  workers,  and  the  progressivity 
and  the  redistributive  effect  of  the  tax  system.  It 
also  provides  information  on  tax  collection  and 
compliance.  

depreciation  to  provide  an  investment  window 
from  2024  (163).  New  taxes  on  CO2  emissions 
covering  various  sectors  are  expected  to  be 
introduced  in  2025  (164),  while  the  design  of  a 
specific climate tax covering the agricultural sector 
is  yet  to  be  decided.  An  expert  group  has 
presented three different models which are now to 
be discussed and agreed politically  (165). 

Denmark’s  tax  revenue  is  relatively  high  in 
relation  to  its  GDP.  It  is  well-balanced 
between  different  tax  types  in  a  growth-
friendly  way.  Table  A19.1  shows  Denmark’s 
revenues from different tax types as a percentage 
of  GDP.  Denmark’s  total  tax  revenue  as  a 
percentage  of  GDP  (41.9%)  was  among  the 
highest  in  the  EU  in  2022.  Revenues  from  labour 
taxation  and,  to  some  extent,  consumption  and 
environmental  taxation  were  comparatively  high 
relative  to  other  EU  countries  as  a  percentage  of 
GDP. Labour taxes as a share of GDP were higher 
in  Denmark  than  in  the  EU  as  a  whole,  and  the 
share of labour taxes as a share of total taxes was 
also higher in Denmark  at 53.2% in 2022 than in 
the  EU  as  a  whole  at  50.6%  (see  Graph  A19.2). 
is  characterised  by 
Denmark’s  tax  structure 
comparatively 
and 
consumption 
environmental  tax  revenues  as  a  share  of  total 
taxation  compared  with 
the  EU  aggregate. 
Recurrent  taxes  on  property  were  among  the 
highest in the EU as a percentage of both GDP and 
total  tax  revenues.  However,  Denmark  also  has 
one of the highest mortgage interest payment tax 
deductions  in  the  EU  and  this  incentivises  the 
financing  of  residential  property  through  debt.  A 
new  property  tax  system  seeking  to  address  the 
debt  incentive  and  increase  fairness  entered  into 
force  on  1  January  2024.  The  new  system  is 
based on new and improved  information for each 
property  and  allows  the  property  owner  to  add 
more  data.  Adjustments  have  also  been  made  to 
the  system  to  assure  the  quality  of  the  appeal 
procedure. Data sourcing and accuracy continue to 
present challenges for the Danish authorities.  

high 

Denmark’s  Recovery  and  Resilience  Plan 
focuses on a fair transition towards greener 
energy  sources  and  digitalising  services.  It 
includes a green tax reform that comprises several 
pieces of legislation to accelerate decarbonisation 
range  of  sectors.  For  example, 
in  a  wide 
investments in the green transition are expected to 
though  a  new  accelerated 
be 

incentivised 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

Note:  Second  earners  are  members  of  a  family  with  the 
primary  earner  earning  100%  of  the  average  wage  and  no 
children.  For  the  methodology  of  the  tax  wedge  for  second 
earners, see OECD, 2016, Taxing Wages 2014-2015. 
Source: European Commission and OECD 

the 

payments 

compulsory 

Denmark’s  labour  tax  burden  is  lower  than 
the  EU  average  across 
income 
distribution.  Graph  A19.1  shows  that  the  labour 
tax wedge for Denmark in 2023 was below the EU 
average  for  single  people  at  all  wage  levels.  Yet, 
non-tax 
significantly 
increase  the  compulsory  payment  wedge  for  a 
single earner at all wage levels. The tax wedge for 
second  earners  at  67%  of  the  average  wage, 
whose  spouses  earn  the  average  wage,  was 
around  the  EU  average  in  2023.  However,  the 
difference between the tax wedges of second and 
single  earners  at  67%  of  the  average  wage  was 
wider  for  Denmark  than  the  EU  average.  The 
higher  tax  wedge  for  second  earners  in  Denmark 
implies  lower  work  incentives  for  second  earners 
(who are often women) than for single earners at 
the  same  wage  level.  Overall,  in  2022  the  tax-

