COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Denmark Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Denmark
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Denmark, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 204 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Denmark Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Denmark {COM(2025) 204 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

The economy, powered by exports, 
remains strong 

continues 

The  Danish  economy 
to 
outperform  the  euro  area,  driven  by 
strong  export  growth  and  a  thriving 
pharmaceutical industry. It is expected to 
maintain  its  momentum  in  the  coming 
years.  The  Danish  economy  showed  robust 
growth  in  2024,  with  real  GDP  increasing  by 
3.7%.  Since  2020,  Denmark’s  real  GDP  has 
grown  by  an  average  of  2.6%  per  year, 
outpacing the euro area’s average growth rate 
of  0.9%  per  year.  Exports 
(in  particular 
pharmaceuticals  and  shipping)  and  public 
consumption were the main drivers of  growth 
in  2024.  Despite  an  increase  in  employment 
and  real  wages,  consumer  spending  remained 
subdued,  while  investments  stagnated  due  to 
higher  interest  rates. If  the  pharmaceutical 
industry  is  left  out  of  the  equation,  economic 
activity  was  modest,  with  growth  in  gross 
value  added  for  2024  estimated  at  1.8%  by 
Statistics  Denmark.  This  figure  does  not  take 
account  of  activity  in  other  sectors,  such  as 
construction,  that  are  driven  by  growth  in  the 
pharmaceutical  industry,  meaning  that  the 
direct  and  indirect  economic  effects  of  the 
pharmaceutical  sector  may  be  even  larger. 
Growth is forecast to remain solid in 2025 and 
2026.  The  pharmaceutical  sector  is  expected 
to  continue  driving  growth,  but  the  planned 
reopening  of  the  Tyra  natural  gas  field in  the 
North  Sea  in  2025,  and  a  gradual  recovery in 
non-pharmaceutical  sectors,  are  set  to  make 
growth more broad-based. 

Graph 1.1: Continued strong growth in the 
pharmaceutical industry 

(1) Gross value added (GVA) equals gross domestic 
production (GDP) minus net taxes. Pharmaceutical 
industry GVA for 2015-2024 was extracted from 
unpublished Statistics Denmark figures and is therefore 
subject to greater uncertainty. 
Source: Statistics Denmark 

Denmark  has  an  exceptionally 
large 
current  account  surplus,  driven  by  a 
strong  export  performance.  Denmark  has 
large  current  account 
had  a  consistently 
surplus over the years, reaching a record high 
of 13.0% of GDP in 2024. This jump, from an 
already high average over the past decade (of 
around  8%  of  GDP  from  2013  to  2023),  was 
mainly  due  to  the  robust  performance  of  key 
export  sectors,  in  particular  pharmaceuticals 
and  shipping.  Looking  ahead,  the  current 
account  surplus is  forecast  to  remain  high,  at 
around 13-14% of GDP, in the coming years. 

Employment  continued  to  grow  in  2024, 
reflecting  healthy  economic  growth  and 
an  increasing  labour  supply.  The  labour 
supply has increased in recent years for three 
main  reasons:  people  retiring  later,  more  first 
and second-generation immigrants joining the 
labour  market  and  more  people  from  abroad 

2 

9095100105110115120125130135GVAGVA excl. pharma 
 
  
finding work in Denmark. In the years after the 
pandemic the latter group have accounted for 
a  significant  proportion  of  the  increase  in 
employment (1).  In  2024  total  employment 
increased  by  0.8%,  while  the  unemployment 
rate  stood  at  6.2%  of  the  labour  force  (see 
Social  Scoreboard  in  Annex  13).  The  outlook 
for  2025  and  2026  suggests  continued  but 
modest growth in employment and a marginal 
increase  in  the  unemployment  rate.  In  2024 
Denmark’s  employment  rate  rose  to  80.2% 
and  its  activity  rate  remained  well  above  the 
EU  average  at  84.8%  (see  Annex  10).  The 
share  of  young  people  who  were  not  in 
education,  employment  or  training  was  8.0% 
in  2024,  well  below  the  EU  average,  and  the 
long-term unemployment rate was among the 
lowest 
in  the  EU  at  0.8%.  People  with 
disabilities continue to be underrepresented in 
the labour market. The job vacancy rate fell to 
in 
2.4% 
construction  and  services  and  in  key  sectors 
linked  to  the  digital  and  green  transition  and 
healthcare  (see  also  Section  4).  Nominal 
wages  increased  by  4.4%  and  real  wages  by 
3.0%  in  2024,  partially  offsetting  the  decline 
seen in previous years, while unit labour costs 
grew by 1.5%. 

in  Q4 2024  but 

remains  high 

Inflation 
in  Denmark  has  decreased 
significantly.  After  reaching  a peak in  2022, 
inflation in Denmark declined  rapidly in 2023, 
mainly  due  to  lower  energy  prices  and  stable 
food  prices.  The  harmonised  consumer  price 
index  increased  by  3.4%  in  2023,  down  from 
8.5%  in  2022;  it  then  dropped  to  1.3%  in 
2024,  mainly  as  a  result  of  falling  energy 
prices. 
is  set  to  remain  stable, 
increasing  only  slightly  to  1.6%  in  2025  and 
1.5% the following year. 

Inflation 

Housing prices are on the increase 

Housing  prices  are  starting  to  increase 
again.  Nominal  house  prices  in  Denmark 
resumed  growth  in  2024,  following  a  price 
hike in 2022 and a decline of a similar order in 

in 

sharply 

especially 

to  Statistics  Denmark, 
2023.  According 
nominal house prices fell by 0.3% in the most 
recent  quarter  (Q3 2024)  compared  to  the 
previous  quarter  (seasonally  adjusted)  and 
increased  by  2.2%  annually.  However,  the 
resurgence  in  house  prices  masks  significant 
regional  differences,  with  apartment  prices 
increasing 
the 
Copenhagen  area.  In  the  Copenhagen  area, 
demand  for  housing  is  outpacing  new  supply 
and  the  share  of  owner-occupied  housing  in 
the housing stock is 22%, which much smaller 
the  50%  share  of  owner-occupied 
than 
housing  in  Denmark  as  a  whole  (2).  Several 
valuation  indicators  suggest  a  steep  rise  in 
housing  valuation  over  the  past  decade  in 
Denmark,  and  since  2015  house  prices  have 
grown  faster  than  households’  incomes,  as 
reflected  in  a  steady  increase  in  the  house 
price-to-income  ratio  over  the  past  10 years. 
High  prices  for  owner  occupied  housing,  a 
highly  regulated  rental  market  and 
long 
waiting  times  for  non-profit  housing  in  the 
main  urban  areas  have  led  to  shortages  of 
affordable  housing  units.  Partly  as  a  result, 
Denmark  has  a  relatively  high  proportion  of 
households  overburdened  by  housing  costs, 
including  many  young  people  living  in  single 
households. A political agreement was reached 
in 2021 to further increase the construction of 
affordable rental  housing, primarily non-profit 
housing,  with  a  total  budget  of  EUR  1.35 
billion for 2022-2035.  

High but declining budget surplus 

Denmark’s  public  finances  recorded  a 
surplus  in  2024,  despite  higher  spending 
on defence. The general government balance 
showed  a  surplus  of  4.5%  of  GDP,  which  is 
mainly  the  result  of  a  healthy  3.7%  real  GDP 
growth.  On  the  revenue  side,  income  taxes 
grew considerably due, among other things, to 
the  higher  employment 
increased 
business taxation linked to healthy profits and 
increased 
the 
expenditure side, there was also an increase in 
government  consumption  due,  among  other 

contributions.  On 

social 

rate, 

(1)  Danish  Ministry  of  Economic  Affairs,  Economic  Survey, 

August 2024. 

(2)  City of Copenhagen, Boligredegørelsen 2024 (in Danish) 

3 

 
 
 
things,  to  significantly  higher  spending  on 
defence and military and other aid to Ukraine. 
The  gross  debt  rate  continued  its  downward 
trajectory, dropping to 31.1% of GDP in 2024, 
down  from  33.6%  the  previous  year.  The 
Commission  forecast  suggests  that  a  general 
government  surplus,  albeit  lower,  will  also  be 
achieved  in  2025  (1.5%)  and  in  2026  (0.6%). 
The  debt  ratio  is  expected  to  fall  further  to 
29.7%  in  2025  and  29.4%  in  2026.  Denmark 
has  a  robust  system  for  managing  public 
finances  over  the  medium  term,  based  on 
multi-year  annual  expenditure  ceilings  at 
central  government  and  regional/municipal 
level. 

Net expenditures growing strongly, driven 
by  defence.  In  2024,  net  expenditure  (3)  in 
Denmark  grew  by  3.3%  (see  Annex  1).  This 
increase  is  mainly  driven  by  higher  defence 
In  2025,  net 
and  social  expenditures. 
expenditure  is  forecast  by  the  Commission  to 
grow by 10.0%, which is above the maximum 
growth  rate  recommended  by  the  Council  (4). 
The cumulative growth rate of net expenditure 
in 2024 and 2025 taken together is projected 
at  13.6%,  which  is  above  the  maximum  rate 
recommended  by  the  Council.  The  projected 
deviation  is  allowed  under  the  conditions  of 
the  national  escape  clause  based  on  current 
projections for defence spending.  

committing  Denmark 

Denmark’s medium-term fiscal-structural plan 
proposes  a  gradual  deconsolidation  over  four 
years, 
to  a  net 
expenditure  of  4.4%  on  average  over  the 
period from 2025 to 2028. This will result in a 
lower  structural  primary  budget  balance  of 
0.5% of GDP by 2028.  

expenditure, 

(3)  Net expenditure is defined in Article 2(2) of Regulation 
(EU)  2024/1263  as  government  expenditure  net  of  (i) 
interest 
revenue 
(ii) 
measures, (iii) expenditure on programmes of the Union 
fully  matched  by  revenue  from  Union  funds,  (iv) 
national  expenditure  on  co-financing  of  programmes 
funded  by 
(v)  cyclical  elements  of 
unemployment  benefit  expenditure,  and  (vi)  one-off 
and other temporary measures 

discretionary 

the  Union, 

(4)  Council Recommendation of 21 January 2025 

endorsing the national medium-term fiscal-structural 
plan of Denmark (OJ C, C/2025/654, 10.2.2025, ELI: 
http://data.europa.eu/eli/C/2025/654/oj) 

Geopolitical risks cloud an 
otherwise positive outlook 

is  currently  Denmark’s 

The  positive  outlook 
is  tempered  by 
significant  external  risks  stemming  in 
particular  from  geopolitical  uncertainty 
and fragmentation. With exports accounting 
for  around  70%  of  GDP,  Denmark  is  a  very 
open economy,  which brings benefits, such as 
productivity gains and economies of scale, but 
also exposes it to international risks like trade 
restrictions  and  supply  chain  distortions.  The 
US 
largest  export 
market, accounting for 18% of total exports of 
goods  and  services  in  2024,  up  from  11%  in 
2015 (5).  Goods  accounted  for  68%  of  the 
value  of  total  exports  to  the  US,  but  a  large 
proportion  (75%)  is  not  produced  in  Denmark 
companies  abroad,  a 
but  by  Danish 
significantly  greater  percentage 
than  for 
Danish exports to the rest of the world (12%). 
Danish  companies’  production  capacity  in  the 
US  helps  cushion  Denmark’s  economy  from 
the full impact of US trade policies. 

Over 

recent 

companies 

enterprises 

Denmark’s  high  and  increasing  growing 
dependence  on  a  limited  number  of  few 
large 
has 
contributed to solid economic growth but 
could  also  constitute  prove  a  source  of 
vulnerability. 
decades, 
Denmark’s  business  structure  has  evolved  to 
become increasingly dominated by a few large 
companies (6). This has helped create a strong 
basis 
innovation,  R&D,  employment, 
exports and economic expansion.  At the same 
time,  however,  dependence  on  a  few  large 
companies  in  a  limited  number  of  economic 
sectors  could  potentially  become  a  source  of 
fluctuations  and  vulnerability  in  the  Danish 
economy  if  these  companies  or  sectors  were 
to face adverse market conditions. 

for 

(5)  Danmarks  Nationalbank  and  Statistics  Denmark, 
Extensive  Danish  Trade  and  Investment  Relations  with 
the United States, Analysis 2025:4, March 2025. 

(6)  Danmarks Nationalbank, The Increasing Importance of 
the Largest Companies, Danmarks Nationalbank 
Analysis, No 8, March 2025. 

4 

 
 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

Denmark is progressing towards achieving or performing well on all environmental sustainability 
SDGs (SDGs 2, 6, 7, 9, 11, 12, 13, 14) bar SDG 15 (Life on Land), where additional efforts could 
be made to catch up with  the EU average. Denmark  also performs well, or is improving, on all 
SDGs  relating  to  productivity  (SDGs  4,  8,  9)  and  macroeconomic  stability  (SDGs  8,  16,  17). 
Furthermore, Denmark is performing well or progressing on most SDGs relating to fairness (SDGs 
3, 4, 5, 7, 8, 10). Although Denmark is performing well on SDG 1 (No poverty), it is moving away 
from  this  goal.  Out  of  the  17  SDGs,  Denmark  performs  better  than  the  EU  average  on  16  of 
17 SDGs, the only exception being SDG 15. 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). 

scores  well 

on  most 
Denmark 
competitiveness 
indicators,  but  high 
costs,  taxes  and  wages  require  constant 
productivity gains. The Danish economy has 
a number of fundamental strengths that make 
it  competitive  overall,  including  a  flexible 
labour  market  with  few  disputes,  a  highly 
educated workforce, good infrastructure and a 
well-functioning 
administration. 
public 
However, high costs, including high wages and 
taxes,  create  constant  pressure  to  achieve 
further productivity growth and  exposes firms 
to  competition  from  lower-cost  producers. 
Skills shortages and mismatches in some parts 
labour  market  could  hold  back 
of 
productivity gains and growth (see Section 4). 

the 

investment 

Denmark’s  investment  levels  are  in  line 
with the EU average, but better access to 
finance  could  boost  private  business 
investment.  The  overall  investment  ratio  of 
the Danish economy is close to the EU average 
suggesting  that  that  total 
is 
broadly  satisfactory  from  a  macroeconomic 
perspective the total investment level is good. 
There  is  a  well-functioning  covered  bond 
market  (realkredit),  which  supports  housing 
financing  and  thus 
in  private 
housing.  Public  and  private  investment  has 
been boosted by support for green and digital 
investments  under  the  Danish  recovery  and 
resilience plan (RRP). While access to finance is 
generally  good,  some  firms  face  difficulties 
(see Annex 5). 

investment 

Maintaining the competitive edge 

Denmark’s labour productivity is high, but 
productivity  growth  has  been  slowing. 
Denmark  boasts  one  of  the  highest  labour 
productivity rates (7) in the EU, at 132% of the 
EU  average  in  2023.  In  terms  of  labour 
productivity  growth,  Denmark  averaged  1.1% 
per  year  over  the  2013-2023  period,  slightly 
below the EU median. This growth rate masks 
a  weak  productivity  development  in  recent 
years.  This  slowdown  in  productivity  could 
prove  temporary  as  it  could  be  linked  to  an 
influx of new workers with less experience and 
lower skills during a period of good job growth, 
in  turn  leading  to  lower  average  productivity 
growth (8).  Denmark  scores  high  on  indicators 
linked  to  innovation  and  the  diffusion  of  new 
technologies as well as on business dynamism, 
to  high-
favouring 
productivity  sectors.  However,  both  research 
and  innovation  activity  and  productivity  gains 
remain  concentrated  in  a  few  large  firms, 
while  small  and  medium-sized  enterprises 
struggle  to  keep  up  (see  also  Section  2).  In 
Denmark’s  manufacturing  sector,  the  largest 
corporations  with  over  2 000 employees  have 
a  productivity  level  more  than  double  that  of 
their smaller counterparts. 

reallocation 

resource 

(7)  Measured by GDP per hour worked at purchasing power 

standards. 

(8)  Danish  Ministry  of  Economic  Affairs,  Economic  Survey, 

December 2024. 

5 

 
 
 
Paving the way for competitive 
decarbonisation 

storage,  demand  response  and  other  market-
based flexibility solutions (see Section 3). 

tighter 

market 

Amidst growing international competition 
and 
conditions, 
government  support  for  decarbonisation 
remains strong and targeted. Denmark is a 
leader in net-zero technologies (9), in particular 
wind  power  and  carbon  capture  and  storage 
technologies.  It  has  implemented  a  range  of 
measures  to  support  green  investments  and 
R&D  activities  in  green  transition  sectors, 
including 
support 
schemes  and  access  to  growth  loans  and 
venture capital through programmes managed 
by  the  Danish  Export  and  Investment  Fund. 
The landmark political  agreement on a  ‘Green 
Denmark’  (see  Section  3)  and  subsequent 
legislative  proposals  set  the  stage  for  a 
substantial  transformation  of  land  use  in 
Denmark,  in  particular  as  regards  farming. 
implementation  will  demand 
Ensuring 
significant efforts. 

incentives,  grant 

tax 

its 

and 

Further  electrification  across  sectors 
could  help  decarbonise  the  economy  in  a 
cost-effective  manner 
enable 
consumers  to  reap  the  benefits  of 
affordable 
generation. 
renewables 
Renewable sources make up the lion’s share of 
Denmark’s  electricity  generation  mix,  creating 
ideal  conditions  for  further  decarbonisation 
through 
(see 
flexible  electricity 
Section 3).  Smart  and 
networks  have  a  crucial  role  to  play  in  a 
setting  characterised  by  a  high  renewable-
energy penetration rate and large potential for 
growing  domestic  and  international  electricity 
demand.  Denmark 
from 
increased  efforts  when  it  comes  to  planning 
and  supporting  grid  upgrades  and  promoting 

could  benefit 

electrification 

increased 

(9)  Net-zero  technologies  are  technologies  considered 
fundamental  to  reach  EU 2030  and 2050  climate  and 
energy  objectives.  See European Commission,  Proposal 
for a regulation of the European Parliament and of the 
Council  on  establishing  a  framework  of  measures  for 
strengthening  Europe’s  net-zero  technology  products 
manufacturing  ecosystem  (Net  Zero  Industry  Act), 
16 March 2023 – Net Zero Industry Act. 

6 

 
 
Box 2: 

Barriers to private and public investment 

Private  investment  in  Denmark  as  a  percentage  of  GDP  has  been  declining  in  recent 
years,  while  net  public  investment  as  a  percentage  of  GDP  has  increased.  Net  private 
fixed-capital  formation  as  a  percentage  of  GDP  declined  in  2024,  mainly  due  to  high  interest 
rates, but Denmark’s five-year average of 4.12% is still slightly above the EU average of 4.01%. 
By contrast, net public fixed-capital formation increased in 2024, yet remained slightly below the 
EU average of 1.01%. 

Regarding the main barriers to private investments, Danish firms highlighted: 

•  Skilled  staff  shortages.  71%  of  Danish  firms  reported  in  2024  that  lack  of  skilled 

staff was a long-term barrier to investment. 

Conversely, significantly fewer Danish firms than the EU  average identify  business regulations, 
access to finance, transport infrastructure or digital infrastructure as barriers to investment. 

Denmark demonstrated best practices in public investment management, particularly 
as  regards  the  planning,  selection  and  budgeting  of  road,  railway  and  IT  projects. 
Nevertheless, there is room for further improvement, and addressing the following barriers could 
make investment decisions even more effective: 

•  Broadening  the  scope  of  external  quality  review  processes  during  project 
appraisal  and  selection  to  include  investigating  alternative  solutions  and  making 
more comprehensive assessments to better inform final investment decisions. 

•  Expanding  best  practice  governance  models  to  additional  sectors  such  as  energy 
infrastructure  and  defence  procurement,  building  on  the  success  of  the  road,  railway 
and IT sectors. 

•  Systematically conducting ex post evaluations of all major projects well after 
the  project  was  launched  (e.g.  after  3-5 years),  thus  allowing  for  a  more 
comprehensive assessment and better-informed decisions for future investments. 

The  implementation  of  the  RRP  is  well  underway.  At  present,  Denmark  has  fulfilled  57%  of 
milestones and targets in its RRP.  

It  remains  important  to  accelerate  the  implementation  of  cohesion  policy  programmes.  The 
mid-term  review  offers  opportunities  to  speed  up  progress  and  better  address  EU  strategic 
priorities related to competitiveness, defence, housing, water resilience and the energy transition. 

While Denmark has leveraged STEP to reallocate some Cohesion Policy resources towards this 
priority, it can further support the development or manufacturing of critical technologies in the 
areas of digital and deep tech, clean and resource efficient technologies, and biotechnologies. 

7 

 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

and 

regulation 

A solid institutional framework, based on 
business-friendly 
a 
digitalised  public  administration,  has 
helped boost Danish competitiveness. The 
country is a leader in digital public services  in 
terms  of  a  strong  online  presence  and  easy 
access,  allowing  people  to  manage  most 
services  online  (see  Annex 6).  This  is  in  part 
in 
thanks 
simplifying 
the 
administrative  burden.  In  line  with  its  'digital-
by-default' approach to public service delivery, 
the  government  is  working  to  ensure  that  all 
citizens  can  benefit 
the  progress 
achieved and that no one is left behind in the 
digital transition. 

to  significant  advances  made 

regulations  and 

reducing 

from 

Denmark’s innovation landscape: 
bridging the productivity gap and 
expanding the R&D base 

Denmark  ranks  high  on  productivity 
growth  in  the  EU,  driven  by  a  strong 
research and innovation base. According to 
the  2024  European  Innovation  Scoreboard 
(see  Annex  3),  Denmark  is  a  research  and 
innovation  leader.  It  boasts  a  strong  public 
research  base  that  benefits  from  significant 
investments, resulting in high-quality scientific 
publications  and  strong  international  linkages, 
as 
in  a  high  proportion  of 
international  scientific  co-publications.  Danish 
universities  readily  transfer  knowledge  to  the 
private  sector,  supporting  the  commercial 
application  of  research  findings.  Furthermore, 
and 
public 
development  (R&D)  is  the  highest  in  the  EU, 
further  bolstering  Denmark’s 
innovation 
performance. 

expenditure 

reflected 

research 

on 

A strong business environment is 
driving growth 

in 

in 

Denmark  has  a  healthy  and  stable 
business  environment,  with  a  focus  on 
digitalisation  and  sustainability.  Denmark 
enjoys a strong competitive position thanks to 
its  excellent  performance 
innovation, 
education and digital public services, combined 
with  a  well-functioning  infrastructure.  This  is 
reflected 
international  competitiveness 
surveys:  In  2024  Denmark  ranked  first  in  the 
EU  and  third  globally  according  to  the  IMD 
World Competitiveness  Ranking  (see  Annex 4). 
There  is  good  potential  for  further  economic 
growth, thanks to a business environment that 
allows  efficient  reallocation  of  resources  to 
productive  activities,  as  evidenced  by 
its 
business  churn  rate  and  proportion  of  high-
growth  firms,  which  exceed  the  EU  average. 
Nevertheless,  firms  struggle  to  recruit  skilled 
workers  and  face  uncertain  future  prospects, 
which  can  hinder  investment  and  growth  (see 
Section 4). Denmark makes continuous efforts 
to  improve  the  business  environment  and 
reduce the administrative burden  on firms, as 
demonstrated by recent initiatives such as the 
improve  business  framework 
strategy 
conditions (10), 
the  business  development 
strategy  2024-2027 (11)  and  the  life  sciences 
strategy (12). 

to 

(10)  Ministry  of  Foreign  Affairs  of  Denmark,  Invest  in 
Priorities 
Denmark,  New  Government 
Improvement  of  Business  Framework  Conditions  and 
International Talent Acquisition, 2024. 

Strategy 

(11)  Danish  Business 

(Danmarks 
Erhvervsfremmebestyrelse), Virksomhedsudvikling i hele 
Danmark 2024-2027, 2024. 

Promotion  Board 

(12)  Ministry  of  Foreign  Affairs  of  Denmark,  Invest  in 
Denmark, New Danish life science strategy, 2024. 

8 

 
 
 
Graph 2.1: Productivity in manufacturing by 
size (the productivity level of large companies 
= 100) 

between  businesses,  research  institutions  and 
government  agencies,  with 
the  aim  of 
converting  new  knowledge  into  innovation. 
Such  efforts  would  complement  current 
strategies  focusing  on  business  development, 
life  sciences,  green  research,  technology  and 
innovation. By encouraging more companies to 
engage in R&D activities, such measures could 
inclusive  and  dynamic 
foster  a  more 
innovation  ecosystem  where  both 
large 
companies and SMEs can thrive. 

(1) The index in the figure is based on average deviation 
from median productivity, with productivity calculated as 
hourly productivity and added value deflated at 69-
industry level. 
Small enterprises: 10-49 full-time employees (FTEs), 
medium-sized: 50-249 FTEs, large: 250-1.999 FTEs, 
mega: > 2 000 + FTEs. 
Source: Statistics Denmark and Danish Ministry of 
Economic Affairs 

In 

Denmark 

technologies. 

The  benefits  of  innovation  are  unevenly 
distributed.  Very  large  companies  (with  over 
2 000 staff)  have  had  significant  productivity 
gains,  while 
small  and  medium-sized 
enterprises  (SMEs)  struggle  to  keep  up.  This 
trend  is  particularly  pronounced  in  sectors 
where industrial R&D is concentrated among a 
few large firms, such as pharmaceuticals. This 
concentration  exacerbates  the  productivity 
gap,  as  smaller  companies  struggle  to  adopt 
new 
the 
pharmaceutical industry has been a key driver 
of  innovation  and  productivity  growth,  while 
other sectors are experiencing slower progress. 
This is also reflected in regional disparities, as 
demonstrated by a widening difference in GDP 
between  the  capital  and  the  other  regions 
which is likely due to variations in productivity 
growth  (see  Annex 17).  A  number  of  targeted 
policies  have  already  been  put  in  place  to 
address  these  disparities  and  broaden  the 
innovation  base,  including  increased  financial 
support  for  SME  innovation,  improved  access 
to 
labour  market  policies 
supporting  skills  development  and  matching 
is  one 
(the  Regional  Lighthouse  projects 
example).  Innovation  efforts  could  be  further 
strengthened  by  fostering  more  collaboration 

funding,  and 

to 

the 

and 

advanced 

Denmark  strengthens  the  incentive  for 
companies  to  invest  in  R&D  through 
higher  R&D  tax  deduction  rates. 
In 
response 
pandemic,  Denmark 
temporarily set a higher tax deduction for R&D 
activities,  as  reflected  in  the  Danish  recovery 
and  resilience  plan.  This  temporary  boost 
helped  stimulate  innovation,  the  green  and 
digital  transitions  and  higher  investment  in 
research 
technologies; 
initiatives  such  as  the  four  green  public-
private  R&D  partnerships  entered  into  by 
the 
Innovation 
programme (14) 
‘SME:Digital’ 
at 
encouraging  SMEs  to  adopt  digital  technology 
also  contributed  to  this  positive  result.  This 
fuelled  discussions  on  the  benefits  of  making 
higher  levels  of  R&D  support  permanent  to 
sustain  innovation  and  allow  Denmark  to 
maintain its competitiveness in the  long term. 
Through  a  political  agreement  on  a  stronger 
business  community (15),  Denmark  has  indeed 
decided  to  further  boost  R&D  incentives  by 
gradually  increasing  the  tax  deduction  rate  in 
the coming years (16).   

Fund  Denmark (13)  and 
aimed 

Life sciences is a major innovative sector 
in  Denmark.  Denmark  has  set  itself  the 
ambitious  goal  of  becoming  a  leader  in  life 

(13)  Innomissions, Innovation Fund Denmark, Innomissions | 

Innovationsfonden. 

(14)  SME:Digital Programme, SME:Digital. 

(15)  Broad political agreement to strengthen Danish 

business - Regeringen.dk. (in Danish). 

(16)  In 2026 the tax rate will rise to 114% for expenditure 
up to DKK 1 billion, up from 108% in 2025, increasing 
further to 116% in 2027. As from 2028 the deduction 
rate will be set permanently at 120%, with expenses 
above the ceiling of DKK 1 billion benefiting from a 
permanent rate of 110%. 

9 

0501001502002502000-2019202020212022Small enterprisesMedium-sized enterprisesLarge enterprisesMegaenterprises 
  
 
sciences  by  2030,  with  plans  to  strengthen 
healthcare  innovation,  improve  access  to  risk 
capital  and  create  favourable  conditions  for 
foreign  investment.  However,  the  sector  still 
has significant untapped potential, and further 
efforts  are  needed  to  strengthen  research 
capabilities,  make  better  use  of  health  data 
and  encourage  public-private  partnerships.  In 
addition  to  life  sciences,  the  Danish  business 
development  strategy 
identifies  other  key 
sectors  that  could  contribute  to  the  country’s 
economic  growth  and  benefit  from  expertise 
available  in  different  regions  of  the  country, 
including  robotics,  green  energy,  biosolutions, 
water  technology  wind  energy,  and  carbon 
capture, utilisation and storage. 

Scaling up businesses remains a 
challenge 

Despite a thriving start-up culture, many 
companies  find  it  difficult  to  scale  up. 
Denmark  is  home  to  many  successful  start-
ups,  including  a  few  unicorns  (privately  held 
companies  valued  at  over  EUR 1 billion),  but 
struggles to retain companies with a potential 
for  high  growth.  Although  venture  capital 
financing 
is  above  the  EU  average  and 
improving,  it  still  trails  behind  some  other 
Nordic  countries.  Private-equity  investment  in 
Denmark  has  increased,  reaching  0.9%  of 
nominal  GDP  in  2021-2023,  up  from  0.7%  in 
2015-2020, which is above the EU average of 
0.6%.  Similarly,  venture-capital  investments 
increased  to  0.16%  of  nominal  GDP  in  2021-
2023,  more  than  double  the  0.06%  recorded 
in the previous five-year period and far better 
than  the  EU  average  of  0.08%  (see  Annex 5). 
Also, investments by the state-financed Export 
and  Investment  Fund  (EIFO)  supplements  the 
private  venture  capital  market.  EIFO’s  direct 
investments,  such  as  venture  investments  in 
Danish companies, have increased significantly 
recent  years.  High-growth  companies 
in 
their 
to  scale  up  and  expand 
looking 
operations  often  require  significant  amounts 
of  capital,  known  as  acceleration  capital. 
Denmark’s  level  of  acceleration  investments 
was relatively low compared to other countries 

in  the  past  but  rose  to  above  the  OECD 
average in the period from 2020 to 2022 (17). 

Denmark is taking steps to support start-
up growth. For start-ups to thrive and remain 
in Denmark rather than relocating abroad, it is 
essential  to  improve  access  to  financing  and 
foster  a  supportive  business  environment. 
Among other things, the framework conditions 
for  launching  initial  public  offerings  and  the 
tax  treatment  of  capital  gains  are  important 
factors  that  could  help  retain  venture  and 
growth  capital.  Denmark’s  2024  strategy  for 
improving  business 
framework  conditions 
addresses  these  issues  by  introducing  tax-
related  measures, 
legal 
framework  for  equity  crowdfunding  of  private 
limited 
capital 
requirement  for  setting  up  limited-liability 
companies  and  making  it  easier  for  new 
companies to open a basic bank account. 

companies,  halving 

setting  up  a 

the 

Denmark  has  taken  steps  to  improve 
access  to  finance  for  growth  companies, 
reducing  regulatory  barriers  that  made 
lending  costly  and  difficult  for  banks.  In 
early  2025  the  Danish  Financial  Supervisory 
Authority  adopted  new  accounting  rules  for 
banks.  Under  the  previous  rules,  growth 
companies  that  reported  accounting  losses 
were  treated  as  firms  in  financial  difficulty, 
making  it  hard  for  them  to  secure  affordable 
financing,  in  particular  those  in  innovative  or 
high-risk sectors. Under the new rules, growth 
companies  with  accounting  losses  will  no 
longer systematically be considered as firms in 
financial difficulty if they have raised at least 
DKK 10 million (some EUR 1.35 million) in own 
funds  and  have  positive  equity.  This  should 
reduce financing costs for high-risk companies 
(see Annex 5). 

(17)  Danish Ministry of Industry, Business and Financial 

Affairs, Entrepreneurial growth in Denmark, 2023 (in 
Danish). 

10 

 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

A leader in the green transition 
and net zero manufacturing 

competition 

international 

Denmark  is  a  frontrunner  in  the  uptake 
and  production  of  net  zero  technologies, 
in  particular  wind  power  and  carbon 
capture  and  storage  technologies.  Amidst 
growing 
and 
tightening  market  conditions,  government 
support  for  clean  and  net  zero  technologies 
remains  strong  and 
targeted.  Denmark 
accounts  for  a  significant  portion  of  the  EU's 
overall capacity for manufacturing wind power 
components  as  well  as  electrolysers  (see 
Annex 7). Furthermore, Denmark plays a major 
role in the development of carbon capture and 
storage  technologies  and  the  creation  of  a 
European value chain for this sector. 

Several measures are already in place to 
support  green  investments  and  research 
and  development,  and  further  measures 
are  planned.  These  include  tax  incentives, 
grant  support  schemes  and  access  to  growth 
loans and venture capital through programmes 
managed by the Danish Export and Investment 
Fund (see Annexes 2 and 5 for further details). 
In  accordance  with  a  political  agreement 
reached in November 2024 on "Red Carpet for 
Manufacturing 
are 
Companies", 
underway  for  a  one-stop-shop 
that  will 
streamline  the  regulatory  process  for  setting 
up  or  expanding  net  zero  and  clean  tech 
production  facilities.  There  are  also  plans  for 
industrial 
parks  where  manufacturing 
companies will have sufficient space and good 
infrastructure, 
access 

the  necessary 

plans 

to 

ensuring a faster and smoother establishment 
process (18). 

Powering an affordable and low-
carbon future 

is  generated 

Denmark’s electricity is mainly generated 
from renewable sources, but the national 
offshore  wind development  plan  came  to 
a  halt  in  2024.  A  remarkable  88%  of 
Denmark’s  electricity 
from 
renewable  sources,  with  wind  accounting  for 
58% (19). The proportion of electricity demand 
covered  by  wind  power  is  the  highest  in  the 
European  Union (20).  A  3GW  offshore  wind 
tender  in  the  North  Sea  failed  to  attract  any 
bids, and a second tender in early 2025 for an 
additional 3GW in the Danish inner straits was 
cancelled. 
with 
17 companies,  the  Danish  Energy  Agency  has 
published  the  main  outcomes  of  this  market 
dialogue,  which  point  to  a  combination  of 
factors  behind the  setback:  sharply increasing 
costs 
operational 
expenditure and financing costs), poor earning 
prospects  in  the  Danish  electricity  market 
(specifically 
in  the  Denmark-West  bidding 
zone),  and  uncertainties  in  the  electricity  and 
hydrogen  markets (21).  In  response  to  these 
findings,  the  authorities  are  preparing  to 
launch a new 3 GW offshore wind tender this 
year on more attractive terms; the overarching 

expenditure, 

discussions 

Following 

(capital 

(18)  Agreement  on  a 

companies 
produktionsvirksomheder), 21 November 2024. 

(Aftale 

red  carpet 
om 

for  manufacturing 
for 
løber 
Rød 

(19)  Ember,  Electricity  Data  Explorer,  available  at  Electricity 

Data Explorer | Ember. 

(20)  Wind energy in Europe: 2024 Statistics and the outlook 

for 2025-2030 | WindEurope., February 2025. 

(21)  See  Danish  Energy  Agency  publishes  results  from  the 

market dialogue on 3 GW offshore wind.  

11 

 
 
 
clean  energy  sector.  Finally,  electrification  is 
an  area  that  could  be  expanded  to  meet  the 
country’s energy efficiency ambitions. 

Graph 3.1: Rate of electrification: Denmark and 
European Union 

(1) Energy balance: Final consumption - energy use 
Source: Eurostat (nrg_ind_re__custom_16166844) 

Promoting flexibility and 
upgrading the electricity grid 
remain key to drive the clean 
energy transition 

it 

rates, 

To  achieve  higher  electrification  and 
renewables  penetration 
is 
necessary  to  upgrade  the  electricity  grid 
and  promote  market-based  flexibility 
solutions  such  as  storage  and  demand 
response.  In  November  2024  the  Danish 
Energy Agency released two reports examining 
possible  ways  of  strengthening  flexibility  in 
the  electricity  grid,  e.g.  through  flexible  grid 
connection  terms  and  grid  products,  and  of 
promoting  a market  for  flexibility  services (24). 
The  report  on  promoting  a  flexibility  market 
was based on an analysis by a working group 
led by the Danish Energy Agency that involved 
several  industry  organisations  as  well  as 

(24)  The  two  reports  are  available  (in  Danish)  at  Two  new 
analyses examine how flexibility can contribute to cost-
effective expansion of the electricity grid. 

in  the  political 
framework  has  been  set 
agreement  on  “tender  frameworks  for  three 
offshore wind farms” of 19 May 2025 (22). The 
parties  to  the  agreement  have  reserved  an 
estimated DKK 27.6 billion for providing state 
support  to  developers  to  be  awarded  under 
future tenders for at least 3 GW of additional 
offshore  wind  energy  capacity.  The  support  is 
foreseen  to  be  provided  via  a  two-sided 
contract  for  difference  model  over  a  20-year 
period.  In  the  onshore  sector,  Denmark  would 
benefit 
the 
recommendations outlined in the report of the 
National  Energy  Crisis  Team  (NEKST)  entitled 
More  sun  and  wind  energy  on  land (23).  The 
report 
to 
streamline  and  expedite  permitting  and 
administrative  procedures  for  deploying  wind 
and solar energy on land, some of which have 
already  been  implemented.  The  Recovery  and 
for 
Resilience  Facility  provides 
NEKST’s work in this area. 

several  measures 

implementing 

proposed 

support 

swiftly 

from 

of 

the 

benefits 

renewables 

Further  electrification  across  sectors 
would help reduce overall greenhouse gas 
(GHG) emissions and enable consumers to 
reap 
affordable 
renewable  generation.  Electricity  accounted 
for  approximately  one  fifth  of  the  country’s 
final  energy  consumption  in  2023,  a  share 
that  has  remained  stubbornly  static  over  the 
past  decade  (see  Annex  8  for  further  details). 
The  high  proportion  of 
in 
Denmark’s  electricity  generation  mix  means 
there 
is  significant  potential  for  further 
electrification  across  sectors  to  achieve  cost-
effective decarbonisation of the economy. For 
instance, 
analysis 
commissioned  by  the  Danish  Energy  Agency, 
up  to  92%  of  the  total  thermal  energy 
consumption  of  Danish  industry  could  be 
electrified  (see  Annex 7).  Higher  domestic 
demand  for  electricity  would  also  strengthen 
the long-term business case for developers to 
expand  renewable-energy  capacity,  thereby 
driving  further  investment  and  growth  in  the 

according 

an 

to 

(22)  Agreement  on  tender  frameworks  for  three  offshore 
tre 

(Aftale  om  udbudsrammer 

wind 
havvindmølleparker), 19 May 2025. 

farms 

for 

(23)  NEKST  working  group  report  ‘More  sun  and  wind  on 

land’ (Mere sol og vind på land), February 2024. 