(163)https://www.ft.dk/samling/20222/almdel/sau/spm/410/svar/1

987493/2764398.pdf 

(164) Political  Agreement  on  a  Green  Tax  Reform.  Draft  Bill  on  a 

New CO2 Emission Taxes  

(165) https://skm.dk/aktuelt/presse-

nyheder/pressemeddelelser/ekspertgruppen-praesenterer-
tre-modeller-for-en-co2e-afgift-for-landbruget  

71 

32.334.036.442.039.442.544.549.0202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - DKSingle earner - EU averageSecond earner -  DKSecond earner -  EU averageSingle earner - DK (with NTCP) 
 
        
 
 
Graph A19.2: Tax revenues from different tax types, % of total revenue 

Note: Values for EU are GDP-weighted EU averages (EU aggregates) 
Source: European Commission 

than 

inequality 

the  EU  average. 

benefit  system  helped  reduce 
(as 
measured by the GINI coefficient) by substantially 
more 
the 
government  announced  a  personal  income  tax 
reform which is expected to lower labour taxes by 
DKK 10 billion (EUR 1.3 billion) (net) annually from 
2026  (166). 

In  2023, 

was partly due to COVID-19 effects. It is forecast 
to have increased slightly in 2022. 

in  2021 

(PSRM)  has,  according 

Denmark  performs  relatively  well  on  tax 
compliance and tax administration. The new IT 
system 
to  official 
sources  (167),  seen  debt  collection  increase  from 
DKK 3.7 billion 
to 
(EUR 0.5  billion) 
DKK 12.6 billion  (EUR 1.7  billion)  in  2022  (168). 
Outstanding  tax  arrears  were  12.1%  of  total 
revenue in 2021. This was significantly below the 
EU-27 average of 35.5%, although the latter was 
inflated  by  very  large  values  in  a  few  Member 
the 
States.  The  VAT  gap 
effectiveness of VAT enforcement and compliance, 
where  a  low  gap  indicates  high  effectiveness) 
stood at 5.0% in 2021 and continued to be below 
the  EU-wide  gap  of  5.4% (Table  A19.1).  However, 
it did not decrease, contrary to the EU trend which 

indicator  of 

(an 

(166) https://skm.dk/aktuelt/presse-nyheder/pressemeddelelser/ny-
skattereform-sender-10-mia-kroner-i-lommerne-paa-det-
arbejdende-danmark 

(167) See  the  note  to  the  Danish  parliament  indicating  measures 
needing to be taken: UFU Almdel Bilag 61 SAU alm del Bilag 
260pdf  (ft.dk)  and  the  proposal  subsequently  submitted  to 
the parliament: L 9 - 2023-24 (som fremsat): Forslag til lov 
om ændring af lov om inddrivelse af gæld til det offentlige, 
kildeskatteloven, 
og 
(Gennemførelse  af  aftale  om 
skatteforvaltningsloven. 
initiativer til effektiv opkrævning og gældsinddrivelse i. 

opkrævningsloven 

(168) https://gaeldst.dk/publikationer/inddrivelsesprovenu-2022 

72 

50.627.322.153.229.517.3Tax revenue shares in 2022, Denmark (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.43.92.10.90.30.24.02.51.42.701234567Denmark -environmentaltaxationEU -environmentaltaxationDenmark -property taxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Denmark and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
 
      
Table A19.1:Taxation indicators 

(1) Forward-looking effective rate (OECD) 
(2) A higher value indicates a stronger redistributive impact of taxation 
(*) EU-27 simple average 
(**)  Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD. 

73 

DK2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)45.047.447.641.943.737.940.040.440.2Labour taxes (as % of GDP)22.724.223.922.320.021.320.720.3Consumption taxes (as % of GDP)14.613.913.212.310.810.711.211.0Capital taxes (as % of GDP)7.79.310.57.37.18.08.68.9Of which, on income of corporations (as % of GDP)2.32.93.93.12.42.53.03.4Total property taxes (as % of GDP)2.52.72.52.31.92.32.22.1Recurrent taxes on immovable property (as % of GDP)2.02.01.81.71.11.21.11.0Environmental taxes as % of GDP4.03.22.82.42.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)31.230.931.132.232.333.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)35.935.835.936.336.441.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)20.320.220.219.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)12.211.212.011.08.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)12.212.140.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)11.54.35.05.99.75.4Tax structureProgressivity & fairnessTax administration & complianceDenmarkEU-27 
 
 
      
 
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1:Key economic and financial indicators 

(1) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

74 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)2.5-0.41.66.82.71.92.61.4Potential growth (y-o-y).1.01.82.32.42.21.81.5Private consumption (y-o-y)3.3-0.31.65.5-1.41.02.11.5Public consumption (y-o-y)1.61.60.54.6-2.80.01.72.4Gross fixed capital formation (y-o-y)5.8-3.63.96.63.2-5.0-1.91.8Exports of goods and services (y-o-y)6.21.02.47.710.813.49.81.8Imports of goods and services (y-o-y) 9.50.53.18.86.58.68.62.4Contribution to GDP growth:Domestic demand (y-o-y)3.2-0.51.75.1-0.6-0.60.91.6Inventories (y-o-y)0.3-0.20.01.80.4-1.80.00.0Net exports (y-o-y)-1.00.3-0.1-0.13.04.31.7-0.2Contribution to potential GDP growth:Total Labour (hours) (y-o-y).-0.10.41.01.11.00.70.3Capital accumulation (y-o-y).0.30.60.80.80.50.40.4Total factor productivity (y-o-y).0.90.80.50.40.60.70.8Output gap3.2-2.4-1.9-0.9-0.5-0.80.10.0Unemployment rate4.56.75.85.14.55.15.66.0GDP deflator (y-o-y)2.42.21.12.98.1-3.52.22.5Harmonised index of consumer prices (HICP, y-o-y)1.52.40.51.98.53.42.01.9HICP excluding energy and unprocessed food (y-o-y)1.22.10.71.15.35.21.91.8Nominal compensation per employee (y-o-y)3.42.61.73.13.12.85.34.7Labour productivity (real, hours worked, y-o-y)1.50.71.40.7-1.31.42.51.8Unit labour costs (ULC, whole economy, y-o-y)2.32.01.2-1.24.22.42.42.9Real unit labour costs (y-o-y)0.0-0.20.2-4.0-3.66.00.20.4Real effective exchange rate (ULC, y-o-y)1.2-0.3-0.2-1.20.8-4.0-2.20.6Real effective exchange rate (HICP, y-o-y)0.1-0.4-0.1-0.7-1.20.3..Net savings rate of households (net saving as percentage of net disposable income)-2.7-0.14.02.56.8...Private credit flow, consolidated (% of GDP)17.55.34.111.513.14.3..Private sector debt, consolidated (% of GDP)192.3224.0216.9206.9188.0196.6..of which household debt, consolidated (% of GDP)116.5136.5117.6102.084.888.9..of which non-financial corporate debt, consolidated (% of GDP)74.886.899.0104.9103.2107.6..Gross non-performing debt (% of total debt instruments and total loans and advances) (1).2.93.01.71.5...Corporations, net lending (+) or net borrowing (-) (% of GDP)3.67.86.06.49.15.77.07.5Corporations, gross operating surplus (% of GDP)22.722.324.527.229.724.625.225.8Households, net lending (+) or net borrowing (-) (% of GDP)-4.8-1.01.0-1.21.11.71.92.0Deflated house price index (y-o-y)11.1-6.04.09.5-7.4-6.5..Residential investment (% of GDP)6.24.34.65.95.25.1..Current account balance (% of GDP), balance of payments3.05.28.19.113.410.911.711.3Trade balance (% of GDP), balance of payments4.25.56.86.711.19.6..Terms of trade of goods and services (y-o-y)0.40.60.60.71.2-6.5-0.70.2Capital account balance (% of GDP)0.10.1-0.10.10.1-0.3..Net international investment position (% of GDP)-0.814.556.172.958.258.9..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-25.6-18.518.930.935.1...IIP liabilities excluding non-defaultable instruments (% of GDP) (2)139.7163.7167.1162.2152.8...Export performance vs. advanced countries (% change over 5 years)..-2.110.116.213.2..Export market share, goods and services (y-o-y)-1.6-3.81.3-2.95.612.26.1-1.8Net FDI flows (% of GDP)1.82.11.94.4-0.51.2..General government balance (% of GDP)4.3-1.61.04.13.33.12.41.4Structural budget balance (% of GDP)..1.44.63.63.62.41.4General government gross debt (% of GDP)35.141.438.236.029.829.326.525.1forecast 
 
 
 
  
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  Denmark  over  the  short,  medium 
and  long  term.  It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

slightly  favourable  but  declining  snowball  effect, 
notably  thanks  to  the  impact  of  Next  Generation 
EU. Finally, government gross financing needs are 
expected  to  remain  limited  and  on  a  strong 
declining path over the projection period, reaching 
a  negative  value  in  2034  (-0.7%  of  GDP),  below 
the average over 2024-2025. 