12 

1516171819202122232425%EU-27Denmark 
 
  
 
Energinet,  the  national transmission  system 
operator.  This  concerted  approach  to  ensure 
that future policies are aligned with industry’s 
needs and capabilities is laudable. The report’s 
recommendations  have  not  yet  been  formally 
endorsed by the government, but the proposed 
measures are expected to optimise the use of 
the  electricity  grid  and  strengthen  resilience. 
For  instance,  Denmark  could  give  households 
and small businesses a stronger position in the 
flexibility  market  by 
tariff 
incentives and rules to promote participation in 
distributed  energy  resources  and  in  balancing 
and  flexibility  services. More  flexible  grids  are 
also expected to strengthen the business case 
for  renewable-energy  developers  by  ensuring 
more  balanced  production  and  consumption 
levels throughout the day and fewer instances 
of negative prices. 

introducing 

reached  on 

the  basis  of 

To  ensure  expansion  of  the  electricity 
grid, the government is stepping up work 
to implement NEKST recommendations. In 
December  2024  a  dedicated  NEKST  working 
group  issued  recommendations  for  a  faster 
expansion  of  the  electricity  grid,  highlighting 
that  increased  flexibility  in  consumption  and 
production  could  help  inform  a  decision  to 
prioritise  grid  expansion  or,  in  some  cases, 
serve  as  an  alternative  to  grid  expansion (25). 
On  20 December  2024  a  political  agreement 
these 
was 
recommendations, 
three  areas 
where  permitting  procedures  for  electricity 
infrastructure could be simplified, including by 
exempting projects from environmental impact 
assessments  provided  that  relevant  nature 
protection  and  environmental  law  is  complied 
with (26).  It  is  expected  that  infrastructure 
projects in those areas can be delivered one to 
three  years  faster  than  under  the  ordinary 
procedure.  The  parties  also  committed  to 
implementing  other  NEKST  recommendations, 
including  new  expropriation  procedures.  While 
these  commitments  are  a  positive  step 
forward, swift implementation of the wider set 

identifying 

of NEKST recommendations remains crucial to 
ensure that grid management  is able to meet 
the  needs  of  increased  installed  renewables 
capacity  and  higher  electricity  demand  in  the 
future. 

A landmark agreement paves the 
way for more sustainable land 
management 

Denmark 
is  taking  steps  to  tackle 
agricultural  GHG  emissions, but intensive 
farming  practices  still  pose  a  major  risk 
to biodiversity, soil health and the quality 
of  aquatic  and  marine  ecosystems. 
Agriculture is the dominant type of land use in 
Denmark, covering 60% of its total land area. 
Intensive  farming  practices  result in  excessive 
nutrient leaching and run-off from fields, with 
serious  repercussions  on  soil  health  and  on 
aquatic  and  marine  ecosystems,  ultimately 
leading to deterioration of the natural  capital. 
Moreover, Denmark has the smallest share of 
land  in  the  Natura  2000  network  in  the  EU, 
and  the  conservation  status  of  grassland, 
wetland/peatland 
habitats 
and 
protected under the Habitats Directive is either 
unfavourable,  bad  or 
(see 
Annex 9).  To  ease  the  pressure  on  land  and 
marine  ecosystems  from  intensive  farming 
(see  Annex  9)  and  reduce  emissions,  a  broad 
political agreement on a  ‘Green Denmark’ has 
been  reached  by  the  government  and  most 
opposition  parties,  paving  the  way  for  a 
historic transformation of land use (27). If they 
the  agreed 
are  effectively 
measures  will  help  reduce  emissions  while 
ensuring  a  fair  and  equitable  transition.  The 
measures  include:  (i) the  establishment  of  a 
Land  Fund  worth  over  DKK 40  billion  to 
support 
conversion, 
strategic  land  acquisition  and  extensification; 
(ii) a  renewed  effort  to  restore  and  protect 

implemented, 

afforestation, 

inadequate 

forest 

land 

(25)  NEKST  working  group  report  ‘Faster  expansion  of  the 
(Hurtigere  udbygning  af  elnettet), 

electricity  grid’ 
December 2024. 

(26)  Agreement  on  faster  and  more  efficient  expansion  of 
the electricity grid (Aftale om hurtigere og mere effektiv 
udbygning af elnettet), 20 December 2024. 

(27)  Agreement on the Implementation of a Green Denmark 
(Aftale  om  Implementering  af  et  Grønt  Danmark), 
18 November 2024. The agreement largely mirrors the 
commitments  outlined  in  the  tripartite  agreement  of 
24 June  2024  between  the  government  and  key 
sectoral and environmental organisations (see Annex 9). 

13 

 
 
 
aquatic environments; and (iii) the introduction 
of  a  CO2  tax  on  emissions  from  carbon-rich 
soils  from  2028  and  on  livestock  emissions 
from 2030. The new Land Fund mainly covers 
voluntary  and  compensation-based  measures, 
including  afforestation,  land  set-aside  and 
peatland  rewetting  schemes.  Their  voluntary 
nature  entails  a  risk  of  low  or  slow  uptake, 
putting  implementation  at  risk,  but  there  is 
also  a  taxation  element  providing  additional 
incentives 
to  businesses.  The  measures 
outlined  in  the  agreement,  complemented  by 
other  initiatives  under  Denmark’s  common 
agricultural  policy  Strategic  Plan  and  the 
recovery  and  resilience  plan,  are  expected  to 
bring  about 
in 
sustainable land management. A new ministry 
has  been 
swift 
implementation  and  ongoing  monitoring.  Also, 
23 local tripartite bodies (28) have been set up 
across  the  country  to  agree  on  local  land 
conversion plans by the end of 2025. 

improvements 

to  oversee 

long-term 

set  up 

Transitioning to a circular economy 
and improving waste management 

While  there  have  been  some  positive 
developments,  sustained  efforts  are 
needed  to  speed  up  the  transition  to  a 
circular  economy  and 
improve  waste 
management in Denmark. In 2022, the last 
year  for  which  reliable  data  are  available, 
Denmark  had  the  second  highest  per  capita 
generation of food and municipal waste in the 
EU. In 2023, the country’s circular material use 
rate  set  at  the  2014  level  again  –  when  was 
the  highest  recorded  –  but  still  remained 
below 
(see  Annex  7). 
Denmark’s  municipal  waste  recycling  rate  is 
also below the EU average based on the most 
recent  available  data.  Most  municipalities  in 
Denmark have introduced a separate collection 

the  EU  average 

local 

organisations, 

(28)  Bodies  composed  of  representatives  of  municipalities, 
farmers’ 
protection 
associations and the Danish Nature Agency that started 
work  on  1 February  2025.  They  will  play  a  key  role  in 
implementing 
the 
Agreement on a Green Denmark, see Ministry of Green 
Tripartite (in Danish). 

the  measures 

contained 

nature 

in 

system for all waste streams, which is a step 
in  the  right  direction,  and  the  system  is 
expected to be fully implemented in the course 
of  2025.  The  incineration  rate  of  municipal 
waste  has  failed  to  decline  significantly  over 
the last five years, and Denmark continues to 
incinerate  the  largest  quantity  of  municipal 
waste  per  capita in the  EU,  more  than double 
the  EU  average.  Denmark’s  2021  action  plan 
for  a  circular  economy  includes  a  range  of 
waste  prevention  and  management  measures 
along the entire circular value chain. The plan 
three  main  areas:  biomass, 
focuses  on 
construction  waste  and  plastics.  However, 
Denmark  needs  to  step  up  efforts  to  reduce 
waste  production  and  incineration,  replace 
waste incineration with more environmentally-
friendly sources of heat generation in national 
district  heating  systems  and  improve  the 
overall  circularity  of  the  economy,  focusing in 
particular  on  e-waste  collection  and  recycling. 
The  introduction  of  stricter  commercial  waste 
management rules, which came into effect on 
1 January 2025, was a positive development. 

14 

 
 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Labour and skills shortages are 
particularly severe in the 
healthcare and digital sectors 

Graph 4.1: Job vacancy rates in Denmark: total 
and ICT-specific 

hurdle  in  this  respect.  Many  are  leaving  the 
public  healthcare  system  due  to  a  heavy 
workload and an uneven distribution of on-call 
duties,  which  can  cause  dissatisfaction  and 
burnout. There is also a shortage of psychiatric 
in 
and  other  specialised  medical  staff, 
particular  in  peripheral  regions,  which  further 
exacerbates the problem. Recruiting healthcare 
professionals 
regional  hospitals  and 
retaining  staff  with  the  right  skills  in  high-
demand areas are ongoing struggles. 

to 

procedures 

The  government  has  launched  targeted 
labour  market  reforms.  These  reforms  aim 
to  increase  the  labour  supply,  particularly  in 
healthcare, by making it easier to employ non-
EU nationals. This will involve simplifying work 
permit 
and  working  with 
international 
recruitment  agencies.  Other 
measures include better integrating vocational 
education and training in healthcare and long-
term  care.  Additional  efforts  are  needed  to 
attract  and  retain  professionals  in  this  field. 
This 
professional 
includes 
attractive  working 
development,  more 
conditions and a more balanced distribution of 
care  duties  to  prevent  burnout  and  ensure 
high-quality patient care. 

continuous 

to 

are 

facing 

report  hard-to-fill 

Businesses 
difficulties 
recruiting ICT specialists. More than 10% of 
Danish  companies 
ICT 
vacancies,  significantly  more  than  the  EU 
average  of  6%  (see  Annex  10).  Denmark  has 
this  problem  by 
taken  steps 
tackle 
in  STEM  subjects 
strengthening  education 
and 
engineering 
(science, 
mathematics).  Moreover,  as  part  of  its  digital 
development  strategy,  Denmark  will  focus  on 
IT 
making 
professionals  and  encouraging  international 
computer  science  students  to  stay  in  the 
Danish  job  market.  Denmark  will  issue  calls 
until 2026 to implement these measures. 

training  available 

technology, 

further 

to 

Source: Statistics Denmark 

in 

to 

particular 

Denmark  has  a  tight  labour  market, 
linked to widespread skills shortages. This 
applies 
healthcare 
professionals  and  ICT  specialists,  but  also  to 
skilled  workers 
in  construction  and  other 
sectors,  including  those  linked  to  the  green 
transition.  However,  for  some  professions  the 
skills shortages have eased due to an increase 
in  labour  supply,  notably  from  a  substantial 
influx of foreign workers. 

is  struggling  to  retain 

Denmark 
its 
healthcare  workforce  as  demand  for 
social  and  healthcare  assistants  grows 
due 
to  an  ageing  population.  With 
mechanical  projections  suggesting  a  need  for 
some  15 000  healthcare  assistants  by  2035, 
there is growing pressure to address this issue. 
Retaining  skilled  professionals  is  a  major 

15 

01234562018201920202021202220232024%Job vacancy rate in the whole economyJob vacancy rate in ICT 
 
  
Denmark’s  tertiary  education  attainment 
rate  increased  significantly  in  the  past 
decade,  but  the  share  of  STEM  students 
remains relatively low. Measures introduced 
by Denmark to strengthen science, technology, 
engineering  and  mathematics  education 
include  digital  tools,  cooperation  between 
schools and initiatives to encourage women to 
enrol  in  STEM  courses  (see  Annex 12).  The 
recent university reform will lead to a gradual 
reduction in the number of university students 
over  the  coming  years,  which  has  met  some 
criticism from both employers and students. 

Despite a good upskilling system, 
some are left behind 

Denmark has a good system for upskilling 
and  reskilling  workers,  contributing  to 
good  skills  matches.  The  Danish  vocational 
and educational training system is managed in 
part  by  the  social  partners,  which  ensures 
expertise  on  skills  and  skills  shortages  and 
how to address them. However, in the view of 
is  slow  to 
some  employers,  the  system 
respond to demand for new skills. 

in  2024. 

respectively, 

People  not  in  education,  employment  or 
training  and  vulnerable  groups  are  an 
untapped potential. In recent years Denmark 
has  enjoyed  high  employment  and  labour 
force  participation  rates,  reaching  80.2%  and 
Increased 
84.8%, 
employment  among  older  workers  has 
contributed  to  this  (see  Annex 10).  While 
young  people,  non-EU  nationals  and  people 
with disabilities fare well compared to their EU 
peers, they continue to face barriers on the job 
market. In 2024, 8% of young people were not 
in employment, education or training, which is 
below  the  EU  average  of  11%.  Nevertheless, 
low enrolment in and high drop-out rates from 
vocational and educational training add to the 
difficulties  of  sectors  facing  skilled-labour 
shortages.  In  response,  Denmark  has  taken 
measures  designed  to  help  people  not  in 
employment, education or training find work or 
in  courses,  as  well  as  preventive 
enrol 
measures  to  encourage  people  to  stay  in 
employment,  e.g.  by  improving  labour  market 

conditions  for  young  people  with  spare-time 
jobs. Furthermore, a commission tasked by the 
Danish  government  to  carry  out  an  in-depth 
analysis  of  the  well-being  of  young  people  in 
Danish society, which presented its findings in 
February  2025,  has  proposed  more  than  30 
initiatives  and  measures  aimed  at  improving 
the well-being of young people. 

A  generally  well-functioning  education 
and  training  system  still  has  certain 
shortcomings  that  result  in  skills  gaps. 
The Danish education system does not give all 
pupils  the  same  opportunities  to  realise  their 
full  potential.  In  2024  the  proportion  of  early 
school leavers stood at 10.4%, and thus above 
the  EU  average  and  the  EU  target  (see 
Annex 12). There is a strong urban-rural divide, 
and  young  people  with  a  migrant  background 
leave  early  from  education  or  training  nearly 
twice  as  often  as  native-born  Danes. 
Underachievement in  basic  skills  is  low by  EU 
standards  but  has  risen,  with  students  of  a 
weak  socioeconomic  background  and  foreign-
born  students  scoring  increasingly  poorly  in 
mathematics.  Quality  differences 
remain 
between  early  childhood  education  and  care 
to 
institutions  as  municipalities  struggle 
attract,  and 
to 
staff 
Folkeskole  (primary  and 
lower  secondary) 
schools.  Denmark’s  ongoing  comprehensive 
education  reform  takes  a  more  practical 
approach  to  general  education  and  aims  to 
give  all  parties  more  autonomy,  especially 
schools  and  teachers.  The  reform  will  be 
implemented  gradually  and  is  expected  to  be 
completed by 2030. 

retain,  qualified 

Strong social protection fends off 
the risk of poverty 

Despite  growing  inequalities,  the  social 
protection  system  remains  effective  in 
preventing  poverty.  Thanks  to  its  strong 
social  protection  system,  Denmark  continues 
to  perform  well  on  most  social  indicators. 
Nevertheless, 
risk  of 
inequality  and 
poverty  have  increased  in  recent  years,  albeit 
from a low level, and are currently well above 
pre-pandemic 
the  at-risk-of-
levels  with 
poverty  and  social  exclusion  rate  reaching 

the 

16 

 
In 

in  2024 

(see  Annex 11).  Housing 
18% 
affordability  remains a problem, as evidenced 
by  a  relatively  high  housing  cost  overburden 
rate  (see  Section 1).  There  are  also  unmet 
needs for medical care, further aggravated by 
labour  shortages  in  the  medical  professions 
and  demographic  pressures. 
its  recent 
reform  of  the  system  of  social  benefits, 
Denmark  introduced  measures  in  the  newly 
reformed  minimum  income  scheme  to  ease 
vulnerable 
the 
situation 
households. 
tax-free 
allowance for afterschool activities for children 
of  social  benefits  recipients,  a  subsidy  that 
covers  100  percent  of  the  recipient’s  -  and 
their  children  -  expenses  for  medicine  and  a 
more  lenient  income  deduction  which  ensures 
that  recipients  may  earn  up  to  335/670  EUR 
per month – depending on the rate – without a 
deduction in benefits.   

financial 

include 

These 

of 

a 

17 

 
KEY FINDINGS 

To  boost  competitiveness,  sustainability  and 
social fairness, Denmark would benefit from: 

• 

chapter; 

implementing the RRP, including the 
REPowerEU 
swiftly 
implementing cohesion policy, taking 
advantage  of  the  opportunities  under 
the  mid-term  review  and  making 
optimal  use  of  EU 
instruments, 
InvestEU  and  STEP,  to 
including 
improve competitiveness; 

recycling, 

focusing  on  waste  prevention  and 
the 
increased 
incineration  of  municipal  waste  and 
relying  less  on  waste  incineration  for 
heat generation; 

reducing 

•  adapting  education  and  training 
provision  to  address  labour  and 
in  key  sectors 
skills  shortages 
the  green  and  digital 
to 
related 
transition; 

•  boosting  the growth  of  innovative 
businesses  at  home,  by  making 
access  to  venture  capital  and  private 
equity 
improving 
framework  conditions  for  IPOs  to  be 
successful; 

easier 

and 

• 

to 

improving  the  teaching  of  basic 
skills 
attainment 
address 
inequalities  linked  to  socio-economic 
and  migrant  backgrounds  and  the 
by 
urban-rural 
attracting and retaining qualified staff; 

including 

divide, 

•  alleviate  shortages  of  affordable 
housing  in  urban  areas  through  new 
construction. 

•  broadening the innovation base by 
helping  SMEs  better  exploit  their  R&D 
and innovation potential to reduce the 
productivity  gap  between  large  and 
small companies; 

• 

• 

further decarbonising the economy 
by continuing to support clean and 
efficient  production  and  use  of 
energy,  and  by  speeding  up 
electrification  across  sectors.  This 
also includes supporting grid upgrades 
and  promoting  demand-  and  supply-
side clean flexibility solutions; 

fostering  the  transition  to  more 
sustainable  and  future-proof  land 
management, 
by 
in 
ensuring  swift  implementation  of  the 
measures set out in the agreement on 
a  ‘Green  Denmark’  of  18  November 
2024; 

particular 

•  making  further  progress  in  the 
transition  to  a  circular  economy 
in  waste  management,  by 
and 

18 

 
 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the recommendation 
Defence expenditure and the national escape clause 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
Projected change in age-related expenditure in 2024-2040 and 2024-2070 

21 

23 

23 

30 

33 

33 

37 

42 

49 

53 

53 

60 

67 

72 

72 

75 

78 

82 

83 

86 

86 

88 

96 

24 
24 
25 
25 
26 
26 
27 
27 
28 

 
 
 
A1.10.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators 
A5.1. 
Financial sector indicators 
A6.1. 
Selected indicators on administrative burden reduction and simplification 
A6.2. 
Key Digital Decade targets monitored through the Digital Economy and Society Index 
A7.1. 
Key clean industry and climate mitigation indicators: Denmark 
A8.1. 
Key Energy Indicators 
A9.1. 
Key indicators on progress on climate adaptation, preparedness and environment 
A13.1.  Social Scoreboard for Denmark 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Denmark 

LIST OF GRAPHS 

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 

Retail energy price components for household and non-household consumers, 2024 

Tax revenue shares in 2023 
Tax wedge for single and second earners, % of total labour costs, 2024 
Business enterprise expenditure on R&D as % of GDP 

A2.1. 
A2.2. 
A3.1. 
A4.1.  Making Business Easier: selected indicators 
A5.1. 
Net savings-investment balance 
A5.2. 
International investment position 
A5.3. 
Capital markets and financial intermediaries 
A5.4. 
Composition of NFC funding as a % of GDP 
A5.5. 
Composition of households' financial assets per capita and as a % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A6.3. 
Participation rate of 25-64 year olds in adult learning (%) by occupation 
A7.1. 
GHG emission intensity of manufacturing and energy-intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A7.3. 
A7.4.  Municipal waste treatment 
A8.1. 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A10.1.  Key labour market indicators 
A10.2.  Beveridge curve 
A11.1.  At-risk-of-poverty or social exclusion rate, age groups 
A11.2. 
A12.1.  Early leavers from education and training by urbanisation and country of birth 
A12.2.  Underachievement in mathematics in Denmark by country of birth and background 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in Denmark 
A16.1.  Distribution of RRF funding in Denmark by policy field 
A16.2.  Distribution of cohesion policy funds across policy objectives in Denmark 
A17.1.  Average annual real GDP per head growth vs GDP per head in 2013 
A17.2.  Labour productivity per hour 
A17.3.  Social indicators by degree of urbanisation, 2024 

Denmark's installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 

In-work-poverty rate, groups 

LIST OF MAPS 

A17.1.  Greenhouse gas emissions per capita, 2023 

22 

29 
31 
36 
41 
48 
50 
51 
59 
66 
71 
82 
84 
91 
92 
97 

30 
32 
34 
38 
42 
43 
43 
45 
46 
49 
49 
51 
55 
56 
56 
57 
60 
61 
63 
69 
72 
73 
75 
76 
78 
79 
83 
84 
86 
89 
89 
96 
96 
97 

97 

 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  Denmark, 
including how Denmark is responding to Council  recommendations issued under the reformed Economic 
Governance Framework. 

The  reformed framework,  which  entered  into force  on  30 April  2024  (29),  aims  to  strengthen 
debt  sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing 
reforms  and  priority  investments.  The  medium-term  fiscal-structural  plans  (hereinafter,  MTPs  or 
plans) constitute the cornerstone of the framework, setting the budgetary commitment of Member States 
over  the  medium  term.  The  latter  is  defined  in  terms  of  net  expenditure  growth,  which  is  the  single 
operational indicator for fiscal surveillance.  

Denmark  submitted  its  plan  on  20  September  2024.  The  plan  covers  the  period  until  2028, 
presenting  a  fiscal  adjustment  over  four  years.  On  21  January  2025,  the  Council  adopted  the 
Recommendation endorsing Denmark’s plan (30).  

The  assessment  of  the  implementation  of  the  Council  Recommendation  endorsing  Denmark’s 
plan  is  carried  out  on  the  basis  of  outturn  data  from  Eurostat  and  the  Commission  Spring 
2025  Forecast,  and  taking  into  account  the  Annual  Progress  Report  (APR)  that  Denmark 
submitted  on  30  April  2025.  Furthermore,  given  Denmark’s  request  to  activate  the  National  Escape 
Clause  (31)  in  accordance  with  the  Commission  Communication  of  19  March  2025  (32),  the  assessment 
also  considers,  as  appropriate,  the  projected  increase  in  defence  expenditure  based  on  the  Commission 
Spring 2025 Forecast.  

The Annex is organised as follows. First, developments in  government deficit and debt are presented 
based  on  the  figures  reported  in  Table  A1.1.  Then,  the  assessment  of  the  implementation  of  the 
Council  Recommendation  endorsing  the  plan  follows,  based  on  the  relevant  figures  presented  in 
Tables A1.2 to A1.8, including data on defence expenditure.  

The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024 (33). 

Developments in government deficit and debt  

Denmark’s  government  surplus  amounted  to  4.5%  of  GDP  in  2024.  Based  on  the  Commission’s  Spring 
2025  Forecast,  it  is  projected  to  decrease  to  1.5%  of  GDP  in  2025.  The  government  debt-to-GDP  ratio 
amounted to 31.1% at the end of 2024 and, according to the Commission, it is projected to decrease to 

(29)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(30)  OJ C, C/2025/654, 10.2.2025, ELI: http://data.europa.eu/eli/C/2025/654/oj 

(31)  On 30 April 2025, Denmark requested to the Commission and to the Council the activation of the National Escape Clause. On this 
basis, the Commission adopted a Recommendation for a Council Recommendation allowing Denmark to deviate from, and exceed, 
the net expenditure path set by the Council, COM(2025)603 

(32)  Communication  from  the  Commission  accommodating  increased  defence  expenditure  within  the  Stability  and  Growth  Pact of  19 

March 2025, C(2025) 2000 final. 

(33)  European Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

23 

 
 
 
 
 
 
29.7% end-2025. The path of debt reduction is forecast to continue in 2026, although at a less dynamic 
pace due to a projected lower general government surplus. 

Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Developments in net expenditure  

The net expenditure (34) growth of Denmark in 2025 is forecast by the Commission (35) to be 
above  the  recommended  maximum,  corresponding  to  a  deviation  of  2.1%  of  GDP.  Considering 
2024 and 2025 together, the cumulative growth rate of net expenditure is also projected to be above the 
recommended  maximum  cumulative  growth  rate,  corresponding  to  a  deviation  of  0.5%  of  GDP.  The 
difference  between  the Commission’s  calculations and  the  estimates  of  national  authorities  is  due  to a 
higher Commission estimate of cyclical unemployment benefits. 

Table A1.2:  Net expenditure growth 

* The cumulative growth rates are calculated by reference to the base year of 2023. 
Source: Council Recommendation endorsing the national medium-term fiscal-structural plan of Denmark (Rec.), Annual Progress 
Report (APR) and Commission's calculation based on Commission Spring 2025 Forecast (COM) 

The  assessment  of  the  net  expenditure  growth  and  in  particular  the  comparison  with  the 
recommended  net  expenditure  path  considers  that  Denmark  has  requested  the  activation  of 
the national escape clause to facilitate transitioning to a higher level of defence expenditure. 
General government defence expenditure in Denmark amounted to 1.2% of GDP in 2021, 1.2% of GDP in 
2022 and 1.8% of GDP in 2023(36). According to the Commission 2025 Spring Forecast,  expenditure on 
defence is projected at 2.1% of GDP in 2024 and 3.0% of GDP in 2025. Based on current projections for 
defence  spending,  the  deviation  that  is  projected  for  Denmark  is  within  the  flexibility  provided  by  the 
national escape clause. 

(34)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union fully matched by revenue from Union funds,  (iv) 
national  expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of  unemployment  benefit 
expenditure, and (vi) one-off and other temporary measures.  

(35)  Commission Spring 2025 Forecast European Economy-Institutional paper 318, May 2025. 

(36)  Eurostat, government expenditure by classification of functions of government (COFOG). 

24 

2024OutturnAPRCOMAPRCOM1General government balance% GDP4.50.81.5n.a.0.62General government gross debt% GDP31.130.029.7n.a.29.4Variables20252026RECAPRCOMRECAPRCOM2024n.a.5.1%3.3%n.a.n.a.n.a.20255.0%8.2%10.0%12.6%13.7%13.6%20265.7%n.a.5.4%18.9%n.a.19.7%AnnualCumulative*Growth rates 
 
           
 
 
           
 
 
 
 
Table A1.3:  Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the 
recommendation 

* The growth rate for 2024 is not a recommendation but serves to anchor the base, as the latest year with outturn data when 
setting the net expenditure path is year 2023. 
Source: Commission Spring 2025 Forecast and Commission's calculation  

Table A1.4:  Defence expenditure and the national escape clause 

Source:  Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation 

25 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC1313.51375.71492.21569.22Interest expenditurebn NAC18.621.722.523.03Cyclical unemployment expenditurebn NAC4.213.714.916.84Expenditure funded by transfers from the EUbn NAC5.73.64.16.45National co-financing of EU programmesbn NAC0.50.20.20.26One-off expenditure (levels, excl. EU funded)bn NAC5.318.30.00.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC1279.21318.21450.41522.88Change in net nationally financed primary expenditure (before DRM)bn NAC39.0132.272.49DRM (excl. one-off revenue, incremental impact)bn NAC-2.90.3-5.410=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC41.9131.977.811Outturn / forecast net expenditure growth% change3.28%10.0%5.4%12Recommended net expenditure growth*% change7.2%5.0%5.7%13=(11-12) x 7Annual deviationbn NAC-50.266.0-4.914 (cumulated from 13)Cumulated deviationbn NAC-50.215.810.915=13/17Annual balance% GDP-1.72.1-0.116=14/17Cumulated balance% GDP-1.70.50.317p.m. Nominal GDP  bn NAC2804.72960.93119.13239.8Variables2021202220232024202520261Total defence expenditure% GDP1.21.21.82.13.03.02of which: gross fixed capital formation% GDP0.30.20.30.30.50.73Flexibility from increases in defence expenditure% GDP1.51.54Cumulated balance after flexibility% GDP-1.0-1.2 
 
           
 
 
 
     
 
 
Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

26 

2024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change3.72.33.6n.a.2.02Private consumption% change0.91.61.6n.a.1.73Government consumption expenditure% change1.44.24.4n.a.2.14Gross fixed capital formation% change2.73.52.4n.a.2.55Exports of goods and services% change7.53.35.4n.a.2.56Imports of goods and services% change3.03.14.0n.a.2.6Contributions to real GDP growth 7- Final domestic demandpps1.41.82.2n.a.1.88- Change in inventoriespps-1.00.0-0.1n.a.0.09- Net exportspps3.30.51.4n.a.0.210Output gap% pot GDP-0.81.00.4n.a.0.311Employment % change0.80.00.5n.a.0.012Unemployment rate%6.22.86.2n.a.6.313Labour productivity% change2.82.33.1n.a.1.914HICP % change1.32.01.6n.a.1.515GDP deflator% change1.81.91.7n.a.1.916Compensation of employees per head% change4.44.73.9n.a.2.917Net lending/borrowing vis-à-vis the rest of the world% GDP12.7n.a.13.3n.a.13.120252026Variables2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue51.049.349.3n.a.49.0of which:2- Taxes on production and imports13.413.313.1n.a.13.13- Current taxes on income, wealth, etc.31.029.929.8n.a.29.44- Social contributions0.70.70.7n.a.0.75- Other (residual)5.95.45.8n.a.5.88=9+16Expenditure 46.548.547.8n.a.48.4of which:9- Primary expenditure45.747.847.1n.a.47.7of which:10- Compensation of employees 14.114.214.3n.a.14.311- Intermediate consumption8.18.98.5n.a.8.712- Social payments15.415.715.5n.a.15.713- Subsidies1.21.41.3n.a.1.314- Gross fixed capital formation3.14.43.8n.a.3.915- Other3.83.23.7n.a.3.716- Interest expenditure0.70.70.7n.a.0.718=1-8General government balance4.50.81.5n.a.0.619=1-9Primary balance5.21.52.2n.a.1.320Cyclically adjusted balance5.0n.a.1.3n.a.0.421One-offs-0.6-0.40.0n.a.0.022=20-21Structural balance5.6-0.31.3n.a.0.423=22+16Structural primary balance6.30.42.0n.a.1.1Variables (% GDP)20252026 
 
           
 
 
 
           
 
 
 
Table A1.7:  Debt developments 

* End of period. 
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

Table A1.8:  RRF – Grants 

Source: Annual Progress Report 

Cost of ageing  

Total age-related spending in Denmark is projected to increase from 24.5% of GDP in 2024 to 
about  26.3%  in  2040,  decreasing  again  thereafter  to  around  26%  in  2070,  close  to  the  EU 
average (see Table A1.9). The overall dynamic is mainly driven by the large projected increase in long-
term  care  spending  and,  to  a  lesser  extent,  healthcare  spending,  partially  offset  by  lower  pension  and 
education expenditure, especially in the period beyond 2040 when pension spending is projected to decline 
by 2 pps of GDP. 

Public healthcare expenditure is projected at 7.1% of GDP in 2024 (above the EU average of 
6.6%)  and  is  expected  to  increase  by  0.3  pps  by  2040  and  by  a  further  0.4  pps  by  2070 

27 

2024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)31.130.029.7n.a.29.42=3+4+8Change in the ratio (pps. of GDP)-2.5-1.1-1.4n.a.-0.3Contributions**3Primary balance-5.2-1.5-2.2n.a.-1.34≈5+6+7'Snow-ball' effect-1.0-0.6-0.9n.a.-0.4of which:5- Interest expenditure0.70.70.7n.a.0.76- Real growth effect-1.2-0.7-1.1n.a.-0.67- Inflation effect-0.6-0.6-0.5n.a.-0.58'Stock-flow' adjustment3.81.01.7n.a.1.420252026VariablesRevenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.10.00.10.10.00.12Cash disbursements of RRF grants from EUn.a.0.10.00.10.10.00.120202021202220232024202520263Total current expenditure0.00.10.00.00.00.00.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.00.00.00.00.06=4+5Total capital expenditure0.00.00.00.00.00.00.020202021202220232024202520267Reduction in tax revenue0.00.10.10.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP) 
 
           
 
 
 
           
 
(37).   Public  expenditure  on  long-term  care  is  projected  at  3.1%  of  GDP  in  2024  (well  above  the  EU 
average of 1.7%) and is expected to increase by 1.6 pps of GDP by 2040 and by a further 1.5 pps of GDP 
by 2070 (38). 

Table A1.9:  Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC). 

National fiscal framework 

The  Danish  Independent  Fiscal  Institution  (IFI),  the  Danish  Economic  Councils  (DEC),  enjoys  a 
high standing as an advisory body, but its independence rests mostly on informal practices. It 
consists  of  the  Economic  Council  and  The  Environmental  Economic  Council,  whose  joint  independent 
Chairmanship  acts  as  the  Danish  IFI  and  as  a  Productivity  Board.  As  the  DEC’s  budget  is  subject  to  an 
annual  2-%-reduction  rule  in  real  terms,  it  implies  a  need  to  reduce  the  staff  level  continuously.  Its 
relocation  from  Copenhagen  to  Jutland  risks  complicating  its  task  of  monitoring  fiscal  policy 
developments. Its independence is hampered by a lack of formalised access to information. 

Denmark has best practices for planning, selecting and budgeting public investment projects in 
the  road/railway  and  IT  sectors.  Denmark  Forward  -  Infrastructure  plan  2035  (39)  is  a  14-year 
strategic mobility plan, covering roads and railway, and integrating climate considerations. Standardised 
appraisal and selection methods, with several decision points and external quality assurance (for projects 
above DKK 350 Mio) are in place for all projects included in the plan (40). This practice follows the state-
of-the-art stage-gate model for large investment projects in which the project selection process includes 
several decision points as the project moves through the different stages and becomes more concrete.(41) 
Analysis suggests that the first external quality review process could be extended to include investigating 
alternatives or providing other solutions to the ones includes in the project material (42) while the second 
review, later in the process, should be considerably more detailed and thorough as that forms the basis 
for  the  final  political  investment  decision  (43).  These  governance  models  could  be  extended  to  other 

(37)  Key performance characteristics, recent reforms and investments of the Danish healthcare system are discussed in Annex 11 

‘Health and health systems’. 

(38)  The adequacy and quality of the Danish long-term care system are covered in Annex 9 ‘Social policies’.  

(39)  https://fm.dk/media/hduprait/danmark_fremad_infrastrukturplan_2035_a.pdf  

(40)  Zerjav, V., Welde, M., and Volden G.  (forthcoming), “Governance of public investment projects: a comparative perspective” (Eds), 

Country Chapter on Denmark, Wiley Publishing House. 

(41)  Belu Manescu, C. (2024), ”The Planning of Public Investments in EU Member States: Long-Term Strategy, Selection and Budgeting 

Issues”, DG ECFIN Discussion Paper nr. 213” 

(42)  Transportministeriet (2022a). Terms of reference - Ekstern kvalitetssikring af fase 1 undersøgelser [Terms of reference - External 

quality assurance of phase 1 studies]. København, Transportministeriet. 

(43)  Transportministeriet (2022b). Terms of reference - Ekstern kvalitetssikring af fase 2 undersøgelser [Terms of reference - External 

quality assurance of phase 2 studies]. København, Transportministeriet. 

28 

DK24.50.10.31.6-0.21.826.3DKEU24.30.50.30.4-0.30.925.2EUDK24.5-1.90.73.1-0.61.325.8DKEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
  
 
 
sectors such as energy infrastructure. The total budget cost of large projects is approved up-front by the 
Parliament which creates a stable framework for financing multi-annual projects.  

Table A1.10:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

29 

2023DenmarkEU AverageCountry Fiscal Rule Strength Index (C-FRSI)11.4914.52Medium-Term Budgetary Framework Index (MTBFI)0.620.73 
 
   
 
 
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview of Denmark’s tax system. It includes 
information on: (i) the tax mix; (ii) competitiveness 
and  fairness  aspects  of  the  tax  system;  and  (iii) 
tax collection and compliance.  

Denmark’s  tax  revenue  is  relatively  high  in 
relation  to  its  GDP.  It  is  balanced  between 
different tax types in a growth-friendly way. Table 
A2.1 shows Denmark’s revenues from different tax 
types as a percentage of GDP. Denmark’s total tax 
revenue as a percentage of GDP (43.4%) was one 
of  the  highest  in  the  EU  in  2023.  It  further 
increased to 44.6% in 2024. 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 in 2023 as a share of GDP were 
higher  in  Denmark  than  the  EU  average,  and 
labour  taxes  as  a  share  of  total  taxes  were  also 
higher  than  the  EU  average  in  2023  at  54.5%  in 
against  51.2%  (see  Graph  A2.1).    Denmark’s 
revenue 
taxes  as  a 
percentage  of  GDP  is  decreasing,  but  it  is  still 
slightly  above  the  EU  average  and  amounted  to 
EUR 7.7 billion in 2023 (44).   

from  environmental 

Denmark’s  property  tax  system  has  recently 
been  reformed.  In  2023,  Denmark’s  recurrent 
taxes  on  property  were  among  the  highest  in  the 
EU  as  a  percentage  of  both  GDP  and  total  tax 
revenues  (45).  However,  Denmark  also  has  one  of 
the 
tax 
highest  mortgage-interest-payment 
deductions  in  the  EU,  and  this  incentivises  the 
financing  of  residential  property  through  debt.  A 
new property tax system aiming at preserving the 
distributional  and  allocative  effects  of  the  Danish 
tax system 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 on their property 
to the system. Adjustments have also been made 
to the system to ensure the quality of the appeal 
procedure. Data sourcing and accuracy continue to 
present  challenges  for  the  Danish  authorities  and 
their management of the property-tax system.  

(44)  Statistics | Eurostat, environmental tax revenue as a 

percentage of GDP, 28.1.2025. DK 2.05% vs EU 2.03% in 
2023.  