Government 

(Table A21.2) (169). 

1  –  Short-term  risks  to  fiscal  sustainability 
low.  The  Commission’s  early-detection 
are 
indicator  (S0)  does  not  point  to  short-term  fiscal 
risks 
gross 
financing  needs  are  expected  to  decrease  to 
around  4%  of  GDP  on  average  over  2024--2025 
(Table A21.1, Table 1). 
markets’ 
perceptions  of  sovereign  risk  remain  positive,  as 
confirmed by the CDS spread and the ‘AAA’ rating 
that  the  three  major  rating  agencies  assigned  to 
Danish government debt. 

Financial 

2  –  Medium-term  fiscal  sustainability  risks 
appear low.   

The DSA baseline shows that the government 
debt ratio is expected to decline significantly 
and  to  remain  below  60%  of  GDP  in  the 
medium term (at around 5% of GDP in 2034) 
(Graph 1,  Table  1) (170).  The  debt  reduction  is 
supported  by  an  assumed  structural  primary 
surplus  (excluding  changes  in  cost  of  ageing)  of     
2.9%  of  GDP  as  of  2024.  This  appears  plausible 
compared  to  past  fiscal  performance 
(Table 
A21.2) (171). The debt decline also benefits from a 

(169) The  S0  is  a  composite  indicator  of  short-term  risk  of  fiscal 
stress.  It  is  based  on  a  wide  range  of  fiscal  and  financial-
competitiveness  indicators  that  have  proven  to  be  a  good 
predictor of emerging fiscal stress in the past.  

to 

refers 

(which 

the  10-year 

(170) The  assumptions  underlying  the  Commission’s  ‘no-fiscal 
policy  change’  baseline  include  in  particular:  (i)  a  structural 
primary surplus, before  changes in ageing costs, of  2.9% of 
GDP  from  2024  onwards;  (ii)  inflation  converging  linearly 
towards  the  10-year  forward  inflation-linked  swap  rate  10 
years  ahead 
inflation 
expectations  10  years  ahead);  (iii)  the  nominal  short-  and 
long-term  interest  rates  on  new  and  rolled  over  debt 
converging  linearly  from  current  values  to  market-based 
forward  nominal  rates  by  T+10;  (iv)  real  GDP  growth  rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10  (average  of  1.1%);  (v)  ageing  costs  in  line  with  the 
2024  Ageing  Report  (European  Commission,  Institutional 
Paper 279, April 2024). For information on the methodology, 
see  the  2023  Debt  Sustainability  Monitor 
(European 
Commission, Institutional Paper 271, March 2024). 

(171) This  assessment  is  based  on  the  fiscal  consolidation  space 
indicator, which measures the frequency with which a tighter 
fiscal  position  than  assumed  in  a  given  scenario  has  been 
observed  in  the  past.  Technically,  this  consists  in  looking  at 

75 

to 

(i.e. 

four 

The  baseline  projections  are  stress-tested 
deterministic 
alternative 
against 
scenarios to assess the impact of changes in 
key  assumptions  relative  to  the  baseline 
(Graph 1).  For  Denmark,  all  the  stress  test 
scenarios  would  lead  to  slightly  worse  results  as 
compared 
the  baseline,  with  particularly 
adverse  developments  under  the  lower  structural 
the  projected 
primary  balance  scenario 
cumulative  improvement  in  the  SPB  over  2023-
2024  is  halved).  Under  this  stress  scenario,  the 
debt ratio would be higher than under the baseline 
by  about  6  pps.  of  GDP  in  2034.  Under  the 
historical structural primary balance (SPB) scenario 
(i.e.  the  SPB  returns  to  its  historical  15-year 
average of 2.5% of GDP), the debt ratio would be 
higher than under the baseline by around 3 pps. of 
GDP  in  2034.  Under  the  adverse  interest-growth 
rate  differential  scenario  (i.e.  the  interest-growth 
rate  deteriorates  by  1  pp.  compared  with  the 
baseline),  the  debt  ratio  would  be  higher  than 
under  the  baseline  by  around  1  pp.  of  GDP  in 
2034.  The  smallest  adverse  impact  on  the  debt 
ratio  is  projected  for  2034  under  the  financial 
stress  scenario  (i.e.  interest  rates  temporarily 
increase  by  1  pp.  compared  with  the  baseline), 
with  debt  ratio  that  would  be  broadly  unchanged 
compared with the baseline.  