(45)  European Commission, 2025, Data on Taxation Trends - 

European Commission 

incentivised 

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 
in  a  wide 
range  of  sectors.  For  example, 
investments in the green transition are expected to 
be 
though  a  new  accelerated 
depreciation measure introduced in 2024, allowing 
companies  to  write  off  the  value  of  these 
investments more quickly, resulting in tax savings. 
New  taxes  on  CO2  emissions  covering  various 
sectors were approved by the Danish Parliament in 
June  2024,  effective  as  of  January  2025.  In 
November 2024, the Danish Parliament also voted 
in  support  of  the  green  tripartite  agreement 
three  areas: 
(‘tripartite’  because 
agriculture,  nature  and  climate)  in  its  entirety, 
introducing a climate tax on agriculture of EUR 40 
per tonne of CO2 equivalent and rising to EUR 100 
per  tonne  from  2035.  However,  an  average  basic 
deduction of 60% will apply to farmers, effectively 
lowering the cost of the tax to EUR 16 per tonne in 
2030.  This  reduced  rate  will  be  gradually  phased 
in  until  2035,  after  which  the  full  rate  of  EUR  40 
per tonne will apply. 

it  covers 

Graph A2.1: Tax revenue shares in 2023 

Source: Taxation Trends Data, DG TAXUD 

Denmark  provides  a  stable  corporate  tax 
framework  with  rates  close  to  the  EU  and 
OECD  averages.  Denmark’s  statutory  corporate-
tax  rate  stood  at  22.0%  in  2023  –  unchanged 
since  2016  and  slightly  above  the  EU  average  of 
21.2%.  Its  average  corporate  effective  tax  rate 
was  lower,  at  19.5%,  but  still  above  the  EU 
average of 18.9%. Denmark offers a variety of tax 
incentives in the form of tax deductions for certain 
types  of  capital  expenditure.  The  Danish  tax 
framework  provides  the  taxpayer  with  the  choice 
between  an 
immediate  write-off  for  capital 
expenditure  for  R&D  or  for  a  tax  depreciation  for 

30 

51.226.921.954.527.118.3Tax revenue shares in 2023, Denmark (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital 
 
 
      
 
Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).       
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in 
the EU - 2024 report,  https://data.europa.eu/doi/10.2778/2476549  
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, OECD 

five years. In December 2024, Denmark amended 
its  tax  framework  (effective  from  January  2025) 
to  abolish  the  ‘entrepreneur  tax’  by  ending  the 
taxation  of  dividends  on  ‘tax-exempt  portfolio 
shares’  (i.e.  holdings  of  less  than  10%  of  the 
in  an  unlisted  company,  held  by  a 
shares 
company)  and 
threshold  of 
progression  for  income  tax  on  capital  gains  of 
shares progressively from DKK 63 300 in 2024 to 
83 100 starting in the income year 2027. 

increase 

the 

the 

Denmark’s  labour  tax  burden  is  lower  than 
the  EU  average  across 
income 
labour  tax  wedge  (46)  for 
distribution.  The 
Denmark  in  2024  was  slightly  above  the  EU 
average  for  single  people  at  50%  of  the  average 
wage (32.0% vs 31.8% for the EU-27), but below 
the  EU  average  for  single  people  at  100%  of  the 
average  wage  (36.1%  vs  40.3%  for  the  EU-27). 
The  tax  wedge  for  second  earners  at  67%  of  the 
average  wage,  whose  spouses  earn  the  average 

and 

employee 

(46)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
taxes 
social-
security security contributions  net  of  family  allowances, 
expressed as a percentage of total labour costs (the sum of 
the gross wage and social-security security contributions paid 
by the employer). 

employer 

and 

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 
2023  Denmark’s  tax-and-benefit  system  helped 
inequality  (as  measured  by  the  Gini 
reduce 
coefficient)  by  substantially  more  than  the  EU 
average.  A  personal  income  tax  reform  was 
adopted  in  2024,  which,  among  other  changes, 
introduces  a  new  top-up  tax  of  5%  for  incomes 
above DKK 2,588,300 (around EUR 336,000). The 
reform  also  includes  the  introduction  of  a  new 
intermediate 
reduce 
marginal  tax  rates  for  incomes  between  DKK 
618.400-750.000  kr.  In  addition,  the  reform  – 
among  other  elements  –  increases  the  earned 
income  tax  credit  for  single  parents.  The  reform 
will  take  effect  from  2026  and  is  expected  to 
reduce  labour  taxes  by  DKK  10  billion  (EUR  1.3 
billion) (net) annually from that year. 

tax  bracket,  which  will 

31 

DKMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)45.147.442.043.444.637.840.239.739.0Taxes on labour (% of GDP)22.823.822.423.719.820.520.120.0of which, social security contributions (SSC, % of GDP)12.69.78.28.012.913.012.712.7Taxes on consumption (% of GDP)14.513.112.311.810.911.210.910.5of which, value added taxes (VAT, % of GDP)9.49.69.29.16.87.37.47.1Taxes on capital (% of GDP)7.710.47.48.07.18.58.78.5Personal income taxes (PIT, % of GDP)24.826.923.424.88.69.69.49.3Corporate income taxes (CIT, % of GDP)2.34.03.33.82.22.93.23.2Total property taxes (% of GDP)2.52.42.32.21.92.22.11.9Recurrent taxes on immovable property (% of GDP)2.01.81.71.71.11.11.00.9Environmental taxes (% of GDP)4.02.82.42.02.52.42.12.0Effective carbon rate in EUR per tonne of CO2 equivalentsNA101.2NA101.7NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)31.231.131.731.832.033.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)35.935.735.935.936.140.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)22.019.419.419.521.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)12.212.011.010.38.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)12.113.035.532.6VAT gap (% of VAT total tax liability, VTTL) (**)4.58.66.67.0Progressivity & fairnessTax administration & complianceBy tax baseSome tax typesDenmarkEU-27 
 
 
 
  
 
Graph A2.2: Tax wedge for single and second 
earners, % of total labour costs, 2024 

The tax wedge for second earners assumes a first earner at 
100% of the average wage and no children. For the full 
methodology, see OECD, 2016, Taxing Wages 2014-2015. 
Source: European Commission 

IT  system  for  taxation 

Denmark  performs  relatively  well  on  tax 
compliance and tax administration. Denmark’s 
(PSRM)  has 
newest 
introduced a new level of efficiency in the digitised 
collection  of  public  debt,  thereby  strengthening 
public  trust  in  the  Danish  taxation  system.  The 
latest figures show that the Danish Debt Collection 
Agency  recovered  approximately  DKK  14  billion 
(around  EUR  1.9  billion)  in  2023  –  a  record  high 
figure  –  up  from  DKK  8.9  billion  (around  EUR  1.2 
billion)  in  2018.  Outstanding  tax  arrears  were 
13.0%  of  total  revenue 
in  2022.  This  was 
significantly  below  the  EU-27  average  of  32.6%, 
although  the  latter  was  inflated  by  very  large 
values  in  a  few  Member  States.  The  VAT  gap  (an 
indicator of the effectiveness of VAT enforcement 
and  compliance,  where  a  low  gap  indicates  high 
effectiveness)  rose  substantially  to  8.6%  in  2022 
from 4.5% the year before, and is now above the 
EU average of 7.0%. 

32 

32.033.536.141.938.92025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - DKSingle earner - EU averageSecond earner -  DKSecond earner -  EU average 
      
 
 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

Denmark is a high performer in research and 
innovation  (R&I)  but  faces  challenges  in 
getting  more  small  and  medium-sized 
enterprises (SMEs) engaged in innovation and 
digital  transformation.  The  2024  European 
Innovation  Scoreboard  ranks  Denmark  as  an 
‘innovation  leader’,  at  136%  of  the  EU  average, 
and  its  performance  has  been  increasing  more 
the  EU  average (47).  Denmark’s  R&D 
than 
intensity (48),  at  2.99%  for  2023,  continues  to 
improve and is close to reaching the EU target of 
3%. However, R&D activities are concentrated in a 
small number of large companies, with a growing 
productivity  gap  between 
large  and  small 
companies and a decline in the employment share 
of  high-growth  firms.  On  the  uptake  of  digital 
technologies by firms, despite the country’s strong 
overall  performance,  there  are  also  very  large 
discrepancies across different types of businesses 
–  larger  firms  lead  the  way,  while  smaller  ones 
still face very significant challenges. 

Science and innovative ecosystems 

Denmark  has  a  very  strong  public  research 
base  that 
is  underpinned  by  significant 
investment  and  delivers  excellent  outputs. 
Denmark’s  share  of  scientific  publications  within 
the top 10% most cited publications worldwide, as 
a percentage of total publications, is above the EU 
average (12.5% vs 9.6%). The strong international 
linkages of the public science base are underlined 
by  the  share  of 
international  scientific  co-
publications  in  total  publications,  which  is  also 
above  the  EU  average  (68%  vs  55.9%).  Danish 
universities  are  also  actively  engaged 
in 
knowledge  transfer  activities  to  promote  the 
research 
commercial  exploitation  of  public 
transfer 
their  knowledge 
discoveries 
offices (49).  This  overall  performance  is  supported 
by a level  of public expenditure on R&D  which, at 
1.15%  of  GDP,  is  the  highest  in  the  EU.  The 

through 

(47)  European Commission, 2024, European Innovation 

Scoreboard (EIS), country profile: Denmark, ec_rtd_eis-
country-profile-dk.pdf. 

(48)  Defined as expenditure on R&D as a percentage of GDP. 

(49)  Ministry of Higher Education and Science, Knowledge transfer 

— English. 

33 

number  of  researchers  employed  by  the  public 
sector  per  thousand  of  the  active  population  is 
also  the  second  highest  in  the  EU  (7.3  vs  an  EU 
average of 4.2). 

Business innovation  

The  Danish  economy  benefits  from  a  large 
volume  of  business  R&D  activities,  although 
they  are  relatively  concentrated in  a limited 
number  of  large  companies.  While  business 
R&D  intensity  has  been  declining  in  the  last 
decade, it has picked up slightly since 2021 and is 
still well above the EU average (1.83% vs 1.49%). 
In  2020,  the  tax  deduction  for  R&D  expenses 
increased  from  101.5%  to  130%  for  2020-2022, 
with  a  company  cap  of  DKK  50  million  on 
qualifying expenditures. It was recently decided to 
set a permanent increase in the deduction for R&D 
activities at 120%, with a total expenditure cap of 
DKK  1  billion (50).  The  number  of  researchers 
employed  by  business  per  thousand  of  the  active 
population  is  nearly  double  the  EU  average  (10.3 
vs 5.7), as is the number of patent applications per 
billion of GDP in purchasing power standards (5.4 
vs  2.8).  However,  as  noted  in  the  Horizon  Policy 
Support  Facility 
the  Danish  R&I 
review  of 
system (51),  and  in  a  later  analysis  by  the  Danish 
Council  for  Research  and  Innovation  Policy (52), 
R&D  investments  are  relatively  concentrated  in  a 
small  number  of  large  companies,  in  particular  in 
the pharmaceutical sector. In addition, the growing 
productivity  gap  between 
large  and  small 
companies  suggests  weaknesses  in  the  diffusion 
of  technological  advances,  and  the  employment 
share  of  high-growth  firms  has  been  declining 
(from  19.6%  in  2012  to  13%  in  2020).  All  this 
points to the need to broaden the innovation base 
and involve more companies in R&I activities. 

(50)  Stronger business community 

https://www.em.dk/Media/638544588960392858/Et%20st
%c3%a6rkere%20erhvervsliv.pdf). 

(51)  Peer review of Danish R&I system, Horizon 2020 Policy 

Support Facility, 2019 (p. 30-34) PSF Denmark_Final report. 

(52)  Danish Council for Research and Innovation Policy: Danish 
innovation must be driven by a broad range of companies 
DFiRbrief_42 (2023). 

 
 
 
 
 
 
 
Graph A3.1: Business enterprise expenditure on 
R&D as % of GDP 

Source: Eurostat 

innovation 

performance 

Danish 
is 
underpinned  in  particular  by  strong  science-
business linkages.  The  number  of  public-private 
scientific  co-publications  as  a  percentage  of  the 
total  number  of  publications  remains  at  a  high 
level  and  well  above  the  EU  average  (13.8%  vs 
7.7%  in  2023).  In  2021-2024,  the  Ministry  of 
Higher  Education  and  Science  and  the  Danish 
Board  of  Business  Development  financed  13 
national  clusters  within  Denmark’s  strongest  and 
most  promising  business  and  technology  areas. 
The  purpose  of  the  cluster  programme  was  to 
strengthen the productivity and competitiveness of 
Danish 
cooperation  on 
innovation and the transfer of knowledge between 
companies  and  knowledge 
institutions.  This 
included  activities  that  promoted  collaboration  on 
knowledge-based  innovation  between  companies 
institutions,  as  well  as  other 
and  research 
participants in the innovation ecosystem (53). 

companies 

through 

businesses, with larger companies leading the way 
and  smaller  businesses,  particularly  SMEs,  still 
facing  challenges  in  digital  adoption.  In  2023,  for 
instance,  65.4%  of  SMEs  adopted  cloud  solutions 
against  89.7%  of  large  firms.  Similarly,  48.3%  of 
SMEs  adopted  data  analytics  in  2023,  against 
88.3% of large firms. With more investments likely 
until  2027  thanks  to  the  updated  digitalisation 
strategy (54), the country is expected to focus more 
the  growth  and  digitalisation  of  SMEs. 
on 
Particular  attention  will  be  given  to  helping  SMEs 
acquire  the  necessary  digital  skills  to  be  more 
productive  and  competitive.  The  national  initiative 
SME:Digital,  for  instance,  provides  guidance  to 
SMEs  on  how  to  use  digital  solutions  as  well  as 
tools  to  assess  their  digital  maturity  and  identify 
areas  for  improvement,  together  with  financial 
support 
to  adopt  new 
technologies.  Denmark  has  also  set  up  five 
European  Digital  Innovation  Hubs  to  improve  the 
digital  capacity  of  companies  and  public  sector 
organisations. 

incentivise 

them 

to 

Denmark  is  taking  steps  to  become  one  of 
the best countries for entrepreneurs. In 2024, 
it adopted a strategy for entrepreneurship entitled 
‘A  World-Class  Entrepreneurial  Nation’.  It  aims  to 
strengthen  Denmark’s  entrepreneurial  ecosystem 
by improving  access  to  capital,  reducing  red tape, 
talent,  promoting 
attracting  and  developing 
and 
knowledge-based 
ensuring 
nationwide 
entrepreneurial 
activities (55). 

innovation 
for 

support 

The 
level  of  digitalisation  of  Danish 
companies  is  among  the  highest  in  the  EU. 
90.5%  of  firms  (with  10-249  employees)  had  at 
least  a  basic  level  of  digital  intensity  in  2024, 
above the EU average of 72.9%. The country also 
performs  significantly  above  the  EU  average  on 
the  share  of  firms  that  have  taken  up  advanced 
digital  technologies  (with  27.6%  of  them  having 
adopted  AI  in  2024,  above  the  EU  average  of 
13.5%;  66.2%  having  adopted  cloud  in  2023, 
above  the  EU  average  of  38.9%;  and  49.5% 
having adopted data analytics in 2023, also above 
the EU average of 33.2%).  

Digital  transformation  is  less  advanced  in 
smaller  companies.  The  level  of  uptake  among 
types  of 
companies  varies  across  different 

Financing innovation 

Denmark  is  a  regional  leader  in  venture 
capital  and  private  equity  investment.  The 
average  annual  value  of  private  equity  and 
venture capital investment relative to nominal GDP 
increased  to  0.9%  and  0.16%  respectively  in 
2021-2023, from 0.7% and 0.06% in 2015-2020, 
remaining  persistently  higher  than  the  respective 
EU averages (0.6% and 0.08%). In 2023, Denmark 
stood  out  as  the  sole  country  among  the  top  10 

(54)  Ministry of Finance, 2022, National Strategy for 

Digitalisation, https://en.digst.dk/media/mndfou2j/national-
strategy-for-digitalisation-together-in-the-digital-
development.pdf. 

(53)  Ministry of Higher Education and Science Danish clusters for 

(55)  Ministry of Industry, Business and Financial Affairs, 2024, 

knowledge and business 2021-2024 — English. 

Web_Iværksætterudspil_110624.pdf (in Danish). 

34 

11.21.41.61.822013201520172020202120222023EUDK 
     
 
 
in  Europe 

capital  ecosystems 

venture 
to 
experience  growth.  Venture  capital  investment,  of 
which  almost  two  thirds  were  dedicated  to 
healthtech  start-ups,  grew  by  2.1%  in  2023  to 
about  EUR  1.2  billion,  the  second-best  year  on 
record.  For  the  last  five  years  prior  to  2023,  the 
main  sectors  of  venture  capital  investment  were 
health 
(15%)  and 
fintech (14.7%). 

(26%),  company  software 

Innovative talent 

Skills  in  the  domain  of  R&I  are  relatively 
strong  and  continue  to  increase.  The  number 
of  new  graduates  in  science  and  engineering  per 
thousand of the population aged 25-34 is slightly 
above  the  EU  average  (19.5  vs  17.6),  while  the 
corresponding number of graduates in the field of 
computing  is  well  above  the  EU  average  (5.8  vs 
3.6).  

strong 

focus  on 

The  Danish  entrepreneurship  education 
system  is  well  developed  and  implemented, 
with  a 
supporting 
entrepreneurship  activities  at  all  school 
for 
levels.  Denmark  has  clear  objectives 
entrepreneurship  education,  and  the  Foundation 
for  Entrepreneurship  ensures  that  initiatives  and 
planning  are  coordinated.  Student  participation  in 
entrepreneurship  education  is  also  relatively  high: 
in  the  2018/2019  school  year,  16%  of  primary 
school  children  and  44%  of  upper  secondary 
school 
entrepreneurship 
received 
education.  This  number  was  29%  for  students  in 
short and medium-cycle higher education and 9% 
for  university  students,  an  increase  compared  to 
previous years (56). 

students 

(56)  Foundation 

for  Entrepreneurship 

for 
Entreprenørskab. (2020). Entreprenørskab for alle  – evner til 
at  skabe,  forandre  og  gøre  en  forskel.  Retrieved  from 
https://www.ffe-ye.dk/media/791592/strategi-for-fonden-
for-entreprenoerskab-2020-2025.pdf. 

(2020):  Fonden 

35 

 
 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the highest number of country data 
Source: Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

36 

20232024R&D intensity (gross domestic expenditure on R&D as % of GDP)2.982.942.972.742.872.99:2.243.45Public expenditure on R&D as % of GDP1.011.071.131.031.11.15:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 14.813.412.512.5:::9.612.3Researchers (FTE) employed by public sector (Gov+HEI) per thousand active population5.66.26.36.67.37.3:4.2:International co-publications as % of total number of publications55.362.567.667.667.868:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP1.961.861.831.71.761.83:1.492.70Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.550.49::::0.400.30Researchers employed by business per thousand active population8.49.18.98.610.310.3:5.7:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)6.36.36.65.75.4::2.8:Employment share of high-growth enterprises measured in employment (%)19.5917.6112.98::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::88.8:90.4772.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::49.49:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::62.22:66.16:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::23.89:15.1727.5813.48:Public-private scientific co-publications as % of total number of publications12.11313.413.6013.513.8:7.78.9Public expenditure on R&D financed by business enterprises (national) as % of GDP0.0270.0290.029::::0.0500.020Total public sector support for BERD as % of GDP0.0760.076:::::0.2040.251R&D tax incentives: foregone revenues as % of GDP0.0100.0200.0940.1000.0960.061:0.1020.141BERD financed by the public sector (national and abroad) as % of GDP 0.0660.056:::::0.1000.110Venture capital (market statistics) as % of GDP, total (calculated as 3-year moving average)0.0350.0320.0950.1470.1390.156:0.078:Seed stage funding share (% of total venture capital)4.84.88.33.97.19.4:7.3:Start-up stage funding share (% of total venture capital)43.444.741.350.348.954.4:44.0:Later stage funding share (% of total venture capital)51.850.550.445.843.936.2:48.7:New graduates in science and engineering per thousand population aged 25-3419.219.018.920.119.5::17.6:Graduates in the field of computing per thousand population aged 25-344.05.65.76.25.8::3.6:Financing innovationInnovative talent20222021Denmark201220172020Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed in businessesPublic support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationEU average (1)USA 
 
 
  
 
ANNEX 4: MAKING BUSINESS EASIER 

a 

in 

strong 

position 

Denmark  has  a  very  favourable  and  stable 
business environment, with a strong focus on 
digitalisation  and  sustainability.  Denmark  has 
maintained 
global 
competitiveness  thanks  to  a  combination  of 
factors  such  as  good  performance  in  innovation 
and education, a favourable business environment, 
excellence  in  digital  public  services  and  well-
functioning infrastructure. It came first in the EU in 
the  2024  IMD  World  Competitiveness  Ranking, 
thanks  in  particular  to  its  good  performance  in 
digitalisation  and  a  clear  focus  on  sustainability. 
SMEs  benefit  from  low  regulatory  barriers,  well-
developed digital and transport infrastructure, and 
good  overall  access  to  finance.  However,  the  lack 
of  skilled  staff  and  uncertainty  about  the  future 
are barriers to business investment.  

Investment climate 

Business  sentiment  recovered  in  2024  and 
returned  to  positive  territory  as  the  Danish 
economy began to experience robust growth. 
After negative growth in the first quarter of 2024, 
economic activity and industrial output rebounded 
in  the  second  half  of  2024.  The  manufacturing 
confidence  indicator  in  Denmark  became  positive 
again (57). Business investment remained subdued 
in 2024 due to high interest rates but is projected 
to  gain  momentum  in  2025  because  the  Danish 
economy  is  now  experiencing  robust  growth  (GDP 
expanded by 3% in 2024 and is expected to grow 
by  2.9% 
in  2025,  according  to  the  Danish 
government (58)). 

Denmark’s  private 
investment  has  been 
declining  (although  it  is  still  above  the  EU 
average)  while  public 
investment  has 
increased. Net fixed capital formation as a share 
of  GDP  declined  from  5.6%  in  2022  to  2.4%  in 
2024.  Despite  this  decline,  Denmark’s  five-year 
average  of  4.12%  is  still  slightly  above  the  EU 
average of 4.01%. Private investment is essential 
to  support  Denmark’s  future  economic  growth. 
Public investment has increased in recent years. A 
number  of  policy  measures  aim  at  supporting 

private  investment.  These  include  the  2024-2027 
strategy for business promotion (59) and incentives 
for  R&D  investment  (see  also  Annex  3).  In  2022, 
public  net  investment  was  0.79%  of  GDP  and 
increased  to  0.97%  in  2024.  However,  Denmark’s 
five-year  average  of  0.83%  still  remains  slightly 
below the EU average of 1.01% (60). 

a 

very 

remains 

attractive 
Denmark 
destination  for  foreign  direct  investment. 
According to the Danish Central Bank, the stock of 
foreign  direct  investment  (FDI)  in  Denmark  grew 
by  around  2%  in  2023,  following  a  decline in  the 
preceding  two  years,  which  were  marked  by  the 
COVID-19  pandemic  as  well  as  Russia’s  invasion 
of  Ukraine.  Similar  growth  is  expected  also  for 
2024 (61). FDI stocks are mostly owned by Sweden, 
the Netherlands, Norway, Luxembourg and the UK 
(in  descending  order).  FDI  is  mostly  directed  into 
finance 
services, 
wholesale  and  retail  trade,  manufacturing,  real 
estate,  and  information  and  communication.  The 
for  Attracting  Foreign 
2024-2027  Strategy 
Investments 
for 
framework 
provides 
Denmark’s  efforts  to  attract,  retain  and  develop 
FDI (62). 

insurance, 

business 

and 

the 

to 

(EIB) 

Investment  Bank 

Firms  highlight  a  lack  of  skilled  staff  and 
uncertainty  about  the  future  as  the  main 
investment  obstacles.  According 
the 
European 
Investment 
Survey, the main long-term barriers to investment 
reported  by  Danish  firms  in  2024  were  the  non-
availability of skilled staff (71%) (see Annexes 10 
and  12)  and  uncertainty  about  the  future  (56%). 
The  share  of  businesses  facing  major  labour 
supply  constraints  was  below  the  EU  average  in 
2024  (13.4%  vs  the  EU  average  of  20.2%)  and 
was slightly lower than in 2023 (17.1%). Vacancy 
rates  remain  slightly  above  the  EU  average.  The 
share  of  businesses  facing  material  supply 
constraints decreased significantly in 2024 (19.6% 
compared  with  24.8%  in  2023) (63).  45%  of 
businesses still identified energy prices as an issue 
in 2024, but electricity and gas prices had already 

(59)  Danmarks 

Virksomhedsudvikling 
https://erhvervsfremmebestyrelsen.dk . 

Erhvervsfremmebestyrelse, 
hele  Danmark 

i 

2024, 
2024-2027, 

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

Investments into Denmark grew 2 % last year. 

dst.dk. 

(58)  Ministry  of  Economic  Affairs,  2024,  Economic  Report:  The 
Danish  economy  remains  strong,  Økonomisk  Redegørelse: 
Dansk økonomi står fortsat stærkt. 

(62)  Ministry  of  Foreign  Affairs  of  Denmark,  2024,  Invest  in 

Denmark Strategy 2024-2027. 

(63)  European  Commission,  2024,  Business  and  consumer 

surveys. 

(60)  AMECO, 2024. 
(61)  Ministry of Foreign Affairs of Denmark, 2024,  Foreign Direct 

37 

 
 
 
 
decreased  substantially  from  their  peak  in  2022 
(see also Annex 8). 

Graph A4.1: Making Business Easier: selected 
indicators 

Danish  firms  benefit  from  business-friendly 
regulation,  good  overall  access  to  finance 
and  well-developed  infrastructure.  According 
to  the  EIB  Investment  Survey (64),  fewer  Danish 
firms  identify  business  regulations  as  a  barrier 
than  the  EU  average  (40%  vs  66%).  In  fact,  in 
recent  years  Denmark  has  been  the  EU  Member 
State  with  the 
lowest  share  of  businesses 
reporting regulation as an obstacle to investment. 
Access  to  finance  is  less  often  reported  as  an 
obstacle to investment (28% vs the EU average of 
45%).  Due 
to  Denmark’s  well-developed 
infrastructure,  most  businesses  do  not  consider 
transport  infrastructure  (DK  30%  vs  EU  45%)  or 
digital  infrastructure  (DK  23%  vs  EU  41%)  as  an 
obstacle.  

is  a 

leader 

in  terms  of 
Thanks 

its 
Denmark 
connectivity 
to 
infrastructure. 
significant public and private investment, Denmark 
has  widespread  access  to  high-speed  broadband, 
fibre-optic  networks  and  5G  technology,  in  line 
with  the  Digital  Decade  targets.  At  97.2%, 
Denmark’s  very  high  capacity  network  (VHCN) 
coverage  was  above  the  EU  average  in  2023. 
Denmark  also  scored  well  above  the  average  in 
fibre to the premises (FTTP) coverage, which stood 
at  84%  (compared  with  64%  in  the  EU  as  a 
reached  100%  of  all 
whole).  5G  coverage 
populated areas, with 5G in the 3.4-3.8 GHz band 
covering  85%  of  Danish  households  (significantly 
above the EU average of 50.6%). With the help of 
the  National  Broadband  Fund  (supported  by  the 
Recovery  and  Resilience  Facility),  Denmark  is 
improving  fast  broadband  access  in  rural  and 
remote  areas,  where  commercial  investments  are 
less  financially  viable.  Regarding  the  resilience  of 
digital  infrastructures,  the  risk  of  exposure  to 
but 
cybersecurity 
cybersecurity 
is 
increasing in response. 

incidents 
awareness 

enterprises 

remains 

high, 

in 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) firms, (4) SMEs. 
Source: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE 
survey. 

in 

insolvencies 

The  decrease 
in  2024 
(following a spike in 2023) indicates a return 
levels.  The  business-to-
to  pre-pandemic 
business  payment  gap  has  gradually  increased 
since  2021  (reaching  an  average  of  18.1  days  in 
2024)  and  is  therefore  above  the  EU  average  of 
15.5  days.  This  can  affect  liquidity-constrained 
SMEs in sectors like construction. The payment gap 
from the public sector has remained below the EU 
average  since  2021,  reaching  13.2  days  on 
average  in  2024,  compared  with  the  EU  average 
of 15.2 days (see Table A4.1). The insolvency rate 
spiked  in  2023  but  declined  in  2024,  when  the 
number  of  insolvencies  was  the  lowest  since 
2020-21. 
Insolvencies  therefore  seem  to  be 
returning to pre-pandemic levels. 

A  new  guarantee  facility  is  intended  to  help 
SMEs invest in green initiatives and increase 
their  competitiveness.  The  share  of  SMEs  who 
consider  access  to  finance  as  an  obstacle  to 
investment  is  below  the  EU  average (65).  Danish 

(64)  European  Investment  Bank,  2024,  EIB  investment  survey 

(65)  European  Investment  Bank,  2024,  EIB  investment  survey 

2024. 

2024. 

38 

36.21219.631.09.747.916.61041.624.50102030405060from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27DK 
 
   
 
firms  have  a  strong  preference  for  equity 
investment  and  other  sources  of  finance.  Only 
41%  prefer  bank 
loans  for  expanding  their 
business  (the  EU  average  is  63% (66)).  Since 
October  2024,  Danish  SMEs  and  Mid-Caps  have 
been able to obtain funding for green investments 
of  DKK 320  million  through  a  new  guarantee 
agreement  between  the  European 
Investment 
Fund and Ringkjøbing Landbobank. This scheme is 
supported by the European Commission’s InvestEU 
initiative  and  aims 
to  support  sustainable 
investments,  with  a  focus  on  renewable  energy 
projects such as wind turbines and solar panels (67) 
(see also Annex 5). 

and 

and 

Many companies are formed in Denmark, but 
innovative 
small 
start-ups 
companies  struggle  to  grow  and  scale  up. 
Denmark  has  one  of  the  highest  shares  of  green 
start-ups (68)  and  high-growth  firms (69)  in  the  EU. 
However,  access  to  growth  capital  and  recruiting 
qualified staff are crucial challenges for start-ups 
and  often  determine  whether  they  stay 
in 
Denmark or relocate elsewhere (70). Venture capital 
financing  is  less  pronounced  than  in  some  other 
Nordic  countries  but  has  improved  and  is  better 
than the EU average (see also Annex 3). 

Regulatory and administrative 
barriers 

Denmark  has  a  very  favourable  business 
environment,  with  a  particular  focus  on 
digital  public  services.  Denmark  consistently 
ranks  highly 
in  global  competitiveness  and 
governance indices, reflecting a stable  and robust 
business  environment.  Recent  initiatives  (e.g. the 
Strategy  on  improvement  of  business  framework 
conditions (71), the Business Development Strategy 

(66)  European Central Bank, European Commission, 2024, Survey 

on the access to finance of enterprises.  

(67)  European Investment  Fund, 2024,  Financial  helping  hand  to 
Danish  SMEs:  guarantee  agreement  to  support  green 
investments. 

(68)  OECD, 2022, The New Green Economy, oecd.org. 
(69)  European Central Bank, European Commission, 2024, Survey 

on the access to finance of enterprises. 

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

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

(71)  Ministry  of  Foreign  Affairs  of  Denmark,  Invest  in  Denmark, 
2024,  New  Government  Strategy  Priorities  Improvement  of 
Business  Framework  Conditions  and  International  Talent 
Acquisition. 

39 

2024-2027 (72) and the Life Sciences Strategy (73)) 
demonstrate  Denmark’s  commitment  to  further 
improving  the  business  environment  and  reducing 
the  administrative  burden  for  firms.  Denmark’s 
corporate  tax  rate  of  22.0%  is  slightly  below  the 
OECD average of 23.9%. The tax system does not 
seem  overly  complex (74),  thanks  in  part  to  a 
particular emphasis on digitalisation.  

Denmark  is  a  front-runner  in  digital  public 
services.  Administrative  procedures  are  usually 
designed  as  ‘digital  by  default’.  98%  of  all  public 
services are offered online (see also Annex 6). It is 
also  performing  well 
invoicing, 
electronic  procurement,  and  technical  and  policy 
support.  Business  churn  and  the  rate  of  high-
growth firms are well above the EU average, which 
shows  that  Denmark’s  business  environment  is 
promoting the efficient reallocation of resources to 
more productive activities.  

in  electronic 

Single market  

Denmark  is  a  small,  open  and  diversified 
economy  which  is  well  integrated  into  the 
is  closely 
EU’s  single  market.  Denmark 
integrated into  the  single  market,  though its  32% 
trade integration for both goods and services was 
slightly below the EU average of 43% in 2023 (75). 
In  2023,  Denmark’s  surplus  in  intra-EU  trade  in 
goods became a deficit, but it retained its surplus 
in  extra-EU 
trade.  Denmark’s  major  export 
partners  include  Germany  (16%  of  Denmark’s 
total), Sweden (9%), the Netherlands (7%), Norway 
(6%),  the  US  (6%),  the  UK  (5%),  Poland  (5%), 
France  (4%),  China  (3%),  Italy  (3%),  Spain  (2%) 
and Finland (2%). Denmark’s main export products 
include  pharmaceuticals  (15%  of  total  exports), 
machinery  and  computers  (12%),  mineral  fuels 
(10%),  electrical  machinery  and  equipment  (7%), 
optical,  technical  and  medical  apparatus  (4%), 
vehicles (3%), fish (3%), meat (3%), furniture (3%) 
and other food products (2%) (76). 

(72)  Danmarks 

Erhvervsfremmebestyrelse, 

2024, 

Virksomhedsudvikling i hele Danmark 2024-2027. 

(73)  Ministry  of  Foreign  Affairs  of  Denmark,  Invest  in  Denmark, 

2024, New Danish life science strategy. 

(74)  European Commission, 2022, Tax compliance costs for SMEs. 
(75)  Eurostat, 2024, International trade in goods. 
(76)  Statistics Denmark, 2025, Imports and exports of goods and 

services - Statistics Denmark. 

 
 
 
Public procurement  

Denmark  performs  well  in  respect  of  public 
e-procurement. 
including 
procurement, 
Procurement  is  conducted  primarily  at  the  local 
level.  The  central  government  and  the  regions 
have  a 
lower  share  of  procurement.  Each 
contracting  authority  is  responsible  for  its  own 
procurement  but  can  use  framework  contracts 
managed  by  the  main  central  purchasing  body. 
Denmark  performs  well  on  public  procurement 
overall, though the share of bids from SMEs could 
be  improved.  Denmark  has  a  relatively  low  share 
of single bid procurements and direct awards (see 
Table A4.1), which indicates a satisfactory level of 
competition  in  public  procurement  procedures. 
Denmark is one of the leading EU Member States 
in  terms  of  ensuring  a  wide  availability  of  digital 
public services. It also performs well on the use of 
e-procurement (see also Annex 6). 

overall 

performs  well 

Denmark 
in 
transposing  EU  directives  into  national  law 
and  handling 
infringement  proceedings. 
Denmark’s  transposition  and  conformity  deficits 
for single market directives are better than the EU 
averages.  The  transposition  deficit  is  in  line  with 
the  target  of  0.5%  proposed  in  the  Single  Market 
Act  and the conformity deficit is close to it (0.7% 
instead  of  0.5%)  (see  Table A4.1).  The  number  of 
pending  infringement  cases  is  considerably  below 
the EU average (14 compared with the EU average 
of  24).  However,  the  delay  in  transposing  single 
market  directives  and  the  length  of  infringement 
proceedings are both above the EU averages (see 
Table A4.1), 
for 
improvement.  In  2024,  Denmark  resolved  92.7% 
of the SOLVIT cases it handled as the lead centre 
(the EU average was 84.9%) (77).  

indicating 

some 

room 

a 

has 

Denmark 
competition-friendly 
regulatory framework. According to the OECD’s 
Product Market Regulation indicators, Denmark has 
a  competition-friendly  regulatory  framework  and 
is among the best performers in terms of product 
market  regulation.  Its  licensing  and  permitting 
regime is aligned with international best practices, 
making Denmark one of the top performers in this 
respect  within  the  EU (78).  In  respect  of  regulated 
professions,  regulatory  restrictiveness  in  Denmark 
is  in  line  with  the  EU  average  except  for  estate 
agents,  for  whom  restrictiveness  is  above  the  EU 
average. This is partly because real estate agents 
manage  the  property  transaction  process 
in 
Denmark,  while  this  task  is  typically  handled  by 
notaries  or  lawyers  in  other  Member  States.  The 
length  of  time  needed  to  qualify  as  an  estate 
agent  in  Denmark  could be  reassessed.  Moreover, 
lawyers in Denmark are subject to legal form and 
shareholding  requirements,  incompatibility  rules 
and multidisciplinary restrictions (79). 

(77)  European  Commission,  Single  Market  and  Competitiveness 

Scoreboard. 

(78)  OECD,  Product  Market  Regulation  (PMR)  indicators,  2023, 

Denmark_PMR country note. 

(79)  European Commission, 2021, Communication on taking stock 
of and updating the reform recommendations for regulation 
in  professional  services  of  2017,  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. 

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A4.1:  Making Business Easier: indicators 

* Change in methodology in 2024: reporting late payments from public and private entities separately. 
**  The 2024 data on single bids is provisional and subject to revision. Please note that approximately 14% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Source: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, 
(7) OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data space (PPDS). 

41 

POLICY AREA20202021202220232024EU-27 average6.527.749.724.819.610.04.223.734.517.113.420.21.83.03.42.72.62.33.98.57.74.16.313.4-94.996.397.2-78.8-74.177.984.0-64.0-98.097.8100-89.3Regulatory environment5.85.36.52.89.724.520.112.111.315.718.115.623.89.713.915.213.215.1from public or private entities in the last 6 months24.935.139.344.2--from private entities in the previous or current quarter----36.247.9from public entities in the previous or current quarter----12.016.626.127.731.731.731.041.60.0370.0370.0370.0370.0400.0500.30.40.50.90.50.81.01.11.00.90.70.992.595.591.791.092.784.919.018.015.016.014.024.41518231723-6655117.0DenmarkINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
      
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

Hence,  most  of  Danish  net  savings,  i.e.  after 
accounting for the investments that are necessary 
to merely maintain the existing capital structure of 
the economy, are used to finance projects abroad. 

Graph A5.1: Net savings-investment balance 

Source: AMECO 

Consistent  with  its  regular  position  of  a  net 
creditor  to the rest of the  world,  the Danish 
economy has accumulated significant foreign 
assets  and 
positive  net 
exhibits  a 
international  investment  position.  As  of  Q3 
2024, total assets on foreigners reached 348% of 
GDP,  while  liabilities  to  foreigners  stood  at  292% 
of GDP, resulting in a net international investment 
position  (NIIP)  equivalent  to  56%  of  GDP  (see 
Graph  A5.2).  The  accumulated  net  foreign  direct 
investment,  which  reached  32%  of  GDP  as  of  Q3 
2024,  accounted  for  most  of  the  NIIP.  The 
significant stock of official foreign reserve assets, 
which  amounted  to  23%  of  GDP,  reflects  the 
central bank’s commitment to maintain the Danish 
Krone  within  the  narrow  band  of  its  official  peg. 
The  net  portfolio  investments,  which  are  directly 
affected by the price volatility of equity valuations 
abroad (assets) and in Denmark (liabilities), turned 
negative  to  the  tune  of  -11%  of  GDP  as  of  Q3 
2024. However, they were more than offset by the 
net stock of other investments, which amounted to 
12%  of  GDP  at  the  same  time.  Thus,  while  the 
Danish  economy  appears  to  be  deeply  integrated 
in international capital flows, including as a major 
recipient of foreign capital, it remains nevertheless 
a net capital exporter, notably by means of direct 
investments abroad. 

for 

Against  the  backdrop  of  high  domestic 
savings  and  significant  net  foreign  assets, 
the  Danish  economy  benefits  from  deep 
national  capital  markets  and  well-developed 
and stable banking and non-banking financial 
sectors.  The  highly  developed  financial  sector  in 
Denmark contributes positively to the financing of 
companies.  Nevertheless,  conditions 
the 
domestic growth of innovative businesses and for 
attracting 
international  capital  could  still  be 
improved.  Thanks  to  the  high  availability  of 
domestic  savings  and  capital,  Danish  companies 
rely  relatively less  than their  EU  peers  on  debt to 
fund 
their  balance  sheets.  The  funding  of 
mortgages  through  marketable  covered  bonds 
relieves the banking sector from the related credit 
liquidity  risks  and  further  supports  the 
and 
resilience of banks. High levels of financial literacy, 
digital adoption and general trust in society help to 
promote  both: 
strong 
in  capital  markets;  and  (ii)  the 
participation 
extensive  development  of  institutional  investors 
and  professional  asset  management.  But  despite 
being considered a ‘factory for unicorns’ (‘unicorns’ 
are  unlisted  companies  valued  at  EUR  1  bn  or 
more),  Denmark  has  tended  to  fail  to  retain 
innovative  companies  with  high  growth  potential, 
in  part  due  to  the  tax  treatment  of  unrealised 
capital gains. 

investors’ 

retail 

(i) 

Availability and use of domestic 
savings 

The Danish economy invests the largest part 
of  its  relatively  high  net  savings  abroad.  In 
the  last  decade,  the  private  savings  ratio,  net  of 
fixed  capital  consumption,  persistently  fluctuated 
around  its  ten-year  average  of  10.4%  of  GDP, 
reaching a maximum of 15.4% in 2022 (see Graph 
A5.1).  The  net  private  investment  ratio,  which 
measures the net contribution of the private sector 
to  capital  accumulation 
in  the  country,  was 
significantly  more  volatile,  exhibited  a  ten-year 
average of 4.2% of GDP and reached a maximum 
of  7.1%  in  2022.  At  the  same  time,  during  the 
same  period  the  government  budget  was  in 
regular surplus that averaged 1.9% of GDP. Thus, 
the  high  positive  balance  between  net  domestic 
savings  and  net  investment,  together  with  the 
government  surpluses,  resulted  in  structural  net 
lending  by  Denmark  to  foreigners  that  averaged 
8.1%  of  GDP,  with  a  peak  of  11.7%  in  2022. 

42 

-15-10-5051015202530352017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate savings, netPrivate savings, grossBorrowing from the rest of the world 
 
  
 
  
Graph A5.2: International investment position 

Source: ECB 

Structure of the capital markets and 
size of the financial sector 

for  more 

than  90%  of 

The  Danish  economy  stands  out  with  one  of 
the  deepest  domestic  capital  markets  in 
Europe. The market capitalisation of listed equity 
reached  174%  of  GDP  at  end-2023,  which  is  the 
highest  among  all  member  states  (see  Graph 
A5.3). Characteristically, non-financial corporations 
accounted 
that 
capitalisation,  which  reflects  the  extent  to  which 
the  stock  market  in  Denmark  is  geared  towards 
funding  the  non-financial  segment  of  the  real 
economy.  The  outstanding  volume  of  debt 
securities  reached  181%  of  GDP  at  end-2023, 
which is one of the highest  national  scores in the 
EU.  Bonds  issued  by  the  monetary  financial 
institutions  (MFIs)  accounted  for  almost  83%  of 
the total. This reflects the specificity  of mortgage 
lending  in  Denmark,  where  all  mortgages  are 
funded  exclusively  through  marketable  covered 
bonds,  which  enjoy  very  high  liquidity  and  strong 
demand, including from foreigners (see section on 
retail  participation  in  capital  markets).  As  the 
government 
budgetary 
been 
surpluses,  the  volume  of  general  government 
bonds declined from 40% of GDP at end-2020 to 
21% at end-2023. 

running 

has 

Even though the financial sector in Denmark 
remains  dominated  by  banks,  non-bank 
financial 
intermediaries  are  very  much 
developed  as  well.  After  peaking  at  402%  of 
GDP  in  2020,  the  size  of  the  banking  sector 
declined to 344% of GDP in 2023, which remains 
however  significantly  above  the  EU  average  of 
257%  and  places  the  Danish  banking  sector  third 
in size in the EU, after Luxembourg (1,847%) and 

43 

France  (421%).  Foreign  presence  is  limited  and 
accounts for about 7% in terms of assets. Banking 
concentration  appears  to  be  higher  than  on 
average  in  the  EU,  with  the  top  five  MFIs 
representing  more  than  65%  the  sector.  The 
insurance sector, with total assets of almost 160% 
of  GDP  at  end-2023,  dominates  non-bank 
intermediation and is the second largest in the EU 
(after Luxembourg at 380% of GDP). Its very large 
size is due to the thriving life insurance and other 
pension savings which are accounted for, in official 
statistics, as part of insurance corporations instead 
of pension funds. As a result of that, the sector of 
pension  funds  is  reported  to  have  total  assets  of 
only  2%  of  GDP  at  end-2023.  Investment  funds, 
though 
total  assets  dropped  by  32 
percentage  points  to  91%  of  GDP  between  2021 
and  2023,  remain  nevertheless  significant  (see 
section on institutional investors). 

their 

Graph A5.3: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO 

Resilience of the banking sector 

has 

ratio 

in  Denmark 

The  Danish  banking  sector  exhibits  high 
resilience  to  risks  and  low  exposure  to 
vulnerabilities. Historically, the aggregate capital 
adequacy 
been 
comparatively  higher  than  elsewhere  in  Europe. 
Driven  by  high  earnings  and  stricter  rules  on 
applying  risk  weights  to  exposures,  banks’  overall 
capitalisation 
strengthened  by  0.9 
percentage  points  and  reached  22.9%  as  of  Q3 
2024,  well  above  the  EU  average  of  20.1%  (see 
Table  A5.1).  The  improvement  came  through  the 
loss-absorption 
accumulation  of  high-quality 

further 

-400-300-200-100010020030040020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIPNon-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300350400Listed equity                           Bonds                        Assets by sector% of GDP 
  
  
capital, as the CET1 ratio increased from 18.7% in 
2022 to 19.3% as of Q3 2024, significantly above 
the  EU  average  of  16.6%.  The  four  institutions 
that were subject to the 2023 EU-wide stress test 
(Danske  Bank,  Jyske  Bank,  Nykredit  and  Sydbank) 
passed  successfully  even  the  most  adverse 
scenario.  Danish  banks’  aggregate  Minimum 
Requirement for Own Funds and Eligible Liabilities 
(MREL)  rate  stood  at  40.1%  of  risk-weighted 
assets  at  the  end-2023,  which  was  8  percentage 
points  above  the  required 
level.  To  further 
strengthen the resilience of the banking sector, the 
Systemic  Risk  Council  of  Denmark  proposed  a 
systemic  risk  buffer  of  7%  for  exposures  to  real 
estate companies, which became effective as from 
30 June 2024. 

Despite  some  risks  of  deterioration,  banks’ 
balance sheets show improved asset quality. 
With an aggregate non-performing loan (NPL) ratio 
of  1.3%  as  of  Q3  2024,  which  is  below  the  EU 
average  of  1.9%,  credit  quality  remains  robust. 
Despite  the  highest  level  of  bankruptcies  since 
2011, the corporate NPL ratio declined to 1.7% as 
of  Q3  2024.  Even  though  more  than  60%  of  all 
mortgages  are  at  variable  rate,  the  tightening 
cycle  of  interest  rates  did  not  deteriorate  asset 
quality.  This  is  due,  inter  alia,  to  banks’  improved 
resilience  to  credit  risk  thanks  to  the  stricter 
lending rules they introduced during the prolonged 
low-interest-rate  period.  Moreover,  the  proportion 
of  new  loans  at  variable  interest  rates  has 
contracted  significantly,  e.g.  to  around  30%  of 
mortgages  to  households.  Yet,  banks’  aggregate 
coverage  ratio  of  NPLs  by  existing  provisions 
remains  short  of  the  EU  average  by  almost  5 
percentage  points,  even  though  it  increased  from 
27.3% in 2016 to 37.5% as of Q3 2024. While in 
principle  this  might  suggest  that  banks  are  over-
stating  their  net  level  of  capital,  this  is  not  the 
case  in  Denmark.  Indeed,  the  market  funding  of 
mortgages  exclusively  by  covered  bonds  implies 
that  the  related  credit  risk  is  transferred  to  the 
investors in the bonds and does not stay with the 
banks. 

long-term  debt 

Danish  banks  maintain  very  strong  liquidity 
issuance 
positions,  with 
returning to pre-crisis levels. MFIs in Denmark 
are exposed to a very low liquidity funding risk and 
show an excellent term adequacy between assets 
and  liabilities.  Both  systemic  and  non-systemic 
institutions  exceed 
regulatory 
liquidity  coverage  ratio  (LCR)  and  the  net  stable 
funding  ratio  (NSFR),  with  no  bank  suffering  an 

the  minimum 

individual  shortfall.  As  of  Q3  2024,  at  the 
aggregate  level,  the  LCR  and  the  NSFR  stood  at 
199% and 127% respectively. The very high level 
of  the  aggregate  loan-to-deposit  ratio  (above 
200%) should be interpreted in the context of the 
national  specificity  of  market  mortgage  funding. 
When recalculated for the sole commercial banks, 
which  alone  owe  deposits  and  are  therefore 
exposed  to  the  liquidity  risk,  the  aggregate  loan-
to-deposit  ratio  stood  at  62.7%  at  the  end  of 
2023,  well  below  the  EU  average.  This  confirms 
that  the  balance  sheets  of  commercial  banks  in 
than 
Denmark  are  structurally  more 
elsewhere 
issuance 
contracted  in  2022  and  2023,  in  part  due  to  the 
higher  interest  spreads,  it  has  rebounded  since 
spreads  started  to  narrow.  Banks  have  issued 
approximately DKK 100 bn (EUR 13.4 bn) of debt 
in  2024  to  refinance  maturing  debt  and  to 
maintain their excess layer of MREL. 

the  EU.  While  debt 

robust 

in 

Resilience of the non-bank financial 
intermediaries 

non-bank 

dominates 

fluctuations.  This 

The  thriving  insurance  sector  in  Denmark, 
financial 
which 
intermediation, is highly solvent and does not 
raise  financial  stability  concerns.  The  main 
risk  remains  the  sensitivity  of  asset  holdings  to 
risk  has 
disorderly  price 
increased  in  the  last  years,  following  a  strategic 
investment  policy  shift  away  from  fixed-income 
securities  to  a  greater  emphasis  on  stocks  and 
variable income alternatives. The sector has so far 
resisted  well  to  the  risk  of  asset  re-pricing,  as 
evidenced by its robust recovery in 2023 following 
a  non-negligible  decline in  total  assets-to-GDP by 
almost  20  percentage  points  in  2022,  driven  by 
asset price corrections. The rebound has continued 
in 2024, with total assets reaching a new nominal 
peak  equivalent  to  EUR  712  bn  in  Q2  2024. 
Insurance  companies’  solvency  ratio  remained 
robust at 244.3% in 2023, slightly above its level 
of 241.1% in 2022. Non-life insurance is expected 
to  remain  highly  profitable,  as  suggested  by  its 
combined ratio of 85%, which is well below the EU 
average of 97% and among the lowest in the EU. 

Supervision,  which  has  not  detected  any 
irregularities  or  specific  vulnerabilities, 
remains  vigilant.  EIOPA’s  protection  gap 
indicates  that  Denmark  faces  a 
assessment 

44 

 
insurance  penetration 

medium to low wildfire risk, medium risks of flood 
and  coastal  flood,  and  a  high  risk  of  windstorm. 
However,  with 
rates 
exceeding  75%,  EIOPA  deems 
the  current 
protection  gap  in  Denmark  as  not  significant.  As 
part  of  its  2025  strategy  to  ensure  the  resilience 
of  the  sector,  the  Danish  Financial  Supervisory 
Authority  has  developed  a  tailored  stress  test  for 
the  insurance  sector,  which  complements  EIOPA's 
exercise  and  accounts  for  national  specificities. 
Preparatory tests, which did not reveal any specific 
vulnerability,  were  conducted  on  eight  entities  in 
2023. 

Sources of business funding and the 
role of banks 

Even  though  Danish  companies  are  more 
indebted  than  their  EU  peers  on  aggregate, 
they rely relatively less on debt finance than 
their  EU  peers  to  fund  their  activities. 
Financial  borrowing  by  non-financial  corporations 
(NFCs)  in  Denmark  reached  almost  101%  of  GDP 
in  2023,  which is  significantly  higher than  the  EU 
average of about 63% (see Graph A5.4). However, 
larger  size  of  the 
given  the  overall  much 
aggregate  balance  sheet  of  Danish  NFCs,  which 
reached 397% of GDP at end-2023 (versus 230% 
in  the  EU),  the  relative  share  of  loans  in  their 
funding  structure  (25.4%)  was  lower  than  the  EU 
average (27.2%). 

To fund their investments, Danish companies 
rely  on  internal  resources  about  as  much  as 
their EU peers. The 2024 EIB Investment Survey 
shows  that  in  2023  Danish  companies  financed 
about two thirds of their investments with internal 
resources,  which  is  as  much  as  the  average  EU 
company.  The  survey  also  revealed  that  15%  of 
companies in Denmark believed they had invested 
too  little  in  the  last  three  years,  compared  with 
14%  in  the  EU.  This  suggests  that  there  is  no 
material  investment  gap  in  Denmark.  However, 
this  may  not  be  the  case  for  all  firms,  especially 
for  the  10%  of  Danish  companies  that  consider 
themselves financially constrained. 

To  improve  access  to  finance,  in  particular 
for  growth  companies,  the  Danish  Financial 
Supervisory 
new 
accounting  rules  for  banks  in  early  2025  to 
avoid penalising growth companies. According 

Authority 

adopted 

to  the  new  rules,  as  long  as  growth  companies 
have  raised  at  least  DKK  10  million  (EUR  1.34 
million)  in  own  funds  and  keep  positive  equity, 
they would no longer be systematically considered 
as  having  financial  difficulties  in  the  event  of 
accounting losses. This new approach should result 
in a lower cost of capital for riskier companies. 

Graph A5.4: Composition of NFC funding as a % of 
GDP 

(1) Reference period is end-2023. 
Source: Eurostat. 

Denmark’s  highly  developed  and  resilient 
banking  sector  provides  a  stable  source  of 
funding  to  the  economy.  Mortgage  lending, 
which  accounts  for  more  than  two  thirds  of  bank 
lending  to  NFCs,  is  provided  by  six  specialised 
mortgage  credit  institutions  that  fund  themselves 
exclusively  through  marketable  and  extremely 
liquid  covered  bonds.  Overall,  the  banking  sector 
appears  quite  solid,  with  excellent  liquidity  and 
capital  positions,  as  well  as  improved  operational 
efficiency  and  profitability,  all  above  EU  average 
levels (see Table A5.1). As of end-2023, less than 
2%  of  bank  loans  to  NFCs  were  non-performing, 
which  was  significantly  lower  than  the  3.4%  EU 
average. Altogether, this suggests that businesses 
in  Denmark  are  unlikely  to  face  challenges  in 
accessing stable and affordable bank loans in the 
future. 

Following  a  two-year  stagnation,  credit 
demand  in  Denmark  has  been  showing  signs 
of  recovery  since  interest  rates  started  to 
ease  in  mid-2024.  Due  to  rising  interest  rates, 
commercial  (non-mortgage)  bank  loans  to  NFCs 
have  been  stagnating  since  the  summer  of  2022 
and  stood  at  16.5%  of  GDP  in  October  2024. 
Mortgage loans to NFCs started to expand in early 
2023 and have been growing since then, resulting 
in a 16% increase by value between October 2022 
and  October  2024,  when  they  reached  the 

45 

050100150200250300350400450DKEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
equivalent  of  36.1%  of  GDP.  Despite  signalling 
that they now face tighter credit standards than in 
the  past,  Danish  companies  do  not 
report 
significant  borrowing  constraints.  In  recent  years, 
companies have been impacted by rising financing 
costs.  Based  on data  from the  ECB,  interest  rates 
on  new  corporate  loans,  all  types  and  maturities 
combined,  peaked  at  5.05%  in  January  2024,  up 
from  0.76%  two  years  earlier.  By  October  2024, 
interest  rates  on  new  corporate  loans  moderated 
to 3.76%. 

Retail investment in capital markets  

Capital  markets  in  Denmark  are  very  well 
developed  for  the  size  of  the  domestic 
economy.  As  of  end-2023,  Nasdaq  Copenhagen 
had  a  market  capitalisation  equivalent  to  about 
175%  of  GDP,  i.e.  about DKK  4 900  bn  (EUR  660 
bn), with 124 companies listed on the main stock 
exchange  and  39  on  the  First  North  growth 
market. The Danish stock market offers one of the 
best investment-protection environments in the EU 
and its performance closely correlates with global 
indices. The OMX20 Copenhagen index (the oldest 
and  best-known  Danish  equity  index,  comprising 
many  of 
largest  companies) 
increased by almost 30% in the first two quarters 
of  2024, 
implying  an  aggregate  market 
capitalisation of more than 204% of GDP as of Q2 
2024, before declining by about 20% since then. 

the  country’s 

Because  all  mortgages 
in  Denmark  are 
market-funded,  the  country  has  become  the 
world’s  largest  private  market  for  covered 
bonds.  As  of  December  2023,  the  six  mortgage 
banks had issued the equivalent of EUR 441 bn in 
outstanding covered mortgage bonds (CMBs). This 
is  equivalent  to  114.5%  of  GDP  or  5.4  times  the 
outstanding  amounts  of  central  government  debt. 
importance  of  CMBs  for 
This  highlights  the 
investors  and  asset  managers 
in  Denmark. 
Historically,  Danish  CMBs  have  never  defaulted, 
and they enjoy very high liquidity, in part because 
of their triple-A rating. Foreign demand for Danish 
CMBs,  which  peaked  at  24.5%  of  amounts 
outstanding  in  2020,  declined  to  19.7%  as  of 
September  2024.  Domestic  demand  for  Danish 
CMBs  was  divided,  as  of  Q3  2024,  between 
(28.5%  of 
insurance  and  pension 
financial 
outstanding 

amounts),  monetary 

funds 

institutions 
households (1.6%) and others (13.9%). 

(26%), 

investment  funds  (10.2%), 

Graph A5.5: Composition of households' financial 
assets per capita and as a % of GDP 

(1) Reference period is end-2023. 
Source: Eurostat. 

The participation of Danish retail investors in 
capital  markets,  although  very  high  by  EU 
standards, still lags behind the levels seen in 
the  US.  With  cash  and  deposits  accounting  for 
only  13%  of  their  financial  wealth  (see  Graph 
A5.5),  Danish  households  are  among  the  most 
sophisticated retail investors in the EU. As of end-
2023,  aggregate  financial  assets  held  by  retail 
investors in Denmark were equivalent to 361% of 
GDP, which is far above the EU average of 209%, 
but  still  behind  the  US  average  of  437%.  Nearly 
every  second  Dane  owns  shares  directly,  which  is 
also one of the highest rates of retail investing in 
Europe.  Most  Danes  also  hold  shares  indirectly 
through  the  widely  held  insurance  and  pension 
funds. But overall, there is a mixed picture on retail 
investment  in  the  country.  On  the  one  hand,  the 
availability  of  investment  savings  accounts  on 
preferential  terms  has  contributed  to  engaging 
retail investors in Denmark from a young age. On 
the  other  hand,  the  tax  treatment  of  unrealised 
capital 
long-term 
investment  and  hamper  Denmark’s  international 
competitiveness. 

gains  may 

discourage 

The role of domestic institutional 
investors 

Large  insurance  companies  dominate  the 
landscape  of 
in 
institutional 
Denmark  and  contribute  significantly  to  the 

investors 

46 

050100150200250300350400050100150200250DKEUDKEUper capita (000 EUR) (lhs)% of GDP (rhs)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
  
sheet  was 

invested  primarily 

financing  of  the  economy.  With  total  assets 
equivalent to 159% of GDP in 2023, the insurance 
sector in Denmark is the second largest in the EU 
(after Luxembourg) and almost three times bigger 
than the European average, relative to the size of 
the  economy.  Based  on  data  from  the  European 
Insurance and Occupational  Pensions Authority  on 
insurance  companies’  asset  exposures,  at  the  end 
of  2023,  the  Danish  insurance  sector’s  aggregate 
balance 
in 
investment funds (35%), equity (23.4%), corporate 
bonds  (23.1%)  and  government  bonds  (10.2%). 
Based  on  the  same  data,  occupational  pension 
funds  appear  significantly  less  developed,  with 
total assets equivalent to only 2% of GDP at end-
2023.  Altogether, 
insurance  companies  and 
pension funds raised 21% of the funds committed 
to venture capital and private equity in the country 
between 2007 and 2023. This is the third largest 
percentage  raised  by  insurance  companies  and 
pension  funds  committed  to  venture  capital  and 
private  equity  after  Sweden  (30%)  and  Finland 
(28%), and well above the 15% EU average.  

In  addition  to  insurance  companies,  asset 
management  is  another  important  segment 
of  the  financial  sector  in  Denmark.  Based  on 
data  published  by  the  European  Fund  and  Asset 
Management Association, despite declining by 5% 
between  2022  and  2023  to  EUR  467  bn,  assets 
under  management  by  dedicated  asset  managers 
were  still  equivalent  to  125%  of  GDP,  putting 
Denmark in third place in the EU for the size of its 
domestic  asset-management  industry,  after  the 
Netherlands (192%) and France (173%). Denmark 
is  the  legal  domicile  for  investment  funds  with 
total  assets  of  EUR  275  bn,  while  residents’ 
investments in investment funds stand at EUR 377 
bn.  Funds  domiciled  in  Denmark  are  almost 
equally  divided  between  UCITS  and  AIFs.  The 
assets  of  these  funds  were  distributed  primarily 
between  equity  (44%),  debt  securities  (35%)  and 
investment funds (16%). 

of 

annual 

2015-2020, remaining persistently higher than the 
EU  average  for  2021-2023  of  0.6%.  And  the 
average 
venture-capital 
value 
investments  relative  to  nominal  GDP  went  up  to 
0.16%  in  the  period  2021-2023  from  0.06%  in 
2015-2020,  also  persistently  higher  than  the  EU 
average  for  2021-2023  of  0.08%. 
In  2023 
Denmark stood out as the sole country among the 
top  10  venture-capital  ecosystems  in  Europe  to 
venture-capital 
experience 
investments  in  the  country,  of  which  almost  two 
thirds  were  dedicated  to  health-tech  startups, 
grew  by  2.1%  in  2023  to  about  EUR  1.2  bn,  its 
second-best year on record. In the five years prior 
to  2023,  the  main  sectors  of  venture-capital 
investment 
(26%), 
company software (15%), and FinTech (14.7%). 

in  Denmark  were  health 

growth. 

New 

in  Denmark  shows  a  very 

Despite  demonstrating  a  persistently  strong 
capacity for company creation to the point of 
gaining  the  reputation  of  being  a  ‘unicorn 
factory’,  Denmark 
is  failing  to  retain 
companies with high growth potential.  With 9 
of  the  13  unicorns  (69%)  ever  founded 
in 
Denmark  having moved their  headquarters  out  of 
the  country  (only  9%  of  unicorns  founded  in 
the  business 
Sweden  have 
left  Sweden), 
low 
environment 
retention capacity for high-growth companies. The 
framework conditions for successful IPOs and the 
tax  treatment  of  capital  gains  are  important 
factors  to  improve  the  retention  of  venture  and 
growth  capital.  In  that  respect,  the  2024-2026 
government  strategy  to  support  entrepreneurship 
includes: (i) various tax-related measures; (ii) plans 
for  equity 
to  set  up  a 
crowdfunding  of  private  limited  companies;  (iii) 
plans  to  introduce  a  framework  for  the  simplified 
management  of  private  pensions;  (iv)  plans  to 
halve the capital requirement for setting up limited 
liability companies; and (v) plans to ease access to 
a basic bank account for new companies. 

framework 

legal 

The depth of venture and growth 
capital  

Denmark  is  a  regional  leader  in  venture-
capital  and  private-equity  investments.  The 
average annual value of private-equity investment 
in  Denmark  relative  to  nominal  GDP  went  up  to 
0.9%  in  the  period  2021-2023  from  0.7%  in 

Financing the green transition 

Danish institutional  investors are pursuing a 
consistent  strategy  to  increase  their  green 
investments.  Half  of  Danish  insurers  have  set 
green investment targets, and almost two thirds of 
them  aim  to  reduce  their  investments  in  climate-
damaging  industries.  By  end-2023,  eight  Danish 
insurers,  representing  55%  of  the  market,  had 

47 

 
signed  international  alliances  or  declarations  to 
mitigate  climate  change. Pension  companies  have 
already  invested  DKK  343  bn  (EUR  46  bn)  in  the 

rights.  Danish  authorities  are  committed 
to 
ensuring  that  every  part  of  society,  especially 
children  and  young  people,  gains  a  good 

Table A5.1: Financial sector indicators 

(1) Annualised data. EU data for credit growth and pension funds refers to the EA average. 
Source: ECB, Eurostat, European Insurance and Occupational Pensions Authority, DG FISMA CMU dashboard, AMECO. 

green transition. 

Danish  commercial  and  mortgage  banks  are 
also actively engaged in the green transition 
through both client activities and operational 
practices. Most notably, as of 2023, these banks 
have  set  green 
their 
investments and for 61% of their loans. All in all, 
the  central  bank  of  Denmark  estimates  that  the 
financial  sector’s  financing  of  climate-friendly 
activities has topped DKK 834 bn (EUR 112 bn). 

targets  for  80%  of 

understanding of money and financial affairs early 
on in life. 

As a  result of these  educational  efforts,  the 
2023  Eurobarometer  on  monitoring financial 
literacy in the EU ranks Denmark third in the 
EU for financial knowledge. It shows that 40% 
of Danes have a high level of financial knowledge 
(26% in the EU) and only 15% have a low level of 
financial  knowledge  (24%  in  the  EU).  Moreover, 
only  8%  of  the  respondents  (23%  in  the  EU) 
declared that they feel some degree of discomfort 
with using digital financial services. 

Financial literacy 

in 

retail  participation 

The  very  high  level  of  financial  literacy  of 
the  Danish  population  contributes  to  its 
strong 
financial 
markets. Danish society recognises that financial 
literacy is crucial for both fostering retail investors’ 
participation  in  capital  markets  and  familiarising 
SMEs  with  alternatives  to  bank  financing.  Since 
2015,  a  school  programme  for  students  aged  13 
to  15  enables  young  people  to  become  proficient 
with  the  fundamental  notions  of  finance  (e.g. 
budgeting,  saving,  and  banking)  and  consumer 

48 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)363.6351.0385.8401.5361.5345.9343.9327.9248.4Common Equity Tier 1 ratio18.117.818.019.118.718.719.819.316.6Total capital adequacy ratio22.121.622.423.222.822.523.422.920.1Overall NPL ratio (% of all loans)2.52.31.91.91.81.51.31.31.9NPL (% loans to NFC-Non financial corporations)4.23.83.03.22.51.91.81.73.5NPL (% loans to HH-Households)2.22.01.81.81.91.71.51.52.2NPL-Non performing loans coverage ratio25.432.132.034.635.134.836.937.542.1Return on Equity110.88.08.74.58.23.811.712.110.0Loans to NFCs (% of GDP)52.353.454.455.654.053.155.755.630.0Loans to HHs (% of GDP)108.8107.4106.3106.999.389.289.986.544.5NFC credit annual % growth--------0.8HH credit annual % growth--------0.7Stock market capitalisation (% of GDP)---161.7179.3149.7174.4182.069.3Initial public offerings (% of GDP)0.090.470.040.330.400.030.06-0.05Market funding ratio43.741.140.339.237.134.632.9-49.6Private equity (% of GDP)0.571.070.690.351.240.750.76-0.41Venture capital (% of GDP)0.030.100.100.080.250.090.14-0.05Financial literacy (composite)------51.0-45.5Bonds (as % of HH financial assets)1.00.90.70.60.40.50.9-2.7Listed shares (as % of HH financial assets)5.44.85.56.37.06.87.2-4.8Investment funds (as % of HH financial assets)8.06.97.17.17.36.76.9-10.0Insurance/pension funds (as % of HH financial assets)46.247.547.745.542.240.541.2-27.8Total assets of all insurers (% of GDP)148.8142.8163.0171.3169.0149.7158.6161.054.8Pension funds assets (% of GDP)--------23.41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.Banking sectorNon-banks sector 
 
 
       
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

institutional 

Denmark’s 
framework 
its  competitiveness.  Denmark's 
influences 
public institutions enjoy a high level of public trust. 
The country excels in digital public services and is 
striving  to  achieve  a  ‘digital-by-default’  policy  in 
public service delivery. Most public services can be 
accessed  online,  there  is  high  level  of  online 
engagement.  The  government  is  now  focusing  on 
ensuring  that  no  one  is  left  behind.  Denmark  is 
taking  measures  for 
reducing  administrative 
burden.  It  could  strengthen  regulatory  oversight 
and  public  consultations.  The  efficiency  of  the 
justice  system  is  faced  with  a  negative  trend,  in 
particular in processing times.  

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

decisions and public spending (EU: 31%), and 31% 
suggested better skilled civil service (EU: 30%) (80). 

Quality of legislation and regulatory 
simplification 

Improvements  could  be  made 

Regulatory  practices  for  developing  and 
evaluating  legislation  are  slightly  below  the 
EU  average.  Performance  has  remained  broadly 
stable  from  2021  to  2024.  Overall  performance 
on  ex-post  evaluations  is  stronger  than  the  EU 
average. 
in 
enhancing oversight and quality  controls  of public 
consultations,  regulatory impact  assessments  and 
ex  post  evaluations  of  both  primary  and 
subordinate  legislation  (Graph  A6.2).  The  Danish 
parliament  has  made  changes  in  the  legislative 
process to give all actors more time to contribute 
to lawmaking (81). 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

(1) EU27 from 2019; EU28 before 
Source: Standard Eurobarometer surveys 

Denmark’s  public  institutions  are  among  the 
most  trusted  in  the  EU  (Graph  A6.1).  Trust  in 
justice, the legal system and in regional and local 
authorities  has  remained  stable,  with  only  slight 
variation  over  time.  Trust  in  the  government  has 
improved slightly since 2023 (0.53), reaching 0.58, 
in  the  EU.  When  asked  about 
the  highest 
increasing 
the  Danish  public 
administration,  around  40%  of  citizens  suggested 
reducing  bureaucracy  (EU  average:  52%),  36% 
wanted  more  transparency  about  government 

trust 

their 

in 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

(80)  European Commission, 2023, Understanding Europeans’ 

views on reform needs - April 2023 - - Eurobarometer survey 

(81)  Deadlines extended include minimum legislative processing 
time from 30 to 40 days, preparation time before first 
reading from 2 to 7 days, and submission deadline for oral 
questions moved from Friday to Thursday at 12:00. 
Folketinget, 2024. Parties agree to slow down the pace at 
Christiansborg / Folketing 

49 

00.10.20.30.40.50.60.70.80.91AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system DKRegional or local public authorities EU27Regional or local public authorities DKGovernment  EU27Government  DK0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsDK_StakeholderengagementDK_Regulatory ImpactAssessmentDK_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27 
 
      
      
 
 
 
 
Table A6.1:  Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source: OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 

burdens (82) 

required 
and 
to  new 

Denmark has scope to further strengthen its 
mechanisms  for  simplifliying  regulation. 
to 
Regulators  are  already 
identify 
substantive 
administrative 
legislation. 
compliance  costs  owing 
Furthermore,  specific 
reducing 
administrative  burdens  are  in  the  pipeline  (see 
Annex  4).  When  preparing  legislation,  however, 
regulators are not required to identify  and assess 
the impact  of  the  baseline  or “do  nothing”  option, 
to  identify  and  assess  the  impact  of  alternative 
non-regulatory  options  or  to  assess  the  level  of 
compliance (Table A6.1).  

initiatives 

for 

regulation 
The  OECD  product  market 
indicators  show  that  Denmark’s  licensing 
system is aligned with most, but not all, best 
practices. For example, although the government 
keeps an up-to-date online inventory of all permits 
and  licences  required/issued  to  businesses  by 
public  bodies,  there  is  no  requirement  for  the 
government to  regularly  review the inventory  and 
assess whether such licences and permits are still 
required  or  should  be  withdrawn  (see  also  Annex 
4).  

(82)  Report by the Danish Center for Social 

Research https://www.vive.dk/media/pure/mxbd22rz/262688
16 

Social dialogue 

Social  partners  contribute  significantly  to 
legislative  quality  and  policymaking 
in 
Denmark.  Social  partners  negotiate  collective 
agreements  covering  wages,  parental  leave,  and 
working  hours 
through  collective  bargaining. 
Coverage  is  extensive,  with  100%  in  the  public 
sector  and  73%  in  the  private  sector  (83).  The 
Danish  government  primarily  acts 
through 
tripartite agreements involving itself, trade unions, 
and 
intervening 
minimally and mainly  when social  partners fail  to 
reach  consensus.  Additionally,  social  partners  are 
consulted  on  labour  market  legislation  before 
parliamentary  adoption,  enhancing 
legislative 
effectiveness (84). 

organisations, 

employers' 

(83)  Confederation of Danish employers. Published in January 

2025, data from 2023 

(84)  For an analysis of the involvement of Denmark’s social 

partners at national level in the European Semester and the 
Recovery and Resilience Facility, see Eurofound (2025), 
National-level social governance of the European Semester 
and the Recovery and Resilience Facility. 

50 

Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
 
 
 
   
 
Table A6.2:  Key Digital Decade targets monitored through the Digital Economy and Society Index 

Technical  System,  part  of  the  EU  Single  Digital 
Gateway (87). 

is  developing 

Denmark 
the  necessary 
infrastructure  towards  seamless,  automated 
exchange  of  authentic  documents  and  data 
across the EU. There are still additional steps to 
be taken for Denmark to become technically ready 
to connect to the Once-Only Technical System (88). 

Graph A6.3: Participation rate of 25-64 year olds 
in adult learning (%) by occupation 

Source: State of the Digital Decade report 2024 

Digital public services 

in 

Denmark  remains  one  of  the  EU’s  top 
performers 
terms  of  digital  public 
services.  It  offers  several  solutions  to  ensure 
citizens  and  businesses  can  access  efficient, 
inclusive  and  user-friendly  digital  public  services. 
Denmark  scored  above  the  EU  average  for  both 
the  availability  of  digital  public  services  for 
citizens and businesses, and in terms of access to 
e-health records (Table A6.2). In 2024 the national 
report  on  digital 
audit  office  published  a 
accessibility (85)  aimed  at  ensuring 
that  all 
websites  are  accessible  by  persons  with 
disabilities.  With  many  online  platforms  available 
for  accessing  different  specialised  services,  there 
is  potential,  however, 
redundancy  and 
confusion. 

for 

The proportion of e-government users is also 
well  above  the  EU  average  (DK  98.7%,  EU 
75%).  Moreover,  83.9%  of  Danes  reported  that 
they use their national eID to access online public 
services,  significantly  above  the  EU  average  of 
36.1%. However, Denmark has not yet set up and 
notified  eID  schemes  for  legal  persons  under  the 
eIDAS  Regulation  (86).  This  means  that  Danish 
businesses  cannot  authenticate  themselves  to 
access  public  services  provided  by  other  Member 
States,  including  those  enabled  by  the  Once-Only 

Source: European Commission, based on the Labour Force 
Survey 

(85)  Statsrevisorerne, 2024. 

(87)  European Commission, 2020, The Once Only Principle 

System: A breakthrough for the EU’s Digital Single Market 

(88)  European Commission, Once-Only Technical System 

(86)  European Commission, eIDAS Dashboard. 

Acceleratormeter 

51 

051015202530354045DKEU-27DKEU-27DKEU-27DKEU-272021202220232024Public administration and defence; compulsory social securityHigh-skilled occupationsMedium-skilled occupationsUnskilled occupationsArmed forcesTotal economyDigital Decadetarget by 20302022202320242024EU-27Digitalisation of public services183848479100Score (0 to 100)20212022202320232030289898985100Score (0 to 100)202120222023202320303na969879100Score (0 to 100)20212022202320232030Digital public services for businessesAccess to e-health recordsDenmarkEU-27Digital public services for citizens 
 
     
 
 
 
  
 
While  most  Member  States  have  established 
rules  on  lobbying  with  a  public  register  for 
lobbyists,  Denmark  does  not  have  such  a 
framework in place. Although the authorities do 
not  see  the  need  for  any  initiatives  in  this  area, 
they  have  confirmed  that  no 
is 
gathered  on  contacts  between  public  and  private 
stakeholders (96). 

information 

Justice 

is  a  continued  negative  trend  in 
There 
judicial  efficiency.  The  clearance 
rate  for 
litigious  civil  and  commercial  cases  at  first 
instance  has  not  yet  reversed  its  negative  trend 
(93%  in  2022  and  93%  in  2023)  (there  are  no 
data  on  administrative  cases  as  these  are  not 
recorded separately). This has also had an impact 
on  the  disposition  time  for  litigious  civil  and 
commercial  cases  at  first  instance  (268  days  in 
2022  and  265  days  in  2023).  The  quality  of  the 
justice  system  is  considered  to  be  good  overall 
with  an  advanced 
In 
particular,  digital  tools  are  widely  used  in  courts, 
including  an  electronic  case  management  system, 
technology  for  distance  communication,  and  a 
secure  remote  working  environment  for  judges 
and  staff.  As  regards  judicial  independence,  no 
systemic deficiencies have been reported (97). 

level  of  digitalisation. 

Civil service  

The average age of civil servants in Denmark 
is  relatively  low.  The  ratio  between  staff  aged 
25-49  and  staff  aged  50-64  has  increased  since 
2021,  indicating  a  younger  workforce  (89).  The 
proportion of civil servants pursuing adult learning 
is  well  above  the  EU  average  (Graph  A6.3). 
Denmark,  however,  is  one  of  the  EU  countries  in 
which  gender  balance  continues to  be  an issue in 
the senior civil service (90). 