to 

plausible 

The  stochastic  projections  indicate  low  risk, 
pointing  to  the  low  sensitivity  of  these 
unforeseen 
projections 
events  (172). These stochastic simulations indicate 
about  4%  probability  that  the  debt  ratio  will  be 
higher  in  2028  than  in  2023,  implying  low  risks 
the 
In  addition, 
the 
given 
the  baseline  debt 
uncertainty 

low  debt 
surrounding 

level. 

the  percentile  rank  of  the  projected  SPB  within  the 
distribution  of  SPBs  observed  in  the  past  in  the  country, 
taking into account all available data from 1980 to 2022. 

(172) The stochastic projections show the joint impact on debt of 
the  government’s 
10000  different  shocks  affecting 
budgetary  position,  economic  growth,  interest  rates  and 
exchange  rates.  This  covers  80%  of  all  the  simulated  debt 
paths and therefore excludes tail events. 

 
 
 
 
 
 
 
 
 
 
which is partly offset by the projected increase of 
the  ageing-related  public  expenditure  (0.8  pp.) 
(Table A21.1, Table 2).  

of 

materialisation 

4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment. On 
one  hand,  risk-increasing  factors  are  related  to 
the higher  interest  rates,  contingent  liability risks 
stemming from the private sector, including via the 
possible 
sizeable 
state guarantees  granted  to  firms  and  self-
employed during the COVID-19 crisis. Overall, this 
risk remains  limited  due  to  relatively  low  take-up. 
Contingent 
liability  risks  stemming  from  the 
banking  sector  point  to  moderate  risks.  On 
the other-hand, 
include 
recent 
the lengthening  of  debt  maturity 
years, relatively  stable  financing  sources  (with 
a diversified  and  large  investor  base)  and  the 
currency denomination 
addition, 
Denmark’s  positive net  international  investment 
position helps mitigating vulnerabilities. 

risk-mitigating  factors 
in 

debt. In 

of 

(as  measured  by 

projections 
the  difference 
between  the  10th  and  90th  debt  distribution 
percentiles) is low, reaching around 16 pps. of GDP 
in five years’ time) (Graph 2).  

3  –  Long-term  fiscal  sustainability  risks 
appear overall low. This assessment is based on 
the  combination  of  two  fiscal  gap  indicators, 
capturing  the  required  fiscal  effort  to  stabilise 
debt  (S2  indicator)  and  bring  to  60%  of  GDP  (S1 
indicator) over the long term (173). This assessment 
is  driven  by  the  favourable  initial  budgetary 
position,  which  more  than  offset  the  projected 
increase  in  ageing  costs.  Hence,  these  results  are 
conditional  on  the  country  maintaining  a  sizeable 
SPB over the long term.  

indicator  points  to 

The  S2 
low  fiscal 
sustainability  risks.  The  indicator  shows  that, 
relative  to  the  baseline,  the  SPB  could  relax  its 
fiscal position by 1.7 pps. of GDP in 2025 and still 
ensure  debt  stabilisation  over  the  long  term.  This 
result  is  underpinned  by  the  favourable  initial 
budgetary  position  (contribution  of  -2.5  pps.  of 
GDP),  which  is  partially  offset  by  the  projected 
increase  in  ageing-related  costs  (contribution  of 
0.8 pp.).  Ageing  cost  developments  are  primarily 
driven  by  a  projected  increase  in  long-term  care 
(2.8  pps.  of  GDP)  and  health-care  spending  (0.7 
pp.),  which  is  partly  offset  by  the  decrease  in 
public pension expenditure (-2.1 pps.) (Table A21.1, 
Table 2).  