Integrity 

Perceptions of corruption are well below the 
EU  average (91). 
In  Denmark,  only  17%  of 
companies  consider  that  corruption  is  widespread 
(EU  average  64%),  while  only  6%  consider  that 
corruption  is  a  problem  when  doing  business  (EU 
average  36%) (92).  Moreover,  53%  of  companies 
believe  that  people  and  businesses  caught  for 
bribing a senior official are appropriately punished 
(EU  average  31%) 
is 
considered as a high-risk area for corruption which 
is  insufficiently  investigated  and  prosecuted.  The 
OECD has emphasised the need for an assessment 
of  the  foreign  bribery  risks  faced  by  Danish 
companies  (94).  By  contrast,  public  procurement  is 
not  a  high-risk  area  in  Denmark.  Only  13%  of 
companies (EU average 27%) think that corruption 
has prevented them from winning a public tender 
or a public procurement contract in practice in the 
last three years (95).  

(93).  Foreign  bribery 

(89)  Eurostat, Labour Force Survey, Employment by sex, age and 

economic activity. 

(90)  European Institute for Gender Equality, 2024. 

(91)  According to the Transparency International, Corruption 

Perceptions Index 2023 (2024) Denmark scores 90/100 and 
ranks 1st in the European Union and globally. 

(92)  Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU, 2024.  

(93)  Ibid. 

(94)  OECD, 2023, Implementing the OECD Anti-Bribery 

(96)  Rule of Law Report, 2024, country chapter for Denmark., p. 

Convention Phase 4 Report: Denmark. See also country 
chapter for Denmark., pp. 13-14. 

(95)  Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU, 2024.  

12. 

(97)  For more detailed analysis of the performance of the justice 
system in Denmark, see the upcoming 2025 EU Justice 
Scoreboard and the 2024 Rule of Law Report. 

52 

 
 
 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

is  a  frontrunner 

Denmark 
in  net  zero 
technologies, particularly in wind energy and 
carbon capture and storage. Denmark provides 
effective  and  targeted  policy  support  for  net  zero 
technologies manufacturing. However, the industry 
is  also  facing  challenges,  such  as  increasing 
international  competition,  skills  shortages  or  the 
complexity  and  financing  needs  of  large-scale 
projects. Moreover, the economy depends more on 
imported  materials  than  the  EU  on  average. 
Denmark’s food and municipal waste per capita is 
the  second  highest  in  the  EU  and  resource 
efficiency  and  circularity  could  be 
improved. 
Although  Denmark  has  put  in  place  policies  to 
support  the  decarbonisation  of  industry,  there  is 
room for further electrification. This annex reviews 
the areas in need of attention in Denmark’s clean 
industry  transition  and  climate  mitigation  efforts, 
looking at different dimensions. 

Strategic autonomy and technology 
for the green transition 

in 

of 

net 

zero 

from  a  diversified 
Denmark  benefits 
technologies 
portfolio 
is  a  global 
manufacturing  capacity  and 
the  wind  energy  sector (98). 
leader 
Denmark’s manufacturing capacity across net zero 
technologies 
includes  substantial  wind  power 
capacity, providing between 14% and 19% of the 
total  EU  capacity.  It  covers  approximately  5.9-6.7 
GW for nacelles, around 4.7-5 GW for towers, and 
5.5-5.6  GW  for  blades.  Denmark’s  export  position 
in  wind  turbine  components  is  highly  competitive, 
with  key  manufacturers  such  as  Vestas  and 
Siemens  Gamesa.  The  industry  is  however  facing 
challenges,  such  as 
international 
competition, skills shortages, and dependencies for 
important  components  and  raw  materials.  The 
complexity  and  financing  needs  of  large-scale 
wind energy projects also present a challenge. 

increasing 

In  addition,  Denmark  has  a  manufacturing 
capacity  in  electrolysers  (400  -  650 MW/y, 
7%-12%  of  the  EU  total),  and  is  actively 

(98)  European Commission, ECORYS, 2024, The net-zero 

manufacturing industry landscape across the Member States 
- Publications Office of the EU. 

53 

in 

participating 
Important  Projects  of 
Common  European  Interest  (IPCEI)  in  the 
hydrogen  value  chain. Denmark boasts  at  least 
five production facilities for heat pumps, adding to 
the nation’s array of manufacturing capabilities. In 
the grid technologies sector, the leading firm NKT 
is  planning  to  build  its  largest  production  site  of 
high-voltage offshore cables (99). 

Denmark  is  also  a  major  player  in  carbon 
capture  and  storage  (CCS)  technologies. 
Denmark  has  been  a  driving  force  in  building  a 
European  CCS  value  chain. 
In  March  2023, 
Denmark 
initiated  the  first  cross-border  CO2 
storage  project in  the  EU, aimed  at  capturing CO2 
in  Belgium  and  Germany.  The  ‘Greensand’  project 
is  expected  to  store  up  to  eight  million  tonnes  of 
liquified CO2 per year by 2030 in the seabed of the 
North Sea. With storage operations set to start by 
the  end  of  2025  or  early  2026,  the  Greensand 
project  is  expected  to  be  the  first  full-scale  CCS 
project  in  Europe,  intended  to  mitigate  climate 
change (100).  Denmark  has  established 
three 
separate  funds  for  the  capture,  storage  and 
utilisation of both fossil and biogenic CO2 (101). The 
Danish recovery and resilience plan also includes a 
study on the technical and economic feasibility of 
CO2  storage  in  depleted  oil  and  gas  fields  in  the 
Danish part of the North Sea. 

Denmark  provides  effective  and  targeted 
policy  support  for  net  zero  technologies 
manufacturing.  In  terms  of  financial  support,  in 
2024  Denmark  implemented  a  grant  scheme 
authorised  under 
the  Temporary  Crisis  and 
Transition  Framework (102) that  provides  State  aid 
support  to the production of  wind technology  and 
electrolysers  (approximately  DKK  1  billion).  The 
scheme  will  also  be  run  in  2025  with  a  lower 
budget.  Moreover,  a  capital  injection  of  DKK  1 
billion will be made in 2025 into the Danish Export 

(99)  NKT, 2024, We are building the world's largest high-voltage 

offshore cable factory | NKT. 

(100) Greensand project website, greensandfuture.com. 

(101) For further information, see the Danish Energy Agency 
website, CCS tenders and other funding for CCS 
development. 

(102) European Commission, 2023, Temporary Crisis and Transition 
Framework for State Aid measures to support the economy 
following the aggression against Ukraine by Russia, EUR-Lex 
- 02023XC0317(01)-20240502 - EN - EUR-Lex. 

 
 
 
 
 
 
 
and  Investment  Fund (EIFO) to increase  access  to 
green venture capital. The injection will reach DKK 
2 billion from 2026 onwards.  

Additional  announced  initiatives  will  also 
contribute  to  supporting  green  investments 
and  research  and  development  activities: 
These  include  i.  a.  a  permanent  increase  of  the 
deduction  rate  for  R&D  investments  (114%  in 
2026,  116%  in  2027  and  120%  from  2028 
onward);  increased  depreciation  basis  (108%)  for 
investments  in  more  climate-friendly  production 
made between 1 January 2025 and 31 December 
2026;  a  new  guarantee  agreement  between  the 
European 
Investment  Fund  and  Ringkjøbing 
Landbobank  to  support  green  investments  by 
Danish  small  and  medium-sized  enterprises  and 
mid-caps  (see  Annex  4);  the  establishment  of  a 
one-stop-shop 
companies 
covered  by  the  Net  Zero  Industry  Act  to  ensure  a 
faster  and  smoother  regulatory  process  for  the 
establishment  and  expansion  of  production 
facilities;  and  designation  of  industrial  parks  for 
manufacturing  companies  to  find  suitable  areas 
with  good  access  to  necessary  infrastructure.  In 
July 2024, a new agreement (103) was put forward 
with 
to  adapt  existing  vocational 
education  and  training  programmes  to  meet  the 
rising demand for green skills and to develop new 
lines  of  vocational  education  related  to  emerging 
jobs in the green economy. 

for  manufacturing 

the  aim 

Critical raw materials 

The  Danish  economy  depends  more  on 
imported  materials  than  the  EU  on  average. 
With 39.8% of materials imported in 2023, above 
the  EU  average  of  22%,  Denmark  is  exposed  to 
supply  chain  disruptions.  The  country’s  material 
import  dependency  has  been  above  the  EU 
average  for  more  than  two  decades (104).  On 
critical  raw  materials,  Denmark’s  score  on  the 
import concentration index is slightly below the EU 

(103) European Centre for the Development of Vocational Training, 
2024, Denmark: new agreement strengthens VET for green 
transition | CEDEFOP. 

range  of 

average (0.17 vs 0.22) (105), but dependencies exist 
raw  materials  and 
for  a  broad 
components, 
raw  materials 
necessary  for  the  green  transition,  such  as  rare 
earths  and  permanent  magnets  needed  for  wind 
turbines (106).  

including  critical 

Businesses  have  reported  shortages  of 
materials.  In  2024,  19.6%  of  firms  reported 
shortages  of  important  materials  and  primary 
products,  which  was  above  the  EU  average  of 
10.0%,  but  less  than  in  2023  when  24.8% 
reported such shortages (107). Surveys indicate that 
most  manufacturing  companies  have  adapted 
their  strategies  and  increased  inventories  and  the 
number  of  suppliers (108).  Further 
improving 
circularity  would  also  contribute  to  reducing 
dependence on volatile raw materials markets. 

E-waste  is  a  key  source  of  critical  raw 
materials.  Denmark  faces  challenges  in  meeting 
the  e-waste  collection  target (109).  Although  the 
recycling  rate  of  the  collected  e-waste  dropped 
just  below  the  EU  average  in  2021,  it  then 
rebounded in 2022 (110). Additionally, the country’s 
reuse  and  recycling  rate  for  end-of-life  vehicles 
stood  at  85.5%  in  2022  -  the  sixth  lowest  in  the 
EU  and  below  the  EU  average  of  89.1%  in 
2022 (111).  Maximising  the  reuse  of  critical  raw 
materials  is  crucial,  especially  as  the  automotive 
sector  transitions  to  battery-electric  vehicles. 
Notably, Denmark has one of the highest shares of 
electric  cars  in  the  EU,  and  ranked  second  in 
2023 (112). The 2024 was the first year when more 

(105) Eurostat, 2024, COMEXT, Concentration in selected raw 

materials, Import concentration index based on a basket of 
critical raw materials. 

(106) Council of the European Union, 2024, Harnessing Wind Power 

Navigating the EU energy transition. 

(107) European Commission, 2024, Business and consumer 

surveys. 

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

inventories and more suppliers, danskindustri.dk. 

(109) Statistics | Eurostat, 29/10/2024. 2021: DK 54.6% /  

target 85%.  

(110) Statistics | Eurostat, 29.10.2024. 2012-2022: DK and EU 
above 80% with the exception of 2021: DK 79.9% / EU 
81.6%. 

(111) Imputed value for EU. Statistics | Eurostat, 3.4.2025. 

(104) Eurostat estimate. Statistics | Eurostat, 7.8.2024. 2022: DK 

(112) Eurostat, Statistics | Eurostat, 19.12.2024. 2023: DK 36%/EU 

38.7% / EU 23.7%. 

15%. 2022: DK 21%/EU 12%. Imputed value for EU. 

54 

 
 
 
than  half  of  the  newly  registered  passenger  cars 
were electric cars (113).  

Climate mitigation 

Industry decarbonisation 

Denmark’s  manufacturing  industry  has  the 
lowest  emission  intensity  in  the  EU,  but  a 
high share is from energy use. In 2023, 6% of 
Denmark’s  total  greenhouse  gas  emissions  came 
from industry (114). In 2022, industrial production in 
Denmark  emitted  90 g  CO2eq  of  greenhouse 
gases per euro of gross value added (GVA), just a 
third of the EU average, which ranked it third best 
among  EU  Members.  Since  2017,  the  emissions 
intensity  of  Denmark’s  industry  has  declined  by 
30%,  significantly  more  than  the  EU  average, 
20%.  In  Denmark’s  overall  industrial  greenhouse 
gas  emissions,  the  shares  of  energy  and  non-
energy-related  emissions 
latter  coming 
primarily  from  industrial  processes)  were  at  67% 
and  33%  in  2023  respectively,  making  Denmark 
the country with the third highest share of energy-
related industry greenhouse emissions in the EU. 

(the 

Denmark’s manufacturing has improved both 
regarding  energy  and  non-energy-related 
emissions  intensity  in  recent  years,  with  a 
shift  to  electricity  and  renewables  and 
energy efficiency improvements (115). Between 

(113) Danish Ministry of Taxation, 2025, Skatteminister efter 

rekordår: ”Elbilen skal være folkeeje” . 

(114) In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat. 

(115) For the GHG emissions intensity of GVA related to energy use 
and  industrial  processes  and  product  use  respectively,  GHG 
emissions  are  from  inventory  data  in  line  with  the  UNFCCC 
Common  Reporting  Format  (CRF),  notably  referring  to  the 
source sectors CRF.1.A.2 –  fuel combustion in manufacturing 
industries and construction and CRF.2  – industrial processes 
and  product  use.  The  CRF.1.A.2  data  broadly  correspond  to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator  for  both  intensities)  are  aligned  with  this 
sectoral  coverage.  Therefore,  they  are  not  fully  consistent 
with the data referred to in other part of this section. 

of 

emissions 

2017  and  2022,  the  energy-related  greenhouse 
Denmark’s 
intensity 
gas 
manufacturing  declined  by  28%,  12  percentage 
points  more  than  in  the  EU  overall.  In  the  same 
period,  the  share  of  electricity  and  renewables  in 
in  manufacturing 
final  energy  consumption 
increased  by  2.4  percentage  points,  to  45%  (and 
2023  saw  a  further 
increase  by  nearly  2 
percentage  points).  At  the  same  time,  the  energy 
intensity  of  manufacturing  in  Denmark  improved 
by 20 per cent, to 0.5 GWh/€, further improving to 
0.4  GWh  in  2023.  The  emissions  intensity  from 
industrial  processes  and  product  use  declined  by 
31%  between  2017  and  2022,  more  than  in  the 
EU on average where it declined by 23%. 

Graph A7.1: GHG emission intensity of 
manufacturing and energy-intensive sectors, 
2022 

Source: Eurostat 

emissions 

decarbonisation, 

On 
energy-intensive 
industries  show  the  way.  Energy-intensive 
industries (116)  account  for  13%  of  Denmark’s 
manufacturing  GVA  (2022).  All  energy-intensive 
sectors are among the best  in the EU  in terms of 
the 
greenhouse 
manufacture  of  basic  metals,  it  is  at  0.2 kg 
CO2eq/€  of  GVA  (compared  to  the  EU  total  of 
3.5 kg);    for  the  chemical  industry  it  stands  at 
0.1 kg,  and  for  the  manufacture  of  non-metallic 
mineral  products,  it  is  1.5 kg  compared  to  the  EU 
average  of  2.2 kg.  This makes  Demark the  leader 
in  clean  industry  and  boosts  its  competitiveness. 
For  example,  by  2023,  the  production  volume  of 

intensity: 

for 

(116) Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

55 

00.511.522.533.54C-C19C17C20C23C24KG CO2eq / €DenmarkEU-27 
 
   
 
basic metals increased by 8% compared to 2015, 
while total EU production decreased by 11% in the 
same period (Eurostat) (117). 

Reduction  of  emissions  in  the  effort  sharing 
sectors  

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

Source: Eurostat 

Although  Denmark  has  put  in  place  policies 
to  support  the  decarbonisation  of  industry, 
there  is  room  for  further  electrification. 
Denmark’s green tax reform of 2022 introduced a 
more  uniform  CO2  tax  for  greenhouse  gas 
emissions  from  the  industrial  sector,  set  to  be 
phased  in  from  2025 to 2030,  as  well  as  further 
in  CCS  and  other  compensatory 
investments 
measures.  Denmark  is  expecting  this  to  reduce 
emissions  from  industry  by  around  50%  (2.5  Mt 
CO2eq)  in  2030  compared  to  2022.  However, 
there  is  potential  for  further  electrification  of 
industry.  Analysis  commissioned  by  the  Danish 
Energy  Agency  shows  that  up  to  92%  of  the 
national  industry’s  thermal  energy  consumption 
can  be  electrified (118).  Considering  the  high  share 
of  electricity  from  renewable  sources,  further 
electrification would contribute to reducing overall 
greenhouse emissions intensity. 

(117) For a detailed analysis of energy prices, see Annex 8 on the 

affordable energy transition. 

(118) Danish  Energy  Agency,  2022,  Analyses  of  the  energy 
conditions  of  the  Danish  business  sector,  available  at: 
Analyses  of  the  energy  conditions  of  the  Danish  business 
sector;  Green  Power  Denmark,  2024,  Electric  Europe  – 
Powered by Denmark, available at: Electric Europe - Powered 
by  Denmark  |  Green  Power  Denmark;  Dansk  Erhverv,  2024, 
rate 
Low 
challenge  Denmark's 
competitiveness  and 
fulfilment  of  climate  ambitions, 
available at: Letter. 

electrification 

can 

To  attain  its  2030  target  for  the  effort 
sharing  sectors,  Denmark  needs  to  swiftly 
specify  and 
implement  further  climate 
mitigation  policies (119).  GHG  emissions  from 
Denmark’s  effort  sharing  sectors  in  2023  are 
expected  to  have  been  24.9%  below  those  of 
2005.  By  2030,  current  policies  are  projected  to 
reduce  Denmark’s  emissions  from  effort  sharing 
sectors  by  44.4%  relative  to  2005  levels (120), 
falling  short  by  5.6  percentage  points  of  the 
country’s effort sharing target of a 50% reduction. 
Denmark  has  yet  to  specify  a  set  of  additional 
measures  to  close  this  gap.  While  Denmark  could 
reach  its  target  by  using  domestic  flexibilities 
available  under  the  Effort  Sharing  Regulation, 
swift  and  steady  adoption  and  implementation  of 
further climate mitigation measures will be critical. 

Graph A7.3: Greenhouse gas emissions in the effort 
sharing sectors, 2005 and 2023 

Source: European Environment Agency 

in  Regulation 

(119) The national greenhouse gas emission reduction target is set 
out 
(the  Effort  Sharing 
(EU)  2023/857 
Regulation).  It  applies  jointly  to  buildings  (heating  and 
cooling); road transport, agriculture; waste; and small industry 
(known as the effort sharing sectors). 

(120) The  emissions  from  effort  sharing  sectors  for  2022  are 
based on approximated inventory data. The final data will be 
review. 
established 
Projections  on  the  impact  of  current  policies  (‘with  existing 
measures’,  WEM)  as  per  Denmark’s  final  updated  national 
energy and climate plan. 

in  2027  after  a  comprehensive 

56 

7080901001101201302017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of other non-metallic mineral productsManufacture of basic metals05101520253035404520052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
          
 
        
 
Sustainable industry 

Circular economy transition 

The circular material use rate in Denmark is 
lower than the EU average. It stood at 9.1% in 
2023,  compared  to  the  EU  average  of  11.8%. 
Between  2014  and  2020,  the  Danish  circular 
material  use rate was on a downward trend,  with 
the  exception  of  2018  when  it  rose  briefly. 
However, since 2020 the rate has been increasing 
and  in  2022-2023  reached  its  2014  level  again 
(121). Resource productivity is slightly above the EU 
average,  with  EUR 2.36  generated  per  kg  of 
material  consumed  in  2023 (122).  The  material 
footprint  is  well  above  the  EU  average  at  21.9 
tonnes per person in 2023. It has remained within 
the  range  of  21-24  tonnes  since  2011 (123).  The 
construction, manufacturing and agri-food sectors 
together account for more than half of Denmark’s 
material  footprint.  The  Circularity  Gap  Report  of 
2023  confirms  the  low  circularity  of  the  Danish 
economy  and  its  high  reliance  on  the  use  of  raw 
materials (124). 

Denmark’s  food  and  municipal  waste  per 
capita  is  the  second  highest  in  the  EU.  In 
2022, the volume of Denmark’s food waste stood 
at  254 kg  per  person,  above  the  EU  average  of 
129 kg  per  person,  and  the  data  suggest  an 
upward  trend  (125).  Denmark  generated  802 kg  of 
municipal  waste  per  person  in  2022,  well  above 
the  EU  average  of  515 kg (see  Graph  A7.4). 
Denmark  still  incinerates  a  large  share  of  its 
municipal  waste  for  district  heating  instead  of 
recycling  and  reusing 
In  2022,  Denmark 
incinerated  the  biggest  quantity  of  municipal 
waste  per capita in the EU  and more than double 
the EU average (126). The municipal waste recycling 

it. 

(121) Imputed value for 2023. Statistics | Eurostat, 13.11.2024.  

(122) Imputed value. Statistics | Eurostat, 7.8.2024. EU EUR 2.23 

per kg. 

(123) Imputed value. Statistics | Eurostat, 31.3.2025. 2023 EU 14 

tonnes per capita. 

(124) Circle Economy Foundation, 2023, The Circularity Gap Report 

– Denmark,. 

(125) Statistics | Eurostat, 14.3.2025. 2021: DK 230/EU 

129 kg/capita. 2020: DK 221/EU 128 kg/capita. Imputed 
value for EU. 

(126) Statistics | Eurostat, 13.2.2025. 2020: DK 435 /138 EU 

kg/capita; 2021: DK 318 / EU 138 kg/capita; 2022: DK 364 / 
EU 131 kg/capita. Imputed value for the EU average. 

rate of 45.7% in 2022 was below the EU average 
of 49.1% (127).  

Graph A7.4: Municipal waste treatment 

Source: Eurostat 

In  2023,  the  Commission  published  an  early 
warning  assessment  about 
the  waste 
targets (128). According to this report, Denmark is 
on  track  to  meet  the  2025  municipal  waste 
recycling  target,  the  2035  landfill  target  and  the 
2025 targets for recycling packaging waste except 
for  plastics  packaging.  Denmark  aims  to  reduce 
packaging waste and increase recycling with a new 
law  expected  to  enter  into  force  at  the  end  of 
2025 (129). 

is 

implementing  policies 

to 
Denmark 
accelerate  the  circular  economy  transition. 
The  Danish  government  launched  in  2021  an 
action  plan  for  the  circular  economy (130). 
It 

(127) Statistics | Eurostat, 13.2.2025. Imputed value for the EU 

average. Denmark has indicated its intention to submit the 
revised data. 

(128) European Environmental Agency, 2023,  Early warning 

assessment related to the 2025 targets for municipal waste 
and packaging waste-Denmark.  

(129) Ministry of the Environment, 2024, Ny lov skal få 

virksomheder til at skære ned på emballagen og gøre den 
lettere at genanvende. 

(130) Ministry of the Environment, Danish Action Plan for Circular 

Economy, July 2021 (in Danish). 

57 

84481476980201002003004005006007008009002019202020212022Kg per capitaMaterial recyclingComposting and digestionLandfill/disposalTotal incineration (incl. energy recovery)Waste treatment unspecifiedEU-27 total waste per capita 
 
        
 
focuses  in  particular  on  making  the  value  chains 
for  biomass,  construction  and  plastics  more 
circular. According to the annual progress report of 
the  national  action  plan  for  the  circular  economy, 
79 
been 
initiatives 
completed (131). 

of  129 

have 

out 

Zero pollution industry 

Denmark  has  made  considerable  progress  in 
reducing  air  pollution,  which 
is  now 
decoupled  from  GDP  growth.  The  emissions  of 
several air pollutants have decreased significantly 
since 2005 (132) and the overall air quality is good. 
Still,  1 790  deaths  in  Denmark  each  year  can  be 
attributed to air pollutants based on the estimate 
for  2022 (133).  Denmark  has  met  its  emission 
reduction  commitments  for  2020-2029  for  air 
pollutants  and  aims 
the 
commitments for 2030 onwards (134). 

to  also  meet 

Industrial emissions can cause significant air 
and  water  pollution.  Therefore,  large  industrial 
plants  must  have  permits  to  operate  and  must 
respect the emission  limit  values  set  out  in  those 
permits.  In  Denmark,  around  2 470  industrial 
installations  must  fulfil  this  obligation.  In  2022, 
most  of  these 
installations  were  from  the 
intensive  poultry  and  pig  rearing  sector  (73%), 
followed  by  the  waste  management  sector, 
including  landfills  (14%),  the  food,  drink  and  milk 
sector (4%) and the energy sector (3%).  

In  Denmark,  permits  are  issued  at  local  and 
at state level. The municipalities are responsible 
for  most  permits  while  the  Danish  Environmental 
Protection  Agency  (EPA)  manages  the  permits  for 
over 400 of the largest and environmentally most 
reassessment 
complex 

companies (135). 

The 

(131) State-of-play at 10 April 2024. 

(132) European  Parliament  and  Council  of  the  European  Union, 

2008, Ambient Air Quality (AAQ) Directive. 

(133) 1 200  deaths  (or  12 100  years  of  life  lost  (YLL))  to  fine 
particulate matter (PM2.5); 50 deaths (or 540 YLL) to nitrogen 
dioxide  (NO2);  and  540  deaths  (or  5 500  YLL)  to  ozone. 
European Environment  Agency,  Harm  to  human  health  from 
air pollution in Europe: burden of disease 2024. 

(134) Five air pollutants (NOx, SO2, NMVOC, NH3 and PM2.5) set by 
the  National  Emission  Reduction  Commitments  Directive 
(NECD). European Environment Agency, National air pollutant 
emissions data viewer 2005-2022. 

(135) Ministry of the Environment,  Ny taskforce skal sætte tempo 

på revurderinger af miljøgodkendelser. 

58 

deadline for a significant number of permits under 
the  EPA’s  responsibility  has  lapsed.  A  dedicated 
Task  Force  has  been  set  up  to  review  26 
environmental permits for undertakings with direct 
discharges  of  wastewater.  The  review  of  the 
permit  of  one  of  the  largest  chemical  companies, 
FMC 
(formerly 
Cheminova A/S) started in May 2024. The deadline 
for  reviewing  the  permit  for  this  company  lapsed 
on 9 June 2020 (136). 

Agricultural 

Solutions 

A/S 

Industrial  emissions  to  air  in  Denmark  are 
among  the  lowest  in  the  EU.  The  main 
contributors  to  emissions  to  air  are  the  energy 
sector  (including  refineries,  gasification,  etc.)  and 
the mineral sector. 

As to industrial emissions to water, the main 
contributor  in  Denmark  is  incineration  with 
energy  recovery.  Other  major  sources  are  the 
chemicals  and  food  and  drink  sectors  with 
considerably  smaller  contributions  in  comparison 
to the incineration with energy recovery (137). 

(136) Ministry of the Environment, Environmental Protection 
Agency, 2024, Faktatark for Cheminova med fokus på 
revurdering og udledning af spildevand - Miljøstyrelsen. 

(137) EEA,  2024,  EU  large  industry  water  pollution  intensity: 

Industrial emission intensity indicators;  
Industrial  Emissions  Directive 
Reporting  under 
2010/75/EU  and  European  Pollutant  Release  and  Transfer 
Register Regulation (EC) No 166/2006 - ver. 12.0 Sep. 2024 
(Tabular data). 

Industrial 

the 

 
 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Denmark 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

59 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW25-75 (m)- Electrolyzer, MW400-650- Wind (b: blade, t: turbine, n: nacelle), MW5500-5600 (b), 5850-6700 (n), 4700-5000 (t)- battery, MWh-Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %438447455466475472474539561New zero-emission vehicles, electricity motor, %0.310.712.447.1513.3320.6336.101.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %38.137.137.037.738.739.824.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.130.120.110.120.110.09 0.340.27Share of energy-related emissions in industrial GHG emissions33.733.233.332.333.932.832.544.842.5Energy-related GHG emissions intensity of manufacturing73.273.066.668.261.252.4-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption42.543.343.943.942.944.946.743.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€0.600.600.550.600.550.470.401.291.09Share of energy-intensive industries in manufacturing production13.07.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.160.160.130.100.120.14--0.730.68- chemicals and chemical products (NACE C20)0.090.090.080.070.070.07--1.251.26- other non-metallic mineral products (NACE C23)2.001.901.882.031.791.47--2.532.24- basic metals (NACE C24)0.240.260.230.230.230.17--2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -21.1-23.9-24.9- domestic road transport-2.0-3.5-11.1-9.6-10.7-14.21.45.2- buildings-41.3-45.2-48.7-47.6-54.2-54.221.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %40.431.930.730.3-50.0-5.60Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person23.224.222.523.123.821.914.715.0Circular material use rate, %8.1        7.6        7.6        8.6        9.3        9.1        11.611.1Resource productivity, €/kg2.2        2.2        2.3        2.4        2.6        2.7        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants397      317      190      220      318      -702571Air pollution damage cost intensity, per thousand € of GVA    5.2            27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.2   0.9DenmarkEU-27DenmarkEU-27DenmarkEU-27 
 
 
 
 
 
        
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero.  It 
examines  the  measures  and  targets  proposed  in 
the  final  (draft)  updates  to  the  national  energy 
and climate plans (NECPs) for 2030. 

in  further 
Denmark  has  made  progress 
adapting 
its  electricity  grid  and  energy 
system  in  view  of  its  clean  energy  targets. 
Work  to  enhance  its  interconnectivity  (already 
above  the  EU  average)  and  expand  the  grid  is 
ongoing.  To  manage  further  electrification  and 
higher  deployment  of  renewables,  it  is  important 
for  Denmark  to  keep  coordinating  action  and 
monitoring challenges through the National Energy 
Crisis  Taskforce.  Work  on  increasing  flexibility 
sources 
is  also  underway,  but  addressing 
restrictions  and  remove  barriers  on  aggregator 
is  key  to 
in  balancing  services 
participation 
improving  demand-side 
integration. 
response 
Denmark  would  benefit  from  additional  efforts  in 
the  energy  performance  of  its  residential  sector 
considering the downward trend of previous years 
in  final  energy  consumption.  To  meet  its  clean 
energy  targets,  work  is  underway  to  enhance  the 
grid  and  ensure  a  stable  and  efficient  energy 
supply. Overall, effort should be put into increasing 
energy  efficiency  (particularly  in  the  residential 
sector)  and  improving  flexibility  in  the  energy 
system.  

Energy prices and costs 

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Denmark’s  retail  electricity  prices  increased 
in  2024  for  both  household  and  non-
household consumers. For households, electricity 
prices in Denmark were the second highest in the 
EU  while  for  non-households,  they  remained 
considerably  below  EU  average  ranking  at  fourth 
lowest in the EU. Retail gas prices dropped for both 
categories,  remaining  however  above  EU  average 
for  households.  For  household  electricity  and  gas 
levies 
retail  prices,  the  share  of  taxes  and 
(including  VAT)  were  considerably  higher  than  the 
EU  average  (49%  and  47.6%  compared  to  an  EU 
average  of  25%  and  15.4%  respectively),  the 
share  of  energy  and  supply  cost  remained  below 
EU  average with a significant reduction compared 
to 2023, while network costs broadly align with EU 
average. For non-household consumers, the share 
taxes  and  levies  (excluding  VAT)  in  the  final  price 
were  more  than  10  times  lower  than  the  EU 
average for electricity and slightly lower for gas.  

Thanks  to  a  large  share  of  renewables 
(88.0%)  in  its  electricity  mix,  Denmark  had 
the EU’s seventh-lowest wholesale electricity 
prices, averaging 70.7 EUR/MWh in 2024 (138) 
(EU average of 84.7 EUR/MWh). Along with the 

(138) Fraunhofer (ENTSO-E data) 

60 

 
 
 
 
 
 
broader  Nordic  region, Denmark  experienced price 
spikes  in  the  winter  months  of  early  2024  which 
occurred amid significant demand increases due to 
a cold winter (+15.5% and +14.2% in Jan. and Feb. 
vs  the  same  period  in  2023,  respectively).  Prices 
picked up again due to price spikes in the Central 
Western  European  (CWE)  markets  due  to  the 
Dunkelflaute.   

Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) Nordics and CWE respectively provide average prices in the 
Nordic (Denmark, Finland, and Sweden) and central-western 
European (Belgium, France, Germany, Luxembourg, the 
Netherlands, and Austria) markets. 
Source: S&P Platts and ENTSO-E 

Flexibility and electricity grids 

Denmark  is  well  interconnected  with  the  EU 
market  and  plans  to  further  strengthen  its 
capacity.  Member  States 
interconnection 
should  ensure  that  a  minimum  of  70%  of 
technical  cross-border  capacity  is  available  for 
trading.  Denmark  is  part  of  the  Hansa (139)  and 
Nordic (140)  capacity  calculation  regions  (CCRs). 
Both CCRs are leaning to an available capacity for 
cross-border  trade  that 
is  mostly  very  high. 
However,  it  is  important  to  operationalise  the 
regional  coordination  centre  in  order  to  ensure 

smooth  coordination  within  the  region  and  with 
neighbouring  countries.  Denmark  aims  to  develop 
projects with a cross-border and connectivity focus 
(e.g. the  North  Sea  Energy  Island (141)  and  the 
Energy Island Bornholm, which is a hybrid offshore 
interconnector with Germany). 

Denmark’s  interconnectivity  level  surpassed 
the  EU  target  and  is  set  to  remain  high. 
According  to  Denmark’s  final  updated  NECP,  the 
level of interconnection is expected to be 31.7% by 
2030,  thus  surpassing  the  EU  interconnection 
target of 15% by 2030. The interconnectivity level 
was  already  36%  in  2024.  Denmark  is  analysing 
potential 
interconnections  and 
reinvestments  in  cooperation  with  other  countries 
and  TSOs.  It  plans  to  become  a  net  exporter  of 
green energy by 2030. 

further 

for 

increased  demand.  Energinet 

Investments  in  grid  expansion  and  cross-
border  energy  projects  are  underway  to 
facilitate 
is 
planning  to  build  approximately  2 700 kilometres 
of  electricity  grid  by  2030  to  meet  the  increased 
demand on the national grid. Denmark has several 
electricity  projects  of  common  interest:  the  North 
Sea  Wind  Power  Hub  with  Germany  and  the 
Netherlands and the Bornholm Energy Island with 
Germany.  As  for  hydrogen  projects  of  common 
interest, 
hydrogen 
interconnector  to  Germany  which  is  supported  by 
EU  funding  of  nearly  EUR 13 million  from  the 
Connecting Europe Facility (CEF). 

Denmark 

one 

has 

recommendations 

It  published  34 

Implementation  of  the  recommendations  of 
the National Energy Crisis Taskforce (NEKST) 
is  key  to  continuing  positive  progress  on 
infrastructure.  NEKST  is  partially  funded  by  the 
EU  through  the  Recovery  and  Resilience  Facility 
in 
(RRF). 
December  2024  on  faster  and  more  efficient 
expansion  of  energy  infrastructure  in  Denmark 
(including  16 
recommendations  on  energy 
infrastructure  permitting).  On  20 December 2024, 
a political agreement on faster and more efficient 
expansion  of  the  electricity  grid  was  signed (142). 
The  parties  to  the  agreement  supported  the 
designation  of  three  acceleration  areas  to  ensure 
simpler  and  faster  permitting  for  electricity 

(139)Hansa  is  the  CCR  which  covers  Denmark,  Germany,  the 
Netherlands,  Norway,  Poland  and  Sweden.  A  capacity 
calculation  region  (CCR)  is  a  group  of  countries  that 
calculate cross-border electricity trade flows together. 
(140)Denmark,  Finland,  Norway  and  Sweden  are  part  of  the 

Nordic CCR. 

(141)It is expected that Belgium, Germany and the Netherlands 

will be interconnected through the project. 

(142)Ministry  of  Climate,  Energy  and  Utilities,  2024,  Broad 
agreement ensures faster and more efficient expansion of 
the electricity grid. 

61 

 
 
 
 
infrastructure,  including  by  exempting  electricity 
infrastructure  projects  in  acceleration  areas  from 
an  environmental  impact  assessment  (EIA).  They 
also  made  a  commitment  to  implement  some  of 
the  NEKST 
including  new 
expropriation procedures.  

recommendations, 

Coordination of the electrical grid expansion 
and mapping bottlenecks should be a priority. 
With  a  view  to  further  electrification  and  higher 
deployment of renewables, NEKST will have a key 
role  in  coordinating  developments  to  adapt  and 
to  address 
expand 
challenges  such  as  possible  bottlenecks.  RES 
curtailment 
is  currently  not  monitored,  but 
electricity  grid  losses  are  estimated  to  be  2%  in 
transmission and 4% in distribution (143).  

the  electricity  grid  and 

Denmark is making progress in the promotion 
of  flexibility  sources.  Denmark’s  operational 
electricity storage capacity (as reported in the final 
updated NECP) is around 3.9 MW (mainly chemical 
and  electrochemical).  is  planning  key  policies  and 
measures  to  incentivise  the  uptake  of  flexibility 
services, aggregators and demand response. These 
include a report on the new ‘Market model 3.0’ to 
develop 
concrete 
flexible  markets  with 
recommendations  and  fields  of  actions.  The  work 
is supported by a needs assessment by 2027.  

Efforts  to  promote  flexibility  in  Denmark’s 
energy system are underway, but barriers to 
demand-side response integration need to be 
addressed.  The  development  of  a  Flexibility 
Forum  to  bring  market  players  and  stakeholders 
together  is  expected  to  significantly  boost  the 
promotion  of  flexibility  in  the  Danish  energy 
system. Denmark has a project (PCI) in the pipeline 
on  advanced  hydrogen-fuelled  compressed  air 
energy storage technology with a storage capacity 
of up to 19 GWh per cycle. Demand-side response 
(DSR) participation in balancing services is allowed 
(particularly  for 
but  with  various  restrictions 
aggregators) (144).  Denmark 
therefore 
review 
remove  barriers  on 
aggregator  participation  in  balancing  services  to 
improve  demand-side  response 
integration.  A 
continuous monitoring framework and stakeholder 
engagement  will  ensure  that  the  uptake  of 

restrictions  and 

should 

(143)IEA Energy Policy Review, Denmark 2023  - Energy Policy 

Review. 

(144)According  to  ACER,  one  of  the  most  restrictive  balancing 
services in the EU is found in Denmark (*ACER MMR 2023: 
Barriers to demand response). 

62 

flexibility resources is consistent  with the planned 
needs assessment by 2027. 

Denmark  has  put  in  place  a  framework  and 
tools  that  facilitate  dynamic  pricing.  Smart 
electricity  meter  deployment  in  households  is 
100%.  Prices  are  not  regulated  in  Denmark  and 
consumers  have  access  to  diverse  types  of 
market-based  contracts.  Denmark  has  set  up  a 
framework that allows citizens to  actively engage 
in  energy  communities.  641  energy  communities 
have been registered.  

in 

in 

the 

final 

share 

remained 

Electricity’s 
energy 
consumption  (FEC)  remains  relatively  low 
(particularly  in  transport)  and  this  indicates 
potential  for  further  electrification.  In  2023, 
electricity  accounted  for 20.1% of Denmark’s FEC 
(below  the  EU  average  of  22.9%)  and  this  share 
has 
last 
largely  stagnant 
decade (145).  Electricity  accounted  for  20.2%  and 
32.8%  of  households’  and 
industry’s  FEC 
respectively 
(see  also  Annex  6  on  Effective 
institutional  framework).  The  transport  sector’s 
FEC remained negligible at 2.1%. Further progress 
in electrification across sectors would help to cost-
effectively decarbonise the economy and bring the 
benefits  of  affordable  renewable  generation  to 
consumers. In 2024’s second semester, household 
electricity  prices  in  Denmark  were  among  the 
highest in the EU, with electricity costing 2.8 times 
more per unit than gas before taxes and 2.9 times 
more  after.  Taxes  and  levies  made  up  56,1%  of 
electricity  prices  (vs.  52,5%  for  gas).  For  energy-
intensive industries, prices were slightly below the 
EU  average.  With  lower  taxes  on  electricity  than 
gas  for  this  consumer  segment,  there  is  limited 
room  for  fiscal  adjustments,  meaning  industrial 
consumers  will  primarily  benefit  from 
lower 
wholesale prices (146). 

(145)The  CAGR  (compound  annual  growth  rate)  was  0.1% 
between 2013 and 2023. The minimum/maximum shares 
were 19.1% and 20.5% respectively. 

(146) Analysis based on Eurostat data for the second semester 
of 2024. For household consumers, consumption band is 
DC for electricity and D2 for gas, which refer to medium-
sized consumers and provide an insight into affordability. 
For non-household consumers, consumption band is ID for 
electricity and I4 for gas, referring to large-sized 
consumers, providing an insight into international 
competitiveness (price used for the calculation excludes 
VAT and other recoverable taxes/levies/fees as non-
household consumers are usually able to recover VAT and 
some other taxes). 

 
 
 
Renewables and long-term contracts 

being 

2024  was  a  record  year  for  Denmark 
regarding renewables (RES), with 88% of its 
electricity  mix 
by 
renewables (147).  Installed  renewables  capacity 
grew  by  nearly  6%  in  2024,  the  total  renewable 
energy  capacity  thus  reaching  13539  MW  (see 
graph A6.2. However, it covered the same share of 
the  electricity  mix  as  in  2023  due  to  increased 
demand for electricity as a result of electrification.  

supplied 

Graph A8.3: Denmark's installed renewable 
capacity (left) and electricity generation mix 
(right) 

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

the  great  acceleration 

Denmark’s  electricity  mix  is  dominated  by 
wind  power.  In  2023,  Denmark  had  the  highest 
share of wind power in its electricity mix in the EU 
(58%),  far  above  the  EU  average  (38.5%) (148). 
Building  on 
the 
deployment of solar since 2021, the total installed 
capacity  in  2024  was  3.9GW  (+0.42  GW,  11.8% 
installed 
increase  compared  to  2023).  Wind 
capacity  significantly 
in 
Denmark by 0.34 GW (4.7%) – mainly attributed to 
offshore wind - reaching 7.6 GW in 2024 (149). 

in  2024 

increased 

in 

Denmark  made  good  progress  in  2024  on 
accelerating  planning  and  permit-granting 
processes  for  renewable  energy  and  related 
infrastructure.  It  was  the  first  Member  State  to 
notify  full  transposition  of  the  permitting  rules 
which  had  to  be  transposed  by  July  2024  under 
Directive 
the 

Renewable 

Energy 

recast 

(147)Ember, Yearly Electricity Data. 
(148)ESTAT Shares. 
(149)IRENA, 2025, Renewable capacity statistics. 

63 

(RED III) (150). More specifically, simplified rules for 
small-scale renewables and for the repowering of 
existing installations have been introduced, as well 
as monitoring of the RED III deadlines. A regulatory 
framework (151)  for  onshore  energy  parks,  where 
wind,  solar  and  Power-to-X  installations  may  be 
combined,  has  also  been  adopted,  as  well  as 
measures to promote multiple use of land. Work is 
also  ongoing  to  streamline  the  environmental 
permit process. 

Denmark  aims  to  significantly  increase  its 
renewable  energy  share  with  a  focus  on 
expanding  solar  and  wind  power  generation. 
Denmark’s final updated NECP includes projections 
that  the  RES  share  will  reach  73.8%  of  final 
energy  consumption  by  2030  and  will  already 
exceed  100%  in  the  electricity  sector  by  2028 
under existing policies. By 2030, Denmark aims to 
ensure  a 
in  electricity 
generation  from  solar  and  wind  –  exceeding  its 
current  projections.  Renewables  deployment  in 
Denmark is market-based. Nevertheless, as part of 
the  Wind  Pledges (152)  under  the  European  Wind 
Power  Action,  Denmark  has  made  a  commitment 
to  install  0.84 GW  onshore  wind  capacity  and 
1.5 GW offshore wind capacity between 2024 and 
2027. 

four-fold 

increase 

Denmark has no unjustified barriers to power 
purchase  agreements  (PPAs)  and  is  a  top 
performer  in  concluding  PPA  deals.  According 
to the final updated NECP, there are no unjustified 
barriers  to  the  conclusion  of  PPAs  in  Denmark.  In 
2023,  Denmark  was  one  of  the  top  10  Member 
States  in  terms  of  the  number  of  PPA  deals 
concluded,  which 
included  some  multi-buyer 
PPAs (153). 

Energy efficiency 

Denmark’s  final  energy  consumption  (FEC) 
remained  nearly  unchanged,  but  efforts 
should be maintained to reach EU-set energy 

(150)European  Parliament  and  Council,  2023,  Directive  (EU) 

2023/2413. 

(151)Danish Parliament, 2024, L 166 – 2023-24 (as adopted): 
proposal  for  an  act  on  State-designated  Energy  Parks. 
Folketing. 

(152)2023, Wind Pledges – European Wind Power Action. 
(153)Pexapark, 2024, European PPA Market Outlook 2024. 

 
 
 
 
efficiency  targets  by  2030.  Despite  energy 
efficiency  gains  in  primary  energy  consumption 
(PEC),  FEC  almost  did  not  change.  In  2023,  PEC 
decreased  by  2.3%  to  15.35 Mtoe.  FEC  grew  by 
0.3%  to  13.37 Mtoe.  However,  both  figures  are 
well  below  the  average  energy  consumption  level 
of the previous decade. Compared with 2022, FEC 
decreased  in  industry  (-6.3%),  but  grew  in  the 
residential (2.1%) and transport  (1.8%) sectors. In 
the services sector, the FEC change was minor – it 
decreased  by  0.1%.  The  recast  Energy  Efficiency 
Directive  (154)  (EED)  requires  Denmark  to  try  to 
reach  a  PEC  of  15.52 Mtoe  and  a  FEC  of 
13.73 Mtoe by 2030. 

Additional  efforts  in  the  residential  sector 
would help Denmark reach its 2030 reduction 
target  for  energy  consumption  of  buildings. 
This  would  especially  be  the  case  because  the 
downward  trend  of  previous  years  in  residential 
FEC  might  be  reversed.  The  final  NECP  is  not 
sufficiently 
to 
decarbonise  the  building  stock  of  Denmark  by 
2050 

the  measures 

concrete  on 

Denmark  has  notified 
its  comprehensive 
heating  and  cooling  assessment.  It  identifies 
potential  for  the  application  of  high-efficiency 
cogeneration  and  efficient  district  heating  and 
cooling in line with Article 25(1) of the recast EED. 
Heating  and  cooling  represented  82%  of  the 
Denmark’s FEC residential in 2022. Approximately 
57 000 heat pumps were sold in 2023 (a decrease 
of  36%  on  2022).  A  ban  on  installing  fossil  fuel 
and gas boilers in new buildings was implemented 
as early as 2013. The use of natural gas for space 
heating in existing buildings will be phased out by 
2030. 

Denmark has a national financing framework 
for  energy  efficiency,  but  there  is  potential 
for further improvement. The national financing 
framework  mobilising 
efficiency 
energy 
is  composed  mainly  of  grants, 
investments 
subsidies  and  tax  rebates.  Many  have  been 
operational  for  several  years  now.  In  2024,  the 
support  scheme  for  heat  pump  subscriptions  was 
discontinued.  The  largest  support  scheme  (the 
agreement  on  green  refurbishment  of  social 

housing (155) 
successfully 
from  2020)  has 
combined  public  and  private  financial  sources. 
However,  efforts  should  be  continued  to  increase 
the  share  of  private  financing  in  other  energy 
efficiency  measures. 
terms  of  supported 
In 
sectors,  Denmark’s  national  financing  framework 
focuses  mainly  on  buildings  and  heating  in  order 
to support a transition to district heating and heat 
pumps.  Denmark  would  benefit  from  ensuring 
(through  further  changes  in  national  financing 
framework) its responsiveness to the achievement 
of long-term policy goals in energy efficiency. 

Denmark  has  not  identified  a  significant 
number  of  households  in  energy  poverty. 
Energy  poverty  is  addressed  via  social  policies 
(e.g. financial  support  available  through  social 
security  measures)  and  the  reimbursement  for 
heating-related  expenses.  There  are  national 
initiatives to provide consumers with better clarity 
on and understanding of their electricity bills.  

Security of supply and diversification 

Denmark 
in  further 
is  making  progress 
securing  security  of  gas  supply.  Gas 
consumption  fell  0.5  points  between  2022  and 
2023  and  remained  stable  during  2024.  Gas 
production in Denmark increased by 36% year on 
year. Denmark does not import gas from Russia. 

Technical  issues  with  gas  infrastructure  in 
2024  are  set  to  be  resolved,  stabilising  gas 
supply in 2025. Unforeseen technical challenges 
on  the  Tyra  platform  affected  domestic  gas 
production.  Maintenance  at  the  entry-point  from 
Europipe  II  and  Baltic  Pipe  reduced  gas  flows  to 
Denmark  during  2024.  Some  of  these  challenges 
were  addressed  by  the  end  of  2024,  but  others 
persisted  and  had  resulted  in  a  lower  level  of 
storage-filling  during  the  autumn  of  2024.  The 
abolition of the German storage levy in December 
2024 and the addressing of technical problems in 
the first months of 2025 means that gas supply is 
set to remain stable during 2025.  

Denmark’s  increasing  reliance  on  renewable 
energy  sources  supports  its  efforts  to  meet 
its  goals  on  security  of  supply  and 

(154)Directive (EU) 2023/1791 of the European Parliament and 

of the Council 

(155)Ministry of Transport, 2020, Broad political agreement on 

green renovation of social housing. 

64 

 
 
 
role 

rise 

diversification 
in  oil 
(despite  a 
consumption in 2023). The positive progress on 
in  Denmark’s  energy  mix 
renewables’ 
continued 
(45.2%)  of 
in  2023.  Nearly  half 
Denmark’s  energy  consumption (156)  was  supplied 
by  renewable  energy  (and  biofuels),  39.3%  by  oil 
and petroleum products, 8.4% by natural gas, and 
the  remainder  by  solid  fossil  fuels  and  non-
renewable  waste.  Denmark  should  work  on 
continuing  this  trend,  because  consumption  of  oil 
has increased since 2022. 

Fossil fuel subsidies 

In  2023,  environmentally  harmful  (157)  fossil 
fuel  subsidies  without  a  planned  phase-out 
before  2030  represented  0.06%  (158)  of 
Denmark’s  GDP  (159),  below  the  EU  weighted 
average of 0.49%.  Tax measures accounted for 
94%  of 
this  volume,  while  direct  grants 
represented  6.1%.  Additionally,  Denmark’s  2023 
Effective  Carbon  Rate  (160)  averaged  EUR  101.68 
per tonne of CO₂, above the EU weighted mean of 
EUR 84.80 (161). 

(156)Gross inland consumption (Eurostat). 
(157)Direct fossil fuel subsidies that incentivise maintaining or 
increasing in the availability of fossil fuels and/or use of 
fossil fuels. 

(158)Numerator is based on volumes disclosed by the Danish 
authorities via the 2025 NECPR reporting. For all Member 
States, it includes public R&D expenditures for fossil fuels 
as reported by the IEA (Energy Technology RD&D Budgets) 
and excludes, for methodological consistency, excise tax 
exemption on kerosene consumed in intra-EU27 air traffic 

(159)2023 Gross Domestic Product at market prices, Eurosta 
(160)The Effective Carbon Rate is the sum of carbon taxes, ETS 
permit prices and fuel excise taxes, representing the 
aggregate effective carbon rate paid on emissions. 
(161)OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

65 

 
 
 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

66 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.3173          0.5215              0.3681              0.3736          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]23.5%46.7%44.7%29.0%36.6%54.3%55.6%47.8%Network costs16.2%10.9%20.8%22.1%26.7%25.3%24.8%27.2%Taxes and levies including VAT60.2%42.4%34.6%49.0%36.7%20.3%19.6%25.0%VAT20.0%20.0%20.0%20.0%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.1067          0.1797              0.1437              0.1269          0.0684              0.0948          0.1121          0.1128          Energy & supply38.9%72.2%45.2%34.1%43.7%61.0%64.5%53.9%Network costs11.1%7.7%12.1%18.3%22.5%17.3%17.1%18.3%Taxes and levies including VAT50.0%20.0%42.7%47.6%33.8%21.7%18.4%27.8%VAT20.0%24.5%20.0%20.0%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.0979          0.1872              0.1220              0.1169          0.1242              0.1895          0.1971          0.1661          Energy & supply46.8%62.5%59.1%49.7%43.0%66.5%63.0%55.8%Network costs14.6%8.6%13.8%17.6%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT4.4%0.7%1.1%1.3%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0528          0.1219              0.0538              0.0506          0.0328              0.0722          0.0672          0.0517          Energy & supply62.1%71.6%59.8%57.1%66.2%77.3%77.3%68.7%Network costs4.0%2.1%6.7%8.0%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT8.9%3.8%8.2%8.7%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)87.8213.784.371.1111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)31,023          30,370              29,517              28,729          33,051              35,124          33,733          -Combustible Fuels15,473       15,500           12,387           11,201       15,671          13,884       10,957       -Nuclear-              -                 -                 -              -                 -              -              -Hydro18               15                  17                  17               16                  15               20               -Wind14,780       13,902           16,150           16,330       16,054          19,022       19,393       -Solar751             953                963                1,181         1,309            2,203         3,363         -Geothermal-              -                 -                 -              -                 -              -              -Other Sources-              -                 -                 -              -                 -              -              Gross Electricity Production [%]Combustible Fuels49.9%51.0%42.0%39.0%47.4%39.5%32.5%-Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Hydro0.1%0.0%0.1%0.1%0.0%0.0%0.1%-Wind47.6%45.8%54.7%56.8%48.6%54.2%57.5%-Solar2.4%3.1%3.3%4.1%4.0%6.3%10.0%-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)4,5635,2245,8116,8834,8691,3633,133-As a % of electricity available for final consumption 14.1%16.4%18.0%21.9%14.5%4.2%9.9%-Electricity Interconnection [%]50.6%49.7%49.0%51.0%45.8%42.7%41.3%36.0%Share of renewable energy consumption - by sector [%]Electricity59.9%62.4%65.3%65.3%72.9%77.2%79.4%-Heating and cooling44.1%45.0%47.3%51.1%51.3%52.3%54.9%-Transport6.9%6.9%7.1%9.7%10.5%10.4%10.8%-Overall34.4%35.2%37.0%31.7%41.8%42.4%44.4%-20202021202220232020202120222023Import Dependency [%] 44.9%32.2%42.8%38.9%57.5%55.5%62.5%58.3%of Solid fossil fuels 67.4%10.9%105.5%108.4%35.8%37.2%45.9%40.8%of Oil and petroleum products 55.3%30.3%53.3%50.4%96.8%91.7%97.8%94.5%of Natural Gas 37.4%27.8%27.1%13.4%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%41.0%40.9%20.7%9.3%of Crude Oil12.2%16.4%1.6%0.0%25.7%25.2%18.4%3.0%of Hard Coal96.6%89.5%14.0%0.0%49.1%47.4%21.5%1.0%2017201820192020202120222023Gas Consumption (in bcm)3.3                 3.2                     3.1                     2.9                 3.1                    2.4                 2.3                 Gas Consumption year-on-year change [%]-1.4%-2.2%-2.8%-8.3%7.0%-22.0%-1.5%Gas Imports - by type (in bcm)0.5                 0.4                     1.1                     2.7                 2.5                    2.7                 8.6                 Gas imports - pipeline0.5                 0.4                     1.1                     2.7                 2.5                    2.7                 8.6                 Gas imports - LNG0.00.00.00.00.00.00.0Gas Imports - by main source supplier [%]Norway80.0%74.4%12.8%0.0%0.0%28.4%94.7%Germany19.5%25.1%86.9%99.9%99.9%71.6%5.3%DenmarkEU 
 
     
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

In Denmark, agriculture is the dominant type 
of  land  use  (162)  and  a  significant  cause  of 
environmental deterioration. A key challenge is 
to tackle issues of degrading biodiversity, pollution 
in surface water bodies and the risk of flooding. By 
contrast,  the  overall  quality  of  groundwater  and 
bathing  water  in  Denmark  is  good  and  urban 
wastewater  treatment  complies  with  the  legal 
requirements. 

Climate adaptation and preparedness 

Denmark is particularly vulnerable to coastal 
flooding  due  to  rising  sea  levels.  The  rate  of 
sea-level  rise  varies  by  region,  with  the  least  in 
North  Jutland  and  the  most  in  southwestern 
Jutland. The sea level is expected to rise between 
30 cm  and  60 cm  towards  the  end  of  the 
century (163), leading to a corresponding increase in 
the water level associated with storm surges. As a 
result,  storm  surges  will  be  able  to  reach  further 
inland. Around half of the population is exposed to 
storms  and  most  cropland  is  exposed  to  heavy 
precipitation (164). By contrast, relative to other EU 
countries,  drought  affects  only  a  small  area  in 
Denmark  (1.7%  of  land  in  2023),  below  the  EU 
average (3.6%) (165). 

The  Danish  population  is  very  well  insured 
against climate risks. Denmark has the highest 
rate  of  insured  economic  losses  for  climate-
related  extreme  events  in  the  EU,  with  62%  of 
insured  economic  losses.  However,  due  to  above-
average  population  density,  economic  losses  per 
area  are  among  the  highest.  The  number  of 
fatalities  caused  by  extreme  weather  events 
remains low, well below the EU average (166). 

In  2023,  Denmark  launched  an  adaptation 
plan  (167)  to  enhance  coastal  protection  and 
safeguard  cities.  The  plan  includes  several 
initiatives and allocates around EUR 175 million to 
climate adaptation for the period 2025-2029. For 
example,  over  EUR 30  million  a  year  will  be 

in 

cities, 

challenges 

allocated  to  the  protection  of  the  west  coast  of 
tackles  high-level 
Denmark.  The  plan  also 
groundwater 
fosters 
collaboration and knowledge sharing, and develops 
a  new  framework  for  municipal  costal  projects. 
However,  it  does  not  clearly  explain  the  role  of 
in  climate  adaptation 
nature-based  solutions 
policy,  although 
state  bears  overall 
the 
responsibility  for  climate  change  adaptation.  It 
prepares  laws,  executive  orders,  guidelines  and 
coordinates action across state authorities. At local 
level,  municipalities  are  responsible  for  mapping 
flood-  and  erosion-prone  areas,  for  planning  and 
prioritising  climate  adaptation  actions,  and  for 
granting  permits  for  projects.  Municipalities  can 
also 
their 
wastewater plans. 

integrate  climate  adaptation 

into 

Water resilience 

Surface  water  bodies  are  in  a  fragile  state. 
According  to  the  assessment  of  the  third  river 
basin  management  plans,  only  29.9%  of  surface 
water  bodies  have  a  good/better  ecological 
status/potential  and  1.7%  have  a  good  chemical 
status. The main cause for the degraded ecological 
status  is  nutrients  leaching  from  manure  and 
fertilisers  used  in  agriculture,  causing  widespread 
eutrophication. The nutrients found in lakes include 
phosphorus  and  nitrates  in  coastal  waters.  The 
chemical  status  of  most  surface  water  bodies 
(92.7%) is unknown and 5.6% of water bodies are 
classified  as  failing  to  achieve  good  chemical 
status.  The  small  sample  of  classified  surface 
water bodies suggests a worsening chemical water 
status caused by toxic pollutants such as mercury, 
anthracene, cadmium, lead and nonylphenols. The 
source and volume of this pollution is unclear (168). 

In 2023, Denmark recorded the worst level of 
oxygen depletion in 21 years affecting large 
areas of coastal and marine waters. In 2024, 
the  situation  further  deteriorated,  by  almost  50% 
in comparison to 2023 (169)(170). The State Auditors 
found  in  2024  that  the  mechanisms  to  monitor 

(162) Statistics Denmark, 2023, Land use accounts. 
(163) Danmarks Meteorologiske Institut, Ændringer i havniveau. 
(164) OECD, 2024, OECD Economic Surveys Denmark, p. 54. 
(165) Eurostat, drought impact area on ecosystems [sdg_15_42]. 
(166) EEA, 2024, Economic losses from weather- and climate-

(168) European Commission, 2025, Commission reports show 

faster progress is needed across Europe to protect waters 
and better manage flood risks. 

(169) The Danish Centre for Environment and Energy, 2023, Iltsvind 

related extremes in Europe. 

i de danske farvande. 

(167) National Klimatilpasningsplan 1. Kommuner og Forsyning - 

(170) The Danish Centre for Environment and Energy, 2024, Iltsvind 

Klimatilpasning 

i danske farvande. 

67 

 
 
 
 
 
 
the use of fertilisers are inadequate and there is a 
risk  of  undetected  excessive  use  of  nitrogen (171). 
Based  on  recent  research (172),  the  estimated 
annual  cost  of  water  pollution,  partly  caused  by 
excessive  nutrients,  rose  to  EUR 1.7  billion  in 
2020 (173) in Denmark. However, the agreement on 
a  Green  Denmark  aims  to  reduce  nitrogen 
pollution by 13 780 tonnes annually (174). Also, the 
derogation  authorising  the  application  of  a  higher 
amount  of  manure  by  cattle  farmers  expired  on 
31 July 2024 (175).  

Biodiversity and ecosystems 

in 

status 

(including  nutrient 

lowest  value 
of 

The decline in biodiversity remains a serious 
concern  in  Denmark. Agriculture  and  mixed-
source  pollution 
leaching) 
create  significant  pressure  for  most  protected 
habitats  and  species (176).  Only  5%  of  habitats 
were  reported  as  having  a  good  conservation 
status  in  the  reporting  period  2013-2018.  This  is 
the  EU.  The 
the  second 
conservation 
grassland, 
wetland/peatland  and  forest  habitats  protected 
under  the  Habitats  Directive  is  unfavourable-
bad/inadequate (177).  The  share  of  protected 
species  in  a  good  conservation  status  dropped 
from  32% 
the  previous 
assessment (178).  In  addition,  biodiversity  loss  is 
confirmed by the common farmland birds index  – 
in  Denmark,  this  indicator  has  shown  an  overall 
negative  trend  for  more  than  two  decades  and 
remained  below  the  EU  average  for  more  than  a 
decade  except  in  2020  (179).  Denmark  is  also  one 

to  20% 

since 

all 

(171) Rigsrevisionen, Audit Report No 2/2024, 21/10/2024. 
(172) Edited  by  Peter  Birch  Sørensen,  2024,  Danmarks  grønne 

nationalprodukt. 

(173) DKK 12.5  billion  measured  in 2023  prices.  Estimates  of  the 
pollution costs are an underestimate because, for example, it 
was  not  possible  to  include  all  types  of  pollutants  in  the 
calculations. 

(174) The  Danish  Ministry  for  Green  Transition,  2024,  Aftale  om 

Implementering af et Grønt Danmark. 

(175) Danish  Ministry  of  Environment,  2024,  ’Kvægundtagelsen’ 
ophører.  The  derogation  was  for  230 kg  N/ha,  above  the 
permitted 170 kg N/ha. 

(176) EEA, The dashboard on the pressures on habitats and 

species. 

(177) EEA, 2024, State of nature in the EU. 
(178) The assessments of the reporting period 2013-2018 

compared to the reporting period 2007-2012. 

(179) European Commission,  Agri Sustainability Compass. 1995: 
109.54 DK / 104.05 EU. 2010: 82.89 DK / 85.58 EU. 2023: 
66.84 DK / 68.72 EU. 

68 

of the EU Member States with the smallest forest 
area  per  inhabitant:  currently  13%  of  the  country 
is covered by woodland (180)(181). 

The  share  of  land  area  covered  by  Natura 
2000  network  in  Denmark  is  the  smallest  in 
the  EU,  at  8.9%,  against  the  EU  average  of 
18.6%.  By  contrast,  the  share  of  its  marine 
Natura 2000 sites, at 18.2%, is well above the EU 
average  of  9%  (182).  The  share  of  the  overall 
other 
protected 
nationally 
including 
designated  protected 
is  bigger,  but 
Denmark’s protected land area is still below the EU 
average  (183).  Further  action is  needed  to  improve 
the  quality  of  conservation  objectives  for  Natura 
2000  areas  as  the  development  of  a  condition 
assessment  system  is  still  pending  for  certain 
habitat types, including all forest types (184).  

sites 

area 

The  agreement  on  a  Green  Denmark aims to 
increase  the  protected  nature.  It  envisages 
protecting 20% of nature in Denmark and creating 
250 000  hectares  of  new  forest,  which  includes 
100 000 hectares of untouched,  natural forest by 
2045  (185).  Under  the  EU’s  2030  biodiversity 
strategy (186),  Denmark  submitted  pledges  to  (i) 
improve  the  conservation  status  of  the  habitats 
and  species  with  declining  trends;  and  (ii)  expand 
the  protected  area  in  the  marine  environment.  In 
October  2024,  Denmark  adopted  its  updated 
national  biodiversity  strategy  and  action  plan  to 
contribute to the global biodiversity targets (187). 

(180) Statistics Denmark, 2023, Land use accounts. 
(181) Danish  Council  on  Climate  Change,  2024,  Danmarks 

fremtidige arealanvendelse, Link. 

(182) European  Commission,  Natura  2000  Barometer.  Natura 
2000  land,  2023  data,  accessed  April  2025.  European 
Commission,  EU  Biodiversity  Strategy  Dashboard.  Natura 
2000  sea,  2022  data,  accessed  April  2025.  The  newly 
classified  marine  special  protection  areas  increase  the 
Natura  2000  marine  area,  but  this  is  not  reflected  in  the 
dashboard (18.2%) used in this annex. 

(183) 2022: Land: 15.1% DK / 26.1% EU. Sea: 18.8% DK / 12.3% 
EU. The newly classified marine SPAs increase the protected 
marine  area.  However,  this  is  not  reflected  in  Eurostat  data 
(18.8%) used for this annex. Statistics | Eurostat, 12.3.2025. 
(184) 12  land  habitats  including  all  forest  types,  2  freshwater 

habitats and 8 marine habitats. 

(185) The  Danish  Ministry  of  Green  Transition,  2024,  Aftale  om 

Implementering af et Grønt Danmark. 
(186) The strategy’s target is to protect 30% 

 of 

land  and  sea  by  2030,  of  which  10%  is  to  be  strictly 
protected. 

(187) Ministry  for  Green  Transition,  National  Biodiversity  Strategy 

and Action Plan. 

 
 
 
 
Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source:  Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

Denmark’s  economy  is  heavily  reliant  on 
ecosystem  services,  which  is  a  significant 
economic  and  competitiveness  risk.  Denmark 
has a high degree of supply chain dependency on 
ecosystem services, estimated at 26% of its gross 
value added (GVA), above the EU average of 22%. 
Overall,  44%  of  the  Danish  economy’s  GVA  is 
highly  dependent  on  ecosystem  services.  Several 
sectors  such  as  agriculture,  forestry,  fisheries, 
mining and metals, construction, water utilities and 
healthcare  delivery 
(see  Graph  A9.1)  are 
particularly  dependent  on  ecosystem  services. 
100%  of  the  GVA  generated  by  these  sectors  is 
directly dependent on ecosystem services. 

Pollution is expensive. Based on recent research 
(188),  the  estimated  annual  cost  of  the  threat  to 
biodiversity is EUR 8 billion and the loss of species 
almost EUR 7 billion (189). Biodiversity costs are the 
highest  cost  component  in  environmental  costs. 
The overall cost of pollution has remained roughly 
constant  between  1990-2019  (190),  suggesting 
that  there  has  not  been  ‘green  growth’  over  the 
in  Denmark,  because 
three  decades 
last 
conventional  national 
income  has  not  been 
accompanied  by  falling  environmental  costs.  The 
environmentally  adjusted  GDP  in  this  research  is 
estimated  at  EUR 41  billion,  almost  14%  lower 
than conventional GDP (191). 

Sustainable agriculture and land use 

(LULUCF).  Denmark 

Denmark’s  carbon  removals  are  in  line  with 
its 2030 target for land use, land-use change 
and  forestry 
recorded 
negative emissions only three times since 1990 (in 
2015,  2022  and  in  2023).  This  is  due  to  the 
relatively  small  forested  area  and  the  high  share 
of  agricultural  land.  To  meet  its  2030  LULUCF 
target,  additional  carbon  removals  of  -0.4  million 
tonnes of CO2 equivalent (CO2eq) are needed (192). 
The  latest  available  projections  show  a  surplus 
above the target of  -0.2 million tonnes CO2eq for 
2030 (193). This indicates that Denmark is on track 
to meet its 2030 target. 

Intensive  agriculture  degrades  soil  health. 
Denmark  had  the  fifth  highest  livestock  density 
(1.59%)  in  the  EU  in  2020  and  60%  of  land  is 
used  for  agriculture,  mainly  to  grow  feed  for  its 
livestock. Denmark’s soils contain excess levels of 
nitrogen and phosphorus and are eroded by water, 
wind,  tillage  and  harvest  (194).  Most  of  Denmark’s 

(188) Edited by Peter Birch Sørensen, 2024, Danmarks grønne 

nationalprodukt. 

(189) DKK 60  billion  (biodiversity)  and  DKK 50  billion  (species)  in 

2022 prices. 

(190) Environmental costs of air pollution decreased, but the costs 
increased of greenhouse gas emissions and biodiversity loss. 

(191) DKK 306 billion in 2023 prices. 
(192) National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

(193) Climate Action Progress Report 2024, COM/2024/498. 
(194) N above 50 kg/ha: 73% agricultural land, 50% national 
territory. P above 50 mg/kg: 31% agricultural land, 25% 
national territory. Soil erosion: 45% national territory, 65% 
cropland area. European Commission, 2023, Impact 

69 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
     
 
 
use (195). 

Therefore, 

peatlands  have  been  drained,  mainly 
for 
converting 
agricultural 
agricultural land to nature is necessary. According 
to the Danish Council on Climate Change, focusing 
on  the  biodiversity  and  aquatic  environment 
objectives  in  land-use  planning  would  also  bring 
significant climate benefits (196). 

Denmark has taken steps to change land use 
but only a small area of agricultural land has 
actually been converted to nature. Since 2021, 
Denmark  has  set  aside  233  hectares  of  carbon-
rich  low-lying  soils  and  buffer  areas  out  of 
100 000  hectares,  a  target  to  be  achieved  by 
2030 (197).  The  agreement  on  a  Green  Denmark 
increased this goal by 40 000 hectares (198). This is 
a political compromise, which envisages converting 
about  400 000  hectares  of  agricultural  land  back 
to nature, corresponding to about 10% of all land 
in  Denmark  and  15%  of  farmland.  By  end  2025, 
23 local tripartites (199) have to agree at local level 
which agricultural areas to convert. The agreement 
on  a  Green  Denmark  also  mentions  the  plan  to 
bring  in  a  CO2eq  tax  on  emissions  from  livestock, 
drained peatlands and agricultural lime (200).  

is 

promoting 

Denmark 
sustainable 
agricultural practices to reduce the impact of 
agriculture  on  air,  water  and  soils.  Utilised 
agricultural  area  (UAA)  fully  converted  to  organic 
farming  accounted  for  11.4%  of  agricultural  land 
in  Denmark,  against  the  EU  average  of  10.5%  in 
2022 (201)  and the national goal  to reach 20% by 
2030.  Compared  to  their  relatively  small  size, 
agricultural  landscape  features  such  as  woods, 
non-productive  grasslands  and  wetlands,  provide 
numerous environmental and biodiversity benefits, 
including  carbon  sequestration,  soil  erosion 

prevention  and  habitat  creation  for  wildlife.  In 
land 
2022,  5.3%  of  Denmark’s  agricultural 
included  these  features,  slightly  below  the  EU 
average of 5.6%. Since 2023, Denmark includes in 
its  common  agricultural  policy  (CAP)  strategic 
plans  the  obligation  for  farmers  to  ensure  as  a 
minimum that 4% of arable land is used for non-
productive areas or landscape features.  

Denmark’s  CAP  strategic  plan  is  designed  to 
contribute  to  the  environmental  and  climate 
targets. (202) Under eco-schemes, almost 20% of 
direct  payments  for  farmers  are  reserved  for 
agricultural practices that go beyond the minimum 
requirements  on  agricultural  areas,  and  which 
benefit  the  climate,  the  environment  and  animal 
welfare.  Additionally,  about  19%  of  the  rural 
is  reserved  for  farmers 
development  budget 
undertaking 
management 
multiannual 
commitments that benefit nature and biodiversity.  

to 
The  plan  allocates  EUR 28  million 
sustainable  agricultural  practices. 
This 
includes  (i)  increasing  the  area  of  organically 
farmed  agricultural  land,  (ii)  diversifying  plant 
production, biodiversity and sustainability, and (iii) 
reducing  nutrient  loss  through  support  for  water 
and  climate  projects.  These  measures  are  crucial 
for  the  long-term  competitiveness  of  Denmark’s 
agri-food  system  and  its  bioeconomy.  The  latter 
contributed  EUR 8.1  billion  of  added  value  to  the 
country’s  GDP  in  2021.  Agriculture  generated 
EUR 3.8 billion, while the food industry contributed 
EUR 4.3  billion (203).  The  primary  sector  generated 
1.5% of Denmark’s total GVA. 

Assessment Report accompanying the proposal for a Soil 
Monitoring Law, p. 748. 

(195) UNEP, 2022, Global Peatlands Assessment: The State of the 

World’s Peatlands. 

(196) Danish  Council  on  Climate  Change,  2024,  Danmarks 

fremtidige arealanvendelse. 

(197) Danish Agricultural Agency, November 2024, Hvad sker der i 
indsatsen for at tage lavbundsjorder ud af landbrugsdrift. 
(198) The  Danish  Ministry  for  Green  Transition,  2024,  Aftale  om 

Implementering af et Grønt Danmark. 

(199) The  local  tripartites  will  consist  of  representatives  from 
municipalities, agricultural and nature organisations, and the 
Nature Agency.  The Danish Ministry for Green Transition,  De 
lokale treparter. 

(200) The  Danish  Ministry  for  Green  Transition,  CO2e-afgift  på 

landbruget. 

(202) European Commission, At a glance: Denmark’s CAP strategic 

(201) Includes UAA in the process of converting land use. Statistics 
|  Eurostat,  27.1.2025.  Agriculture  biologique  au  sein  de 
l’union européenne. 

plan. 

(203) European Commission, 2023, EU Bioeconomy Monitoring 

System dashboards. 

70 

 
 
 
Table A9.1:  Key indicators on progress on climate adaptation, preparedness and environment 

(1)  The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action, The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, 7th Implementation Report from the Commission to the Council and the European Parliament on 
the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third River Basin 
Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) 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. 
Source: Eurostat, EEA. 

71 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems46.613.190.81.218.651.736.772.76[area impacted by drought as % of total]Forest-fire burnt area (1)77            77            77            77            77            77            [ha, annual average 2006-2023]Economic losses from extreme events87            -           59            -           4              167          24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----1.00         1.00         [composite score between 0 and 4]Heat-related mortality (3)41            41            41            41            41            [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action56            57            57            59            55            53            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)7.44.34.04.95.2-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption527          415          428          430          446          -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---58%---59%Groundwater bodies---0%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)5.4-----14.7-[% of habitats having a good conservation status]Common farmland bird index75.171.582.872.461.8-72.274.42000=100Protected areas---1515--26[% of protected land areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)13 746     15 295     16 334     16 181     634 378     716 124     [EUR million]Landscape features----5              -[% of agricultural land covered with landscape features]Food waste--221230254-[kg per capita]Area under organic farming9.811.111.511.611.47.99-[% of total UAA]Nitrogen balance------[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)29.720.527.518.3--[mgNO3/l]Net greenhouse gas removals from LULUCF (9)2 503       1 531       1 292       198          381-          -           256 077-     240 984-     [Kt CO2-eq]DenmarkEU-27DenmarkEU-27DenmarkEU-27DenmarkEU-27 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

In  recent  years,  the  Danish  labour  market 
has  been  characterised  by  high  employment 
and participation, with both employment and 
unemployment  rates  slightly  increasing  in 
2024.  Demographic  trends  are  impacting  the 
labour  market,  with  growing  participation  among 
older  workers  and  unmet  potential  among  young 
people  not  in  employment,  education  or  training 
and vulnerable groups. Shortages of skilled labour 
persist  in  certain  areas,  highlighting  the  need  for 
all groups to be integrated into the labour market 
and  also 
light  of  the  green  and  digital 
transitions. 

in 

employees above the state pension age has risen 
by 19% (206). 

Graph A10.1: Key labour market indicators 

the 

target 

lowest 

Denmark’s  labour  market  remains  strong. 
With  the  employment  rate  already  surpassing  the 
country’s  2030 
in  2022  and  falling 
marginally  to  79.8%  in  2023,  it  rose  again  to 
80.2%  in  2024,  well  above  the  EU  average  of 
75.8%. Also the activity rate continued to increase, 
reaching 82.4% in 2024, one of the highest levels 
in the EU (75.4%). After having reached its lowest 
point  in  the  post-pandemic  period  (3.8%  in  Q2-
2022),  the  unemployment  rate  increased  to  5.1% 
in 2023 and 6.2% in 2024 (204), slightly above the 
EU  average  of  5.9%.  Despite  this  trend,  Denmark 
long-term 
still  has  one  of 
unemployment rates in the EU – 0.8% in 2024 (EU: 
1.9%). Labour market slack (205), measuring unmet 
demand  for  employment,  rose  to  12.7%  in  2024 
(10.1%  in  2023),  and it is  now  slightly  above  the 
EU  average  (11.7%).  This  was  mainly  due  to  the 
increase 
in  the  number  of  unemployed  and 
underemployed people working part-time, with the 
latter  growing  from  2.1% to  3.4%  in  the last two 
years,  above  the  EU  average  of  2.4%.  The 
employment  rate  for  older  workers  (55-64)  rose 
from 71.4% in 2020 to 75% in 2024, compared to 
an  EU  average  of  65.2%,  due  to  demographic 
changes  and  retirement  schemes  adjustments.  In 
2023,  the  Danish  Parliament  removed  a  measure 
offsetting  state  pension  transfers  for  people  who 
were  still  employed.  Since  then,  the  number  of 

(204) Unemployment figures from 2023 onwards are subject to a 

break in the time series. 

(205) Labour market slack refers to the extent to which labour 
supply exceeds demand in the short run. It includes 
underemployed people working part-time, unemployed 
people, people seeking work but not immediately available, 
and people available to work but not seeking it. By including 
unemployment, it is subject to the same break in the time 
series above. 

72 

Activity rate and Employment rate (% of population), total, 
ages 20-64. 
Unemployment rate and long-term unemployment rate (% of 
labour force), total, ages 15-74. 
Youth unemployment rate (% of labour force), total, ages 15-
24. 
NEET: Not in employment, education or training (% of 
population), total, ages 15-29. 
Source: Eurostat, LFS 

Young  people  are  well  integrated  into  the 
labour  force,  but  untapped  potential  among 
in  employment,  education  or 
those  not 
training  remains.  In  2024,  youth  employment 
and  participation  in  the  labour  force,  standing  at 
59%  and  69.1%,  respectively,  were  significantly 
above  the  respective  EU  averages  of  35%  and 
41.1%.  The  youth  unemployment  rate  rose  to 
14.6% (EU: 14.9%), and 8% of young people were 
not  in  employment,  education  or  training  (NEET), 
compared  to  an  EU  average  of  11%.  The  Danish 
government  has  implemented  targeted  measures 
to  increase  youth  participation  in  employment, 
education  and  training.  In  October  2024,  the 
government (207), together with supporting parties, 

(206) Ministry of Economic Affairs, Flere pensionister i 

beskæftigelse. 

(207) Ministry of Employment, Aftale om Ungeløftet – flere unge i 

arbejde og forpligtende fællesskaber. 

7274767880828486024681012141620172018201920202021202220232024%%DKActivity rate 20-64 (rhs)Employment rate 20-64Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)Youth unemployment rate 15-24 (lhs)NEET rate 15-29 (lhs) 
 
 
 
  
 
 
 
introduced  a  political  agreement  that  includes 
individual 
young 
providing 
employment plans and support. 

people  with 

Vulnerable  groups  still  face  challenges,  and 
their  increased  participation  in  the  labour 
market could help alleviate labour shortages. 
In 2024, the employment rate for people with less 
levels  of 
than  primary  and  lower  secondary 
education  was  61.4%,  above  the  EU  average  of 
58.7% for this group. However, this was nearly 27 
percentage points (pps) below that of people with 
tertiary-level education, which stood at 88.2% (EU: 
86.5%). International labour is also contributing to 
high  employment  rates  in  recent  years (208).  Both 
third-country  nationals  already 
in 
Denmark  and  newly  arrived  migrants  can  help 
mitigate  labour  shortages,  particularly  in  sectors 
such  as  construction  and  trade.  The  employment 
rate  for  third-country  nationals  was  72.6%  in 
2024,  compared  to  the  EU  average  of  64.2%. 
Persons  with  disabilities  continue 
face 
significant  labour  market  barriers:  the  disability 
employment gap  rose to 26.1 pps in 2024, which 
was  above  the    EU  average  of  24  pps  (209).  In 
2023,  38%  of  NEETs  had  a  disability (210). 
Denmark  has  not  yet  set  an  employment  target 
for persons with disabilities. 

residing 

to 

Labour  shortages  have  partly  eased  but 
remain significant. The job vacancy rate (211) fell 
to 2.5% in 2024 (EU: 2.5%), below the 3.7% peak 
reached  in  Q2-2022  but  still  above  pre-pandemic 
levels  (1.9%  in  Q4-2019).  In  January  2025,  the 
share of employers expecting labour shortages to 
limit  their  production (212)  stood  at  28%  in  the 
construction  sector,  exceeding  the  EU  average 
(26%) and its pre-pandemic levels (213). In industry, 
this share has increased sharply in recent months, 
reaching  20.6%  in  January  2025  (EU:  18.6%).  In 
services,  the  share  also  remained  well  above  its 

(208) The Ministry of Economic Affairs, Economic Survey August 

2024. 

(209) Figures for 2024 for Denmark are subject to a break in time 

series. 

(210) VIVE – The Danish Centre for Social Science Research, 

Handicap og beskæftigelse 2023. 

(211) For Denmark, the job vacancy rate is only available for the 
business economy (NACE sectors B to N) on Eurostat. 

(212) ECFIN Business and Consumer Surveys. 

(213) The pre-pandemic (Q4 2019) shares in Denmark were equal 
to 23.33%, 16%, and 6.4% respectively in construction, 
services and industry. 

of 

each 

pre-pandemic  level  at  22.9%,  but  below  the  EU 
average  for  this  sector  (24.1%).  According  to 
CEDEFOP-EURES  data (214),  in  2024,  the  most 
requested  profiles  in  the  country  were  trade 
workers 
(24.6%),  service  and  sales  workers 
(12.6%).  Mostly 
(21.3%)  and  professionals 
construction  workers,  personal  service  workers, 
and  researchers  and  engineers  were  requested 
under 
above-mentioned  macro 
groups (215).  In  2023,  job  vacancy  rates  in  the 
transformation  sectors  were  higher  than  the  EU 
averages  for  the  manufacturing  sector  (2.4%  vs 
2.1%)  and  the  electricity,  gas,  steam  and  air 
conditioning  supply  sector 
(3.8%  vs  1.8%). 
recruitments (216)  were  most 
Unsuccessful 
prevalent  in  the  iron,  metal  and  auto  industry,  in 
the construction sector and in the social education 
sector, with 18.7% posted jobs unfilled in the iron, 
metal  and  auto  industry  and  15.4%  in  both  the 
construction and the social education sectors. 

Graph A10.2: Beveridge curve 

Annual data based in the average of the four quarters 
Source: Eurostat, LFS and European Commission, EU Business 
and Consumer Surveys. Data seasonally adjusted. 

is 

implementing 

labour  market 
Denmark 
measures  to  address  persistent  workforce 
shortages  in  key  sectors.  The  rapidly  growing 
tech  and  digital  industry  is  driving  demand  for 
skilled  ICT  professionals,  not  always  met  by 

(214) EURES - Countries and occupations | CEDEFOP. 

(215) From January to September 2024. 

(216) Danish Agency for Labour Market and Recruitment, Vores 

Arbejdsmarked. 

73 

 
 
  
 
Real  wages  rebounded 
in  2024,  partly 
offsetting  the  losses  of  2022  and  2023, 
while  overall  wage  developments  remain 
moderate.  After  nominal  wages  rose  by  3.1%  in 
2023 and 4.2% in 2024, nominal  wage growth is 
expected  to  remain  stable  and  above  the  EU 
average  in  2025 (220).  In  turn,  real  wages,  after  a 
marked  drop  of  5.3% in  2022  and  a  slight  dip  of 
0.1% in 2023, are set to increase by 2.8% in 2024 
and  by  more  than  2%  in  2025  (close  and  above 
the EU average). This recovery reflects both lower 
inflation  and  higher  nominal  wage  growth, but  by 
2025  it  may  not  be  sufficient  to  fully  recoup  the 
losses  from  2022  and  2023.  In  recent  years, 
growth  in  unit  labour  costs  (ULCs)  has  been 
relatively moderate, leaving some room for further 
wage increases in the short run. After rising by 5% 
in  2022,  ULCs  increased  by  1.9%  in  2023  and 
1.4%  in  2024,  among  the  lowest  growths  in  the 
EU. Gross disposable household income per capita 
grew more than the EU average, reaching 122.57 
in  2023 
(EU:  111.09;  2008=100).  Labour 
productivity remains high, with the productivity per 
hour  worked  standing  at  131.6%  of  the  EU 
average  despite  a  decrease  of  8 pps  in  2023. 
Maintaining  a  strong  productivity  growth  will  be 
key to ensure sustainable higher wage growth over 
the longer run. 

STEM 

these 

challenges,  Denmark 
(science, 

adequate  supply.  ICT  specialists  accounted  for 
5.8% of total employment in 2024, above the EU 
average  of  5%,  but  the  share  of  companies  with 
hard-to-fill ICT vacancies (10.7%) was significantly 
higher  than  the  EU  average  (6%)  in  2022.  To 
has 
address 
strengthened 
technology, 
engineering  and  mathematics)  education  through 
digital  tools,  school  collaboration  and  initiatives 
targeting women participation in these areas (See 
Annex  12).  Demographic  changes  are  driving 
labour  demand,  particularly 
for  healthcare 
in  recent  years,  Denmark  has 
services,  and 
introduced  labour  market  reforms  to  increase 
labour  supply  for  such  services  by  45 000  by 
2030 (217).  In  January  2024,  the  government (218) 
reached  an  agreement  with  supporting  parties  to 
enable  third-country  nationals  to  be  employed  in 
the  healthcare  sector.  This  agreement  includes 
issuing  1 000  work  permits  to  foreign  healthcare 
workers  and  a  plan  to  identify  partnerships  with 
non-EU  countries  for  targeted  recruitment  of 
healthcare professionals. 

is 

investing 

in  upskilling  and 
Denmark 
reskilling  to  address  skills  shortages  and 
mismatches, with the support of EU funding. 
The macroeconomic skills mismatch (219) continued 
to decline in 2024 in line with EU trends, reaching 
13.6%,  well  below  the  EU  average  (19.2%).  For 
over-qualification,  15.3%  of  workers  with  higher 
education  degrees  were  employed  in  occupations 
not requiring that level of qualification, below the 
EU  average  of  21.5%.  The  European  Social  Fund 
Plus  (ESF+)  and  the  Just  Transition  Fund  (JTF) 
support  the  upskilling  and  reskilling  of  the 
workforce. The ESF+ helps people acquire the skills 
needed  for  the  labour market,  including  those  for 
the  green  and  digital  transitions,  and  the  JTF 
in  polluting 
focuses  on  equipping  workers 
industries  with  the  skills  required  for  the  green 
transition.  The 
resilience  plan 
recovery  and 
includes  upskilling  and  reskilling  measures  for 
teachers  in  vocational  education  and  training 
schools. 

(217) DK2030 - Danmark rustet til fremtiden - Regeringen.dk. 

(218) Bred politisk aftale om udenlandsk arbejdskraft i 
sundhedsvæsenet og ældreplejen | Indenrigs- og 
Sundhedsministeriet. 

(219) The macroeconomic skills mismatch indicator measures the 
dispersion of employment rates across skill groups (proxied 
by qualification levels, with ISCED 0-2 low; 3-4 medium and 
5-7 high). Source: DG EMPL own calculations. 

(220) European Commission, Autumn 2024 Economic Forecast. 

74 

 
 
 
Graph A11.1: At-risk-of-poverty or social exclusion 
rate, age groups 

ANNEX 11: SOCIAL POLICIES 

Denmark’s  strong  welfare  system  continues 
to  tackle  poverty  and  social  exclusion 
effectively, though some risk indicators have 
increased  slightly  in  recent  years.  Social 
benefits  play  a  key  role  in  reducing  poverty  and 
inequalities,  but  vulnerable  groups  still  face 
significant  disparities,  especially  among  non-EU 
nationals,  persons  with  disabilities  and  single-
parent  households.  Further  efforts  to  alleviate 
inequalities affecting these groups will help foster 
inclusive growth and competitiveness. 

The 

(AROP) 

Denmark  continues  to  have  a  relatively  low 
rate  of  people  at  risk  of  poverty  or  social 
exclusion  (AROPE),  despite  a  slight  increase 
in recent years. The AROPE rate rose in the last 
two years, moving from 17.1% in 2022 to 17.9% 
in 2023 and further to 18% in 2024, while the EU 
average declined to 21%. After a sharp increase in 
2023,  severe  material  and  social  deprivation  fell 
to 4% in 2024, remaining below the EU average of 
6.8%. 
rate 
at-risk-of-poverty 
decreased  slightly to  11.6%  in  2024  (EU:  16.2%), 
underscoring the effectiveness of Denmark’s social 
protection system (see below). In 2024, the AROPE 
rate  remained  stable  at  20.7%  for  the  working-
age  population  (18-64  years  old),  and  at  12.3% 
for  those  aged  65  or  above,  following  a  sharp 
increase for the latter group during the COVID-19 
pandemic  (see  Graph  A11.1).  Vulnerable  groups 
continue to face higher risks of poverty and social 
exclusion: in 2024, foreign-born adults experienced 
a high AROPE rate at 29.6% (EU: 35.2%) compared 
to  17.2%  for  native-born  adults  (EU:  18.3%).  The 
AROPE  rate  for  persons  with  disabilities  has  been 
increasing, going from 23.1% in 2019 to 28.1% in 
2024(221).  Although  it  is  below  the  EU  average 
(28.8%), there is room for improvement to reverse 
the trend of increasing inequality. Denmark has set 
a target of reducing the number of persons living 
in  very  low  work  intensity  households  by  30 000 
by 2030. In 2024, around 474 400 people lived in 
such  households,  60 000  above  the  2019  base 
year level. Further efforts are needed to reach the 
national  2030  target  and to  prevent  more people 
from experiencing poverty. 

(221) 2024 data for Denmark are subject to a break in time series 

75 

AROPE: At-risk-of-poverty or social exclusion rate (% of total 
population). 
Source: Eurostat, EU-SILC 

The risk of poverty or social exclusion among 
children has increased but remains relatively 
low.  The  AROPE  rate  for  children  rose  by 
2.1 percentage  points  (pps)  in  the  last  two  years, 
reaching  15.9%  in  2024  (EU:  24.2%).  While 
Denmark  has  not  set  a  complementary  child 
poverty reduction target, the number of children at 
risk  in  2024  was  approximately  24 000  higher 
than  in  2019.  In  order  to  mitigate  the  impact  of 
poverty on children, Denmark is implementing the 
European  Child  Guarantee  (ECG)  as  part  of  its 
biennial 
2022 
implementation  report  concludes  that  Denmark 
continues  to  fulfil  the  objectives  of  the  ECG  but 
acknowledges that there is room for improvement 
as  regards  ensuring  equal  opportunities  for 
vulnerable children. 

action 

2024 

plan. 

The 

low 

faces 

relatively 

Denmark 
in-work 
poverty  rates,  though  certain  groups  remain 
more  vulnerable.  The  in-work  at-risk-of-poverty 
rate  in  Denmark  was  6.2%  in  2023,  compared  to 
an  EU  average  of  8.2%.  The  share  was 
the  non-EU-born 
significantly  higher  among 
(15.9%), with a high gap compared to native-born 
people  (10.9 pps  vs  11.3 pps  for  the  EU),  and 
(14.8%  vs 
among  single-person  households 
11.8%) and single parents (14.7% vs 18.9%). Part-
timers and temporary workers also face relatively 
greater challenges. However, their in-work poverty 
risk,  at  9.1%  and  10.4%  respectively  in  2023,  is 

05101520252015201620172018201920202021202220232024% of populationDKChildren (<18y)Working age (18-64)Elderly (65+) 
 
 
  
 
 
lower  than  the  EU  average  (12.6%  for  both 
categories). 

Graph A11.2: In-work-poverty rate, groups 

transactions  stabilised  in  2023  (-0.2%)  while  the 
values  transacted  increased  (+22.7%).  Building 
permits  decreased  by  10.5%  in  2022  and  by  a 
further 34.2% in 2023, implying a lower supply of 
new  housing  looking  ahead,  which  will  put  upside 
pressure  on  house  prices.  At  the  same  time, 
Denmark’s  household  debt  ratio  –  while  trending 
downwards – is one of the highest in the EU, both 
as  a  share  of  GDP  (88%  in  2023)  and  of  gross 
disposable  household  income  (140%  in  2023).  In 
February 2024, the European Systemic Risk Board 
(ESRB)  concluded  that  the  residential  property 
market  in  Denmark  was  subject  to  high  risks  and 
the  macroprudential  policy  mix  was  only  partially 
appropriate and partially sufficient to mitigate the 
situation (222). 

In-work-poverty rate (% of employed). Employed who have an 
equivalised disposable income below 60% of the national 
equivalised median income. 
Source: Eurostat, EU-SILC 

Denmark’s  strong  social  benefits  system 
plays  a  critical  role  in  reducing  poverty  and 
inequalities by supporting vulnerable groups. 
The impact of social benefits on poverty reduction 
was among the highest in the EU in 2024 (50.4% 
vs 34.4%). Expenditure on social protection is also 
relatively high (27.9% of GDP compared to 26.8% 
in the EU). Income inequality, as measured by the 
income quintile share ratio, increased in 2023 and 
remained  stable  in  2024,  with  the  income  of  the 
richest  20%  of  the  population  around  4.16  times 
that  of  the  poorest  20%.  Despite  this,  it  remains 
significantly below the EU average of 4.66. 

House  prices  have  been  growing  moderately 
amid  high  household  indebtedness.  House 
prices have increased by close to 40% in nominal 
terms  over  the  past  decade.  After  increasing  in 
2021 and 2022 (+11.7% and +4.8% respectively), 
house prices decreased slightly in 2023 (-4.2%) in 
the context of higher interest rates and the related 
moderation  of  mortgage  credit.  House  prices 
rebounded  in  2024  (+4.6%  in  Q3-2024  year-on-
year).  As  of  end-2024,  house  prices  have 
increased  and  are  estimated  to  be  slightly 
overvalued  (less  than  5%).  After  a  significant 
decrease in house transactions in 2022 (-24.8% in 
number  and  -38.0%  in  value),  the  number  of 

housing 

affordability 

Overall 
has 
deteriorated  over  the  last  decade  especially 
in  terms  of  people’s  ability  to  buy  a  house. 
House  prices  have  grown  faster  than  household 
incomes  since  2015,  as  reflected  in  the  steady 
increase in the standardised house price-to income 
ratio. This ratio stood almost 15% above its long-
term  average  in  2021  but  has  decreased  since 
then and stood 5% above its long-term average in 
2023.  Taking  into  account  the  cost  of  mortgage 
funding,  the  borrowing  capacity  of  households 
remained largely stable over the past decade. With 
a rather large rental market, the ratio of new rents 
to  incomes  remained  rather  stable  over  the  last 
decade. 

its 

The  housing  cost  overburden  remains  high, 
despite  efforts  to  mitigate 
impact. 
Denmark  continues  to  have  one  of  the  highest 
housing cost overburden rates, standing at 14.6% 
in 2024 compared to the EU average of 8.2%. The 
overburden  rate  for  people  with  some  or  severe 
disabilities was 21.2%, which is roughly double the 
EU  average  of  10.4%.  Although  Denmark  has  an 
effective social protection system and a variety of 
social benefits to mitigate its impact, housing cost 
remains  a  significant  challenge. 
overburden 
Homelessness  has  increased  slightly,  growing  by 
3% between 2022 and 2024 and affecting almost 
6 000 people (223). Men account for the majority of 

(222) ESRB  (2024):  ‘Follow-up  report  on  vulnerabilities  in  the 
residential real estate sectors of the EEA countries, February 
2024’. On the recommendation of the Danish Systemic Risk 
Council, Denmark activated a sector-specific buffer for credit 
institution exposures to real estate companies at a rate of 7 
per cent effective from 30 June 2024. 

(223) Hjemløshed i Danmark 2024 - vive.dk. 

76 

05101520252015201620172018201920202021202220232024% of employedDKTotalTemporaryPart-timeSingle parents 
  
 
is  projected  to  increase  to  74  by  2070.  The 
aggregate  replacement  ratio  remained  stable  at 
47% in 2024, compared to an EU average of 61%. 

relatively  well 

Denmark  performs 
in 
addressing  energy  poverty.  The  share  of  the 
population unable to keep their homes adequately 
warm  stands  at  4.4%  in  2024,  up  1.6 pps  from 
2021  and  1.7 pps  from  2017,  but  below  the  EU 
average  of  9.2%.  Similarly,  4%  of  individuals 
faced arrears on utility bills in 2024, a 1.1 pp. rise 
since 2021 but below the EU average of 6.9%. In 
terms  of  structural  issues,  15%  of  the  Danish 
population  reported  leaks,  damp  or  rot  in  their 
dwellings in 2023, a slight improvement of 1.8 pps 
from  2019,  close  to  the  EU  average  of  15.5%. 
Denmark  does  not  have  a  national  definition  for 
energy poverty, but relies on three main indicators: 
low-income  households,  poor  energy  performance 
in  housing,  and  high  energy  consumption.  Social 
measures  include  heating  allowances  for  low-
income  pensioners  and  a  range  of  subsidies  and 
targeted  support  schemes,  such  as  personal 
allowances 
to  cover  additional  heating  or 
electricity  costs.  One  aim  of  Denmark’s  national 
energy  and  climate  plan  is  to  expand  district 
heating and to retrofit older buildings, which make 
up  a  significant  portion  of  Denmark’s  housing 
stock. 

homeless people, at 77% (224). Between 2021 and 
2022, the number of beneficiaries of refuges and 
homeless  shelters  increased  by  5% (225).  At  the 
same  time,  national  data  shows  a  significant 
decrease  in  the  number  of  homeless  individuals 
aged  18-24,  which  several  observers  attribute  to 
the  increase  in  the  number  of  policies  addressing 
the problem of youth homelessness. The European 
Social Fund Plus (ESF+) supports the homeless and 
those  at  risk  of  homelessness  through  activities 
that promote social integration. 

to 

longer 

in  2035 

the  ageing  population, 

Challenges in the care sector are expected to 
continue in light of the demographic changes. 
Shortages  in  the  healthcare  sector  have  been 
ongoing  for  several  years  and  the  demand  for 
skilled  professionals  is  projected  to  outweigh 
supply  by  15 000  workers  (social  and  healthcare 
(226).  Denmark’s  public 
workers) 
expenditure on long-term care (LTC) is expected to 
increase  by  3.3 pps  of  GDP  between  2022-2070 
due 
life 
expectancy and growing need for care services. In 
comparison,  the  EU-average  public  expenditure  is 
expected  to  increase  by  only  0.8 pps  of  GDP (227). 
The  expected  increase  in  public  LTC  expenditure 
coincides  with  enrolment  levels  in  social  and 
healthcare  education  programmes  that  do  not 
sufficiently  match  the  increasing  demand  for 
qualified  personnel  in  the  healthcare  sector  (228).  
The  Danish  government  and  a  broad  coalition  of 
parties  has  agreed  on  13  initiatives  aimed  at 
strengthening the quality of the social  and health 
education  programmes, 
increasing  recruitment, 
and  reducing  dropout  rates  in  the  programmes.  
These  include  the  professionalisation  of  training 
supervisors, increasing support for VET institutions 
and  language  support  for  pupils,  and  upskilling 
teachers (229). The state pension age in Denmark is 
regularly  adjusted  based  on  life  expectancy,  with 
the  parliament  reviewing  it  every  five  years.  In 
2024, the State pension age was 67 years, and it 

(224) COUNTRY NOTE: DATA ON HOMELESSNESS IN DENMARK. 

(225) Fondation Abbé Pierre – FEANTSA - 9th Overview of Housing 

Exclusion in Europe 2024 - Rapport_-_EN.pdf. 

(226) Danish Ministry of Finance, DK2030 - Danmark rustet til 

fremtiden. 

(227) 2024 Ageing Report. Economic and budgetary projections for 

the EU Member States (2022-2070), page 118. 

(228) See Forberedt på fremtiden III - Regeringen.dk and DK2030 - 

Danmark rustet til fremtiden - Regeringen.dk. 

(229) Aftaletekst om SOSU-uddannelserne. 

77 

 
 
 
ANNEX 12: EDUCATION AND SKILLS 

While  education  outcomes  in  Denmark  are 
above  the  EU  average,  the  Danish  education 
system  does  not 
support  all  pupils 
developing  to  their  full  potential.  Young 
people with migrant background clearly lag behind. 
The  number  of  early  leavers  from  education  and 
training has increased in recent years, contrary to 
the EU trend. Further efforts to reduce early school 
leaving and improve participation in adult learning, 
particularly  vocational  education  and  training 
(VET),  could  help  address  persistent  skilled  labour 
shortages and support Denmark’s competitiveness. 

in  Denmark.  Early 

Early  school  leaving  remains  a  persistent 
challenge 
leaving  from 
education  and  training  continued  to  increase  to 
10.4%  both  in  2023,  being  unchanged  in    2024, 
remaining  persistently  above  the  EU  average 
(9.3%)  and  the  EU-level  target  of  9%.  11.8%  of 
young people born outside the EU left school early, 
a sudden 4.6 percentage points (pps) decrease on 
the previous year. This amounts currently to a 1.4 
(pps)  gap compared to native born  and is 8.2 pps 
below the EU average. The gap between urban and 
rural areas is pronounced, with a much lower rate 
in  cities  (6.2%)  and  towns  (12.3%)  than  in  rural 
areas (15.5%). Since only about one seventh of all 
Danes  lives  in  rural  areas (230),  the  challenge 
remains  concentrated.  Launched  in  March  2024, 
the  ‘Folkeskole’  (primary  and  lower  secondary 
school)  quality  programme  is  a  major  reform  of 
Denmark’s primary and lower secondary school. It 
aims  to  simplify  curricula  for  all  subjects,  grant 
teachers  more  pedagogical  autonomy  and 
reinforce practical aspects of the curriculum, while 
ensuring  excellence  in  education  outcomes  and 
well-being (231). 

Denmark  has  a  very  high  participation  in 
childhood  education  and  care  (ECEC),  but 
quality  issues  remain.  62.9%  of  children  below 
the  age  of  three  attended  formal  childcare  in 
2024, most of them all day (232). This is one of the 
highest  shares  in  the  EU  and  close  to  the  67.5% 
national  Barcelona  target.  95.7%  of  the  children 
aged  between  three  years  and  compulsory  school 

age  attended  ECEC  in  2023,  both  above  the  EU 
average (94.6%) and at the EU-level target (96%), 
but  participation  is  significantly  lower  among 
children  at  risk  of  poverty  or  social  exclusion 
(89%). The quality of ECEC for children under three 
(233). 
varies  significantly  across  municipalities 
Lower  salaries  for  ECEC  teachers  are  one  reason 
making  recruitment  challenging,  especially 
in 
municipalities in the Capital Region and in Zealand. 

Graph A12.1: Early leavers from education and 
training by urbanisation and country of birth 

Year: 2024; Age class: From 18 to 24 years 
Source: Eurostat [edat_lfse_02]; [edat_lfse_30] 

Denmark  faces  challenges  in  attracting  and 
retaining  qualified 
teachers,  deepening 
staffing  shortages.  Municipalities  struggle  to 
attract and retain fully trained staff in ECEC and in 
the  Folkeskole.  The  number  of  fully  trained 
teachers has decreased by 11.6% to 38 000 in the 
last  10  years,  and  20%  of  graduates  never  enter 
the  teaching  profession.  Up  to  a  quarter  of 
Folkeskole teachers consider leaving (for example, 
for private schools), further increasing the need to 
facilitate  lateral  entry  into  the  profession (234). 
According to a 2021 survey, 18.1% of teachers in 
Folkeskole lack pedagogical training (235). 

(230) 2023 rural population: 684 197, -0.36% from 2022. Urban 

population: 5 262 755, +0.89% from 2022.  

(231) Ministry of Children and Education: Agreement on the primary 

and lower secondary school's quality programme. 

(232) In Denmark, 58.6% attend formal childcare for 25 hours or 

(233) Lindeberg, H.H. et al. (2023). Kvalitet i dagtilbud, National 
undersøgelse af kvalitet i pædagogiske læringsmiljøer og 
rammer i kommunale daginstitutioner og dagplejen for 0-2-
årige børn.digit VIVE, EVA.  

(234) Danmarks Evalueringsinstitut (EVA): Lærerer i grundskolen. 

more in 2024 compared to a 28.2% EU.  

(235) Plauborg et al. (2022): Lærere, der bliver i professionen. 

78 

0.2.4.6.8.10.12.14.16.18.CitiesTowns &suburbsRural areasNative-bornNon-EUborn% 
 
 
  
 
 
 
Underachievement  in  basic  skills  has  risen 
but  remains  among  the  lowest  in  the  EU. 
According  to  2022  OECD  PISA  results,  one  in  five 
15-year-olds  shows  low  performance  in  basic 
skills, with 20.4% underachieving in mathematics, 
19.0%  in  reading  and  19.9%  in  science  –  well 
below  the  EU  averages  of  29.5%,  26.2%  and 
24.2%, respectively. The share of top performers is 
higher  than  the  EU  average,  but  a  significant 
gender  gap  remains.  The  share  of  boys  (9.9%) 
among  top  performers  in  mathematics  is  nearly 
twice the share of girls (5.4%). At the same time, 
Denmark  also  registered  one  of  the  greatest 
decreases  in  top  performance  in  mathematics 
within  the  EU  (-3.9  score  points)  between  2018 
and  2022.  Danish  15-year-olds  also perform  well 
above  the  EU  average  in  creative  thinking:  +3.5 
points  for  the  mean  score  and  +6.2 pps  for  the 
share of top performers (31.3%). 

Despite  overall  good  performance,  migrant 
impact  on 
background  has  a  strong 
educational  outcomes.  Underachievement 
in 
mathematics reaches 34.1% among students with 
migrant  background  and  rises  to  46%  for  those 
born  abroad  (see  Graph A12.2).  In  the  same  vein, 
in  terms  of  basic  digital  skills  the  gap  between 
young with migrant background and natives (49.8 
points)  is  nearly  double  the  EU  average  (28.5 
points).  On  a  positive  note,  socio-economic 
background  has  much  smaller  impact  on  basic 
skills,  including  digital  skills.  (236).  The  quality 
programme  builds  on  previous  reform  actions  to 
reduce  low  performance  and  to  increase  well-
being.  Nevertheless,  further  targeted  support  to 
disadvantaged  learners  could  help  them  realise 
their full potential.  

Graph A12.2: Underachievement in mathematics in 
Denmark by country of birth and background 

Source: OECD (2023); PISA 2018 and 2022 

Shortages  of  graduates  in  critical  sectors 
makes 
increasing  student  retention  and 
enhancing  access  to  VET  a  political  priority. 
Denmark has one of the highest employment rates 
among  recent  VET  graduates  (87.7%  vs  EU 
average  of  80%  in  2024),  and  their  exposure  to 
work-based  learning  is  above-average  (78.8%  vs 
EU 65.3% in 2024). Still, the share of VET students 
among  all  upper  secondary  students  stood  at 
39.9%  in  2023,  well  below  the  EU  average 
(54.2%). Low enrolment, combined with high drop-
out  rates,  pose  challenges,  particularly  to  those 
sectors 
such  as 
construction,  skilled  trades  and  long-term  care 
(see Annex 10). To address these issues, Denmark 
has  made  permanent  the  scheme  “Right  to 
Educational  Boost  with  110%  Unemployment 
Benefits”, granting eligible unemployed individuals 
the  right 
to  undertake  vocational  education 
targeted at occupations in shortage. 

facing  acute 

shortages, 

Skills shortages are widespread. 56% of SMEs 
reported  difficulties  in  finding  workers  with  the 
right  skillset (237)  and  the  demand  for  skilled 
healthcare  professionals  is  expected  to  exceed 
supply by 15 000 workers in 2035 (see Annex 11). 
Several  political  initiatives  have  already  been  put 
in place to counteract the trend. In addition to the 
Folkeskole reforms, upper secondary education will 
be  restructured,  eliminating  one  out  of  the  four 
tracks, EUX and introducing EPX, a new vocational 
and  profession-oriented 
should 
encourage  more  young  people  to  choose  VET 
  The  government  has  planned  to 
education. 
allocate  DKK  1  billion  annually  for  vocational 
education  programmes  from  2030  onwards. 
Denmark’s  REPowerEU  chapter  includes  measures 

track 

that 

(236) The difference in achievement based on the number of 

books and computers at home is among the lowest in the 
EU. 

(237) Eurobarometer survey 

79 

05101520253035404550AdvantagedDisadvantagedNativeNative (foreign-bornparents)Foreign-born%20182022 
 
     
 
for  upskilling  VET  teachers  and  developing  green 
curricula  and  green  equipment  for  VET-schools 
amounting  to  approximately  EUR 28 million.  The 
ESF+  supports  measures 
the 
attractiveness of VET as well as several upskilling 
and  reskilling  measures  for  young  people  and 
adults. 

increase 

that 

Denmark  excels 
in  digital  skills,  but 
challenges  remain  in  meeting  ICT  demand 
and 
In 
increasing  women’s  participation. 
2023, 69.6% of the population aged 16-74 had at 
least basic digital skills, compared to 55.6% across 
the  EU.  Danish  students  rank  among  the  best  in 
the  EU (238)  in  computer  and  information  literacy, 
with  only  32%  of  low  achievers  in  2022  (EU 
average: 43%). However, additional efforts are still 
required  to  reach  the  EU-level  target  of  15%. 
Persistent  shortages  in  ICT  remain  a  challenge 
(see Annex 10), and attracting young people to the 
sector  is  difficult,  with  only  5.5%  of  graduates 
earning  an 
ICT-related  degree.  While  girls 
outperform boys on basic digital skills by 11.3 pps, 
(EU 
are 
7.9 pps), 
underrepresented  in  ICT,  making  up  23.9%  of  all 
students in the field, though above the EU average 
ICT 
(20.1%).  Similarly,  the  share  of  female 
students  relative  to  all  female  students 
is 
relatively  high  (2.2%,  EU  average:  1.9%).  The 
Ministry  of  Education  has 
the 
development  of  digital  tools  and  resources  for 
teachers  and  students,  enhancing  STEM  learning 
through 
content. 
interactive  and  engaging 
Increased  collaboration  between  primary  and 
secondary schools and universities has also led to 
joint  projects  and  initiatives  that  expose  students 
to  advanced  STEM  concepts  and  research.  To 
address  the  gender  gap,  some  universities  in 
Denmark  have  launched  targeted  initiatives  to 
encourage women to pursue STEM studies. 

supported 

average: 

women 

Denmark’s  tertiary  educational  attainment 
rate  has  increased  significantly  in  the  past 
decade,  but  the  share  of  STEM  students 
remains  relatively  low.  At  51.2%  in  2024,  the 
tertiary  educational  attainment  rate  is  both  well 
above  the  EU  average  (44.2%)  and  the  EU-level 
target  (45%).  However,  in  2022,  only  23.9%  of 
students  were  enrolled  in  STEM  studies,  slightly 
below the EU average, while among VET students, 
45.1%  were  enrolled  in  STEM  fields  (EU  average: 

(238) International Computer and Information Literacy Study 

(ICILS) 2023. 

80 

36.2%).  Various  measures 
to  make  STEM 
education  more  accessible  and  attractive  for 
students  include  curriculum  development,  funding 
and  grants,  teacher  training,  partnerships  with 
industry, extracurricular programmes, research and 
innovation  and  public  awareness  campaigns. 
Nevertheless,  learning  facilities,  student  support 
services,  clarity  of  teaching  and  labour  market 
readiness still have scope for improvement (239). 

Higher  education  reforms  focus  on  greater 
flexibility and shortening study programmes. 
This  applies  in  particular  to  Masters  degrees, 
enabling  Danish  students  (who  characteristically 
have  long  study  durations)  to  enter  the  labour 
market faster and better prepared, easing existing 
skill shortages. A key innovation is that students in 
shortened Masters programmes obtain the right to 
return  to  university  later  in  life  for  additional 
education.  Along  with  other  initiatives,  this makes 
the  Danish  lifelong  learning  system  more  flexible 
and  strengthens 
integration  of  higher 
education. 

the 

intensive 

in  energy 

Participation in adult learning has fallen, but 
Denmark  has  made  progress 
in  energy 
intensive industries. Yearly participation in adult 
learning slightly decreased from 50.4% in 2016 to 
47.1%  in  2022.  This  is  below  the  headline  EU 
2030  target  of  60%  (which  is  also  Denmark’s 
target),  but  well  above  the  EU  average  of  39.5%. 
in  education  and 
Nevertheless,  participation 
industries  has 
training 
increased,  with 
in 
education and training in the last four weeks rising 
from  14.3%  in  2020  to  25.3%  in  2024  (the  EU 
average  only  increased  from  7.6%  to  11.1%).  In 
2024, 
in 
shortages  were 
occupations  requiring  specific  skills  related  to  the 
environmental 
green 
engineers,  environmental  protection  professionals, 
and 
production 
managers (240).  Although  Denmark  is  performing 
better than the EU average, boosting participation 
tackle 
in  adult 

the  share  of  employees 

remains  crucial 

agricultural 

transition, 

including 

reported 

learning 

forestry 

labour 

and 

to 

(239) DEA (2024), KVALITET PÅ STEM. 

(240) European Labour Authority 2025, EURES Report on labour 
shortages and surpluses 2024, based on data from EURES 
National Coordination Offices. Skills and knowledge 
requirements align with the ESCO taxonomy on skills for the 
green transition, with examples analysed using the ESCO 
green intensity index. 

 
 
 
 
shortages  in  key  sectors  and  sustain  Denmark’s 
competitiveness. 

81 

 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Denmark 

(1) Update of 5 May 2025. Members 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 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

82 

47,110,469,68,06,54,1680,26,20,8122,618,015,950,426,114,662,93,1Critical situationTo watchWeak but improvingGood but to monitorOn averageSocial Scoreboard for DenmarkEqual 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, 2024)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, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Better than averageBest performers 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Denmark’s  health  system  fares  relatively 
well, with high life expectancy at birth linked 
to  low  levels  of  treatable  and  preventable 
mortality  and  a  high 
level  of  sound 
digitalisation.  However,  shortages  of  health 
professionals  (general  practitioners  and  nurses  in 
certain regions, and also hospital doctors in some 
specialty  areas),  and  an  uneven  geographical 
distribution  of  healthcare  resources,  pose  a 
challenge.  These  issues  could  be  rectified  given 
the  high 
level  of  funding  available  for  the 
country’s health system. 

Life  expectancy  at  birth  in  Denmark  is 
slightly  above  the  EU  average.  However, 
mortality  due  to  cancer  is  high.  In  2023,  life 
expectancy  at  birth  stood  at  81.8  years, 
rebounding above its pre-COVID-19 level. There is 
a clear gender gap in Denmark, with women living 
3.8  years  longer  than  men.  However,  women  live 
2.5  more  of  their  years  in  bad  health  than  men. 
Compared  to  other  EU  countries,  Denmark  had 
lower  rates  of  mortality  from  preventable  and 
treatable  diseases  in  2022.  This  points  to  the 
effectiveness  of  the  public  health  and  healthcare 
system in preventing deaths from such conditions. 
In 2022, the leading causes of death were cancer, 
cardiovascular  diseases,  followed  by  diseases  of 
the 
in 
respiratory  system.  Cancer  mortality 
Denmark  was  260  per  100 000  population  in 
2022, above the EU average of 235. Lung cancer 
remains  the  most  frequent  cause  of  death  by 
cancer,  followed  by  colorectal  cancer.  This  has 
prompted a number of initiatives to prevent cancer 
(such  as  policies  to  reduce  smoking)  and  to 
promote  better  access  to  cancer  screening  and 
treatment.  Denmark  participates  in  EU4Health-
funded  joint  actions  aimed  at  cancer  and  other 
non-communicable 
anti-microbial 
resistance,  e-health,  the  European  Health  Data 
Space,  clinical  trials,  medicine  shortages  and  the 
European Reference Networks for rare diseases. 

diseases, 

Graph A14.1: Life expectancy at birth, years 

Source: Eurostat (demo_mlexpec) 

Denmark’s  health  system  performs  well  in 
delivering  services  to  the  population,  with  a 
focus on primary care. In 2022, health spending 
per  inhabitant  was  among  the  highest  in  the  EU. 
The largest share of health spending goes towards 
outpatient care (36.4%). This, together with a low 
number  of  hospital  beds  (195  per  100 000 
population  in  2022,  among  the  lowest  in  the  EU), 
clearly  illustrates  Denmark’s  outpatient-centred 
care model. Out-of-pocket payments account for a 
slightly smaller proportion of spending on health in 
Denmark  (13%)  than  the  EU  average  (14.3%). 
Nearly  half  of  all  out-of-pocket  payments  are  for 
outpatient pharmaceuticals, the next highest share 
being for dental services (241). Spending on primary 
care  services  as  a  share  of  current  health 
expenditure  is  very  close  to  the  EU  average  for 
dental  care  and  relatively  close  for  general 
outpatient  care  (242).  Through  its  recovery  and 
resilience  plan  (RRP),  Denmark  invests  EUR  33 
million  in  healthcare.  The  Danish  RRP  includes 
investments aimed at ensuring sufficient stocks of 
critical medicines and improving the infrastructure 
for  managing 
and  monitoring  medical 
countermeasures 
in  an  emergency.  A  new 
agreement  between  the  Ministry  of  the  Interior 
and  Health  and  the  Danish  Pharmacy  Association 
strengthens 
primary 
for  2025–2026 
healthcare.  The  agreement 
to  offer 
funding 
allocates 
telephone  and  digital  counselling  to  healthcare 
and  care  professionals  and  relatives  managing 
medications (243). 

for  pharmacies 

pharmacies’ 

role 

in 

(241) OECD/European Commission (2024), Health at a Glance: 

Europe 2024 - State of Health in the EU Cycle, pp. 186-187. 

(242) Health at a Glance: Europe 2024, pp. 151. 
(243) https://www.ism.dk/nyheder/2025/januar/ny-aftale-styrker-

apotekernes-rolle-i-det-naere-sundhedsvaesen 

83 

81.581.681.581.381.881.380.480.180.681.420192020202120222023DenmarkEU 
 
        
 
 
 
Table A14.1:Key health indicators 

*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 based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents 
Source:  Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

Graph A14.2: Treatable mortality 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

its 

on 

to  COVID-19,  Denmark 
spending 

As  regards  public  health,  there  is  scope  for 
further  improvement  on  disease  prevention. 
In  2022,  the  share  of  spending  directed  at 
prevention  in  Denmark  dropped  to  5%  of  total 
spending  on  health,  bringing  it  below  the  EU 
average  of  5.5%.  Between  2019  and  2021  and 
significantly 
linked 
increased 
immunisation 
programmes, epidemiological surveillance and risk 
and  disease  control  programmes.  The  rate  of  the 
increase was around 300%, greatly exceeding the 
EU  average  increase  of  106%.  Other  areas  for 
improvement  include  increasing  the  consumption 
of  fruit  and  vegetables,  which  is  currently  below 
the  EU  average,  and  reducing  vaping  among  15–
24-year-olds,  which  is  above  the  EU  average 
according  to  2022  figures.  For  other  lifestyle 
factors,  Denmark  performs  better  than  the  EU 
“Better  Psychiatry 
average.  As  part  of 
Agreement” 
the 
2023, 
government  and  agreement  parties  have  decided 
to  improve  access  to  regional  acute  psychiatric 

November 

from 

the 

services, 
including  via  an  acute  psychiatric 
emergency  hotline  integrated  into  the  existing 
emergency 
via 
reinforcements with psychiatric expertise (244). 

response 

system 

and 

Denmark  has  more  doctors  and  nurses  per 
1 000 population 
the  EU  average 
than 
according  to  2022  figures,  but  specific 
workforce  shortages  pose  a  challenge.  There 
were  1  034  practising  nurses  per  100 000 
inhabitants in 2022, significantly more than the EU 
average  of  756.  For  several  years,  doctor  density 
in  Denmark  (around  4.5  per  1 000 population  in 
2022)  has been above the EU  average of 4.2 per 
1 000.  However,  doctor  density  appears  to  be 
higher in the capital region of Copenhagen and in 
other  major  cities  than  in  remote  and  sparsely 
populated  regions.  While  the  number  of  doctors 
to  population  size  has 
and  nurses  relative 
increased over the past decade, the growth in the 
number  of  nurses  has  been  more  modest.  The 
increase in doctors relative to population size has 
solely been due to an increase in specialists, while 
the  density  of  general  practitioners  (GPs)  has 
remained  unchanged.  However, 
in  2024,  the 
government  adopted  a  wide-ranging  health 
reform, the largest in Denmark in almost 20 years 
(245),  aiming  to  reduce  waiting  times,  strengthen 
free choice of health and care places and a better 
distribution of GPs, specialists and hospital doctors 
(on  top  of  increased  supply),  as  well  as  chronic 
care packages ensuring more integrated care. 

(244) https://www.ism.dk/nyheder/2025/januar/aftale-om-national-

psykiatrisk-akuttelefon-er-paa-plads 

(245) Historisk reform flytter sundhedsvæsenet tættere på 

borgerne | Indenrigs- og Sundhedsministeriet 

84 

73.066.263.564.364.091.389.291.793.389.720182019202020212022per 100 000 populationDenmarkEU20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population282.5271.0270.6259.6n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 215.3 207.4 211.8 210.8n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 7643 9984 4104 154n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 83.7 84.3 85.1 84.6 83.581.3 (2022)Spending on prevention, % of current health expenditure 2.23.28.85.02.55.5 (2022)Available hospital beds per 100 000 population** 208 207 199 195n.a.444 (2022)Doctors per 1 000 population*4.34.44.5n.a.n.a.4.2 (2022)*Nurses per 1 000 population* 10.1 10.2 10.3n.a.n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality14.013.512.912.312.314.3 (2023)Number of patents (pharma / biotech / medical technology)28927424312920029 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****15.314.314.415.216.220.0 (2023) 
        
 
 
      
 
above the EU median of 29. The country has also 
held a high number of clinical trials (251). 

aims 

accelerate 

Denmark 
the 
to 
digitalisation  of  its  health  system,  with 
support  from  EU  programmes.  It  has  among 
the  highest  shares  in  the  EU  of  people  accessing 
their  personal  health  records  online  and  making 
telemedicine/  online  health  services 
use  of 
(excluding 
in-person 
consultations.  Denmark’s  RRP  also  focuses  on 
strengthening  digital  solutions  in  the  healthcare 
in  e-health 
sector,  with  planned 
services and applications.  

investments 

instead 

phone) 

of 

The  retention  of  nurses  in  public  hospitals 
has  become  a  growing  challenge.  Between 
2020  and  2022,  the  number  of  nurses  employed 
in  public  hospitals  decreased,  with  many 
transferring to other types of healthcare facility  – 
notably  in  the  municipal  health  sector  and  to  a 
lesser extent in private hospitals. Overall, in 2022, 
around  4  700  nursing  positions  were  unfilled  in 
hospitals.  The  number  of  nursing  graduates  per 
100 000 inhabitants is also below the EU average. 
Moreover,  more  than  a  quarter  (around  29%)  of 
nurses  are  aged  55  and  over,  which  raises 
concerns  about  the  sustainability  of  workforce 
numbers,  especially  given  the  shortages  of  GPs 
and  hospital  doctors  in  some  specialty  areas 
mentioned above. These workforce shortages have 
made  it  impossible  to  reduce  the  backlog  of 
patients  on  waiting  lists  and,  by  extension,  the 
waiting  times  for  surgical  interventions.  In  2022, 
the  Danish  government  agreed  on  a  reform  to 
including  by 
strengthen 
improving  medical  coverage  in  areas  with  a 
shortage of doctors (246). The government also set 
up  a  ‘Resilience  Commission’  to  look  at  staff 
shortages  and  recruitment  issues.  In  2023,  the 
government announced a package of measures to 
address staff shortages and long waiting lists (247). 
Moreover,  the  Government  established  the  Health 
Structure Commission in March 2023 with the task 
of proposing solutions to ensure a preventive and 
coherent  healthcare  system  with  more  equality 
and that is close and sustainable (248).   

the  health  system, 

health 

system 

development 

Denmark’s 
contributes 
significantly  to  innovation  and  industrial 
in  the  EU  medical  sector. 
development 
Denmark  is  among  the  EU  countries  that  report 
considerable  public  spending  on  health  research 
(249), 
and 
private 
investment by large corporations headquartered in 
the  EU  and  by  the  pharmaceutical  sector  in 
general.  Denmark  was  granted  200  European 
patents 
in  the  combined  areas  of 
pharmaceuticals,  biotechnologies  and  medical 
technologies  (250).  This  is  a  remarkably  high 
number  for  a  relatively  small  EU  country,  and  far 

alongside 

in  2023 

(246) See https://commission.europa.eu/system/files/2023-

05/2023-Denmark-NRP_en.pdf. 

(247) See: https://eurohealthobservatory.who.int/monitors/health-
systems-monitor/updates/hspm/denmark-2012/acute-
package-to-address-waiting-lists-and-staff-shortages. 
(248) https://www.ism.dk/temaer/sundhedsstrukturkommissionen 
(249) For further details, see Annex 3. 
(250) European Patent Office, Data to download | epo.org. 

(251) EMA (2024), Monitoring the European clinical trials 

environment, p. 9. 

85 

 
 
 
 
 
 
 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Denmark’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
sustainability,  social  fairness  and  macro-
economic  stability.  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 
inequalities  and  tackle  climate 
poverty,  fight 
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 
the EU. 

Denmark  performs  well  on  all  SDGs  on 
competitiveness 
is 
progressing towards SDGs 8 and 9. The share 
internet 
of  households  with  a  high-speed 

(SDGs 4,  8,  9)  and 

Graph A15.1: Progress towards the SDGs in Denmark 

connection  (SDG 9)  increased  between  2019  and 
2023 (from 93% to 97.2%) and is well above the 
EU  average  (78.8%  in  2023).  After  several  years 
of lower R&D intensity, Denmark’s gross domestic 
expenditure  on  R&D  increased  again  to  2.99%  of 
GDP  in  2023,  above  the  EU  average  (2.24%  in 
2023).  The  number  of  patent  applications  to  the 
European  Patent  Office  per  million  inhabitants 
reached  431  in  2024,  well  above the  EU  average 
(156  in  2024).  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 static between 2019 
and 2024, when it reached 10.4%; the situation is 
slightly worse than the EU average (9.3% in 2024). 
The  recovery  and  resilience  plan  (RRP)  includes 
measures 
remaining 
digitalisation  challenges  and  to  promote  green 
upskilling. 

tackle 

help 

the 

to 

Denmark is progressing towards all the SDGs 

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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

86 

 
 
 
 
 
 
 
 
related  to  poverty,  quality  education,  clean  and 
affordable energy, inclusive growth and inequality 
(SDGs 1, 4, 7, 8, 10). On reduced inequalities (SDG 
10),  Denmark  has made  progress  in  all  indicators 
related 
to  education  and  employment  gaps 
between  EU  and  non-EU  citizens.  The  gap  has 
narrowed  in  particular  for  the  number  of  young 
people  not  in  employment,  education  or  training 
(1.3  percentage  points  (pps)  difference  between 
EU  and  non-EU  citizens  in  2024,  compared  to 
5.2 pps in  2019) and for employment rate (8 pps 
difference  between  EU  and  non-EU  citizens  in 
2024,  compared  to  19.2 pps  in  the  EU  average). 
Both  values  were  considerably  below  EU  average 
in  2024.  Denmark’s  performance  on  several 
indicators  related  to  poverty  has  deteriorated,  as 
evidenced  by  (i)  an  increase  in  the  share  of  the 
population experiencing severe material and social 
deprivation (from 3.5% in 2018 to 4.9% in 2023); 
(ii) an increase in the housing cost overburden rate 
(14.7%  in  2018  to  15.4%  in  2023)  and  (iii)  an 
increase  in  the  share  of  the  population  reporting 
that  their  medical  needs  were  not  met  (1.3%  in 
2018  to  2.7%  in  2023).  The  share  of  the 
population unable to keep their homes adequately 
warm (SDG 7) increased between 2018 and 2023 
but  is  still  significantly  below  the  EU  average 
(6.9% vs 10.6% in 2023). 

Denmark performs well on and is progressing 
towards  all  SDGs  related  to  macroeconomic 
stability (SDGs 8, 16, 17). The country performs 
very  well  on  peace  and  justice  indicators,  with  a 
high  level  of  trust  in  its  institutions  (SDG 16).  In 
2024,  the  perception  of  corruption  was  much 
lower  than  the  EU  average.  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 half 
the EU average (0.8% vs 1.9% in 2024). Real GDP 
per capita (EUR 60 510 in 2024) is almost double 
the  EU  average  (EUR 33 530  in  2024).  The  share 
of  environmental  taxes  in  total  tax  revenues  was 
4.7% in 2023; it was 8.1% in 2018. 

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

final 

energy 

in  gross 

issuance  by 

related to  sustainability (SDGs 2, 6, 7, 9, 11, 
12, 13, 14, 15). Denmark performs well on all 
SDGs  in  this  area  but  SDG  2  (Zero  hunger) 
and SDG 15 (Life on Land), where the country 
scores slightly below EU average. The share of 
renewable 
energy 
consumption (SDG 7) increased considerably, from 
35.2% in 2018 to 44.4% in 2023, well above the 
EU average (24.6% in 2023). Net greenhouse gas 
emissions (SDG 13) decreased from 9.1 tonnes per 
capita  in  2018  to  6.5  tonnes  per  capita  in  2023, 
moving  closer  to  the  EU  average  (6.8  tonnes  per 
capita  in  2023).  Net  greenhouse  gas  emissions 
from  land  use  and  forestry  (SDG 13)  decreased 
significantly  from  57.9  tonnes  CO2  eq.  per  km²  in 
2018  to  -11.7  tonnes  in  2023,  a  figure  which  is 
nevertheless  higher  than  the  EU  average  (-47 
tonnes  CO2  eq.  per  km²  in  2023).  The  share  of 
green  bonds 
corporates  and 
governments  in  total  bond  issuance  (SDG 13)  in 
2023  was  higher  than  the  EU  average  (16.6%  vs 
6.8%).  On  waste  generation  and  management 
(SDG 12),  the  circular  material  use  rate  increased 
from 8.1% to 9.1% between 2018 and 2023 and 
in  2023). 
is  below  the  EU  average  (11.8% 
However,  the  recycling  rate  of  municipal  waste 
(SDG 11)  decreased  between  2017  (47.6%)  and 
2022 (45.7%) and is below the EU average (48.7% 
in  2022).  After  a  period  of  increase,  the  material 
footprint  (SDG 12)  decreased  to  21.9  tonnes  per 
inhabitant  in  2023.  It  remains  well  above  the  EU 
average  (14.2  tonnes  per  inhabitant  in  2022).  In 
terms  of  SDG 14  (Life  below  water),  Denmark  is 
performing slightly better than the EU average on 
terrestrial 
indicators.  The  share  of 
several 
is 
(SDG 15) 
protected  areas 
significantly below the EU average (15.1% of total 
area,  vs  26.1%  in  2022).  Measures  included  in 
Denmark’s  RRP  support  the  green  transition  and 
incentivising  the 
decarbonisation  priorities  by 
phase-out  of  fossil  fuels 
in  district  heating, 
accelerating  the  deployment  of  renewable  energy 
sources, promoting sustainable transport, fostering 
taxing 
green 
greenhouse gas emissions. 

innovation  and 

research  and 

in  Denmark 

Denmark performs well on and is progressing 
towards most SDGs related to social fairness 
(SDGs 5, 7, 8, 10). Denmark performs well on 
SDG  1  (No  poverty)  and  SDG  3  (Good  health 
and  well-being),  and  very  well  on  SDG  4 
(Quality  Education).  However,  it  is  moving 
slightly  away  from  these  SDGs.  The  country 
performs above the EU average on most indicators 

87 

 
 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

programmes  is  advanced  and  implementation  of 
selected projects has gained momentum.  

The Danish RRP contains 48 investments and 
12  reforms  to  stimulate  sustainable  growth, 
with a focus on supporting the green transition of 
the  economy,  increasing  energy  efficiency  and 
reducing CO2 emissions.  A  year  before the  end  of 
the  RRF  timespan,  implementation  is  well  on  its 
way with 67% of the funds disbursed. At present, 
Denmark  has  fulfilled  57%  of  milestones  and 
targets  in  its  RRP  (256).  With  sustained  effort, 
Denmark  should  be  able  to  complete  all  RRP 
measures by 31 August 2026. 

Denmark  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed  in 
Table A16.1. Most notably, as a Member State with 
a  significant  agricultural  sector,  Denmark  is  a 
sizeable  recipient  of  funds  under  the  common 
(CAP).  The  CAP  provides 
agricultural  policy 
Denmark with an EU contribution of EUR 4.8 billion 
under  the CAP  strategic  plan  for  2023-2027  (257). 
Furthermore,  operations  amounting  to  EUR  865.9 
million  (258)  have  been  signed  under  the  InvestEU 
instrument backed by the EU guarantee, improving 
access  to  financing  for  riskier  operations 
in 
Denmark. 

Denmark faces structural challenges in some 
policy  areas,  as  identified  in  the  country-
specific  recommendations  (CSRs)  addressed 
to the to the country as part of the European 
Semester.  They  refer,  among  other  things,  to 
infrastructure  and 
renewable  energy,  energy 
resource 
networks,  environmental  policy  and 
management, 
vocational 
education, 
education and training, and private-sector debt. 

skills, 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
Denmark to date and the commitments in its 
recovery  and  resilience  plan  (RRP).  At  this 
stage, Denmark has made at least ‘some progress’ 
on 94% of the CSRs (252), and ‘limited progress’ on 
100% (Table A16.2). 

to 

reforms 

EU funding instruments provide resources to 
investments  and 
Denmark  by  supporting 
increase 
structural 
competitiveness, 
environmental 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 1.6  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (253) 
to  Denmark 
are  providing  EUR 0.5  billion 
(amounting  to  EUR 0.9  billion  with  national  co-
financing)  for  2021-2027  (254)  to  boost  regional 
competitiveness  and  growth.  Support  from  these 
instruments  combined  represents  0.55%  of  2024 
GDP (255). The contribution of these instruments to 
different  policy  objectives  is  outlined  in  Graphs 
A16.1  and  A16.2.  This  support  comes  on  top  of 
financing  provided  to  Denmark  under  the  2014-
2020  multiannual  financial  framework,  which 
financed projects until 2023 and has had benefits 
for  the  economy  and  Danish  society.  Project 
selection  under  the  2021-2027  cohesion  policy 

(252) 17% of the 2019-2024 CSRs have been fully implemented, 
37% substantially implemented, and some progress has 
been made on 40%. 

(253) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025. 

(254) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

(255) RRF funding includes both grants and loans, where 

(256) As of mid-May 2025, Denmark has submitted 3 payment 

requests. 

(257) An overview of Denmark’s formally approved strategy to 
implement the EU’s common agricultural policy nationally 
can be found at: https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/denmark_en  

applicable. GDP figures are based on Eurostat data for 2024. 

(258) Data reflect the situation on 31.12.2024. 

88 

 
 
 
 
 
 
Graph A16.1: Distribution of RRF funding in 
Denmark by policy field 

ESF+ allocation) to support upskilling and reskilling 
measures  to  help  people  develop  the  skills  and 
competencies  needed  for  the  green  and  digital 
transitions. 

(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 circle 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. 
Source: European Commission. 

Graph A16.2: Distribution of cohesion policy funds 
across policy objectives in Denmark 

Source: European Commission 

Cohesion  policy  funds  aim  to  increase  the 
productivity  and  competitiveness  of  Danish 
firms and improve the business environment. 
The  European  Regional  Development  Fund  (ERDF) 
and  the  Joint  Transition  Fund  (JTF)  will  support 
over  11 500  businesses.  Among  these,  2 200 
small  and  medium-sized  enterprises  (SMEs)  are 
investing  in  skills  for  smart  specialisation,  for 
industrial  transition  and  entrepreneurship,  over 
400  companies  are  cooperating  with  research 
organisations  to  boost  research  and  innovation 
and  almost  100  SMEs  are  expected  to  develop 
new and innovative products or solutions. Denmark 
is also using over EUR 50 million from the JTF for 
the  Strategic  Technologies  for  Europe  Platform to 
develop  cleantech  and  related  value  chains  and 
skills  in  North  and  South  Jutland.  In  addition,  the 
European  Social  Fund  Plus  (ESF+)  is  providing 
around  EUR 88  million  (about  74%  of  the  total 

are 

funds 

contributing 

to 
Other 
competitiveness  in  Denmark,  for  instance 
through  open  calls.  The  Connecting  Europe 
Facility has supported strategic investments in rail 
infrastructure,  such  as  the  Fehmarn  Belt  Tunnel 
between  Denmark  and  Germany. 
It  also 
contributed  to  energy  market  integration,  the 
decarbonisation  of  the  energy  system  and  the 
security  of  energy  supply,  in  particular  through 
improved electricity interconnectivity. In the digital 
sector, it has strengthened the capacity, resilience 
infrastructure  by 
and  security  of  backbone 
deploying  submarine  cables  and  it  has  advanced 
the  deployment  of  5G  along  transport  corridors. 
Horizon  Europe  has 
research  and 
innovation  across  the  spectrum,  from  scientific 
breakthroughs  to  scaling  up  innovations,  with  the 
European  Research  Council  and  Climate,  Energy 
and  Mobility  as  top  priorities.  In  Denmark,  the 
Technical  Support  Instrument  (TSI)  has  provided 
assistance  in  key  areas,  including  the  preparation 
of  the  Social  Climate  Plan,  the implementation  of 
a  revised  emissions  trading  system  and  the 
alignment with the Net Zero Industry Act. 

funded 

to 

the 

Denmark’s  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  As  part  of 
the  measures  covered  by  payment  requests 
submitted  over  the  past  year,  550  SMEs  received 
funding for digital projects to support their digital 
transformation.  This  initiative  is  expected  to  be 
particularly  important  for  economic  recovery,  as 
SMEs have been among the most affected by the 
crisis.  In  addition,  500  firms  benefited  from  a 
130%  tax  deduction  for  private-sector  research 
and  development  expenses  in  the  2022  financial 
year.  The  measure  aims  to  front-load  investment 
in research and development. The deduction is also 
expected 
to 
increasingly engage in research and development, 
since they qualify for the deduction as well. 

to  encourage 

smaller 

firms 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
in  Denmark  during  the 
green  transition 
current  seven-year  EU  budget  (multiannual 
financial  framework).  EUR 156.5  million  from 
the  ERDF  and  JTF  are  used  to  support  the  green 
transition.  The  aim  of  this  funding  is  to  reduce 

89 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
      
 
      
greenhouse  gas  emissions 
in  Denmark  by 
260 000 t  CO2  eq./year,  transform  over  26 000 
tonnes  of  waste  into  raw  materials  and  support 
fair  climate  transition  by  creating  over  800  new 
jobs  and  upskilling  and  reskilling  over  3 000 
workers  in  SMEs  in  the  most  affected  regions. 
Denmark’s  CAP  strategic  plan  allocates  EUR 432 
million  (66%  of  rural  development  funding)  to 
environmental and climate objectives and EUR 819 
million (20% of direct payments) to eco-schemes, 
supporting  biodiversity,  organic 
farming  and 
sustainable  practices.  For  example,  farmers  that 
crop  diversification  or  establish 
implement 
wetlands,  forests  or  grassland  can  receive  extra 
support.  To  preserve  and  protect  biodiversity,  the 
CAP  strategic  plan  promotes  the  inclusion  and 
maintenance  of  landscape  features  on  farms.  On 
top  of  the  spending  under  the plan,  Denmark  has 
kept  the  requirement  for  farmers  that  4%  of 
productive land must lie fallow in 2025. 

Denmark’s  RRP,  including  the  REPowerEU 
chapter, has a comprehensive set of reforms 
and investments for the green transition. The 
Danish  RRP  includes  support  for  a  study  into  the 
technical  and  economic  feasibility  of  CO2  storage 
in depleted oil and gas fields in the Danish part of 
the  North  Sea.  Also,  the  RRP  supported  the 
drawing-up  of  recommendations  on  concrete 
models for a uniform CO2-equivalent tax and cost-
efficient  reductions 
in  greenhouse  gases  by 
increasing taxes on fossil fuels. 

Promoting  fairness,  social  cohesion  and 
improving  access  to  basic  services  are 
among  the  key  priorities  of  EU  funding  in 
Denmark.  In  Denmark,  the  ESF+  fosters  social 
inclusion  with  a  focus  on  actively  supporting 
vulnerable  people 
integration  and 
participation  into  the  labour  market.  ESF+  will 
support  at  least  1 500  people  who  are  homeless 
or  at  risk  of  homelessness,  and  at  least  4 600 
people on the margins of the labour market. 

towards 

Denmark’s RRP contains several reforms and 
investments  related  to  fairness  and  social 
policies.  The  Danish  RRP  supported  a  study 
conducted  by  Aarhus  University  Hospital  on  the 
effects  and  side  effects  of  COVID-19  vaccines  to 
be  made  available  to  the  Danish  Ministry  of 
Health. 

90 

 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the Member 
State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-2020 allocation. The 
cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off date for data on disbursements 
under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI- Border Management and Visa Instrument; ISF - Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is based on the 
Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started in 2024. 
Source: European Commission 

91 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)1 092.0RRF loans0 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total) 630.1 455.7 483.8European Regional Development Fund (ERDF) 362.4 247.2 275.7European Social Fund (ESF, ESF+) 267.7 119.6 180.0Just Transition Fund (JTF) 89.0 28.1European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF)209.0 201.0132.9Migration, border management and internal security - AMIF, BMVI and ISF (4)24.6 37.2 18.7The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan1 680.2European Agricultural Guarantee Fund (EAGF)1 590.2European Fund for Agricultural Development (EAFRD)90.0Allocation 2023-20274 809.34 156.5652.9Allocation 2021-2026 1 625.90FisheriesMigration and home affairs 
 
 
             
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

92 

DenmarkAssessment in May 2025Relevant SDGs2019 CSR 1Some progressFocus investment-related economic policy on education and skills,Some progressSDG 4researchandinnovationtobroadentheinnovationbasetoincludemorecompanies, Substantial progressSDG 9and on sustainable transport to tackle road congestion.Substantial progressSDG 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 AddSDG 8, 16Enhancetheresilienceofthehealthsystem,includingbyensuringsufficientcriticalmedicalproductsandaddressingtheshortageofhealth workers. Substantial progressSDG 32020 CSR 2Substantial progressFront-load mature public investment projects andSubstantial progressSDG 8, 16promote private investment to foster the economic recovery. Full implementationSDG 8, 9Focus investment on the green and digital transition, in particular on clean and efficient production and use of energy,Substantial progressSDG 7, 9, 13sustainable transport Substantial progressSDG 11as well as research and innovation. Substantial progressSDG 9Supportanintegratedinnovationstrategywithabroaderinvestmentbase. Substantial progressSDG 92020 CSR 3Substantial progressImprove the effectiveness of anti-money laundering supervision and effectively enforce the anti-money laundering framework. Substantial progressSDG 8, 16 
 
 
  
 
Table (continued) 

(Continued on the next page) 

93 

2021 CSR 1Not Assessed / No Input to AddIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment.Not Assessed / No Input to AddSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not Assessed / No Input to AddSDG 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 AddSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,includingbystrengtheningthecoverage,adequacy,and sustainability of health and social protection systems for all.Not Assessed / No Input to AddSDG 8, 162022 CSR 1Some progressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspending to the evolving situation.Not Assessed / No Input to AddSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandotherUnionfunds.Not Assessed / No Input to AddSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudent medium-term fiscal positions.Not Assessed / No Input to AddSDG 8, 16Implementthenewpropertytaxsysteminordertorestorethelinkbetween market prices and taxes and ensure fairer taxation.Substantial progressSDG 8, 10, 12Stimulateinvestmentinconstructionofaffordablehousingtoalleviatethe most pressing needs.Some 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 3Some progressStrengthencirculareconomyandwastemanagementpoliciesincludingbypromotingwastepreventionandreuse,increasingrecycling,andgraduallyshiftingawayfromincinerationofmunicipalwastetogreenersources of heat generation.Some progressSDG 6, 12, 152022 CSR 4Some progressReduceoverallrelianceonfossilfuels.FurtherdiversifyenergysupplyandSome progressSDG 7, 9, 13helpdecarbonisetheeconomybyacceleratingthedeploymentofrenewables,includingbyintroducingreformstosimplifyandexpediteadministrative and permitting procedures,Some progressSDG 7, 8, 9, 13upgradingenergytransmissionnetworks,increasinginterconnectionswith neighbouring countriesSome progressSDG 7, 9, 13and improving energy efficiency.Some progressSDG 7RRP 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. 
 
 
  
 
Table (continued) 

(Continued on the next page) 

94 

2023 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 implementationSDG 8,16While maintaining a sound fiscal position in 2024,Full implementationSDG 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 implementationSDG 8,16Fortheperiodbeyond2024,continuetopursueinvestmentandreformsconducivetohighersustainablegrowthandpreserveaprudentmedium-term fiscal positionFull implementationSDG 8,16Implement the new property tax system in order to restore the link between market prices and taxes and ensure fairer taxation.Substantial progressSDG 8, 10, 12Accelerateinvestmentintheconstructionofaffordablehousingtoalleviate the most pressing needs.Limited progressSDG 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 progressSGD 12, 6, 152023 CSR 4Some progressReduce reliance on fossil fuels andSome progressSDG 7, 9, 13increase the share of renewables in the energy supply.Substantial progressSDG 7, 9, 13Address increasing demand and flexibility needs by incentivising the necessary electricity network developments at transmission and distribution level.Some progressSDG 7, 9, 13Streamline the applicable permit-granting rules for renewable energySome progressSDG 7, 8, 9, 13Implementadditionalmeasuresthatsupportenergyefficiencyinprivateand public buildings to reduce energy bills and energy system costs.Some progressSDG 7Ensure a better roll-out of decarbonised heating sources.Substantial progressSDG 7, 9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionoftheskillsneeded for the green transition.Some progressSDG 4RRP 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) 

Source: European Commission. 

95 

2024 CSR 1Full implementationSubmit the medium-term fiscal-structural plan in a timely mannerFull implementationSDG 8, 162024 CSR 2Continuewiththeswiftandeffectiveimplementationoftherecoveryandresilienceplan,includingtheREPowerEUchapter,ensuringcompletionofreformsandinvestmentsbyAugust2026.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreview,continuefocusingontheagreedpriorities,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologiesforEurope Platform initiative to improve competitiveness2024 CSR 3Some progressTakefurthereffortsforsustainableagriculturebysteppingupdecarbonisation measures and action to reduce nutrient lossesSome progressSDG 12, 6, 15RRP 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. 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

Denmark’s  capital 
region,  Hovedstaden, 
continues  to  lead  the  country’s  economy, 
outperforming other regions in terms of GDP 
growth, productivity, innovation and peoples’ 
skills  and  education  level.  While  all  regions 
enjoy  favourable  labour  market  conditions,  the 
rural-urban  divide  is  reflected  in  terms  of  social 
indicators,  such  as  poverty  and  the  level  of 
education.  

Competitiveness 

for 

43% 

accounts 

Hovedstaden 
of 
Denmark´s  GDP  and  its  long-term  annual 
GDP  per  head  growth  exceeds  the  EU 
average. The other four regions show lower long-
term  growth  rates  below  the  EU  average  and 
declining  GDP  per  head  relative  to  the  national 
average. Sjaelland, with its further decreasing GDP 
per  head  (88%  of  the  EU  average),  remains  the 
only  region  to  be  categorised  as  a  'transition 
region' under cohesion policy. It is closely followed 
by Nordjylland, which is slightly below the EU GDP 
per head average at 98% (Graph A17.1).  

Graph A17.1: Average annual real GDP per head 
growth vs GDP per head in 2013 

the 

and 

productivity  growth  has  widened  between  the  top 
lowest, 
performer,  Hovedstaden, 
Nordjylland. This coincides with differences in R&D 
expenditure  in  the  business  sector,  where  the 
Capital  region  largely  exceeds  the  EU  average, 
while  all  other  Danish  regions  are  below  EU 
average,  Nordjylland  being  the  lowest  (Table 
A17.1). 

Graph A17.2: Labour productivity per hour 

Unit: Real GDP per hour worked (EUR, 2015 prices) 
Source: ARDECO (JRC) 

In  2024,  half  of  Danish  employment  was 
concentrated in knowledge-intensive services 
and  employment  in  high-tech  industries  was 
above the EU average, both being significant 
drivers of productivity and economic growth. 
Furthermore, Hovedstaden leads Denmark in terms 
of  employment  in  these  sectors,  followed  by 
Sjaelland, both above the EU average. Syddanmark 
has 
in 
and  high-tech 
knowledge-intensive 
sectors.  Nordjylland  has  also  by  far  the  lowest 
share of R&D expenditure in the business sector.  

lowest  share  of  employment 

services 

the 

In  the  capital  region  more  than  half  of  its 
working age population is highly educated. In 
Midjylland  the  share  is  nearly  15  percentage 
points  lower  (43.0%).  Other  Danish  regions  are 
close  to  the  EU  average  of  36.1%,  ranging 
between 35% and 38%. 

Social fairness 

Labour  market  conditions  are  generally 
favourable in all regions, but risks of poverty 
and  social  inclusion  have  increased  over 
recent years  (see Annex  11).  While there are no 

X axis: GDP per head, 2013 (PPS, index EU-27 = 100).  
Y axis: Annual average real growth of GDP per head, 2014-2023 (EUR, 
2015 prices, %). Bubble size: Population, 2023. 
Source: ARDECO (JRC) 

The  widening  disparity 
in  GDP  between 
Hovedstaden  and  the  other  NUTS2  regions 
in 
seems  to  be  driven  by  differences 
productivity  growth.  (Graph  A17.2).  The  only 
regions  where  productivity  growth  improved  were 
Hovedstaden  and  Sjaelland  (only  slightly),  while 
in  productivity  and  annualised  real 
the  gap 

96 

HovedstadenSjællandSyddanmarkMidtjyllandNordjylland0.00.51.01.52.02.57090110130150170GDP per head growth, 2014-2023 (%)GDP per head, 2013 (EU27=100)Capital regionOther NUTS2 regionsLinear (National average)Linear (EU27_2020)30405060708090201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS2 regionsCapital regionNational averageEU27 
 
        
        
 
 
Table A17.1:Selection of indicators at regional level in Denmark 

Source: Eurostat and JRC 

major  disparities  across  regions,  rural  areas  fare 
worse regarding young people's participation in the 
labour market and education, whereas urban areas 
suffer from poverty (Graph A17.3).  

Sustainability 

Graph A17.3: Social indicators by degree of 
urbanisation, 2024 

reduced 

its 
Denmark  has  significantly 
greenhouse  gas  emissions  per  person  from 
13.4  to  6.9  tCO2eq  between  1990  and  2023. 
While  Hovedstaden  is  the  lowest-emitting  region 
with  2.4 
tCO2eq  per  person,  Nordjylland’s 
emissions  remain  six  times  higher  (Map  A17.1).  
However,  all  regions  are  moving  towards  climate 
neutrality.  

Map A17.1:  Greenhouse gas emissions per capita, 
2023 

Unit: Percentage of respective population (%) 
Source: Eurostat 

Affordable  housing  remains  a  significant 
challenge in Denmark (see Annex 11). This is the 
case  particularly in  large cities  with  22.7%  of  the 
urban  population  facing  housing-cost  overburden 
(259)  in  2024,  which  significantly  exceeds  the  EU 
average  of  around  10%.  Housing  prices  in  Byen 
København  are  exceptionally  high,  whereas 
housing  costs  are  less  pronounced  in  towns, 
suburbs and rural areas (Graph A17.3). 

(259) The housing cost overburden rate is the percentage of the 

population living in households where the total housing costs 
(‘net’ of housing allowances) represent more than 40% of 
disposable income (‘net’ of housing allowances’). 

Source: Eurostat and JRC 

97 

0510152025NEET (15-34)Early leavers(18-24)Loweducated (25-64)AROPEHouse costoverburdenCitiesTowns and suburbsRural areasGDP (PPS)GDP per head (PPS)Real GDP growthReal GDP per head growthProductivity - GDP per person employed (PPS)Real productivity growth (per person employed)Productivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)R&D expenditure in business enterprise sector (BERD)Employment in knowledge-intensive servicesEmployment in high-technology sectorsPopulation with high educational attainmentAt-risk-of-poverty or social exclusionGreenhouse gas emissionsmillionIndex EU-27 = 100Average annual % changeAverage annual % changeIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % change% of GDP% of total employment% of total employment% of population aged 25-64% of total populationtCO2eq. per person202320232014-20232014-202320232014-202320222013-2022202220242024202420242023European Union (27 MS)159052801001.71.61000.61000.91.541.55.236.121.07.1Denmark2856141252.31.71140.81401.01.849.86.445.118.06.9Hovedstaden1275231683.22.31331.51701.73.156.711.157.117.12.4Sjælland25414881.81.41020.61141.20.748.56.535.315.17.5Syddanmark500191111.81.51040.51230.41.044.32.338.418.59.0Midtjylland571881071.91.2980.31241.01.446.63.943.019.77.7Nordjylland21706981.10.8950.11130.40.445.83.635.420.314.6