indicator  points  to 

The  S1 
low  fiscal 
sustainability risks. The indicator shows that the 
country could relax its fiscal position by 2.8 pps. of 
GDP  in  2025  and  still  ensure  that  the  debt  ratio 
will not exceed 60% of GDP in 2070. This result is 
mainly  driven  by  the  favourable  initial  budgetary 
position (contribution of -2.8 pps. of GDP) and to a 
lesser  extent  the  debt  requirement  (-0.7  pp.), 

(173)The  S2 

indicator  measures 

fiscal  sustainability 

the 
permanent  SPB  adjustment  in  2025  that  would  be  required 
to stabilise public debt in the long term. It is complemented 
by  the  S1  indicator,  which  measures  the  permanent  SPB 
adjustment in 2025 to bring the debt ratio to 60% by 2070. 
For  both  the  S1  and  S2  indicators,  the  risk  assessment 
depends on the amount of fiscal consolidation needed: ‘high 
risk’ if the required effort exceeds 6 % of GDP, ‘medium risk’ 
if it is between 2% and 6% of GDP, and ‘low risk’ if the effort 
is  negative  or  below  2%  of  GDP.  The  overall  long-term  risk 
classification  combines  the  risk  categories  derived  from  S1 
and S2. S1 may notch up the risk category derived from S2 if 
it  signals  a  higher  risk  than  S2.  See  the  2023  Debt 
Sustainability Monitor for further details. 

76 

 
 
Table A21.1:Debt sustainability analysis - Denmark 

Source: European Commission services 

Table A21.2:Heatmap of fiscal sustainability risks - Denmark 

(1)  Debt  level  in  2034.  Green:  below  60%  of  GDP.  Yellow:  between  60%  and  90%.  Red:  above  90%.  (2)  The  debt  peak  year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early. Yellow: peak towards the 
middle of the projection period. Red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country  that  were  more  stringent  than  the  one  assumed  in  the  baseline.  Green:  high  value,  i.e.  the  assumed  fiscal  position  is 
plausible by historical standards and leaves room for corrective measures if needed. Yellow: intermediate. Red: low. (4) Probability 
of debt ratio exceeding in 2028 its 2023 level. Green: low probability. Yellow: intermediate. Red: high (also reflecting the initial 
debt level). (5) the difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
10000  different  shocks.  Green,  yellow  and  red  cells  indicate  increasing  uncertainty.  (For  further  details  on  the  Commission's 
multidimensional approach, see the 2023 Debt Sustainability Monitor) 
Source:  European  Commission  (for  further  details  on  the  Commission's  multidimensional  approach,  please  see  the  2023  Debt 
Sustainability Monitor) 

77 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)36.029.829.326.524.822.019.417.014.712.510.48.56.64.9Changes in the ratio-6.3-6.2-0.5-2.8-1.7-2.8-2.6-2.4-2.3-2.2-2.1-2.0-1.8-1.7of whichPrimary deficit-4.6-4.1-3.7-2.9-2.3-2.3-2.2-2.2-2.0-2.0-1.9-1.8-1.6-1.6Snowball effect-3.3-2.91.1-0.9-0.4-0.5-0.4-0.3-0.2-0.2-0.2-0.2-0.2-0.1Stock-flow adjustments1.60.72.11.01.00.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)7.74.94.33.83.52.11.30.70.30.0-0.2-0.4-0.6-0.7S1S2Overall index  (pps. of GDP)-2.8-1.7of which Initial budgetary position-2.8-2.5Debt requirement-0.7Ageing costs0.80.8of which    Pensions-1.2-2.1     Health care0.40.7     Long-term care2.02.8Education-0.4-0.6Table 2. Breakdown of the S1 and S2 sustainability gap indicators051015202530354020212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9001020304020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWLOWLOWLOWDebt level (2034), % GDP4.98.410.76.15.1Debt peak year20242024202420242024Fiscal consolidation space66%72%74%66%66%Probability of debt ratio exceeding in 2028 its 2023 level4%Difference between 90th and 10th percentiles (pps. GDP)16.4Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWLOWLOWLOWLOW