COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Denmark Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Denmark
Date: 2026-06-03
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, 3.6.2026  SWD(2026) 204 final  COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Denmark    Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Denmark {COM(2026) 204 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Solid economic growth, driven by 
exports and the pharmaceutical 
sector 

by 

rising 

employment, 

Denmark’s  economy  has  grown  more 
quickly  than  the  European  average  since 
the  end  of  the  pandemic.  This  was 
supported 
low 
unemployment and a steady influx of workers 
from  abroad.  However,  economic  growth  has 
been  markedly 
the 
pharmaceutical  sector  expanding  strongly 
while other sectors have remained sluggish or 
stagnant.  Net  exports  have  been  a  strong 
demand 
domestic 
component,  whereas 
demand has been more subdued, with private 
consumption  held  back  by  weak  consumer 
confidence  and  investments  dampened  by 
high construction costs. 

uneven, 

with 

The  outlook  is  for  continued,  although 
moderating,  growth.  2026  could  see  GDP 
growth of 1.9% falling to 1.8% in 2027. This is 
set to be driven more by domestic demand as 
private  consumption  and  investments  pick  up, 
while the growth contribution from net exports 
becomes broadly neutral.  

to 

Employment  has  expanded  continuously 
over  recent  years,  driven  by  increasing 
production.  Due 
increased  economic 
activity  over  the  last  years,  there  has  been  a 
need  for  a  larger  labour  force,  which  has 
brought  about  the  highest  number  of  people 
on the labour market ever. The higher number 
largely 
in  employment 
of  persons 
attributable  to  influx  of  workers  from  abroad 
(other  Member  States  as  well  as  third 
countries),  an  increasing  number  of  persons 
before  and  after  retirement  age  who  remain 
active  as  well  as  an 
the 
employment  rate  among  immigrants  already 

increase 

in 

is 

living in Denmark. The unemployment rate has 
remained  rather  low  and  relatively  stable, 
increasing  from  6.2%  in  2024  to  6.4%  in 
stagnating 
The  outlook 
2025. 
stable 
and 
employment 
unemployment, reaching 6.5% in 2027. 

for 
largely 

is 

Government finances are robust. Denmark 
has substantial  general  government surpluses 
and a gross debt ratio below 30% of GDP on a 
downward  trajectory.  An  expected  budget 
surplus of 0.9% of GDP in 2026 could fall to a 
in  2027.  The 
surplus  of  0.5%  of  GDP 
government  sector  is  a  sizeable  net  asset 
holder.  Denmark’s  medium-term 
fiscal-
structural  plan 
implies  a  gradual  de-
consolidation  of  public  finances  over  the 
coming  years,  moving  towards  a  structural 
deficit  of  general  government  finances  of 
0.5% annually. 

Macroeconomic challenges  

Denmark  is  a  small  open  economy.  This 
comes  with  the  associated  advantages  and 
challenges  as  regards  trade  and  exchanges 
opportunities. 
potential 
also 
vulnerabilities  with  respect  to  international 
market  access  and  dependencies  on  trading 
partners for vital resources. 

brings 

It 

households 
robust, 

are 
generally 
Danish 
despite  many 
financially 
households having significant gross debt. 
The household debt ratio is among the highest 
in the EU, although it has dropped by nearly a 
fourth over a four-year period. The robustness 
of  households’  finances  is  linked  to  the  fact 
that gross debt is offset by very sizeable and 
to  some  extent  liquid  pension  savings  assets, 
as well as (largely illiquid) housing assets. 

2 

 
 
The 

balance 

double-digit 

Over  recent  years,  Denmark  has  had 
recurrent 
of 
payments  surpluses  relative  to  GDP, 
driven  by  exports  and  pensions  savings. 
These  developments  have  been  underpinned 
by  the  expansion  of  the  export-oriented 
pharmaceutical 
recurrent 
sector. 
surpluses,  in  the  order  of  11-12%  of  GDP, 
have  turned  Denmark  over  time  into  an 
important foreign net creditor. While this bears 
witness  to  a  strong  and  competitive  export-
driven economy, it also raises questions about 
whether  investment  in  Denmark  could  be 
stronger. The decision of the social partners to 
build up a strong second-pillar pension system 
has 
long  period  of  sizeable 
contributions  to  the  pension  system.  But  the 
corresponding  payouts  from  the  system  are 
still  limited.  This  structural  net  saving  in  the 
Danish economy could be a contributing factor 
to  the  build-up  of  large  balance  of  payments 
surpluses. 

implied  a 

Graph 1.1: Defence expenditure, % of GDP 
(2018 - 2027) 

Source: Statistics Denmark and European Commission 
Spring 2026 forecast 

Expenditure  on  defence  in  Denmark  is 
steadily  increasing,  also  with  additional 
EU support. In order to facilitate an increase 
in  public  spending  on  defence,  the  Council  of 
the European Union has activated the national 
escape  clause  (NEC)  for  Denmark (1).  Total 
government expenditure on defence amounted 
to 1.8% of GDP in 2024 and is forecast by the 

(1)  The  activation  of  the  national  escape  clause  provides 
Member  States  with  budgetary  flexibility  to  increase 
defence  expenditure,  without  an  immediate  need  to 
finance  this  increase  with  spending  cuts  or  revenue-
raising measures. 

European  Commission  to  be  2.2%  of  GDP  in 
2025 and 2.6% of GDP in 2026 (see Annex 2). 
Investment in defence is also receiving support 
from  the  EU.  As  part  of  the  European 
Commission’s ReArm Europe plan, following an 
assessment  by  the  Commission  of  Denmark’s 
national  defence 
investment  plan  under 
Security  Action  for  Europe  (SAFE),  the  Council 
financial 
adopted 
assistance  available 
to  Denmark  for  an 
amount  of  up  to  EUR  50  million  for  defence 
procurement. 

decision,  making 

a 

Denmark  exhibits  some  socio-economic 
differences  between  the  Capital  Region 
and  the  rest  of  the  country.  This  is 
income  and 
particularly  true  as  regards 
productivity levels, with incomes ranging from 
88% of the EU average in the Zealand Region 
to  168%  of  the  EU  average  in  the  Capital 
Region (2).  The 
income  and  productivity 
differences  between  regions  have  widened 
over  recent  years  (see  Annex  18),  with  the 
Capital  Region  growing  significantly  faster 
than other regions. This growth is linked to the 
concentration  of  R&D  and  capital-intensive 
businesses such as pharmaceutical companies 
in  the  Copenhagen  area.  The  differences  are 
mirrored  in  a  few  other  dimensions  that  are 
central  to  growth  and  well-being.  This  is  true 
of access to healthcare, where transport times 
to  general  practitioners  or  hospitals,  for 
instance,  are  much  longer  than  in  the  Capital 
Region.  Likewise,  proximity  to  major  cities  is 
also 
likelihood  of  better 
educational  outcomes,  such  as  completing 
upper secondary education.  

increasing 

the 

Housing supply and affordability  

(CSR) 

recommendation 

In  2025,  Denmark  received  a  country-
specific 
to 
improve  the 
implement  measures  to 
affordability  of  housing.  The 
issue  of 
housing  affordability  was  addressed  through 
reforms  which  sought  not  only  to  remove 
barriers  to  non-profit  cost-based  housing 

(2)  These two regions will be joined together on 1 February 

2027. Figures could be influenced by commuting. 

3 

00.511.522.533.542018201920202021202220232024202520262027 
  
 
 
construction,  but  also  to  stimulate  housing 
construction more generally. 

A  mismatch  between  applicable  cost 
ceilings  and  markedly  higher  building 
costs  has  resulted  in  several  years  of 
very  low  new  construction  of  non-profit 
housing (see Annex 16). In relation to the CSR 
Denmark  received  in  2025,  several  measures 
have  been  introduced  –  most  notably  raising 
the  maximum  cost  threshold  for  non-profit 
cost-based  housing,  particularly  in  high-cost 
urban areas such as Copenhagen and Aarhus, 
alongside  enhanced  support  schemes  under 
the Fund for Mixed Cities. 

increased 

After  a  decline  in  2023,  nominal  house 
prices 
in  2024  and  have 
continued  to  rise  in  2025.  Nominal  house 
prices  increased  by  6.0%  in  2025  compared 
with  2024.  Price  increases  remain  uneven 
across  regions,  with  particularly  strong  price 
increases  for  apartments  in  the  largest  cities, 
especially  in  the  Copenhagen  area,  indicating 
that demand for housing continues to outpace 
supply.  The  Systemic  Risk  Council  notes  that, 
while  credit  growth  has  so  far  remained 
moderate,  the  housing  burden  in  Copenhagen 
is  at  high  levels,  and  expectations  of  capital 
gains  as  well  as  fear  of  higher  prices  are 
increasingly 
first-time  buyers’ 
housing  considerations (3).  The 
increasing 
housing  demand  and  prices  are  exacerbated 
by  tax  incentives  for  home  buyers  through 
generous  mortgage  interest  relief  (see  Annex 
3) and a low taxation of property values (4). 

influencing 

Housing  supply  is  tempered  by  varying 
local  implementation  of  rules.  National 
regulation shapes housing policy but approving 
new  construction  and  laying  down  detailed 
regulations  are  done  at  municipal  level.  The 
rules  administration 
differences 
contribute  to varying,  and  sometimes  lengthy, 
timelines  and  complicate  fast 
permitting 
construction.  This  has  an 
impact  on  the 
responsiveness  of  new  housing  supply  to 

local 

in 

to 

be 

higher  prices  (see  Annex  16).  Issued  building 
permits (measured in square metres per 1 000 
inhabitants)  were  around  40%  lower  in  2023 
and  2024  than  the  average  of  earlier  years, 
In 
indicating  potential  supply  constraints. 
January  2026,  a  political  agreement  was 
reached  to  change  the  Planning  Act  to  allow 
local  authorities  to  require  up  to  25%  of  new 
owner-occupied 
developments 
housing (5).  This  aims  to  increase  the  overall 
supply of homes suitable for first-time buyers 
and to reduce the disparity between rental and 
ownership  opportunities,  particularly  in  major 
cities. The measure is expected to help relieve 
upward pressure on prices and improve access 
for  households  seeking  affordable  purchase 
options.  These  measures  on  the  affordability 
of housing are expected to be important, while 
the  effects  will  take  some  time  to  fully 
materialise.  

Economic security and 
competitiveness  

The  geopolitical  situation  has  been  a 
source  of  new  vulnerabilities.  First,  the 
changes in US tariff policy constituted a major 
threat to Danish exports, as the largest Danish 
export market, the US,  became less  attractive 
for  Danish  export  companies.  However,  as 
regards  pharmaceutical  products,  which  form 
the backbone of Danish exports to the US, the 
situation was less severe. These products are, 
to a high extent, already being produced within 
the  US,  and  therefore,  on  the  face  of  it,  not 
subject  to  tariffs.  Second,  the  US  claims  to 
Greenland, which is subject to self-government 
and  the  constitution  of  the  Kingdom  of 
Denmark,  poses  another  threat.  Support  from 
the  EU  and  other  partners  appears  to  have 
been  instrumental  in  starting  a  constructive 
process  towards  greater  mutual  safety  and 
security 
including 
Greenland. 

the  Arctic 

region, 

in 

(3)  The Systemic Risk Council,  The Systemic Risk Council // 
51th Meeting of the Systemic Risk Council, 2025.  

The 
is 
strong  productivity  growth 
concentrated  in  the  international  sector. 

(4)  OECD, OECD Economic Surveys: Denmark 2026 | OECD, 

(5)  Ministry  for  Urban,  Rural  and  Church  Affairs,  Ny  aftale 

2026. 

skal sikre flere ejerboliger til danskerne, 2026. 

4 

 
 
 
are 

companies. 

Productivity  growth picked up in 2024 after a 
subdued period. However, most of this growth 
can  be  attributed  to  a  small  group  of  large, 
highly  productive  global 
In 
contrast,  small  to  medium  sized  enterprises 
(SMEs)  productivity  growth  is  more  moderate, 
and  SMEs  in  the  manufacturing  sector  in 
particular 
The 
facing 
concentration  of  productivity  growth  and  the 
limited  diffusion  of  innovation  and  advanced 
technologies  to  the  broader  economy  call 
economic  resilience  into  question.  Tackling 
research, 
challenges 
securing  scale-up  financing,  and  increasing 
involvement  of  small  to  SMEs  in  innovation 
and  technology  adoption,  could  help  diversify 
and expand the country's innovation base. 

commercialising 

challenges. 

in 

while  its  dependence  on  oil  imports  remains 
limited.  Finally,  sustained  efforts  will  be 
needed  to  advance  the  transition  of  the 
agricultural  sector  towards  more  sustainable 
practices. 

funding 

instruments 

competitiveness, 

EU 
provide 
considerable  resources  to  Denmark.  They 
support investments and structural reforms to 
environmental 
increase 
sustainability,  skills,  social 
fairness  and 
security,  while  helping  to  address  challenges 
identified in the CSRs. Key instruments include 
the  Recovery  and  Resilience  Facility  (see  Box 
2)  and  Cohesion  policy  funds  (see  Box  3).  In 
addition, the Common Agricultural Policy (CAP) 
provides  Denmark  with  an  EU  contribution  of 

Box 1: 

UN Sustainable Development Goals (SDGs)  

Denmark performs well on all SDGs related to competitiveness (SDGs 4, 8 and 9) and on 
those linked to macroeconomic stability (SDGs 8, 16 and 17). 

It also performs well on, or is progressing towards, most SDGs related to environmental 
sustainability (SDGs 2, 6, 7, 9, 11, 12, 13 and 14), but lags slightly behind the EU average 
on SDG 15 (Life on land). Denmark performs well or is progressing on most SDGs related 
to social fairness (SDGs 3, 4, 5, 7, 8 and 10), although it is moving away from SDG 1 (No 
poverty) despite still performing above the EU average on most related indicators. 

Overall, Denmark performs above the EU average on most SDGs, with particularly strong 
results  on  SDG  7  (Affordable  and  clean  energy),  SDG  9  (Industry,  innovation  and 
infrastructure) and SDG 10 (Reduced inequalities). 

EUR 4.8 billion under the CAP strategic plan for 
2023-2027  (6),  while  EUR  201  million  are 
allocated  under  the  Common  Fisheries  Policy 
(CFP). A further EUR 56.2 million are available 
under  the  Border  Management  and  Visa 
Instrument (BMVI). Other EU programmes also 
support  competitiveness 
in  Denmark,  for 
instance  through  open  calls  under  Horizon 
Europe and the Connecting Europe Facility. 

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

found 

can 

be 

Further  aligning  decarbonisation  and 
competitiveness  objectives  is  important. 
Denmark  is  a  front  runner  in  the  green 
transition.  However,  electrification  could  be 
further  supported  as  a  powerful  lever  for 
reducing  emissions  and  enabling  energy 
consumers to benefit from low-cost renewable 
generation.  In  this  context,  addressing  current 
electricity  network  constraints  and  growing 
electricity  demand  and 
system-flexibility 
needs  remains  a  key  priority.  Denmark  also 
faces  long-standing  challenges  in  the  circular 
economy and waste management. Structurally, 
the  country  remains  largely  dependent  on 
imports  for  a  range  of  critical  raw  materials, 
intermediate 
high-tech 
components  (see  Annex  5).  That  said,  the 
recent  reopening  of  the  Tyra  gas  field  has 
made  Denmark  self-sufficient  in  natural  gas, 

products 

and 

5 

 
 
 
Box 2: 

Key achievements of the recovery and resilience plan  

Denmark’s  recovery  and  resilience  plan  (RRP)  represents  a  total  budget  of  EUR  1.6 
billion,  corresponding  to  0.4%  of  GDP.  It  is  aimed  at  supporting  reforms  and 
investments  contributing  to  the  green  and  digital  transitions,  strengthening  economic 
resilience  and  addressing long-standing  structural  challenges  identified  in  the  European 
Semester.  As  of  4 May  2026,  EUR  1.3  billion  (around  78% of the  total allocation) 
has  been  disbursed  to  Denmark  following  the  satisfactory  fulfilment  of  63 
milestones  and  targets.  Implementation  has  progressed  steadily,  with  a  growing 
number  of  reforms  and  investments  already  fulfilled  and  delivering  tangible  results  on 
the ground.  

The Recovery and Resilience Facility is estimated to increase Denmark’s GDP by EUR 4.4 
billion between 2020 and 2030, more than double the size of its own national recovery 
and  resilience  plan’s  budget.  Spillover  effects,  estimated  at  EUR  2.4  billion,  account  for 
more than half of the total impact. The wholesale trade, construction, manufacturing of 
machinery  and  equipment  and  IT  sectors  are  the  largest  beneficiaries  of  direct  and 
spillover effects (7). 

Highlights and impact of the plan 

•  Green  tax  reform.  Several  thousand  companies  benefited  from  tax  subsidies 
covering  116-130%  of  green  investment  costs,  modernising  enterprises  and 
delivering  measurable  reductions  in  energy  consumption  and  greenhouse  gas 
emissions. 

•  Reform to reprioritise the registration tax of vehicles and low electricity 
tax on charging electric vehicles. A reduction in registration taxes for low- and 
zero-emission vehicles has driven the uptake of more than 300 000 cleaner cars 
on Danish roads and led to four out of five new cars registered being electric cars 
(2025 data). 

•  Access  to  the  high-speed  broadband  network.  More  than  3  000  additional 
households or businesses have been covered by high-speed internet, contributing 
to an overall coverage of approximately 98% of households and businesses.  
•  Digitalisation in businesses. More than 1 400 SMEs have received subsidies to 

digitalise their business (expected). 

•  Energy efficiency and decarbonisation in buildings. Reduced fossil fuels and 
energy consumption by replacing 27 500 oil burners or gas furnaces with district 
heating  or  heat  pumps,  and  by  renovating  10 500  residential  dwellings 
(expected). 

•  Green upskilling. At least DKK 187 million (approx. EUR 25 million) for upskilling 

activities (expected). 

(7)  See more in the analysis available at the following link: 
Economic  impacts  of  the  Recovery  and  Resilience 
Facility:  The  Case  of  Denmark  -  Reforms  and 
Investments. 

6 

 
 
 
 
 
 
 
 
 
Box 3: 

Contribution of cohesion policy funds 

EU  cohesion  policy  funding 
is  supporting  Denmark’s  efforts  to  boost 
competitiveness,  environmental  sustainability,  as  well  as  skills  and  social 
fairness.  In  the  2021-2027  programming  period,  EU  cohesion  policy  funds  (8)  are 
providing  EUR  456  million  (amounting  to  EUR 929 million  paired  with  national  co-
financing) to Denmark. The value of selected projects corresponded to 84.8% of the total 
allocation as of March 2026, with additional calls for projects in the pipeline. 

• 

Innovation, business environment and productivity. EUR 130 million is allocated 
to research and innovation, SME competitiveness and to the regions most affected by 
the  transition  away  from  carbon-intensive  activities.  More  than  7 000  firms  are 
already receiving support.  

•  Decarbonisation, 

energy 

affordability 

Nearly 
EUR 157 million  is  dedicated  to  clean  transition  projects.  This  is  primarily  delivered 
through  support  of  SME  innovation  in  green  hydrogen  and  power-to-X,  brown 
biorefining  and  pyrolysis,  and  carbon  capture  and  storage.  Related  investments  in 
skills development represent approximately 30% of green investments.  

sustainability. 

and 

•  Skills, quality jobs and social fairness. Over EUR 65 million is allocated to the re- 
and  upskilling  of  workers,  EUR 22.9 million  to  education  and  training  and 
EUR 3.4 million to addressing homelessness. The European Social Fund Plus (ESF+) is 
also improving opportunities for entrepreneurship and for the development of social 
innovation.  More  than  17 000  people  have  already  taken  part  in  regional  education 
and training projects. 

The  mid-term  review  (9)  reinforced  the  cohesion  policy’s  contribution  to  emerging 
strategic  priorities,  reallocating  EUR 65 million.  The  mid-term  review  will  strengthen 
competitiveness through support for SME innovation in Strategic Technologies for Europe 
Platform  (STEP)  technologies  and  relevant  skills.  In  addition  to  cohesion  policy  funding, 
Denmark  will  allocate  over  EUR 324 million  under  the  Social  Climate  Fund  over  2026-
2032  to  help  mitigate  the  social  impact  of  the  new  emissions  trading  system  (ETS2), 
supporting vulnerable households and small businesses. 

(8)  European Regional Development Fund (ERDF), European 
Social  Fund  Plus  (ESF+),  Cohesion  Fund  (CF)  and  Just 
Transition Fund (JTF). 

It 

(9)  The mid-term review is carried out halfway through the 
is  a  formal 
2021-2027  programming  period. 
assessment  process  required  under  Article  18  of  the 
Common Provisions Regulation that aims to assess the 
implementation  of  programmes  and,  where  necessary, 
propose  adjustments  to  improve  their  performance, 
ensure  their  relevance  in  light  of  new  and  emerging 
needs and keep them aligned with other EU policies. 

7 

 
 
 
 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

by 

and 

(CSR) 

equity 

financing, 

businesses 

recommendation 

In  2025,  Denmark  received  a  country-
specific 
to 
address  the  productivity  gap  between 
large  and  small  companies  and  boost 
further 
innovative 
improving  access  to  venture  capital  and 
private 
by 
improving  the  framework  conditions  for 
initial  public  offerings.  Denmark  has  taken 
steps  to  strengthen  productivity  of  small  to 
medium-sized enterprises (SMEs) and advance 
technology 
capabilities 
adoption.  Key  measures  include  enhanced 
advisory  and  innovation  programmes,  deeper 
between 
and 
and 
knowledge/research 
businesses  (see  Annex  4),  and  more  targeted 
business support schemes (see Annex 5). While 
positive, these measures have not yet yielded 
visible results. Progress on improving access to 
financing,  however,  remains  limited  –  though 
with  venture 
investment  activity  reaming 
robust (see Annex 6). 

innovation  and 

collaboration 

institutions 

broader 

in 

innovation  system  to  uphold  its  outstanding 
long-term  excellent  performance  (see  Annex 
4). 

Labour productivity in Denmark increased 
again after a long period of slow growth. 
In  2024,  labour  productivity  increased  by  3%. 
However, the 10-year (2014-2024) annualised 
growth rate stands at only 0.9%. This is partly 
due  to  cyclical  factors  and  to  the  disruptions 
caused  by  the  COVID-19  pandemic.  At  the 
sectoral  level,  labour  productivity  growth  has 
been  strongest  in  manufacturing,  information 
and  communication,  wholesale  and  retail 
trade, and professional and scientific services. 
Conversely,  labour  productivity  growth  has 
been  weak  in  energy,  construction  and  some 
administrative 
services. 
Productivity  remains  a  key  driver  of  further 
economic  growth,  especially  given 
the 
country’s already very high employment levels 
and  an  ageing  population,  which  limit  the 
scope for growth expansion through increases 
in labour supply.  

support 

and 

Pick-up in productivity led by the 
pharmaceutical sector 

Denmark has one of the highest levels of 
labour  productivity  in  the  EU.  Denmark's 
labour  productivity  remains  above  the  EU 
average, as evidenced by its high GDP per hour 
worked  (133.2%  of  the  EU  average)  and  GDP 
per  employed  person  (113.5%  of  the  EU 
average).  This  can  be  attributed  to  the 
country's  robust  human  capital,  cutting-edge 
infrastructure  and  significant  R&D 
digital 
expenditure,  which  surpasses  the  EU  average 
as a percentage of GDP, driven by substantial 
investments  from  both  the  public  and  private 
sectors.  To  maintain  this  high  productivity 
level,  focus  must  be  directed  towards  the 
challenges  faced  by  the  Danish  research  and 

Manufacturing  productivity  recorded  a 
strong  increase,  largely  driven  by  the 
pharmaceutical  industry.  Despite  sluggish 
labour  productivity  growth  across  the  broader 
economy,  productivity  in  the  manufacturing 
sector  rose  by  an  average  of  11.7%  per  year 
between  2020  and  2024,  far  exceeding 
previous  periods (10).  Over  three  quarters  of 
this  growth  is  attributable  to  higher  total 
(11)  –  reflecting  more 
factor  productivity 
efficient  use  of  labour  and  capital  through 
globalised  production  and  greater  adoption  of 
technological  advances  –  while 
increased 
capital  and  labour intensity  accounted  for the 

(10)  Danmarks  Statistik,  NEW:  Large  increase  in  industrial 

productivity - Statistics Denmark, 2025.  

(11)  Total factor productivity is a measure of the efficiency 
and  effectiveness  with  which  different  labour  and 
capital inputs are used.  

8 

 
 
 
remainder.  The pharmaceutical  industry is  the 
primary driver of this increase. In recent years, 
a  large  and  growing  share  of  pharmaceutical 
production  and  value  creation  took  place 
abroad,  including  through  merchanting  and 
processing.  This  significantly  boosted  value 
creation  in  Danish  pharmaceutical  companies 
without  a  corresponding  rise  in  domestic 
labour input, which translates in practice into a 
substantial  productivity  gain.  Internationally, 
growth 
Denmark's  manufacturing 
productivity  has  far  outpaced  the  EU-27,  and 
neighbours  Germany  and  Sweden.  However, 
excluding the pharmaceutical sector, growth is 
only  marginally  stronger  than  in  the  EU-27, 
Germany and Sweden (Graph 2.1).  

in 

Graph 2.1: Labour productivity in 
manufacturing (index: 2020=100) 

firms (14).  This 

can  exploit  increasing  returns  to  scale  (13). 
They  also  tend  to  adopt  new  technologies 
more quickly than smaller firms. However, this 
advantage  does  not  always  apply  to  new  or 
concentration  of 
young 
productivity growth, while partly cyclical, raises 
questions  about  economic 
resilience  and 
increased  regional  GDP  disparities  (see  Annex 
19),  as  growth  performance  becomes 
dependent  on  a  narrow  segment  of  firms (15). 
It also suggests limited diffusion of advanced 
technologies  and  management  practices  to 
smaller  and  domestically  oriented  firms. 
Ensuring  sustained  long-term  growth  would 
benefit from policies that strengthen domestic 
investment,  promote 
technology  adoption 
across  sectors  and  regions,  and  improve  the 
absorptive capacity of SMEs. 

A business environment conducive 
to growth and productivity 

productivity 

differences, 
Despite 
competitiveness  performance 
remains 
strong  thanks  to  an  overall  favourable 
business environment. Denmark maintains a 
strong position in global competitiveness. This 
is  driven  by  efficient  business  practices, 
favourable  regulations  and  a  well-developed 
digital and transport infrastructure. Denmark’s 
highly skilled workforce and strong innovation 
performance, together with continuous efforts 
to  improve  the  business  environment, support 
its  competitiveness  (see  Annex  5).  Business 
dynamics,  reflected  by  the  number  of  firms 
entering  and  exiting  the  market  and  the 
proportion of high-growth companies, exceeds 
the  EU  average.  This  dynamic  environment 
indicates  support  for the efficient  reallocation 
towards  more  productive 
of 

resources 

(13)  Returns to scale is an economic concept measuring how 
much  a  firm's  output  changes  when  all  inputs  are 
increased proportionally.  

(14)  OECD,  Compendium  of  Productivity  Indicators  2025, 
https://doi.org/10.1787/b024d9e1-en  OECD  Publishing, 
Paris, 2025. 

(15)  OECD Economic Surveys: Denmark, 2026. 

(1) 2023 and 2024 are provisional data 
Source: Danmarks Statistik 

sector  masks 

in  the 
The  high  productivity  growth 
manufacturing 
very 
different  developments  across  firms.  A 
small  group  of  large,  highly  productive  global 
companies accounts for most of the growth in 
labour  productivity,  reflecting  their  highly 
globalised  operations.  This  highlights  a 
widening gap in productivity performance, with 
a  small  number  of  large  firms  driving  overall 
growth, while the rest of the business sector is 
progressing much more slowly (12). Productivity 
generally  rises  with  firm  size  as  large  firms 

(12)  Dansk  Industri,  20  virksomheder  står  for  næsten  hele 

produktivitetsvæksten - DI, 2025.  

9 

10011012013014015016020202021202220232024DenmarkDenmark excl. PharmaGermanySwedenEU-27 
  
 
 
 
in 

includes 

mainly driven by large businesses. At the same 
time,  on  several  indicators,  the  long-term 
excellent  performance 
research  and 
innovation  shows  some  signs  of  stagnation, 
following a period of very strong performance. 
This 
the  proportion  of  Danish 
scientific  publications  ranking  among  the 
world's  top  10%  of  most-cited  publications, 
and  the  share  of  employment  in  high-growth 
companies  (see  Annex 4).  Moreover,  despite 
the growing expenditures on R&I, public Danish 
research institutions are also failing to achieve 
in  the  commercialisation  of 
an 
research  results  as 
indicated  by  several 
indicators,  including  patent  applications  and 
new inventions (17). 

increase 

Policy  measures  to  strengthen  research 
and  innovation  collaboration  exist,  but 
challenges  remain.  In  line  with  the  CSR  to 
support  SMEs  to  innovate  and  adopt  new 
technologies, recent policy measures reinforce 
the  framework  for  research  and  innovation. 
These  include  the  introduction  of  multiannual 
funding  for  strategic  research  and  innovation 
priorities, 
innovation 
the  streamlining  of 
support  schemes  for  SMEs  and  the  political 
agreement  to  strengthen  collaboration  and 
transfer  of 
technology 
knowledge  and 
between  research  institutions  and  businesses. 
While  these  measures  represent  important 
progress,  further  efforts  could  help  enhance 
the  diffusion  of  innovation  and  the  uptake  of 
advanced  digital  technologies  across  firms  of 
different  sizes,  sectors  and 
In 
particular,  the  complexity  of  the  innovation 
support framework with multiple  national  and 
regional  actors,  can  create  administrative 
burdens and complicate innovation and scale-
up,  especially  for  SMEs.  Challenges  include  a 
fragmented 
system, 
different  eligibility  criteria  across  support 
schemes, 
navigating 
reporting 
application 
requirements.  This  highlights  a  need  for 
further  harmonisation  of  rules  and  a  more 
comprehensive  review  of  existing  measures. 
Furthermore,  some  administrative  ex  ante 
uncertainty about the eligibility of projects for 

procedures 

difficulties 

innovation 

regions. 

support 

and 

and 

(17)  The  Danish  Agency  for  Higher  Education  and  Science, 
— 

forskningsresultater 

Kommercialisering 
Uddannelses- og Forskningsstyrelsen. 

af 

activities  and  is  supported  by  a  competition-
friendly regulatory framework.  

to 

surveys 

suggest 

business-friendly 

regulation, 
Despite 
further 
business 
simplification of regulation and reporting 
requirements  could  support  business 
EIB 
performance. 
According 
the 
Investment  Survey (16),  Denmark  has 
the 
that 
lowest  share  of  businesses 
report 
regulation  as  an  obstacle  to 
investment. 
Nevertheless, despite ongoing work to simplify 
reporting,  most 
and  automate  business 
companies rank public reporting obligations as 
their  heaviest  administrative  burden 
(see 
Annex 7).  Further  simplification  of  reporting 
reduce  administrative 
requirements  could 
burdens and costs, especially on smaller firms, 
and  complement  innovation  and  financing 
efforts  to  support  business  growth.  Recent 
evidence also points to a rise in late payments 
by  public  authorities  (see  Annex  5).  While 
public  financial  management 
is  generally 
robust,  these  late  payments  can  strain  the 
liquidity  of  SMEs,  which  often  have  limited 
financial  buffers.  Timely  payments  by  public 
authorities  could  thus  enhance  the  business 
environment.  

Excellent research and innovation, 
but uneven diffusion 

Denmark  continues  to  be  a  leader  in 
research  and  innovation,  but  there  are 
some  signs  of  stagnation.  The  2025 
European  Innovation  Scoreboard  highlighted 
Denmark's leadership with a score of 135% of 
the  EU  average  on  the  Summary  Innovation 
Index.  R&D  expenditure,  supported  by  both 
public and private investments, remains above 
the  EU  average  as  a  share  of  GDP.  A  well-
performing  public 
strong 
science  base, 
international 
research  collaborations,  and 
robust  research  activity  in  sectors,  such  as 
pharmaceuticals  and  biotechnology,  further 
innovation  strengths, 
underpin  Denmark’s 

(16)  European  Investment  Bank,  EIB  investment  survey, 

2025. 

10 

 
 
 
R&D tax incentives may also discourage SMEs 
from making use of these improved schemes. 
Geographically,  R&D  expenditure 
remains 
concentrated  in  regions  hosting  the  country's 
indicating  potential  to 
largest  universities, 
further  strengthen  innovation  capacity  across 
the whole country (see Annex 18). 

to 

Innovation procurement offers additional 
opportunities  to  support  growth  and 
scaling.    Public  procurement  represents  an 
important  share  of  aggregate  demand  in 
Denmark, and overall performance in this area 
is  strong  (see  Annex  5).  However,  a  national 
plan, covering all national sectoral policies and 
engaging  actors  across  all 
levels  of 
leverage  procurement  for 
governance, 
promoting innovation and deploying innovative 
solutions in the public sector is still at an early 
stage 
(see  Annex  4).  Advancing  such  a 
framework  could  help  the  public  sector  to 
provide  early  revenue  streams  to  innovative 
SMEs and facilitate scale-up through reference 
contracts.  Moreover,  financial  incentives  for 
R&D  procurements  in  key  technologies  and 
sensitive  sectors  could  help  boost  strategic 
autonomy  in  certain  sectors  such  as  AI,  cyber 
security and quantum technology.  

Early-stage financing is robust, but 
scale-up financing remains more 
limited 

Denmark remains one of Europe’s leading 
venture  capital  markets  relative  to  GDP, 
investment  activity  in 
with  a  stable 
recent  years.  Newest  data  from  the  Export 
and Investment Fund of Denmark (EIFO) show 
that  venture  investment  activity  has  been 
stable  from  2024  to  2025,  mainly  due  to  a 
strong venture investment activity in the last 3 
months  of  2025.  According  to  EIFO,  EUR  1.1 
billion  in  venture  capital  was  invested  in 
in  2025  compared  to 
Danish  companies 
EUR 1.2 billion in 2024. (18). Denmark’s venture 
capital market continues to outperform the EU 

average,  with  total  investments  over  the 
period  2022–2024  exceeding  0.36%  of  GDP, 
placing  it  third  in  Europe  behind  Estonia 
(0.74%  of  GDP)  and  the  UK  (0.40%  of  GDP).  
Biotech  continues  to  dominate  investment 
volumes  together  with  Enterprise  solutions 
and Fintech, underscoring Denmark’s strengths 
in  both  deep-tech  innovation  and  scalable 
digital business models. 

Graph 2.2: Venture capital investments 
(percentage of GDP) 

Source: OECD 

Scale-up  financing  remains  a  challenge, 
particularly  for  companies  transitioning 
from  early-stage  growth  to  later-stage 
expansion.  While  Denmark  performs  well  in 
seed and early-stage financing (0.27% of GDP 
in  the  period  2022-2024),  access  to  scale-up 
capital remains more limited (0.10% of GDP in 
the  period  2022-2024).  This  can  encourage 
some  firms  to  relocate  to  larger  international 
markets  where  deeper  capital  pools  are 
available.  To  address  this,  Denmark  has 
the  2024 
introduced  measures  under 
entrepreneurship  strategy  aimed  at  improving 
framework conditions for investment and firm 
growth.  Measures  include  changes  to  capital 
gains  taxation,  simplified equity  crowdfunding 
regulations  and  better  access  to  venture debt 
financing  (see  Annex  6).  Over  time,  these 
measures  are 
strengthen 
expected 
Denmark’s  attractiveness  for  scale-ups  and 
initial  public  offerings  (IPOs)  (19).  Continued 
efforts to expand late-stage financing, deepen 
capital  markets  and  strengthen  links  with 
international  investors  could  further  support 
the  growth  of  high-potential  firms  and  help 

to 

(18)  EIFO,  https://eifo.dk/media/w44pdfzw/ventureanalysen-

2025.pdf, March 2026. 

(19)  An  initial  public  offering  refers  to  the  process  of 
launching the sale or distribution of a company's shares 
to the public for the first time. 

11 

0.000.020.040.060.080.100.120.142015201620172018201920202021202220232024SeedStart-up and other early stageLater stage venture 
 
  
 
In  this 
retain  scale-ups  within  Denmark. 
context,  encouraging  greater 
institutional 
participation  in  Danish  listed  companies  and 
refining the preferential stock savings account 
to make it more attractive could help enhance 
market liquidity and support IPO activity.  

12 

 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

is  phasing 

In  2025,  Denmark  received  a  country-
specific recommendation (CSR) to support 
clean and efficient energy production and 
use, accelerate electrification, incentivise 
electricity network upgrades and promote 
clean  flexibility  solutions.  Denmark  was 
also recommended to reduce the intensity 
of agricultural and farming activities and 
to  strengthen  the  circular  economy  and 
waste-management  policies.  Considerable 
financial  and  political  support  has  been 
secured to deploy additional renewable energy 
capacity.  Denmark 
in  a  new 
emissions  taxation  system  that  incentivises 
further 
industrial  decarbonisation,  while 
ensuring the availability of transitional support 
for energy-intensive companies. The electricity 
tax  has  been  temporarily  reduced,  providing 
welcome relief to household consumers. Given 
the  high proportion  of  low-cost  renewables  in 
Denmark's 
generation  mix, 
electrification  emerges  as  a  cost-effective 
enabler  of  both  decarbonisation  and  energy 
affordability  –  one  that  could  be  further 
supported  by  policy.  However,  electricity  grids 
are  under  severe  strain  following  a  surge  in 
connection requests. Action is being taken, but 
this  issue  warrants  continued  close  attention. 
Despite  some  positive  developments,  clean 
flexibility  solutions,  such  as  energy  storage 
and  demand  response,  remain  essential  to 
decarbonisation,  competitiveness  and  energy 
affordability.  Finally,  Denmark is  delivering  on 
its national strategy for sustainable agriculture 
and  is  making  some  progress  on  the  circular 
economy and waste management. 

electricity 

Powering an affordable and low-
carbon future 

Graph 3.1: Net electricity generation 2025 - 
total vs renewable sources (TWh) 

Source: Eurostat 

of 

its 

92% 

Denmark  set  an  historic  record  in  2025, 
generating 
domestic 
electricity  from  renewables.  Following  a 
setback in its offshore wind development plan, 
and  in  light  of  growing  electricity  demand, 
Denmark  received  a  CSR  in  2025  to  support 
the  production  of  clean,  efficient  energy. 
Implementation  has  advanced  significantly.  In 
November  2025,  new  tenders  for  2.8  GW  of 
offshore  wind  capacity  were  announced, 
backed  by  a political  agreement  guaranteeing 
state  support to  wind  farm  developers  for  20 
years  and  capped  at  DKK 44.2 billion  (approx. 
(20).  On  26 January 2026, 
EUR 5.9 billion) 
joint 
Denmark  and  Germany  signed  a 
declaration  of  intent  on  the  Bornholm  Energy 
Island  project,  which  will  connect  3  GW  of 

(20)  See  the  official  communication  at  the  following  link: 
The Danish Energy Agency opens tenders for three new 
Danish  offshore  wind  farms.  See  also:  Agreement  on 
tenders’  framework  for  three  offshore  wind  farms 
(Aftale om udbudsrammer for tre havvindmølleparker), 
19 May 2025. State support is provided through a two-
sided, capacity-based contract-for-difference model. 

13 

0.000.501.001.502.002.503.003.504.002025-012025-022025-032025-042025-052025-062025-072025-082025-092025-102025-112025-12TotalRenewable Sources 
 
  
 
established a transition support framework for 
energy-intensive industries (see Annex 8).  

Graph 3.2: Electricity prices for households 
(€/kWh) - 1H-2025 

Source: Eurostat 

in 

further 

received  a  CSR 

Electrification offers a powerful pathway 
to 
reduce  emissions  while 
enabling  consumers  to  benefit  from  low-
In  2025, 
cost  renewable  generation. 
Denmark 
to  accelerate 
electrification across sectors. A significant step 
was  taken  on  1 January 2026,  when  the 
electricity  tax  was  cut  from  72.7  øre  to  just 
0.8  øre  per  kilowatt-hour.  This  is  a  welcome 
development for households, whose electricity 
bills in  2025  remained  above  the  EU  average 
and  were  heavily  influenced  by  taxation  (see 
Annex  9  and  Graph  3.2).  However,  the 
reduction  is  temporary  –  valid  only  until  the 
end  of  2027  –  and  is  unlikely  to  stimulate 
further  electrification 
industry,  where 
electricity  taxes  were  already  recoverable  for 
industrial 
9). 
Electrification  in  the  transport  sector,  which 
remains the greatest source of CO2 emissions 
in  the  country  (see  Annex 8),  is  progressing 
well,  particularly  in  the  passenger  car  fleet. 
The  RRF  has  significantly  contributed  to  this 
development via a reduced registration tax for 
low-  and  zero-emission  vehicles  and  lower 
electricity  taxes  for  electric  vehicle  charging. 
Denmark's  high  share  of  low-cost  renewables 
in 
its  electricity  generation  mix  means 
electrification  could  serve  as  a  cost-effective 
lever  for  both  decarbonisation  and  energy 
affordability.  To  fully  exploit  this  potential, 
Denmark  would  benefit  from  adopting  a 
comprehensive 
strategy, 
including  clear  2030  or  2035  targets  and 
sectoral sub-targets.  

electrification 

consumers 

Annex 

(see 

to 

electricity 

both 
offshore-generated 
countries’  national  grids  (21).  The  project  is 
supported by a EUR 645 million grant from the 
EU’s  Connecting  Europe  Facility.  Further 
enabling  measures  have  been  put  in  place  in 
response to recommendations by the National 
Energy  Crisis  Team 
is 
supported  by  EU  funds  through  the  Recovery 
and Resilience Facility (RRF) (see Annex 9). 

(NEKST),  which 

important 
Tax  policy  has  been  an 
instrument 
industrial 
in  Denmark’s 
decarbonisation  efforts;  the  cornerstone 
of these  efforts  is the  green  tax  reform. 
This  multi-annual  reform,  supported  by  EU 
financing from the RRF, has been implemented 
in  several  stages.  Shortly  after  the  COVID-19 
pandemic,  Danish  businesses  benefited  from 
three  tax  policy  incentives:  (i)  a  time-limited 
116%  tax  deduction  for  business  investment 
(except  for  fossil-fuel-driven  machinery  and 
vehicles); 
tax 
deduction rate for R&D investments; and (iii) a 
substantial  permanent  increase  in  the  ceiling 
for  minor  investments  eligible  for  immediate 
full tax depreciation (22).  

time-limited  130% 

(ii)  a 

The  tax  incentives  were  accompanied  by 
a  credible  commitment  to 
introduce 
substantially  higher  emissions  taxes, 
which  are  currently  phased 
in.  This 
sequencing enabled businesses to factor rising 
energy and carbon costs into their investment 
decisions,  encouraging  a  shift  toward  energy 
efficiency  and  emissions  reduction.  Higher 
energy  taxes  were  subsequently  introduced, 
and  an  expert  group  developed  a  framework 
for significantly higher emissions levies, which 
came 
(see 
Annex 8).  The  reform  stands  as  an  ambitious 
model for combining post-pandemic economic 
recovery with strong incentives for low-carbon 
business  investment.  To  complement  the  new 
also 
taxation 

system,  Denmark 

in  January  2025 

into  force 

has 

(21)  See  the  official  communication  at  the  following  link: 
Energy Highways: Germany and Denmark agree on joint 
development  of  the  Bornholm  Energy  Island  offshore 
wind project.  

(22)  A tax policy that allows businesses to deduct the entire 
cost  of  a  qualifying  asset  in  the  year  it  is  purchased, 
rather  than  spreading  the  deduction  over  the  asset's 
useful life through standard depreciation schedules. 

14 

€ 0.00€ 0.05€ 0.10€ 0.15€ 0.20€ 0.25€ 0.30€ 0.35€ 0.40Price excl. taxesOther taxes &levies excl. VATVATTotalHouseholdsDenmarkHouseholdsEU-27 Avg 
 
  
in 

level, 

to  ensure  a 

January 2026, 

(see 
production  or  consumption  projects 
Annex 9).  Building  on 
this,  Energinet's 
March 2026  emergency  package  sought  to 
further strengthen prioritisation, free up short-
investment 
term  capacity  and  accelerate 
decisions for new network development. At the 
political 
the 
reached  an  agreement  on 
government 
transparent  and 
measures 
accelerated  expansion  of 
the  electricity 
grid (25).  These  steps  are  welcome,  but  the 
underlying  challenge  remains  acute.  Network 
development  projects  take  several  years  to 
complete,  and  a  striking  indicator  of  growing 
systemic  pressure  is  Energinet's  finding  that 
average  processing  times  for  environmental 
approvals  by  competent  authorities  have 
increased more than sevenfold – from around 
100 days in 2020 to approximately 750 days 
in  2025.  In  March 2026,  the  National  Audit 
by  mid-2025 
that 
Office 
approximately  70%  of  network  expansion 
projects  initiated  by  Energinet  were  delayed 
and  stated  that  Energinet's  management  of 
the expansion  of  the electricity  grid  was  ‘very 
unsatisfactory’ (26). 

reported 

Denmark  remains  exposed  to  electricity 
price  spikes,  highlighting  the  importance 
of  clean  flexibility  solutions.  In  2025, 
Denmark  received  a  CSR  to  promote  clean 
(demand  response,  storage  and 
flexibility 
other  solutions).  When  renewable  energy 
production  is  low,  the  limited  availability  of 
non-fossil flexible resources means that more 
costly  fossil-based  power  plants  are  likely  to 
set  marginal  prices  at  high  levels.  This  drives 
price  volatility,  with  average  price  spreads  in 
Denmark reaching EUR 109/MWh in 2025 – an 
8%  increase  compared  with  2024.  Despite 
several  positive  developments  (see  Annex  9), 
clean 
to 
decarbonisation,  competitiveness  and  energy 
affordability.  Denmark  would  benefit  from 
prioritising  clean  flexibility  over  fossil-based 

flexibility 

remains 

key 

(25)  Agreement on a transparent and rapid expansion of the 
power  grid  (Aftale  om  en  transparent  og  hurtig 
elnetudbygning), 26 January 2026. 

(26)  National Audit Office, Report on Energinet's expansion 

of the electricity grid, March 2026, page 3.   

Meeting network and flexibility 
needs to sustain the energy 
transition 

projects 

infrastructure 

Despite  substantial  grid 
investments, 
Denmark’s  electricity  network  remains 
under  severe  strain  from  unprecedented 
demand  for  new  connections.  In  2025, 
Denmark received a CSR to address increasing 
incentivising 
electricity  demand  needs  by 
network  upgrades.  By  end-2025,  the  value  of 
electricity 
under 
construction  at  Energinet  –  the  national 
electricity transmission system operator – had 
grown  nearly  sevenfold  since  2020,  reaching 
DKK 100 billion 
almost 
(approx. 
EUR 13.4 billion).  However,  Energinet  reported 
that  the  total  demand  for  new  consumption 
capacity directly on the electricity transmission 
grid  was  around  33.5  GW  (peak  electricity 
consumption in the country is approximately 7 
GW).  Two  thirds  of  this  was  added  in  2025 
alone, mainly due to data centres, power-to-X 
and battery projects (23). As a result, Energinet 
temporarily  paused  new  grid  connection 
agreements  in  March  2026  and  extended 
processing  times  for  projects  in  the  screening 
and maturity phases (24).  

have 

measures 

been 
Several 
implemented  or  announced  to  address 
existing grid constraints, though capacity 
is  likely  to  remain  limited  in  the  medium 
term. In February 2026, Energinet replaced its 
‘first  come,  first  served’  approach  to  grid 
connection  application  screening  with  a  new 
to  more  mature 
model  giving  priority 

reflect  the  new 

reality.  Power-to-X 

(23)  See  the  official  communication  at  the  following  link: 
Energinet  ready  for  external  investigation:  Framework 
must 
is  the 
conversion of  electric  power  –  typically  surplus  electric 
power generated from renewable energy sources during 
periods  when  generation  exceeds  load  –  to  another 
form  of  energy 
(such  as  hydrogen,  methane  or 
methanol)  for  storage  and  reconversion  to  electric 
power, to an alternative form of energy (such as gas or 
synthetic  fuel),  or  to  another  useful  product  (such  as 
ammonia or other chemical feedstocks). 

(24)  See  the  official  communication  at  the  following  link: 
Energinet  introduces  temporary  pause  in  new  grid 
connections and turbocharges emergency package. 

15 

 
 
 
flexibility  in  its  upcoming  national  flexibility 
needs assessment (27). 

Delivering Denmark’s landmark 
green tripartite agreement for 
sustainable agriculture 

Denmark  is  taking  steps  to  reduce  the 
environmental  and  climate impact  of the 
agricultural  sector.  In  2025,  the  country 
received  a  CSR  to  reduce  the  intensity  of 
agricultural  and  farming  activities.  Agriculture 
dominates land use in Denmark and remains a 
major  source  of  emissions (28). 
Intensive 
practices  lead  to  excessive  nutrient  leaching 
and 
run-off  from  fields,  particularly  of 
nitrogen  and  phosphorus.  This  has  serious 
repercussions  for  soil  health,  nature  and 
aquatic  environments  (see  Annex  10).  To 
address  these  challenges,  a  comprehensive 
political agreement on a ‘Green Denmark’ was 
reached  in  November  2024,  paving  the  way 
for a historic transformation of land use in the 
country (29).  

In 2025, progress was made in delivering 
on the ‘Green Denmark’ agreement. By the 
end  of  the  year,  all  23 
local  tripartite 
bodies (30)  had  approved  a  comprehensive 
conversion plan for reducing nitrogen in water 

(27)  The revised EU Electricity Market Regulation adopted in 
2024  introduces  mandatory  national  flexibility  needs 
assessments.  Member  States  must  submit  the  first 
national flexibility needs assessment by July 2026. 

(28)  Emissions  from  the  agriculture  and  forestry  sector 
(including  energy  consumption)  are  estimated  to 
account  for  47%  of  Denmark’s  total  CO2  emissions  in 
2030. Klimaprogram 2025,  Ministry of Climate, Energy 
and Utilities, page 152. 

(29)  Agreement  on  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 
the  government  and  key  sectoral  and 
between 
environmental organisations. 

organisations, 

(30)  Bodies  composed  of  representatives  of  municipalities, 
farmers’ 
protection 
associations and the Danish Nature Agency. They play a 
key role in implementing the measures contained in the 
Agreement on a Green Denmark.  

nature 

local 

cap-and-trade  model 

bodies.  The  conversion  plans  also  aim  to 
reduce nitrogen impact on nature and provide 
the opportunity  to connect fragmented nature 
and  develop  new  nature.  Furthermore,  a  sub-
agreement  was  reached  on  a  new  model  to 
regulate  the  discharge  of  nitrogen  in  fields. 
This 
allocates 
discharging  quotas  to  farmers  across  the 
country and is expected to lead to a reduction 
in  nitrogen  discharge  of  approximately  7  900 
tonnes (31) (see Annex 10). As part of the sub-
agreement,  an  additional  DKK  345  million 
(approx.  EUR  46  million)  was  allocated  to 
support  nature  projects (32).  Building  on  these 
positive  steps,  swift  implementation  of  the 
agreed measures is crucial  to ensure that the 
climate  and  environmental  targets  set  out  in 
the  ‘Green  Denmark’  agreement  are  met  by 
2030.  Denmark  would  also  benefit  from 
exploring  synergies  with  the  actions  to  be 
included in the national nature and biodiversity 
act  and  several  obligations  in  the  nature 
restoration plan such as restoring nature, take 
out  from  agricultural  production  and  rewet 
carbon  rich  lowlands  and  the  shared  goal  on 
planting three billion trees in the EU by 2030. 

Further improving waste 
management and the circular 
economy 

received  a  CSR 

Progress  has  been  observed  on  the 
circular economy and waste management. 
In  2025,  Denmark 
to 
strengthen  the  circular  economy  and  waste-
management  policies.  The  Danish  economy 
primary 
remains  highly  dependent  on 
resources  and 
(see 
Annexes  5  and  8).  Per  capita  food  waste, 
municipal waste and packaging waste volumes 

imported  materials 

(31)  7  900  tonnes  out  of  a  technically  adjusted  reduction 
need  of  14  800  tonnes  (not  taking  future  land 
retirement into consideration). 

(32)  Six  projects  have  already  been  selected  for  their 
potential  to  link  existing  natural  areas  by  removing 
agricultural  land  from  production  and  designating  new 
protected nature zones. See at the following link:  Work 
on six large nature areas is now underway - Ministry of 
Green Tripartite. 

16 

 
 
 
system 

separate 

collection 

revision  of 

remain  among  the  highest  in  the  EU  (see 
Annex 8). Denmark has introduced a material-
based 
for 
municipal  waste  across  all  municipalities.  Of 
the  129  initiatives  included  in  the  national 
action  plan  for  the  circular  economy  (CEAP) 
(2020–2032),  107  have  been  implemented 
and  5  are  in  the  pipeline.  The  upcoming 
the  CEAP 
reassessment  and 
provides  an  opportunity  to 
identify  new 
initiatives.  This  could  include  incentives  for 
more  circular  packaging  and  product  design 
and for increased use of secondary materials. 
Further integrating circular economy principles 
into  public  procurement  could  also  be 
beneficial.  Finally,  an  extended  producer 
packaging 
responsibility 
entered  into  force  in  October  2025.  However, 
affected  companies  claimed  that  the  scheme 
has resulted in higher-than-expected costs and 
the  former  government  has  therefore  taken 
steps to reduce producers’ fees (33).  

framework 

for 

Denmark 
incinerates  more  municipal 
waste  per  capita  than  any  other  EU 
country,  reflecting  the  central  role  of 
waste-to-energy  in  supplying  its  well 
developed  district  heating  network. 
Around  half  of  municipal  waste  –  and  a 
quarter  of  total  waste  –  is  incinerated  for 
electricity  and  heat  (see  Annex  8).  The  2025 
reform  introduced  competition  into  the  sector 
and  set  a  medium-term  objective  of  reducing 
incineration  capacity  to  match  the  volume  of 
incinerable waste generated domestically from 
2030 onwards (bringing to zero the amount of 
imported  from  abroad). 
incinerable  waste 
However,  the  reform’s 
impact  on  actual 
incineration  volumes  remains  uncertain  (34): 
the ceilings granted to operators through 2030 
are  relatively  permissive,  and  a  substantial 
shift  may  not  materialise  without  further 

(33)  See the official announcement at the following link: Nyt 
lovforslag  skal  skære  op  til  30  procent  af  gebyr  på 
glasemballage - Miljø- og Ligestillingsministeriet. 

(34)  According  to  the  latest  projections  from  the  Danish 
Energy  Agency,  incineration  capacity  is  expected  to 
decline  over  the  next  few  years,  reaching  a  plateau  in 
2031  when  it  is  anticipated  that  the  capacity  will  be 
roughly  equivalent 
incineration 
requirements.  See:  Monitoring  of  waste  incineration 
capacity in Denmark. 

the  domestic 

to 

policy action. Moving up the waste hierarchy – 
prioritising  prevention,  reuse  and  recycling  – 
will  be  essential  to  reducing  the  country's 
reliance on incineration. 

17 

 
 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

(CSR) 

recommendation 

In  2025,  Denmark  received  a  country-
to 
specific 
address  skills  shortages,  including  by 
stepping  up  action  to  tackle  attainment 
inequalities in education and training and 
to ensure the provision and acquisition of 
the  necessary  green  and  digital  skills. 
Continued  job  creation  has  ensured  a  steady 
demand  for  workers  with  a  variety  of  skills. 
Some  skills  shortages  persist,  notably  as 
regards 
ICT  specialists,  health  and  care 
workers as well as some other skilled workers, 
the  green 
relevant 
including 
transition.  

those 

for 

Robust labour market, but youth 
and geographical divides persist 

and 

employment 

The  labour  market  has  seen  steadily 
increasing 
stable 
unemployment  figures. 
In  recent  years, 
Denmark  has  achieved  an  employment  rate 
that  exceeds  its  2030  target,  remaining  well 
above  the  EU  average  (see  Annex  11).  The 
inflow of foreign workers and the tendency for 
individuals  to  stay  in  employment  longer 
before and after reaching retirement age have 
helped  to  boost  the  workforce.  However,  at 
6.4%,  Denmark's  unemployment  rate  (35)  is 
slightly  higher  than  the  EU  average  and  the 
proportion of part-time workers is significantly 
higher than the EU average. At the same time, 
Denmark’s  active  labour  market  policies  are 
considered effective.  

Young  people  in  rural  areas  are  more 
likely  to  struggle  with  education  and 
employment  than  their  peers  in  urban 

areas.  Although  the  proportion  of  young 
people who are not in employment, education 
or training (NEET) in Denmark is below the EU 
average,  NEET  rates  are  markedly  higher  in 
rural  areas  (11.5%)  than  in  cities  (7%)  (see 
Annexes 11 and 18) and there is concern that 
these  young  people  remain  at  risk  of  social 
exclusion.  The  NEET  group  faces  complex 
challenges  that  are  difficult  to  address, 
including  the  transition  from  education  to 
work,  somatic  and  mental  health  issues,  and 
difficult economic and social circumstances. To 
tackle  this,  in  2024  Denmark  concluded  a 
political  agreement,  Ungeløftet  (The  Youth 
Commitment)(36).  The  implementation  of  this 
initiative  started 
involves 
partnerships  bringing  together  municipalities, 
businesses, and civil  society to create tailored 
opportunities  to  help  young  people  aged  15-
29-years  old  move  into  employment  and 
education.  The  effects  have  not  yet  been 
identified.  

in  2025  and 

Aligning skills with labour market 
needs to promote fairness and 
competitiveness 

learning 

in  Denmark 

Adult 
is  well 
established  and  advanced.  Participation  in 
learning  activities  by  the  adult  population  is 
higher  than  the  EU  average,  but  Denmark  is 
still falling behind the target for 2030 agreed 
by all EU Member States in the context of the 
Pillar of Social Rights (see Annex 13). However, 
the  active  labour  market  policy,  ‘Right  to 
Educational 
pct. 
unemployment  benefit’,  which  combines  up- 
and  reskilling  with  an  increased  amount  of 

Boost 

with 

110 

(35)  National register-based unemployment figures suggest 

an unemployment rate of 3.0% (March 2026). 

(36)  See  Aftale  om  Ungeløftet  for  the  political  agreement 
between the government and three of the parties in the 
Folketing; see also the dedicated website Ungeløftet for 
more information on the detailed implementation. 

18 

 
 
 
 
 
unemployment  benefit,  had  a  positive 
outcome, with high participation rates, and has 
now become a permanent measure.  

such 

sectors 

economy, 

the  need 

report  persistent  difficulties 

in  strategic  sectors 
Skills  shortages 
underscore 
to  strengthen 
vocational  education  and  training  (VET) 
and  boost  talent  in  science,  technology, 
engineering  and  mathematics  (STEM).  In 
Denmark’s  highly  digitalised  and  innovation-
oriented 
as 
engineering,  ICT  and  those  tied  to  the  green 
in 
transition 
finding  suitably  skilled  workers.  Consequently, 
Denmark received a CSR in 2025 on improving 
the  provision  and  acquisition  of  the  skills  for 
transition,  while 
the  green  and  digital 
addressing 
in 
inequalities 
attainment 
education  and 
training.  A  comprehensive 
reform  of  the  education  and  training  sector, 
‘Prepared for the Future’ (37), aims to enhance 
alignment  of  the  educational  offer  with 
market needs, through the targeted expansion 
of the offer in strategic sectors and reforms in 
technical  and  vocational  fields.  However, 
enrolments  in  initial  VET  and  STEM  fields  in 
higher  education 
the  EU 
average, with notable gender gaps (see Annex 
13).  Vocational  professions  with  large  shares 
of unfilled vacancies will in coming years face 
increasing  numbers  of  retiring  workers.  The 
shortage  of  skilled  labour  in  these  areas  is 
therefore likely to increase further. The effect 
of  the  recent  reforms  is  yet  to  be  assessed. 
However, 
stakeholder 
engagement  and  nurturing  STEM  and  VET 
talent  from  an  early  age  would  support 
Denmark’s  continued  success  in  innovation 
and sustainable development.  

remain  below 

sustaining 

robust 

Rising  early  school  leaving  and  declining 
basic  skills  pose  risks  for  long-term 
competitiveness  and  social  cohesion. 
While Denmark maintained its position as one 

(37)  See the following link: Prepared for the future – Ministry 
of Higher Education and Science. It is a comprehensive 
reform  covering  six  areas:  (i)  university,  master’s  level, 
June  2023;  (ii)  folkeskole,  March  2024;  (iii)  vocational 
education,  health  and  care  sectors,  January  2024;  (iv) 
vocational  education,  green  transition,  June  2024;  (v) 
upper  secondary 
level,  vocational  baccalaureate, 
February  2025;  (vi)  bachelor’s  level,  including  STEM, 
March 2025.      

of 

of  the  best  performing  EU  Member  States  in 
the  OECD’s  Programme  for 
International 
Student Assessment (PISA) 2022, a worsening 
registered  across  all  areas, 
trend  was 
top-
shares 
regarding 
particularly 
performing  15-year-olds 
reading  and 
in 
mathematics. Underachievement in basic skills 
is  particularly  high  among  students  with  a 
migrant  background,  with  42.1%  struggling  in 
mathematics,  compounded  by  gender  gaps. 
Meanwhile,  the  rate  of  early  leavers  stood  at 
10% in 2025, exceeding the EU average, with 
particularly  large  disparities  between  cities 
and rural or suburban areas (see Annex 13). To 
counter  these  challenges,  Denmark  already 
tracks attendance, wellbeing, and performance 
in  view  of  identifying  at-risk  pupils,  although 
this data could be more systematically used to 
direct additional support to vulnerable schools 
or  areas.  Strengthening  preventive  and 
remedial  support  could  help  cultivate  a  more 
inclusive 
educational 
environment. 

effective 

and 

Graph 4.1: Danish students’ PISA results, 
2000-2022 

Source: OECD 

Denmark  faces  growing  difficulties  in 
attracting  and  retaining  teachers,  which 
has  an 
impact  on  the  quality  of 
education.  Teacher  shortages  stem  from 
attracting 
associated  with 
challenges 
graduates  in  the  field  of  education  to  the 
state-school  sector,  as  around  half  opt  for 
other  career  paths.  Consequently,  reliance  on 
non-qualified  staff  has  risen  above  15%, 
among the highest in the EU, undermining the 
effectiveness  of  education  spending.  While 
Danish  teachers  report  comparatively  high 
career satisfaction in the OECD’s Teaching and 
Learning 
the 
demands  of  increasingly  diverse  classrooms 

International  Survey  2024, 

19 

51451350350051150948949749249449549650050148949649949850249349448049050051052020002003200620092012201520182022MathematicsReadingScience 
 
  
education  and 

insufficient  support  from  educational 
and 
specialists  diminish  the  profession's  appeal. 
Despite having high participation rates in early 
childhood 
care,  quality 
disparities  –  linked  but  not  limited  to  staff 
shortages  –  persist.  As  Denmark  prepares  to 
revise  its  Inclusive  Education  Act  in  2026, 
directing  more  resources  to  disadvantaged 
learners and establishing staffing benchmarks 
for  multi-disciplinary  teams  would  better 
support diverse classrooms and ease teachers’ 
workloads.  Strengthening  structured  induction 
and  mentoring  programmes  for  new  teachers 
could  help  to  retain  educated  teachers  within 
the 
fast-track 
educational  pathways  for  non-qualified  staff 
could  help  improve  the  overall  quality  of 
education provision. 

Additionally, 

profession. 

Addressing disparities to maintain 
the high level of social inclusion 

in  housing  costs,  where 

Despite  Denmark’s  high  level  of  social 
protection,  some  disparities  are  putting 
vulnerable  groups  at  risk.  While  Denmark 
has a relatively stable rate of people at risk of 
poverty  and  social  exclusion, 
there  are 
noticeable  regional  differences,  with  urban 
residents  facing  a  higher  risk  than  those  in 
smaller  towns  and  rural  areas.  This pattern  is 
mirrored 
city 
households  experience  greater  financial  strain 
than  rural  ones.  Vulnerable  groups  also 
encounter  challenges  related  to  transport 
affordability, making it more difficult for them 
to  afford  a  car.  In  contrast  to  the  broader  EU 
trend,  the  rate  of  severe  material  deprivation 
among  children  has  risen,  albeit  from  a  very 
low level. The country is significantly behind its 
2030  poverty  reduction  target,  indicating  a 
need  for  comprehensive  measures  to  reduce 
the  risk  of  poverty  in  line  with  the  EU’s  anti-
poverty strategy. 

Denmark’s  healthcare  system  performs 
well  overall  but  faces 
income-based 
inequalities  in  access  to  services.  The 
is 
Danish 
characterised  by  universal  health  coverage.  It 
is  primarily  organised  at  regional  level  and 
taxes. 
mainly  funded  publicly  based  on 

system 

health 

care 

and 

Patients’ own contributions are the largest for 
pharmaceuticals  and  dental  care.  Uneven, 
income-related  disparities  are  particularly 
pronounced  for  services  such  as  dental  care, 
hearing  aids  and  vision  aids  (see  Annex  15). 
This leads to inequality in the uptake of health 
and care services, with the wealthier segment 
of  the  population  being  in  a  position  to  make 
greater  use  of  the  system.  In  2024,  over  9% 
of  people  in  Denmark  reported  unmet  dental 
care needs, rising to 23% among those at risk 
of poverty (see Annex 15). At the end of 2025, 
the  former  Danish  government  reached  a 
political  agreement  on  adult  dental  care  that 
envisages the introduction of an annual dental 
allowance  for  all  individuals  aged  21  and 
above and the provision of free dental care for 
certain  groups,  including  individuals  receiving 
cash benefits. Denmark’s advanced healthcare 
digitalisation  is  under  constant  development, 
but  uptake  is  lower  among  people  with  lower 
education  levels,  highlighting  room  for  more 
inclusive use of such systems. 

in 

The  healthcare  system  also  suffers  from 
geographical 
service 
disparities 
distribution. There are significant differences 
in the supply of health professionals, as some 
rural  areas  (in  particular  West-Zealand  and 
North-Jutland)  have  much  fewer  general 
practitioners  and  reduced  hospital  services 
available  for  patients  than  urban  areas.  A 
recent  political  agreement  on  a  reform  of  the 
healthcare  system (38)  is  expected  to  improve 
and  streamline  health  and  care  provision  by 
increasing  the  supply  of  general  practitioners 
in  understaffed  areas,  shifting  treatments 
from  hospital  care  to 
local  clinics,  and 
improving  the  connection  between  health 
treatments  and  subsequent  care  provision.  In 
addition, the provision of psychiatric treatment 
is set to be improved. The reform is ambitious 
and 
for 
the 
healthcare  by  shifting  tasks  from  the  98 
municipalities  to  17  newly  created  health 
councils and now 4 regions. Implementation is 
expected  to  be  finalised  in  2027;  results 
remain to be assessed. 

responsibility 

centralises 

(38)  See  Aftale  om  sundhedsreform  2024  |  Indenrigs-  og 
Sundhedsministeriet  that  was  reached  in  November 
2024 between the government and four of the parties 
in the Folketing. 

20 

 
 
increasing  the  share  of  qualified  teachers 
in  schools  and  lowering  rates  of  early 
leavers,  especially  in  vocational  education 
and training. 

In other areas, Denmark would benefit from: 

• 

increasing housing supply by simplifying 
planning  procedures  and  reviewing  land-
use planning rules. Implementing measures 
to  contain  house  price  increases  including 
reviewing mortgage credit incentives.  

KEY FINDINGS 

In areas covered by existing CSRs, Denmark 
would benefit from: 

•  continuing  to  boost  innovation  and 
technology  adoption  by  small 
to 
medium-sized  enterprises  (SMEs)  by 
providing  more 
support 
instruments,  improving  further  knowledge 
institutions, 
diffusion  between  research 
large  firms  and  SMEs  and  strengthening 
the 
procurement 
innovation 
framework;  

accessible 

national 

• 

scale-up 

financing 

by 
improving 
strengthening  growth  equity, 
improving 
conditions  for  initial  public  offerings  and 
mobilising  domestic  savings  by  putting  in 
place better conditions for household equity 
investment  and 
investor 
participation; 

institutional 

•  supporting  electrification  as  a  key 
decarbonisation  and  energy  affordability 
lever  by  means  of  a  comprehensive 
national electrification strategy; 

•  addressing growing electricity demand 
and  price  spreads  by 
incentivising 
electricity  network  upgrades  and  clean 
flexibility solutions; 

•  accelerating  the  transition  to  more 
sustainable 
the 
agriculture 
restoration  of  natural  ecosystems 
through  continued swift implementation  of 
the agreement on a ‘Green Denmark’; 

and 

•  strengthening  circular  economy  and 
waste  management 
by 
promoting  circular  packaging  and  product 
design,  expanding  the  use  of  secondary 
materials,  and  reducing  reliance  on  waste 
incineration; 

policies, 

•  sustaining  job  creation  by  tackling  skills 
shortages,  raising  basic  skills  proficiency, 

21 

 
 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

A1.  CSR implementation 

Fiscal 

A2.  Fiscal developments and debt sustainability 

A3.  Taxation 

Productivity 

A4. 

Innovation to business 

A5.  Single market and industry 

A6.  Savings, investment and access to finance 

A7.  Effective institutional framework 

Sustainability 

A8. 

Industry decarbonisation, circularity and climate mitigation 

A9.  Affordable energy transition 

A10.  Climate adaptation, preparedness and environment 

Fairness 

A11.  Labour market 

A12.  Social policies 

A13.  Education and skills 

A14.  Social scoreboard 

A15.  Health and health systems 

A16.  Housing 

Horizontal 

A17.  Sustainable development goals 

A18.  Competitive regions 

A19.  Transport 

LIST OF TABLES 

A1.1. 
A2.1. 
A2.2. 
A2.3. 
A3.1. 
A4.1. 

2025 CSR implementation and Commission assessment 
Supplementary pension schemes - Scope for expansion 
Fiscal governance databse indicators and public accounting maturity 
Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 
Taxation indicators 
Key innovation indicators 

25 

28 

32 

32 

36 

40 

40 

46 

54 

61 

67 

67 

75 

82 

89 

89 

92 

94 

99 

100 

104 

109 

109 

111 

116 

28 
34 
34 
35 
37 
45 

 
 
 
Single Market and Industry 
Savings and Investments Union summary diagnostic 
Financial sector indicators 
Denmark. Selected indicators on better regulation practices for primary legislation 
Digital Decade key performance indicators: availability of digital public services 
Key clean industry and climate mitigation indicators: Denmark 

A5.1. 
A6.1. 
A6.2. 
A7.1. 
A7.2. 
A8.1. 
A10.1.  Key Adaptation Indicators 
A14.1.  Social Scoreboard for Denmark 
A15.1.  Key health indicators 
A18.1.  Main development trends, challenges and the concentration of resources 
A18.2.  Key regional indicators (at NUTS 2 level) for Denmark 
A18.3.  Production of wind and solar energy in Denmark (MWh per capita, 2023) 
A19.1.  ERTMS deployment in Denmark. 

LIST OF GRAPHS 

Composition of non-financial companies' funding 
Capital markets and financial intermediaries 
Composition of households' financial assets 
Trust in the justice system, regional / local authorities and in government 

Public investment evolution and composition (% of GDP) 
Primary spending evolution and composition (2007-2024) 
Compositional change (% total spending) in primary spending (2019-2024) 
Tax revenue by economic function in 2024, DK (outer ring) and EU-27 (inner ring) 
Tax wedge for single and second earners as a% of total labour costs, 2025 
R&D expenditure as % of GDP (2013-2024) 

A2.1. 
A2.2. 
A2.3. 
A3.1. 
A3.2. 
A4.1. 
A5.1.  Manufacturing industry production: total and selected sector, index (2021=100), 2015-2024 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2.  Most time-consuming aspects of service delivery 
A8.1. 
A9.1. 
A9.2. 
A9.3. 
A11.1.  Key labour market indicators 
A12.1.  AROPE rate and its components 
A13.1.  Early leavers from education and training (% among 18-24-year-olds), DK vs EU 2015-2025 
A13.2.  Labour shortages 
A15.1.  Life expectancy at birth, in years 
A15.2.  Treatable mortality 
A16.1.  House prices, rents and price-to-income evolution in DK and EU27 since 2005 
A16.2.  House supply indicators in DK since 2005 
A16.3.  Housing affordability selected indicators 
A17.1.  Progress towards the SDGs in Denmark 
A18.1.  GDP (PPS) per head (2024) and GDP per head growth (2014-2024), Denmark (NUTS 2 regions). 
A18.2.  Share of population with a hospital within 10 minutes by car in rural areas, (NUTS 2), 2023 

Greenhouse gas emissions in the effort sharing sectors, 2005, 2023, and 2024 
Electricity and gas prices for household and non-household consumers, first half of 2025 
Low-carbon electricity generation vs. electricity wholesale prices, 2025 
Denmark’s installed renewable capacity vs electricity generation mix 

LIST OF MAPS 

A18.1.  GDP per head compared with the EU average 
A18.2.  Population growth in Danish municipalities 2014-2025 
A18.3.  Percentage growth in number of jobs at municipal level, 2018-2023 
A18.4.  Age dependency ratio in Danish municipalities 
A18.5.  House purchase capacity relative to income in Denmark (NUTS 3) 
A19.1.  TEN-T Cross-Border & National Priority Sections in Denmark. 

26 

53 
54 
60 
62 
63 
74 
88 
99 
101 
112 
113 
115 
117 

32 
33 
33 
36 
38 
40 
51 
55 
56 
56 
61 
63 
68 
75 
76 
79 
89 
92 
96 
97 
100 
100 
104 
105 
108 
109 
111 
114 

111 
112 
113 
114 
115 
117 

 
 
 
 
 
27 

 
 
ANNEX 1: CSR IMPLEMENTATION  

Table A1.1:  2025 CSR implementation and Commission assessment 

(Continued on the next page) 

28 

Denmark faces challenges in a wide range of policy areas, as identified in the country-specific recommendations (CSRs). Denmark was recommended, among other things, to boost SME innovation and access to finance, accelerate the green transition through cleaner energy, electrification and better grid flexibility, strengthen circular economy and sustainable agriculture, and address skills shortages while improving education outcomes and housing affordability.  The Commission has assessed the degree of implementation of the 2025 CSRs considering the policy action taken by Denmark to date*. To do so, the Commission has taken into account the information provided by Denmark in its Annual Progress Report as well as other information sources. This annex provides summary information on the policy actions taken or planned by Denmark for each CSR. More detailed information on these actions is included in the relevant chapters and other annexes of the report. *CSR 2 is not assessed in CeSaR. RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  1.1 Reinforce overall defence and security spending and readiness while ensuring debt sustainability in line with the European Council conclusions of 6 March 2025. Total general government defence expenditure in 2026 is projected at 2.6% of GDP, corresponding to an increase of 0.8 ppt. compared to 2024. Total general government defence expenditure in 2027 is projected at 2.8% of GDP, corresponding to an [increase/decrease] of 1.0 ppt. compared to 2024.  Substantial progress 1.2 Adhere to the maximum growth rates of net  expenditure recommended by the Council on 21 January 2025, while making use of  the allowance under the national escape clause for higher defence expenditure. A budget surplus of 2.9% of GDP and 0.9% of GDP is recorded in 2025 and projected for 2026, respectively. Cumulated deviation in 2025 amounted to –0.6% of GDP. Cumulated deviation in 2026 projected to –0.1% of GDP.   Full implementation 3.1 Address the productivity gap between large and small companies by supporting SMEs to innovate and adopt new technologies, notably in sectors with emerging potential.  Political agreement on multiannual R&I funding incl. new separate funding for innovation.   Political agreement on strengthened knowledge and technology transfer from university to business.   Strategic reconfiguration and refocus of the 2025–2028 Innovation Cluster Programme  Some progress 3.2 Boost innovative businesses by improving access to venture capital and private equity and the framework conditions for initial public offerings. By law no. 1781 of 29 December 2025, Denmark has extended the employee share scheme to include more small and medium-sized enterprises.  From 1 January 2026 an increased progression threshold for returns on shares and dividends and an increased deposit limit on the “Aktiesparekonto” (preferential stock savings account).   Limited progress  
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

29 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  The Export and Investment Fund of Denmark received in 2025 a DKK 2 billion capital injection to expand its capacity for venture and acceleration/growth investments, including investments in green technologies. 4.1-2 Reduce reliance on fossil fuels by supporting clean and efficient energy production and use[...] New broad CO2 taxation regime across sectors phased in 2025. For non-ETS industries a tax of 750 DKK per ton of CO2 has been phased in 2025. Industries within the ETS have a reduced tax of 375 DKK per ton of CO2. Denmark also introduced a Green Transition Support Scheme (Omstillingsstøtten), under which approximately DKK 2 billion has been allocated to support industrial decarbonisation projects in energy-intensive companies.  Several initiatives covered by NEKST REPowerEU measure (Milestone 79 and 81 of the national recovery and resilience plan)  November 2025 launch of new offshore tenders for 2.8 GW under improved terms (20-year state support under a contract-for-difference model)  Approved state loan support for the construction of a hydrogen pipeline connecting Denmark to Germany (project development subject to minimum booked capacity in upcoming auctions)  As of 1 February, the national TSO Energinet depart from a “first come, first served” approach to a maturity-based one when screening grid connection requests. May 2025, KEFM, Danske Regioner, and KL reached an agreement to improve the energy efficiency of public buildings  October 2025 political agreement on the designation of 11 industrial parks (PtX, CCUS, life sciences, biotech, clean tech)  October 2025 agreement containing 21 initiatives to accelerate RE deployment  February 2026 government proposal for a 2035 climate target of 82% emissions reduction compared to 1990 levels  On 26 January 2026, Germany and Denmark reached an agreement on cost-sharing for the Bornholm Energy Island project. Substantial progress 4.3 [...], and by accelerating electrification across sectors.    As of 1 January 2026, the electricity tax has been reduced to the EU minimum level. However, this is a temporary measure (2 years).  December 2025 Law extending reimbursement scheme for charging of corporate electric cars. Biofuels (liquid or gaseous fuels produced from biomass) are exempted from CO2 tax (with a few exceptions).  Record share of electric vehicles in  Some progress  
 
 
  
 
Table (continued) 

(Continued on the next page) 

30 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  newly registered vehicles in 2025, especially in passengers cars fleet. 4.4-5 Address increasing demand and flexibility needs by providing incentives to make the electricity network upgrades needed at transmission and distribution level, and by promoting demand response, energy storage and other clean flexibility solutions. On the network element:   In July 2025 an investment of over DKK 12.5 bn for electricity network running from Trige near Aarhus to Kassø near Aabenraa was approved.   As of 1st January 2026, underground cables dimensioned for voltages above 100 kV, as well as associated substation facilities, are exempted from an environmental screening decision; expropriation and other rules have also been amended in a view to speed up grid construction projects.   As of 1st February 2026, Energinet departed from a “first come, first served” approach when screening grid connection requests. Moreover, Energinet and the country's distribution network companies have set up a fast-working group.   On the flexibility element:   In 2025, there has been a boom in grid connection demand, and the long pipeline also includes battery projects. No major dedicated initiatives were observed but works are ongoing on a national flexibility needs assessment to be delivered by the national designated entities by July 2026. On the network element:  On 26 January 2026, a new political agreement has been reached to discuss urgent measures for a transparent and rapid expansion of the electricity grid.  On 5 February 2026 another agreement has been signed. The parties endorse Energinet's new proposal for alignment from Aarhus-Aabenraa and enable a major adjustment in South Zealand with an expansion of the grid acceleration area so that local wishes can be met. An extended zone is now being created where neighbours of 400 kV overhead lines on the two new lines are offered the purchase of their homes on expropriation-like terms out to 80 metres.   On the flexibility element:   The October 2025 agreement containing 21 initiatives to accelerate RE deployment will also partly contribute to storage and flexibility efforts. Some progress 4.6 In line with planned measures, reduce the intensity of agricultural and farming activities. The state is contributing to the land conversion efforts by strategically buying land at market prices.    By the end of 2025, all 23 local tripartite configurations reached an agreement on a comprehensive conversion plan for nitrogen reductions in water bodies.   Work is ongoing establishing the necessary “backbone” for the CO2e tax on livestock emissions from 2030, which is a first of its kind world-wide. On 3 December 2025, the government and the parties behind the Agreement on the Implementation of a Green Denmark have entered into an agreement on the distribution of agricultural nitrogen emissions and how farmers should be compensated for reducing their emissions (cap-and-trade model with discharge quota). The new model is expected to be enshrined in a law. Timeline for this is subject to formation and orientation of the new government. Some progress 4.7 Strengthen the circular economy and waste management policies by As of October 2025, a new Extended Producers Responsibility framework was introduced in the country but  Some progress  
 
 
  
 
Table (continued) 

Source: Denmark's reporting and Commission assessment 

31 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessm. of progress  promoting waste prevention and the reuse of municipal and other waste, increasing recycling rates, reducing food waste and shifting away from the incineration of municipal waste for heat generation to using cleaner sources. both stakeholders and the ministry acknowledged that the implementation has been complicated so far.  The outgoing government proposed new legislation to reduce producers’ fees.  On incineration, reforms introduced in 2024/2025 aimed to increase competition in the waste-to-energy sector, with the objective of reducing incineration capacity over time and limiting imports of waste generated abroad. However, it remains uncertain whether incineration volumes will decline, as relatively high incineration ceilings have been granted to operators up to 2030-2035. 5.1 Address the skills shortages to meet labour market needs, including by stepping up action to tackle attainment inequalities in education and training and to ensure the provision and acquisition of the skills needed for the green and digital transition. In 2025, a considerable number of reforms have been put in place for primary and secondary education covering educational subjects and adding practical aspects and traineeships in companies, changing the range of baccalaureates adding a vocational dimension.   A university reform covering the geographical spread of study places, the range of subjects, intake of foreign students, and increasing the focus on STEM.  Purpose is to ensure future provision of skilled labour across the labour market. In addition, measures have been put in place to reduce the share of early school leavers and young people not in education, employment or training.  Full implementation of the school reform until 2030.   Full implementation of the higher education reform until 2028.   Full implementation of the youth commitment by 2028. Some progress 5.2 Implement measures to improve the affordability of housing. Temporary increase in the allowable construction cost ceilings for non-profit housing of 4% nationwide (1% + inflation-adjustment of 2.88%) and a first additional 10% for the major cities of Copenhagen and Aarhus.    Improved support schemes in the Fund for Mixed Cities for cheapest non-profit housing including 150 million DKR temporary rent support.   A legislative proposal for a second additional 10% increase in the cost ceiling for non-profit housing for the high-cost areas of Copenhagen and Aarhus to be put forward  (backed by majority political agreement in December 2025).  Political agreement 27 January 2026 to change the Planning Act to allow local authorities to require that up to 25% of new developments be owner-occupied housing. Substantial progress   
 
  
 
FISCAL 
ANNEX 2: FISCAL DEVELOPMENTS AND DEBT SUSTAINABILITY 

set  to  rise  to  3.9%  in  2027  despite  the  reduced 
support  from  the  Recovery  and  Resilience  Facility 
thanks  to  higher  investment  financed  by  national 
is 
budgets, 
projected  to  spend  more  on  nationally  financed 
investment in 2027 than it did before the COVID-
19 pandemic.   

including  on  defence.  Denmark 

Rising  public  investment  is  improving  the 
quality  of  expenditure  in  Denmark.  Public 
investment  is  expected  to  reach  X%  of  GDP  in 
2026, up from 3.2% in 2019 (see Graph A2.2). It is 
set  to  increase  further  in  2027  despite  the  lower 
support  from  the  Recovery  and  Resilience  Facility 
(RRF) thanks to greater investment financed by the 
national budget, mainly on defence.  

Graph A2.1: Public investment evolution and 
composition (% of GDP) 

Source:  AMECO 

The  type  of  expenditure  that  has  a  greater 
impact  on  GDP  had  remained  broadly  stable 
over two decades in Denmark but has slightly 
increased  since  2019.  Since  2019,  public 
expenditure  on  social  protection  and  defence  has 
increased  by  less  than  expenditure  on  other 
functions, as a share of total spending (See Graph 
A2.3), with the rise in defence spending reflecting 
recent  security  developments.  Spending  on  health 
and  R&D  has  increased  more  modestly  since 
2019.  

in 

developments 

This annex discusses selected topics in public 
finance  and 
fiscal-
structural  country-specific  recommendations 
(CSRs)  addressed  to  Denmark  in  July  2025. 
These  CSRs  include  a  call  to  strengthen  defence 
spending  and  readiness  while  implementing  a 
the  Council 
strategy 
fiscal 
Recommendation 
21 January 2025.  On 
21 January 2025,  the  Council  of  the  European 
Union  adopted  the  Recommendation  endorsing 
Denmark’s medium-term fiscal-structural plan (39). 
At  the  same  time,  the  Council  also  activated  the 
national  escape  clause  for  Denmark  in  order  to 
enable  it  to  boost  public  spending  on  defence 
(40)(41). 

line  with 

of 

in 

Developments in the government 
balance, debt and public 
expenditure (42) 

Denmark’s  government  surplus  amounted  to 
2.9%  of  GDP  and  the  government  debt-to-
GDP  ratio  amounted  to  27.9%  at  the  end  of 
2025.  Based  on  the  Commission  Spring  2026 
Forecast,  Denmark’s  government  surplus 
is 
projected to decrease to 0.9% of GDP in 2026 and 
to  0.5%  of  GDP  in  2027.  The  decrease  in  the 
surplus  is  set  to  be  driven  both  by  Denmark’s 
falling  revenue  to  GDP  ratio  and  rising  general 
government  expenditure, which  reached  44.0%  of 
GDP  in  2025.  Expenditure  is  expected  to  increase 
over the forecast horizon and reach 44.9% of GDP 
in 2027, remaining above the EU average.  

Rising  public  investment  is  contributing  to 
the  falling  government  surplus  in  Denmark. 
Public 
investment  was  preserved  during  the 
pandemic, and is expected to reach 3.8% of GDP in 
2026, up from 3.2% in 2019 (see Graph A2.3). It is 

(39)  OJ C, C/2025/654, ELI. 

(40)  OJ C, C/2025/3963, ELI. 

(41)  Compliance by Denmark with the maximum growth rates of 
net expenditure recommended by the Council is assessed in 
COM(2026)200. 

(42)  Figures  underpinning  fiscal  surveillance  (net  expenditure 
growth)  are  provided 
in  the  Fiscal  Statistical  Tables 
(SWD(2026)200) providing background data relevant for the 
assessment of the budgetary policies of the Member States. 

32 

0.00.51.01.52.02.53.03.54.04.55.0201920202021202220232024202520262027% of GDPOther nationally-financedRRF grants and other EU fundsDefence 
 
 
 
  
 
 
 
Graph A2.2: Primary spending evolution and 
composition (2007-2024) 

The costs of ageing 

Total  ageing-related  spending  in  Denmark  is 
projected  to  rise  by  about  1.5 pps  of  GDP 
between  now  and  2040,  to  around  26%  of 
GDP, with a further 2.5 pps increase between 
2040  and  2070  (see  Table  A2.3).  The  overall 
increase is mainly the result of a projected rise in 
long-term 
smaller 
contribution  from  healthcare,  and  an  expected 
decline in pension spending.  

spending,  with  a 

care 

Public pension spending as a share of GDP is 
projected  to  remain  stable  in  the  coming 
decades  but  decline  in  the  longer  term. 
Overall,  between  now  and  2070,  public  pension 
outlays  are  projected  to  fall  by  2 pps  of  GDP,  to 
around  7%  of  GDP,  which  would  be  substantially 
lower  than  the  projected  EU  average  of  around 
12%. 

Supplementary  pension  schemes  can  make 
the  pension  system  more  resilient  by 
diversifying  retirement  income  sources.  In 
Denmark,  the  uptake  of  these  supplementary 
schemes is significant. By the end of 2024, private 
pension assets amounted to around 207% of GDP 
and  participation  covered  around  70%  of  the 
working-age  population  (44).  This  coincides  with 
stable  public-pension  spending  pressures  and 
forecasts  for  a  slight increase  in  the  replacement 
rate  by  0.1 pps  between  2025  and  2040  (Tables 
A2.2 and A2.3) (45).   

Public healthcare expenditure is projected to 
reach  7.1%  of  GDP  in  2025  (above  the  EU 
average of 6.6%) and is expected to increase 
by  0.3  pps  of  GDP  between  now  and  2040 
and  by  a  further  0.4  pps  between  2040  and 
2070 (46). Public expenditure on long-term care is 
projected to be 3.2% of GDP in 2025 (well above 
the  EU  average  of  1.7%)  and  is  expected  to 

(44)  Source:  OECD  Pension  Market  in  Focus  2025.  The  highest 
participation rate in at least one supplementary pension plan 
is reported. 

(45)  The  (gross)  replacement  rate  refers,  depending  on  data 
availability,  to  both  public  and  private  pensions.  It  is  based 
on projections from the 2024 Ageing Report. 

(46)  Key  performance  characteristics, 

reforms  and 
investments  of  the  Danish  healthcare  system are discussed 
in Annex 15. 

recent 

Source: Eurostat 

Graph A2.3: Compositional change (% total 
spending) in primary spending (2019-2024) 

(1) Based on economic literature, the categories considered to 
have a greater growth impact include education, R&D, health, 
transport and communication (See Barbiero and Cournede 
(2013), Gemmel et al. (2016), Lupu et al. (2018), Cepparulo 
and Mourre (2020) and OECD (2025)). 
Source: Eurostat 

Denmark  has  a  high  level  of  tax  compared 
with  EU  peers  but  a  balanced  tax  system 
overall.    Denmark’s  total  tax  revenues  as  a 
percentage  of  GDP  (including  compulsory  social 
contributions  security)  amounted  to  45.4%  in 
2024,  compared  with  an  EU  average  of  39.5%. 
Total  tax  revenues  are  projected  to  remain  at 
45.4% of GDP in 2025 and fall to 45.3 % of GDP 
in  2026  according  to  the  Autumn  2025  Forecast 
(43).  The  split  of  the  tax  mix  in  Denmark  between 
taxes on labour, consumption and capital is similar 
to  the  EU  average  (see  Graph  A3.1).  Labour  tax 
revenues  as  a  percentage  of GDP  are the highest 
among  all  Member  States,  while  consumption 
taxation  is  broad-based  with  no  use  of  reduced 
rates. Denmark maintains one of the EU's highest 
tax  deductions  for  mortgage  interest,  thereby 
incentivising  debt-financed  property  ownership 
and likely increasing house prices (see Annex 3). 

(43)  Data  retrieved  from  the  AMECO  database  (https://economy-

finance.ec.europa.eu/economic-research-and-
databases/economic-databases/ameco-database_en). 

33 

51015202530404448525660200720082009201020112012201320142015201620172018201920202021202220232024Primary expenditureSpending with higher impact on GDP (rhs)-2.00-1.60-1.20-0.80-0.400.000.400.801.201.60SocialprotectionEducationCultureOther economicCommunicationR&DEnvironmentHealthInterestspendingPublicorderTransportHousingGeneralservicesDefence 
  
 
  
 
 
Table A2.1:  Supplementary pension schemes - Scope for expansion 

Source: European Commission. 

Table A2.2:  Fiscal governance databse indicators and public accounting maturity 

(1) 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. 
The score for public accounting reflects the degree of maturity in relation to the International Public Sector Accounting Standards 
(IPSAS). Countries with an accounting maturity of 70% or more in relation to IPSAS are deemed to apply accrual accounting. For 
more information, see the report on public accounting in the EU (COM(2025)746 and accompanying Staff Working Document 
SWD(2025)396). 
Source: Fiscal Governance Database, European Commission 

increase  by  1.5  pps  of  GDP  between  now  and 
2040  and  by  a  further  1.5  pps  of  GDP  between 
2040 and 2070 (47). 

National fiscal framework  

Denmark  employs  best  practices  for  its 
spending  reviews.  The  Danish  Ministry  of 
Finance  operates  a  system  of  spending  reviews 
known  as  ‘special  studies’  in  close  cooperation 
with  line  ministries.  The  spending-review  system 
runs  annually  and 
the  budget 
preparation process. 

is  part  of 

The  long-standing  Danish  Economic  Councils 
(DECs)  have  a  remit  that  goes  beyond  the 
tasks  of  the  typical 
independent  fiscal 
institution  (IFI).  They  also  fulfil  the  roles  of 
productivity  board,  general  economic  council,  and 
environmental-economic council.  

(47)  The  adequacy  and  quality  of  the  Danish  long-term  care 

system are covered in Annex 12. 

On  the  IFI  tasks,  the  DECs  have  a  relatively 
(i)  the 
broad  mandate,  covering  both: 
assessment  forecasts  and  compliance  with 
national  fiscal  rules;  (ii)  and  carrying  out 
long-term  sustainability  analysis.  The  DECs’ 
access  to  information  is  covered  by  the  Danish 
Public  Administration  Act.  The  DECs  report  strong 
medium-term  concerns  regarding  resources,  as 
they  are  subject  to  an  annual  requirement  to 
reduce their budget by 2% in real terms.  

Denmark  uses  best  practices  for  planning, 
selecting  and  budgeting  investment  projects 
in  the  road/railway  and  IT  sectors.  The 
Denmark  Forward  -  Infrastructure  plan  2035  is  a 
14-year strategic mobility plan, covering roads and 
railways,  and  integrating  climate  considerations 
(48). Standardised appraisal and selection methods 
and external quality assurance (for projects above 
DKK  350  million  (approx.  EUR 47 million))  are  in 
place  for  all  projects  included  in  the  plan  (49). 

(48)https://fm.dk/media/hduprait/danmark_fremad_infrastrukturpl

an_2035_a.pdf. 

(49)Zerjav,  V.,  Welde,  M.,  and  Volden  G.  (2026),  “Governance 
frameworks for major public projects. International practices 
and experiences” (Eds), Country Chapter on Denmark, Wiley. 

34 

Assets in 2024 (% GDP)Participation in 2024 (% working-age population)DK206.40.167.7DKEU32.4-2.855.9EUGross replacement rate at retirement: (pps change 2025-2040) Country Fiscal Rule Strength Index (C-FRSI)11.4914.81Medium-Term Budgetary Framework Index (MTBFI)0.620.722025 Public accounting maturity of general government76%65% 
 
 
 
      
 
 
  
 
Table A2.3:  Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 

Source: 2024 Ageing Report (EC/EPC). 

These  governance  models  could  be  extended  to 
other  sectors 
in  Denmark  such  as  energy 
infrastructure.  The  total  budget  cost  of  large 
projects  is  approved  up-front  by  the  Danish 
Parliament  which  creates  a  stable  framework  for 
financing multi-annual projects.  

35 

DK24.7-0.10.31.5-0.11.626.3DKEU24.30.50.30.4-0.30.925.2EUDK24.7-2.00.73.0-0.61.125.8DKEU24.30.20.60.8-0.31.325.6EUageing-related expenditure change in 2025-2070 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotalageing-related expenditure change in 2025-2040 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotal 
 
 
 
 
   
 
ANNEX 3: TAXATION 

This  annex  provides  an 
indicator-based 
overview of Denmark’s tax system. It includes 
information  on  the  tax  mix,  on  competitiveness 
and fairness aspects of the tax system, and on tax 
collection and compliance. 

in 

the  EU 

Denmark  has  the  highest  tax  revenues  as 
share  of  GDP 
in  2024, 
5.8 percentage  points  (pps)  above  the  EU 
average.  Denmark's  total  tax  revenue  stood  at 
45.2%  of  GDP  in  2024,  up  from  44.0%  in  2023, 
compared to the EU-27 average of 39.4%. Budget 
projections indicate this ratio will remain elevated 
through  2025-2026,  though  declining  budget 
surpluses are expected (50) (51). 

Graph A3.1: Tax revenue by economic function in 
2024, DK (outer ring) and EU-27 (inner ring) 

Source: Taxation Trends Data, DG TAXUD 

Denmark may abandon uniform VAT taxation 
for 
taxes 
some  products.  Consumption 
accounted  for  11.8%  of  GDP  in  2024  (EU-27: 
10.6%),  with  VAT  at  9.3%  of  GDP  (EU-27:  7.1%). 
Denmark's  25%  standard  VAT 
rate  applies 
uniformly to goods and services throughout 2024 
and  2025,  with  no  reduced  rates.  As  part  of  the 
political  budgetary  agreement  for  2026,  it  was 
expected that books would be exempted from VAT, 
and century-old excise duties on coffee, chocolate, 
and  sugar  would  be  phased  out.  However,  due  to 
parliamentary  elections  in  March  2026,  the  draft 
bill  has  been  repealed.  Whether  the  envisaged 
amendments will be introduced will depend on the 
new government. 

(50)  European Commission, 'Economic forecast for Denmark', 

Winter 2025. 

(51)  Preliminary Eurostat data point to a tax-to-GDP ratio of 

44.5% in 2025.  

36 

Denmark's environmental tax revenue equals 
the  EU  average  but  applies  significantly 
higher  carbon  pricing.  Environmental  taxes 
stood  at 2.1%  of  GDP in 2024,  matching  the  EU-
27  average,  down  from  3.3%  in  2019.  However, 
Denmark's effective carbon rate of EUR 101.7 per 
tonne  significantly  exceeds  the  EU-27  average  of 
EUR 84.8. 

is 

Denmark 
implementing  comprehensive 
carbon  pricing  reforms  from  2025-2030.  A 
new  CO2  tax  on  industry  became  effective  in 
January  2025,  reaching  DKK 750  (ca.  EUR  100) 
per tonne for non-ETS companies (i.e., not covered 
by the EU Emissions Trading System) and DKK 375 
(ca.  EUR  50)  for  ETS  companies  (i.e.,  covered  by 
the  EU  Emissions  Trading  System)  by  2030.  The 
broader  green  tax  reform  package  is  expected  to 
tonnes (52). 
reduce  emissions  by  4.3 million 
Denmark  will  also  implement  the  world's  first 
agricultural emissions tax in 2030 at an effective 
rate of DKK 120 (EUR 16) per tonne (after a 60% 
(EUR  40)  by 
deduction),  rising  to  DKK 300 
2035 (53).  An  enhanced  deduction 
(108%  of 
investments 
acquisition  cost)  supports  green 
through 2026 (54). 

New  property  taxes  remain  above  the  EU 
average but face implementation challenges. 
Total property taxes stood at 1.9% of GDP in 2024 
(EU-27: 1.8%), with recurrent taxes on immovable 
property  at  1.4%  (EU-27:  0.9%).  The  reformed 
system  that  entered  into  force  in  January  2024 
benefits  78%  of  homeowners  with  lower  taxes 
through  reduced  rates,  a  refined  valuation  model, 
and  a  precautionary  principle (55).  Final  property 
valuations however remain delayed through 2026, 
creating fiscal uncertainty. Taxation in 2024-2026 
relies  on  preliminary  2023  assessments,  with 
creating 
retroactive  adjustments 
uncertainty 
for  property  owners.  Denmark 
maintains  one  of  the  EU's  highest  mortgage-
incentivising  debt-financed 
interest  deductions, 

to  2022 

(52)  Government of Denmark, 'Agreement on Green Tax Reform 

for Industry'. 

(53)  Government of Denmark, 'Denmark introduces CO2 tax on 

agriculture'. 

(54)  Denmark, 'Fiscal and Structural Policy Plan 2024', submitted 

to European Commission. 

(55)  Danish Tax Authority, 'Introduction to property in Denmark’. 

51.526.821.653.426.220.5Taxes on labourTaxes on consumptionTaxes on capital 
 
       
 
 
 
 
Table A3.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2024. EU-27 refers to the median value. For more data on tax revenues as well as the methodology 
applied, see the Data on Taxation Trends webpage 
Source: European Commission, OECD, ISORA. 

property ownership and pushing up property prices 
(56). 

Denmark  provides  a  stable  corporate  tax 
framework  with  rates  close  to  EU  averages. 
The  statutory  corporate  income  tax  rate  stood  at 
22.0% in 2025, unchanged since 2016 and slightly 
above  the  EU  average  of  21.2%.  Likewise,  the 
average  effective  corporate  tax  rate  stood,  at 
21.2%  in  2024,  slightly  above  the  EU  average  of 
19.3%.  Denmark  offers  a  range  of  tax  incentives, 
notably  through  deductions  for  certain  types  of 
capital  investment,  including  a  choice  between 
immediate  expensing  of  R&D-related  capital 
expenditure  and  depreciation  over  five  years.  In 
tax’  was 
January  2025, 
abolished  by  exempting  dividends  on  tax-exempt 
portfolio  shares  (holdings  below  10%  in  unlisted 
companies)  and  the  progressive  threshold  for  the 
higher rate of capital gains taxation on shares was 
raised  from  DKK 63 300  (ca.  EUR  8 500,  2025 
level) to DKK 83 100 (ca. EUR 11 100, 2025 level) 
from the 2025 income year onwards. 

‘entrepreneur 

the 

Denmark’s  tax-benefit  system 
is  highly 
redistributive  and  reduces  income  inequality 

(56)  IMF, 'Denmark: Staff Concluding Statement of the 2025 

Article IV Mission', 12 May 2025. 

37 

in 

the  EU-27 

more than the EU average.  In 2024, taxes and 
transfers lowered the Gini coefficient by 10.5 pps, 
(57). 
compared  with  7.8 pps 
Progressivity  of  labour  taxation,  as  measured  by 
the  difference  in  the  tax  wedge  between  high-
income  earners (167%  of  the  average  wage)  and 
low-income earners (50% of the average wage) is 
at  8.6 pps,  clearly  below  the  EU  average  of 
12.5 pps (58). 

(57)  The  Gini  coefficient  measures  the  extent  to  which  the 
distribution  of  income  within  a  country  deviates  from  a 
perfectly  equal  distribution.  A  coefficient  of  0  expresses 
perfect equality where everyone has the same income, while 
a coefficient of 100 expresses full inequality where only one 
person has all the income. 

(58)  The  tax  wedge  is  an  indicator  of  the  tax  burden  on  labour 
that  can  be  assessed  at  various  levels  of  earnings.  It  is 
defined as the sum of personal income taxes, employee and 
employer  social-security  contributions  and  other  mandatory 
contributions,  expressed  as  a  percentage  of  total  labour 
costs  (composed  of  the  net  wage,  personal  income  tax, 
social 
contributions,  and  other  mandatory 
contributions).  Tax  wedge  data  in  the  2026  country  reports 
are calculated by the Joint Research Centre of the European 
Commission and based on the EUROMOD model, while in the 
past country reports they were based on the OECD’s tax and 
benefit  model.  While  the  underlying  methodology  is  very 
similar, differences in the assumptions can lead to different 
results between both models. 

security 

2019202220232024202520192022202320242025Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)47.342.144.045.244.539.939.739.039.4Taxes on labour (% of GDP)23.522.324.024.120.620.119.920.3of which, social security contributions (SSC, % of GDP)0.00.10.10.113.012.712.713.0Taxes on consumption (% of GDP)13.712.311.911.811.210.910.510.6of which, value added taxes (VAT, % of GDP)9.79.49.39.37.17.47.17.1Taxes on capital (% of GDP)10.17.58.19.38.18.78.58.5Personal income taxes (PIT, % of GDP)27.023.525.326.49.69.49.39.6Corporate income taxes (CIT, % of GDP)3.23.43.74.22.63.23.23.1Total property taxes (% of GDP)2.72.32.31.92.22.11.91.8Recurrent taxes on immovable property (% of GDP)2.01.71.71.41.21.00.90.9Environmental taxes (% of GDP)3.32.32.12.12.62.12.12.1Effective carbon rate in EUR per tonne of CO2 equivalentsnana101.7nanana84.8naTax wedge at 50% of average wage (single person) (*)32.432.832.832.932.432.431.631.531.531.6Tax wedge at 100% of average wage (single person) (*)36.336.436.436.636.140.139.739.939.940.0Corporate income tax - effective average tax rates (1) (*)19.419.419.521.220.019.219.019.3Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)11.311.010.310.57.88.07.97.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)12.313.013.2na31.832.630.7naVAT gap (% of VAT total tax liability, VTTL) (**)11.27.98.98.010.57.38.2naProgressivity & fairnessTax administration & complianceBy tax baseSome tax typesEU-27Denmark 
 
 
 
       
 
Denmark’s  labour  tax  burden  is  generally 
lower  than  the  EU  average  across  much  of 
the income distribution. In 2025, the labour tax 
wedge  for  single  individuals  earning  50%  of  the 
average  wage  was  above  the  EU-27  average 
(32.4% compared with 31.6%), while it was below 
the  EU  average  for  single  individuals  at  67%  of 
the average wage (34.1% compared  with 35.8%), 
at  the  average  wage  level  (36.1%  compared  with 
40.0%) and at 167% of the average wage (41.0% 
compared with 44.1%). The tax wedge for second 
earners  at  67%  of  the  average  wage  with  a 
spouse earning the average wage was higher than 
the EU average in 2025. Also, the gap between the 
tax  wedges  of  second  earners  and  single  earners 
at  this  income  level  was  wider  than  in  the  EU  on 
average,  implying  weaker  work  incentives  for 
second earners, who are often women. 

Graph A3.2: Tax wedge for single and second 
earners as a% of total labour costs, 2025 

between  DKK 696 956 
higher 
and 

for 
incomes 
and 
employment 
a 
DKK 845 543; 
allowance,  notably  for  single  parents.  Overall,  the 
reform  is  expected  to  reduce  labour  taxes  by 
around DKK 10 billion (EUR 1.3 billion) per year on 
a net basis. 

for 

the 

Denmark  reports  a  large  number  of  tax 
expenditures,  but  does  not  have  a 
standardised  process 
regular 
evaluation of tax expenditures. A total of 122 
tax  expenditures  is  identified,  with  combined 
foregone  revenues  of  about  DKK  75.8  billion 
(around EUR 10 billion, and around 2.7% of GDP). 
More than half of this amount relates to personal 
income tax measures (around DKK 48.6 billion, or 
the  employment 
EUR  6.5  billion),  such  as 
the  personal  allowance.  The 
allowance  and 
concerns  business-related 
remainder  mainly 
measures, 
incentives.  Denmark 
publishes  an  official  Tax  Economic  Report 
(Skatteøkonomisk  Redegørelse) 
approximately 
every two years, providing in-depth analysis of the 
tax  system,  its  fiscal  implications  and  selected 
topical  issues.  Although  a  structured  framework 
for  systematic  tax  expenditure  evaluation  and 
impact  assessment  could  not  be 
identified, 
Denmark publishes detailed analytical reports that 
the  effectiveness  of  specific 
often  assess 
measures. More recently, Denmark has undertaken 
a  review  of  all  business-related  tax  expenditures 
to assess their economic rationale. 

including  R&D 

Note: The second earner tax wedge shows a household’s tax 
wedge resulting from the wage that a second earner taking 
up a job at 67% of the average wage receives. It does not 
show the total tax wedge of the household. The household is 
assumed to have a first earner at 100% of the average wage 
and no children. For the methodology of the tax wedge for 
second earners, see OECD (2024), Taxing Wages 2024. 
Source: European Commission 

A  recent  personal  income  tax  (PIT)  reform 
lowers labour taxation for low- and- average 
income earners and increases the tax burden 
for  the  highest-income  earners.  According  to 
JRC  simulations  using  EUROMOD,  PIT-related  tax 
expenditures  in  Denmark  reduce  PIT  revenues  by 
around  5%  (fourth  lowest  in  the  EU)  and  raise 
average  disposable  income  by  about  3%,  but 
slightly  increase  inequality,  as  benefits  accrue 
mainly  to  higher-income  households.  A  personal 
income  tax  reform  that  entered  into  force  as  of 
2026 introduced: a new 5% top-up tax on incomes 
above  DKK 2 818 152  (around  EUR 336 000);  a 
new intermediate bracket lowering marginal  rates 

Denmark  demonstrates  strong  tax  collection 
performance  with  arrears  at  13.2%  versus 
the  EU  average  of  30.7%.  Outstanding  tax 
arrears  stood  at  13.2%  of  total  revenue  in  2023, 
significantly  below  the  EU-27  average  of  30.7%, 
supported  by  Denmark's  digital  tax  collection 
system (59). 

The  VAT  gap  improved  to  8.0%  in  2024  but 
remains  a  compliance  challenge.  The  VAT  gap 
decreased  from  8.9%  in  2023  to  8.0%  in  2024 
(forecast),  close  to  the  EU-27  median  of  8.2%  in 
2023 (60). The 2022-2023 increase was attributed 
to  consumption  shifts  toward  non-compliance-
prone  services  and  business  bankruptcies  after 
COVID-19 support ended. Denmark's VAT rate gap 
of  0.7%  remains  among  the  EU's  lowest  (EU 

(59)  Statistics Denmark, 'Economy of the general government 

sector'. 

(60)  EU VAT Gap Report. 

38 

32.434.136.141.040.22025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - DKSingle earner - EU averageSecond earner -  DKSecond earner -  EU average 
       
 
reform, 

average:  12%)  due  to  its  uniform  25%  rate.  The 
implementing  mandatory  e-
Danish 
invoicing  for  domestic  B2B  (business-to-business) 
transactions from 1 January 2026, is expected  to 
improve VAT compliance. 

While  Denmark  does  not  publish  PIT  and  CIT 
compliance gap estimates, evidence from JRC 
shows  a  relatively  small  CIT  compliance 
gap (61).  Denmark  estimates  both  the  personal 
income  tax  (PIT)  and  corporate  income  tax  (CIT) 
gaps, but does not publish the results. According to 
the OECD 2024 Tax Administration Report, PIT gap 
estimation relies on both top-down (two methods) 
and  bottom-up  approaches  (five  methods),  with 
the  latter  based  on  random  audit  data,  and 
includes  a  detailed  decomposition  by  taxpayer 
behaviour  and  error  type.  Denmark  is  therefore 
recognised  for  having  sophisticated  tax  gap 
estimation  practices.  The  Commission  estimates 
based  on  a  top-down  methodology  developed  by 
the  JRC  suggest  that  Denmark’s  CIT  compliance 
gap  amounted  to  around  2%  of  collected  CIT 
revenues  in  2017,  the  lowest  among  Member 
States with available estimates, compared with an 
unweighted  average  of  10.9%  across  23  Member 
States. 

to  high 
The 
use 

Denmark  is  among  the  EU  leaders  in  the 
digitalisation of tax administration. It records 
full e-filing uptake across all tax types and has a 
digital  transformation  strategy  in  place,  with 
levels  of 
digitalisation  contributing 
voluntary 
tax 
compliance. 
administration  makes 
advanced 
technologies,  including  artificial  intelligence  for 
risk  analysis  and  behavioural  nudging,  enabling  a 
more  efficient  allocation  of 
resources,  and 
provides a wide range of online services to support 
taxpayer  compliance.  Some  scope  remains  to 
further 
reduce  compliance  burdens,  notably 
through  the  expansion  of  pre-filling  facilities  for 
VAT. 

Danish 

of 

(61)  European Commission, Directorate-General for Taxation and 

Customs Union, Mind the gap - 2025 report. 

39 

 
 
PRODUCTIVITY 
ANNEX 4: INNOVATION TO BUSINESS  

and 

research 

innovation 

Denmark  remains  an  innovation  leader,  yet 
its 
(R&I) 
performance is stagnating. A key challenge it 
faces  is  enhancing  the  capability  of  small 
and  medium-sized  enterprises  (SMEs)  to 
innovate  and  adopt  new  technologies.  The 
2025  European  Innovation  Scoreboard  recognises 
Denmark as an ‘innovation leader’ achieving 135% 
of  the  EU  average  on  the  Summary  Innovation 
Index,  but  its  score  has  decreased  from  2024  to 
2025 by 4.9 percentage points. Denmark’s growth 
rate on the index since 2018 is slightly below the 
average  EU  growth  rate (62).  Denmark’s  R&D 
intensity (63),  at  3.01%  for  2024,  has  slightly 
decreased from its 2023 record, with the decrease 
in  both  the  public  and  private  components.  R&D 
activities  are  concentrated  among  a  few  large 
companies,  mainly  in  the  pharmaceutical  and 
biotechnology  sector,  and  high  growth  businesses 
account 
of 
for 
employment. 
technology 
adoption,  while  Denmark  performs  well  overall, 
there  are  notable  differences  among  business 
sizes:  uptake  of  advanced  digital  technologies  is 
pronounced  mostly  in  larger  firms,  while  smaller 
firms  are  lagging  behind.  The  2025  country-
the 
specific 
existing productivity gap between large and small 
companies  highlighted  the  need  for  enhanced 
support  for  SMEs  to  get  them  more  involved  in 
innovation  activities,  adopting  new  technologies 
and thereby broadening the innovation base.  

recommendation  on  addressing 

terms  of  digital 

proportion 

decreased 

In 

a 

Graph A4.1: R&D expenditure as % of GDP (2013-
2024) 

Excellent science 

Denmark  has  a  well-funded  and  globally 
appealing  public  science  base,  yet 
its 
performance (64) shows signs of erosion. After 
reaching  its  peak  in  2023  at  1.15%,  Denmark’s 
public  R&D  intensity  slightly  declined  in  2024  to 
1.12%, although it remains the highest in the EU. 
The Danish public science base also benefits from 
strong  international  linkages,  as  evidenced  by the 
high  proportion  of  international  scientific  co-
publications  among 
total  number  of 
the 
from 
publications,  which  steadily 
52.41%  in  2007  to  69.49%  in  2024  and  is 
considerably higher than the EU average (57.24% 
scientific 
in  2024).  However, 
performance,  the  key  indicator,  the  proportion  of 
Danish publications ranking among the world's top 
10%  of  most-cited  publications,  has  been  on  a 
slightly  declining  trend  since  2016  (14.78%), 
standing at 13.06% in 2022. As broader analyses 
also show (65), the Danish R&I system is currently 
facing  challenges 
long-term 
excellent performance.  

in  sustaining 

increased 

turning 

its 

to 

Research  performance  assessment  is  being 
reformed.  Acknowledging  the  important  role  of 
evaluation  practices  in  enhancing  the  quality  and 
integrity  of  Danish  research,  the  Independent 
Research Fund Denmark has initiated a reform of 
the  performance  assessment  based  on 
the 
European  Agreement  on  Reforming  Research 
Assessment  (66).  The  action  plan  (67)  developed  in 
2024  seeks  to  broaden  the  scope  of  research 
assessment  to  better  encompass  the  various 
contributions  of  researchers,  thereby  fostering  a 
more 
research 
environment. 

impactful 

inclusive 

and 

Source: Eurostat 

(62)  European Commission, 2025, European Innovation 

Scoreboard (EIS), country profile: Denmark. 

(64)  Indicator-based analysis (middle- to long term): measured by 

`Scientific publications within the 10% most-cited scientific 
publications worldwide as % of total scientific publications of 
the country`. 

(65)  Danish Centre for Studies in research and research policy, 
Aarhus University, 2023: The scientific impact of Danish 
research 1980-2020. 

(66)  Action plan by the EC for the implementation of the 

Agreement on Reforming Research Assessment (ARRA)  

(67)  Independent Research Fund Denmark CoARA Action Plan 

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

2024 - 2027. 

40 

00.511.522.533.5201320142015201620172018201920202021202220232024R&D expenditure as % of GDPPublic R&D expenditure as % of GDPBusiness R&D expenditure as % of GDP 
 
 
  
 
 
 
 
Danish 

funding 

government 

The 
introduced 
for  R&I  strategic 
multiannual 
priorities.  Following  the  recommendations  from 
the Danish Research and Innovation Policy Council 
(68),  Denmark  has  made  a  significant  shift  in  its 
R&I funding policy (69). In November 2025, a broad 
political  agreement  was  reached  on  introducing 
multiannual  funding  for  strategic  priorities  within 
R&I  for  the  years  2026-2029.  This  aims  to  offer 
longer-term strategic focus and stable funding, as 
well  as  to  strengthen  research  in  areas  like 
security, health, climate and critical technologies. It 
supports basic research as a foundation for future 
scientific  breakthroughs  and  promotes  innovation 
and  entrepreneurship.  Over  four  years, 
the 
agreement  together  with  the  Finance  Act  allocate 
more than DKK 19 billion (approx. EUR 2.5 billion) 
for  strategic  investments  in  R&I  (70).  Additional 
annual  negotiations  will  address  new  priorities  to 
maintain flexibility.  

Business innovation 

Denmark  benefits  from  significant  business 
R&D  investment:  however,  this  tends  to  be 
concentrated  in  large  enterprises  in  the 
pharmaceutical  and  biotechnology  sector. 
While  business  R&D  intensity  (1.89%  vs  an  EU 
average  of  1.49%  in  2024)  and  the  number  of 
researchers employed by business (10.10 vs an EU 
average of 5.9 in 2024) are significantly above EU 
averages,  both 
indicators  slightly  decreased 
between  2023  and  2024  (71)(72).  Denmark´s 
private  R&D  investment is  primarily  driven  by  the 
health 
country's 
strengths  in  pharmaceuticals  and  biotechnology 
(Annex  15)  but  also  a  significant  sectoral 
concentration  of  R&D  activities.  Spending  on  R&D 
by the pharmaceutical  industry reached DKK 13.2 

industry,  highlighting 

the 

billion  (approx.  EUR 1.76 billion)  in  2023,  around 
25% of Danish firms´ R&D expenses (73).  

face 

challenges 

significant 

SMEs 
in 
undertaking  innovation  activities.  The  Horizon 
Policy Support Facility (74) review of Denmark's R&I 
system, followed by a three-year study (75) of the 
Danish  Council  for  R&I  Policy,  highlighted  the 
challenges  faced  by  SMEs  in  knowledge-based 
innovation. This has been reflected in the country-
specific  recommendation  for  2025  on  supporting 
SMEs  to  innovate.  In  response,  Danish  authorities 
have  taken  several  actions.  First,  the  cluster 
programme (76) has been revised to include several 
improvements,  such  as  a  stronger  focus  on 
clusters’  ability 
to  attract  private  financing, 
prioritisation  of  deeper  collaboration  over  broad 
networking  activities,  and  consolidation  of  its 
management under the Danish Board of Business 
Development.  Secondly,  Innovation  Fund  Denmark 
is  being  revised  as  part  of  the  new  strategic  R&I 
funding  plan  starting  in  2026.  This  includes 
updating  programmes  (e.g.  Innobooster  (77)  and 
Grand  Solutions  (78)  to  bolster  innovative  and 
particularly 
collaborative 
between  SMEs  and  knowledge  institutions.  While 
positive,  these  incremental  steps  are  expected  to 
have  only  minor  impact,  and  there  has  still  been 
no  thorough  review  of  existing  measures  to 
support innovation in SMEs.  

research 

projects, 

Planned reforms of R&D tax incentives might 
help  to  increase  SME  engagement  in  R&D.  In 
2020,  Denmark  introduced  tax  credits  for  R&D 
spending,  featuring  accelerated  depreciation,  a 
higher ceiling for depreciation, and a deduction for 
R&D investment of up to 130%, capped at DKK 50 
million  (approx.  EUR  6.7  million).  Further  policy 
developments  are  planned  for  2026  (including 
gradually  increased  rates  for  the  enhanced  tax 
allowance  on  R&D  capital)  and  for  2027  (raised 
ceiling  of  R&D  tax  credit  for  deficit-related  R&D 

(68)  The Danish Council for Research and Innovation Policy, 

Annual report 2024. 

(69)  Strategic Priorities for Research and Innovation 2026-2029 

and press release on the political commitment. 

(70)  Research and Innovation areas — Uddannelses- og 

Forskningsministeriet. 

(71)  Business  expenditure on  R&D (BERD)  as % of  GDP  declined 

from 1.91 in 2023 to 1.89 in 2024. 

(73)  OECD Economic Surveys: Denmark 2026. 

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

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

(75)  DFIR: Innovative SMEs — rich and resilient societies have 

smart businesses — English. 

(76)  DFIRbrief 50: Strengthening Denmark’s Cluster Program — 

English. 

(72)  Researchers  (FTEs)  employed  by  business  per  thousand 
active  population  declined  from  10.20  in  2023  to  10.10  in 
2024. 

(77)  Innobooster. 

(78)  Grand Solutions. 

41 

 
 
 
expenses  (79).  These  initiatives  might  help  to 
increase  SMEs‘  engagement  in  R&D  activities. 
Because  of  the  challenges  in  broadening  the 
innovation  base,  the  OECD  pointed  out  that  the 
effectiveness and accessibility of public support to 
business  R&D  should  be  continually  monitored, 
evaluated, and improved (80). 

in 

knowledge 

transfer  and 

There  is  room  to  strengthen  collaboration 
between  knowledge  institutions  and  SMEs. 
The  percentage  of  Denmark’s  public-private 
scientific  co-publications  relative  to  the  total 
number of publications remains well above the EU 
average  (7.62%)  at  13.25%  in  2024.  However, 
Denmark’s  contract  research  (as  measured  by 
public  expenditure  on  R&D  financed  by  business 
enterprises as a percentage of GDP) is significantly 
below the EU average (0.03% in 2023 vs 0.06% in 
the  EU)  (81).  While  Danish  universities  are  actively 
involved 
the 
commercialisation  of  research  with  technology 
transfer  offices  (TTOs),  innovation  hubs  (82),  and 
cross-cutting 
Open 
Entrepreneurship (83) and SPARK (84), there is room 
to strengthen the innovation capacities of SMEs as 
well  as  universities’  efforts 
through  further 
developing  public-private  knowledge  sharing  and 
In  November  2025,  the  Danish 
cooperation. 
strengthening 
for 
governmental 
knowledge  and  technology  transfer  proposed 
recommendations  (85)  to  standardise  and  improve 
the  organisation  of  technology  transfer  at  Danish 
universities  for  the  benefit  of  businesses  and 
In  January  2026,  a  political 
entrepreneurs. 
agreement  on 
implementing  the  task  force’s 
recommendations was reached. The taskforce also 
highlighted the need for a cultural and policy shift 
within universities to foster innovation (86).  This is 
reflected in the new strategic plan for R&I funding, 

initiatives 

taskforce 

such 

as 

(79)  Enhanced Tax allowance on R&D capital details - Denmark | 

INNOTAX Portal. 

(80)  OECD Economic Surveys: Denmark 2026. 

(81)  In Denmark private foundations play a significant role in 

funding public research. 

(82)  for instance, The Kitchen at Aarhus University. 

(83)  Open Entrepreneurship Denmark. 

(84)  SPARKS Denmark. 

which 
universities’ innovation activities (87). 

substantial 

allocates 

resources 

to 

has 

and 

digital 

42.03% 

adopting 

technologies 

Danish SMEs have made significant strides in 
digital  adoption,  but  disparities  by  company 
size  persist.  In  2025,  92.45%  of  Danish  SMEs 
had  at  least  a  basic  level  of  digital  intensity, 
showing  an  annual  progression  of  +10.8% 
between  2023  and  2025.  The  adoption  of 
advanced 
also 
accelerated,  with  67.57%  of  Danish  enterprises 
adopting  cloud  solutions,  59.99%  using  data 
artificial 
analytics 
intelligence  (AI). However,  a  digital  divide  remains 
large  and  small  enterprises.  While 
between 
91.49%  of 
large  firms  have  adopted  cloud 
computing, only 66.80% of small businesses have 
done  so.  Similarly,  AI  adoption  stands  at  74.52% 
among  large  companies  but  drops  to  40.99%  for 
small  enterprises. To  bridge  this  gap,  several 
national  and local initiatives are supporting SMEs’ 
digitalisation. The SME:Digital initiative has offered 
grants to help Danish SMEs accelerate their digital 
transformation.  Throughout  2024  and  2025, 
multiple funding schemes were launched, including 
the  SME:Robot programme,  which  enables  smaller 
companies  to  test  robotic  automation  solutions 
before  making  full-scale  investments.  The  third 
and final robot pool opened in January 2026, with 
DKK  5  million  (approx.  EUR  670  000)  funding.  A 
recent impact report (June 2025) shows that SMEs 
receiving  support  in  2019,  2020  and  2021  have 
seen  higher  growth 
revenue  and 
employment  (88).  However,  it  is  important  to  note 
that, while SME:Digital formally continues to exist, 
its  scope  and  funding  have  been  significantly 
reduced  starting  2026.  In  addition,  the  European 
digital innovation hubs (EDIHs) continue to support 
SMEs by providing technical expertise, training and 
access  to  test  facilities.  Denmark’s  EDIHs  are 
expected  to  receive  renewed  support  from  EU 
in  2026, 
funding  and  national  co-financing 
particularly 
solutions.  The 
scale-up  AI 
government also launched a strategic approach to 
AI (2024-2027) (89)  to  promote  the  responsible 
development and use of AI in both the private and 
public sectors. The results of this initiative remain 
to be seen. 

in  both 

to 

(85)  Recommendations from the Task Force for Strengthening 

Knowledge and Technology Transfer. 

(86)  as done for instance in the context of Innovation District 

Copenhagen. 

(87)  Strategic Priorities for Research and Innovation 2026-2029. 

(88)  SME:Digital Impact Report June 2025. 

(89)  Strategic Approach to AI. 

42 

 
 
 
Entrepreneurial dynamism 

Denmark is actively working to position itself 
as  a  leading  nation  for  entrepreneurs.  While 
high growth enterprises decreased as a proportion 
(90),  the  Danish  government 
of  employment 
presented a strategy plan in 2024 that outlines its 
vision  and  initiatives  to  make  Denmark  a  'world-
class  entrepreneurial  nation’  (91).  The  strategy's 
goals  include  improving  access  to  capital  and 
reducing 
talents, 
taxation,  activating  more 
increasing  diversity  among  entrepreneurs  and 
supporting  entrepreneurs  across  the  country.  In 
December  2024,  Denmark  amended 
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,  starting  in  the  income  year 
2025.  Another  initiative  aims  at  reducing  the 
capital  deposit  requirements  for  establishing  a 
private  limited  company  by  half  (92).  The  IMF 
pointed out that monitoring and evaluating all the 
the  new  entrepreneurship 
initiatives 
strategy,  along  with  strengthening  policies  that 
help  startups  stay  and  grow  in  Denmark,  will  be 
key to further boosting business innovation (93). 

increase 

tied 

the 

its 

to 

Denmark  is  a  regional  leader  in  venture 
capital  (VC)  and  private  equity  investment. 
Total  VC  investment  as  a  percentage  of  GDP 
increased from 0.09% in 2020 to 0.16% in 2023, 
before  dropping  to  0.12%  in  2024.  Despite  this 
decrease, this remains well above the EU average 
of  0.06%.  Denmark  continues  to  be  one  of 
Europe´s  leading  VC  markets,  with  over  EUR  3 

(90)  Employment share of high-growth enterprises measured as 
% of employment has declined from 1.17 in 2022 to 0.94 in 
2023. 

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

Strategy for Entrepreneurship (in Danish). 

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

(93)  IMF  Country  Report  25/  165,  2025  and  Export  and 
Investment  Fund  EIFO  Annual  review  From  Startup  to 
Scaleup 2025. 

43 

billion  invested  from  2022  to  2024  (94).  Between 
2018  and  2023,  42.2%  of  total  domestic  VC 
investment was dedicated to health tech startups, 
followed by the ICT sector (34.5%) (95).  

for 

framework 

innovation 
The  policy 
procurement  is  incomplete.  In  the  European 
benchmarking  study  (96)  on  national  innovation 
procurement  policy  frameworks,  Denmark  ranks 
21st.  Denmark  has  completed  only  26%  of  the 
to  create  a  comprehensive 
necessary  steps 
national 
innovation 
for 
framework 
policy 
procurement.  Despite  improving  from  19%  in  the 
previous  study  (2020),  Denmark’s  performance  is 
still  well  below  the  European  average  of  33.05%. 
This  means  there 
is  considerable  scope  to 
significantly strengthen this framework in the field 
of  policies  and  financial 
incentives  for  R&D 
procurement  in  key  technologies,  as  well  as 
transparency  to  unlock  the  full  potential  of  public 
and 
foster 
procurement 
entrepreneurship (97).  

innovation 

to 

full-time 

Skills  in  the  domain  of  R&I  are  relatively 
strong  and  continue  to  increase.  Denmark  is 
characterised  by  6.9 
researchers 
employed by the public sector per thousand of the 
active  population  in  2024,  compared  to  the  EU 
average of 4.3. In 2024, Denmark´s proportion of 
new  graduates  in  science  and  engineering  per 
thousand  of  the  population  is  19.74%,  which  is 
significantly  higher  than  the  EU  average  of 
16.82%  (2024)  and  has  slightly  increased  from 
the  previous  year.  Similarly,  the  proportion  of 
graduates  in  the  field  of  ICT  rose  from  5.79%  in 
2022 to 6.32% in 2023 but fell down to 5.81% in 
2024, still above the EU average of 3.48% (2024). 
The  proportion  of  employed  ICT  specialists  within 
total  employment  has  remained  steady  in  recent 
years,  reaching  5.8%  in  2024.  This  figure  is 
slightly above the EU average of 5.0% (98). 

Entrepreneurship education is well embedded 
across education levels, with strong national 

(94)  OECD (2025), Benchmarking government support for venture 
capital: A comparative analysis, OECD Publishing, Paris. 

(95)  See also Annexes 5 and 6. 

(96)  Denmark  country  profile  –  Benchmarking  of  national  policy 

frameworks for innovation procurement 2024. 

(97)  OECD  Studies  on  SMEs  and  Entrepreneurship 

(2022), 
Promoting  Start-Ups  and  Scale-Ups  in  Denmark’s  Sector 
Strongholds and Emerging Industries. 

(98)  Source: Eurostat. 

 
 
 
and 

clear 

coordination 
ambitions. 
Entrepreneurship  education  is  taught  as  a  cross-
curricular  area  in  basic  education,  while  in  upper-
secondary  education,  several  elective  subjects 
incorporate  innovation  and  entrepreneurship  as 
core  learning  components.  In  higher  education, 
entrepreneurship is increasingly promoted through 
dedicated  degree  programmes,  elective  courses, 
learning  and  university-based 
incubator-linked 
innovation  hubs.  The  Danish  Foundation  for 
Entrepreneurship is the national knowledge centre 
entrusted  with  developing  and 
implementing 
entrepreneurship  education  policy,  backed  by  a 
cross-ministerial  partnership  between the Ministry 
of  Business, 
the  Ministry  of  Children  and 
Education,  the  Ministry  of  Higher  Education  and 
the  Ministry  of  Culture.  The 
Science  and 
Foundation's  2025–2030  strategy  (99)  sets  a 
national  participation  target  of  engaging  30%  of 
all  pupils  in  practical  entrepreneurial  experiences 
the  quality, 
by  2030,  while  strengthening 
relevance  and  inclusiveness  of  entrepreneurial 
learning.  Strengthening 
training  on 
entrepreneurship - so far only provided on an ad-
hoc  basis  - is  also  a  key  goal  under  the  strategy. 
Denmark  also  provides  a  visa  scheme  aimed  at 
allowing  talented  entrepreneurs  to  grow  high-
impact startups or branches in Denmark (100).  

teacher 

(99)  Foundation  for  Entrepreneurship,  2025.  Entrepreneurship 

Strategy 2025-2030 (in Danish). 

(100)  The Startup Denmark programme. 

44 

 
 
Table A4.1:  Key innovation indicators 

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

45 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.913.062.972.883.073.01:2.243.44Public expenditure on R&D as % of GDP0.941.111.131.111.151.12:0.720.64Scientific publications of the country within the top 10% most-cited publications worldwide as % of total publications of the country 14.6414.0312.7913.06:::9.4412.31Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population5.16.36.37.376.9:4.3:International co-publications as % of total number of publications54.8559.4167.5767.7668.0769.49:57.24:Business enterprise expenditure on R&D (BERD) as % of GDP1.951.941.831.771.911.89:1.492.69Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.530.49:0.43::0.470.30Researchers employed by business per thousand active population8.18.98.910.310.210.1:5.9:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)4.734.694.974.04:::2.812.20Employment share of high-growth enterprises measured in employment (%):::1.170.94::0.87:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::75.33:92.4571.39:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%)::::49.49:59.9939.85:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%)::::66.16:67.5746.69:Artificial intelligence adoption % enterprises (EU Digital Decade target by 2030: 75%)::::15.1727.5842.0319.95:Public-private scientific co-publications as % of total number of publications12.4512.1212.8813.1413.6413.25:7.62:Public expenditure on R&D financed by business enterprises (national) as % of GDP0.030.030.03:0.03::0.060.02Total public sector support for BERD as % of GDP:0.08::0.13::0.21:R&D tax incentives: foregone revenues as % of GDP00.020.090.10.06::0.10:BERD financed by the public sector (national and abroad) as % of GDP :0.06::0.07::0.11:Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.040.030.090.1400.1600.12:0.06:Seed-stage funding share (% of GDP)000.010.010.020.02:0.01:Start-up stage funding share (% of GDP)0.020.020.040.070.090.07:0.03:Later stage funding share (as % of GDP)0.020.010.050.060.060.03:0.03:New graduates in science & engineering per thousand population aged 25-34:17.0518.9219.519.9519.74:16.82:Graduates in the field of computing per thousand population aged 25-34:4.875.755.796.325.81:3.84:Science and innovative ecosystemsDenmark2010201520202022202320242025EU average (1)USHeadline indicatorInnovative talentR&D investment & researchers employed in businessesInnovation outputsDigitalisation of businessesAcademia-business collaboration Public support for business innovationFinancing innovation 
 
 
  
 
ANNEX 5: SINGLE MARKET AND INDUSTRY 

strong 

in  particular 

companies.  Denmark’s 

Denmark’s 
competitiveness 
performance  is  supported  by  a  favourable 
business  environment.  The  2025  country-
specific  recommendations  called  for  measures  to 
address  the  productivity  gap  between  large  and 
small 
recovery  and 
resilience plan contributed to further improving the 
business  environment, 
through 
support  for  digitalisation  and  innovation  of  small 
to  medium-sized  enterprises  (SMEs),  expanded 
streamlined 
high-speed 
administrative 
procedures. 
Denmark  maintains  a  strong  position  in  global 
competitiveness  thanks  to 
its  high  business 
efficiency  and  favourable  business  regulation, 
well-developed digital and transport infrastructure, 
highly qualified workforce and strong performance 
in innovation. While productivity  levels  are among 
the  highest  in  the  EU,  productivity  growth  is 
increasingly  driven  by  large  and  international 
firms.  Denmark  is  a  front  runner  in  life  sciences 
and net-zero technologies, notably in wind energy 
and  carbon  capture  and  storage,  but  it  is  also 
particularly dependent on imported raw materials. 

broadband 
and 

and 
permitting 

Business dynamics 

Denmark  has  a  highly  developed,  export-
oriented  economy  with  a  strong  position  in 
life  sciences  and  cleantech.  Services  account 
for  about  72%  of  GDP  and  include,  for  example, 
logistics and transport services as well as business 
services.  Industry  (without  construction)  accounts 
for  about  22%  of  GDP.  Denmark’s  main  export 
products  include  pharmaceuticals  (about  16%  of 
exported  goods,  machinery 
(including  wind 
turbines,  about  13%),  electrical  and  electronic 
equipment  (about  8%)  and  mineral  fuels  (about 
4%) (101). Denmark’s major export partners include 
Germany (16% of Denmark’s total), Sweden (9%), 
the  Netherlands  (7%),  Norway  (6%)  and  the  US 
(6%).  Despite  some  volatility  in  2025,  export 
momentum remained positive, showing Denmark’s 
continued  strength  in  life  sciences  and  advanced 
manufacturing  and  underlining  the  resilience  of 
key sectors even amid global trade headwinds. 

Denmark 
features  a  dynamic  start-up 
ecosystem,  including  in  technology-driven 
fields.  The  number  of  new  businesses  has 
increased  by  about  9%  in  2025  (102).  Start-up 
activity  seems  to  be  particularly  concentrated  in 
technology-driven  fields,  such  as  cleantech,  green 
innovation,  fintech, 
life  sciences,  biotech  and 
software (see Annex 4). Starting a business (103) is 
considered  easy,  thanks  to  efficient  digital  public 
services and moderate registration costs. Business 
dynamics,  as  indicated  by  the  sum  of  firms 
entering  and  exiting  the  market  and  the  rate  of 
high-growth  firms,  is  well  above  the  EU  average, 
suggesting 
the  business  environment 
supports  the  efficient  reallocation  of  resources  to 
more productive activities. 

that 

(104) 

programmes 

Denmark  has  a  persistent  productivity  gap 
between 
large  firms  and  SMEs.  While 
Denmark’s  overall  productivity  level  remains  high 
in international  comparison, productivity growth is 
increasingly driven by a relatively small number of 
large,  highly  productive  and  international  firms, 
reflecting advantages in scale,  digitalisation, R&D, 
management  capacity  and  internationalisation.  In 
response, policymakers have intensified efforts to 
support  SME  productivity.  SME  advisory  and 
been 
innovation 
strengthened  and  efforts  have  been  made  to 
simplify access to support schemes and accelerate 
disbursement.  For  example,  about  DKK 1 billion 
(approx. EUR 134 million) was committed in 2025 
(105)  to  help  SMEs  implement  digital  solutions, 
advance 
transition  and  enhance 
competitiveness.  The  Danish  Board  of  Business 
Promotion  allocated  about  DKK 312  million 
(approx.  EUR 42 million)  to  projects  supporting 
SME  digitalisation,  sustainability  and  export 
readiness (106). The Danish Cluster Programme has 
been consolidated. For the 2025-2028 period, the 
Board  will  select  up  to  14  cluster  organisations, 
with  total  funding  of  approximately  DKK 720 

the  green 

have 

(102) Datahub, 2026, Erhvervsdemografi | Virksomhedsguiden. 

(103) Part of the barriers highlighted in the Single market strategy 
(‘Terrible  Ten’)  and  the  2026  Annual  Single  Market  and 
Competitiveness Report. 

(104) Danish 

Board 
Erhvervsfremmebestyrelse. 

of 

Business 

Promotion, 

2025, 

(101) Statistics Denmark, 2026, Imports and exports of goods and 

(106) Ministry  of  Industry,  Business  and  Financial  Affairs,  2025, 

services. 

https://erhvervsfremmebestyrelsen.dk/. 

(105) Ministry  of  Industry,  Business  and  Financial  Affairs,  2025, 
Business Development Denmark, 2025, https://www.em.dk/. 

46 

 
 
 
 
 
 
million  (approx.  EUR  95.5  million)  (107).  These 
measures  contribute  to  the  2025  country-specific 
recommendation  on  addressing  the  productivity 
gap (see Annex 4 and Annex 18). 

identified  energy  prices  as  an  issue  in  2025, 
compared with 45% in 2024, as electricity and gas 
prices  decreased  substantially  from  their  peak  in 
2022 (see Annex 9). 

indicator 

sentiment 

in  Denmark 

Business  sentiment in Denmark  continued  to 
recover  in  2025,  but  remains  moderate. 
Business 
remained 
moderate  in  2025,  with  the  composite  business 
confidence 
but 
manufacturing  confidence  still  below  long-term 
averages,  indicating  cautious  optimism  among 
firms rather than a strong rebound. In April 2026, 
Denmark’s manufacturing confidence index rose to 
100.7,  surpassing  the  long-term  average  of  100 
for the first time in eight months and reaching its 
highest level in a year (108). 

slightly 

rising 

Business  investment  remained  subdued  in 
2025,  although  still  above  the  EU  average. 
Investment  ratios  in  2025  continued  below  long-
run  levels,  with  total  investment  (gross  capital 
formation) as a share of GDP estimated at around 
21-22%.  Business  investment  remained  subdued 
in  2025,  held  back  by  high  financing  costs  and 
global  uncertainty,  but  is  still  above  the  EU 
average.  A  number  of  policy  measures  aim  to 
support  business  investment,  including  the  2024-
(109), 
2027  strategy  for  business  promotion 
incentives  for  R&D  investment  and  support  for 
SMEs  and  innovation  ecosystems,  e.g.  through 
export  and  investment  funds,  designed  to  help 
address structural bottlenecks in venture financing 
and scale-up financing (see Annex 4 and Annex 6). 

to 

Investment  Bank 

Uncertainty  about  the  future  and  lack  of 
skilled staff are highlighted by firms as main 
investment  obstacles.  According 
the 
European 
Investment 
Survey  2025,  the  main  long-term  barriers  to 
investment 
firms  are 
reported  by  Danish 
uncertainty  about  the  future  (73%,  2024:  56%) 
and  the  availability  of  skilled  staff  (67%,  2024: 
71%) (110). The availability of skilled staff remains 
a  key  concern,  though  pressures  have  eased  over 
the last years (see Annex 11). 37% of businesses 

(EIB) 

Denmark  remains  an  attractive  location  for 
foreign direct investment. Over the past years, 
Denmark  saw  significant  surges  in  investment  in 
high-tech  areas  like  digital,  cleantech  and  life 
sciences. According to the Danish Central Bank, the 
stock  of  foreign  direct 
in 
Denmark  grew  by  about  6%  from  2022  to  2024, 
driven  primarily  by  European  investors  (111).  FDI 
stocks  are  mostly  owned  by  the  US,  Sweden,  the 
UK, Norway, France and Germany (112). The 2024-
2027  strategy  for  attracting  foreign  investments 
provides  the  framework  for  Denmark’s  efforts  to 
attract, retain and develop FDI (113). 

investment 

(FDI) 

Insolvencies  seem  to  be  moving  towards 
stabilisation,  but  late  payments  from  public 
authorities  have  increased.  After  a  spike  in 
2023, insolvencies declined in 2024 to their lowest 
level  since  2020-2021,  suggesting  a  return 
towards pre-pandemic conditions. Early 2025 data 
showed mixed trends across sectors. The business-
to-business  payment  gap  has  decreased  since 
2024,  reaching  an  average  of  15  days  in  2025, 
below  the  EU  average  of  17.4  days.  By  contrast, 
public-sector  payment  delays  have 
increased 
above  the  EU  average,  standing  at  14.5  days  in 
2025,  compared  with  13.6  days  in  the  EU  (see 
Graph  A5.1).  Late  payments  (114)  may  weigh  on 
liquidity-constrained  SMEs,  particularly 
in  the 
construction, trade and services sectors. Moreover, 
studies  indicated  considerable  variations  in  late 
payments among municipalities in Denmark (115). 

(111) Ministry 

of 
https://investindk.com/. 

Foreign  Affairs 

of  Denmark,  2026, 

(107) European  Cluster  Collaboration  Platform,  2025,  Country 

(112) Statistics Denmark, 2026, Direct investments. 

factsheet Denmark. 

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

(108) Statistics Denmark, 2026, Sentiment indicators for business, 

Denmark Strategy 2024-2027. 

dst.dk. 

(109) Danish 

Promotion, 
Virksomhedsudvikling i hele Danmark 2024-2027. 

Business 

Board 

of 

2024, 

(114) Part of the barriers highlighted in the Single market strategy 
(‘Terrible Ten’) and the 2026 Annual Single Market and 
Competitiveness Report. 

(110) European Investment Bank, 2025, EIB investment survey. 

(115) Dinero 2025, https://dinero.dk/. 

47 

 
 
 
Business environment 

regulatory 

framework 

Danish  firms  benefit  from  business-friendly 
regulation  and  good  framework  conditions. 
IMD’s  2025  Global  Competitiveness  Index  (116) 
again  places  Denmark  first  in  the  EU  and  fourth 
internationally  for  global  competitiveness.  This  is 
thanks  in  particular  to  Denmark’s  high  degree  of 
business efficiency, excellent digital  and transport 
infrastructure,  highly  qualified  workforce  and 
favourable 
conditions. 
According  to  the  EIB  Investment  Survey  (117), 
Denmark has been the EU Member State with the 
lowest  share  of  businesses  that  report  regulation 
as  an  obstacle  to  investment.  Denmark  is  a  front 
runner in digital public services and administrative 
procedures  are  designed  as  ‘digital  by  default’. 
Denmark’s  corporate tax  rate  of  22.0%  is  slightly 
below  the  OECD  average  of  23.9%  and  the  tax 
system does not seem overly complex (118). Recent 
initiatives,  such  as  the  strategy  to 
improve 
business  framework  conditions  (119),  the  business 
development  strategy  2024-2027  (120)  or  the 
support  for  biosolutions  (121)  illustrate  Denmark’s 
commitment  to  further  improving  the  business 
environment.  Particularly  noteworthy 
the 
initiative  on  automatic  business  reporting,  which 
facilitates  digital  bookkeeping  and  streamlines 
reporting  to  authorities,  resulting  in  an  expected 
burden  relief  of  up  to  DKK 21.5  billion  (approx. 
(122).  Denmark’s  recovery  and 
EUR 2.9 billion) 
resilience  plan  also  included  relevant  measures, 
notably  support 
for  SME  digitalisation  and 
innovation and expanded high-speed broadband. It 
also  contributed  to  streamlining  administrative 
and permitting procedures (see Annex 7). 

is 

Denmark  performs  strongly 
in  both  the 
deployment  and  use  of  digital  connectivity 

(116) IMD, 2025, World Competitiveness Ranking 2025. 

(117) European Investment Bank, 2025, EIB investment survey. 

(118) European Commission, 2022, Tax compliance costs. 

towards  high-speed 

infrastructure. In 2024, fixed very high-capacity 
network  coverage  reached  96.82%  of  households 
(EU:  82.49%),  while  fibre-to-the-premises  (FTTP) 
coverage  stood  at  87.19% 
(EU:  69.24%). 
Denmark’s  rollout  pace  also  exceeded  the  EU 
average  in  rural  areas  (91.52%  versus  58.78%). 
The country has already achieved full 5G coverage. 
Regarding  take-up,  Denmark  continues  to  see  a 
connections,  with 
shift 
growing fibre subscriptions and declining xDSL and 
cable  subscriptions.  In  2024,  86.36%  of  fixed 
broadband subscriptions offered speeds of at least 
100 Mbps, up from 81.83% in 2023 and above the 
EU  average  (71.88%).  Gigabit  subscriptions  also 
increased,  reaching  33.69%  in  2024,  compared 
with  28.72%  in  2023.  In  this  context,  telecom 
operators  are  increasingly  focusing  on  simplifying 
the fibre customer journey to ensure that deployed 
networks  are  fully  utilised.  Some  have  started  to 
advertise 
the  home’  as  a 
competitive alternative to fixed broadband (123). 

internet 

‘5G 

to 

Access  to  finance  for  SMEs  in  Denmark  is 
generally  favourable  compared  with  the  EU 
average. The share of SMEs who consider access 
to  finance  to  be  an  obstacle  to  investment  is 
below  the  EU  average  (124).  Danish  firms  have  a 
strong preference for equity investment and other 
sources of finance. Only 41% prefer bank loans for 
expanding  their  business  (EU  average:  63%)  (125). 
Access to finance for SMEs is supported through a 
range  of  loan  and  guarantee  schemes,  often  in 
partnership  with  the  European  Investment  Fund 
(EIF)  and  the  European  Investment  Bank  (EIB) 
under  the  InvestEU  programme.  Additionally,  the 
Export  and  Investment Fund  of  Denmark  provides 
targeted 
to  spur 
financing  and  guarantees 
investment,  especially  in  sustainability  and  digital 
projects (see Annex 6). 

Denmark  is  an  attractive  location  for  start-
ups,  but  small  and  innovative  companies 
often struggle to scale up. Denmark has one of 
the  highest  shares  of  green  start-ups  (126)  and 
high-growth firms (127) in the EU. However, access 

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

2024, https://investindk.com/. 

(123) European Commission, 2025, Digital Decade 2025: Country 

reports. 

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

(124) European Investment Bank, 2025, EIB investment survey. 

https://erhvervsfremmebestyrelsen.dk/. 

(125) European Central Bank, European Commission, 2025, Survey 

(121) Ministry  of  Industry,  Business  and  Financial  Affairs,  2026, 

on the access to finance of enterprises. 

DKK 100 million for Danish biosolutions. 

(122) Ministry  of  Industry,  Business  and  Financial  Affairs  2026, 

Erhvervsministeriet. 

(126) OECD, 2025, The New Green Economy, oecd.org. 

(127) European Central Bank, European Commission, 2025, Survey 

on the access to finance of enterprises. 

48 

 
 
 
to growth capital and recruiting qualified staff are 
for  start-ups  and  often 
crucial  challenges 
determine  whether  they  stay  in  Denmark  or 
relocate  elsewhere.  Venture  capital  financing  is 
less  pronounced  than 
in  some  other  Nordic 
countries but has improved and is better than the 
EU  average  (see  Annex  4).  Business  associations 
emphasise  that  while  Denmark  has  strong  talent 
and  innovation  potential,  the  continued  decline  in 
new  business  registrations  suggests  a  need  to 
further  improve  conditions  for  start-ups, including 
by reducing the number of regulatory barriers and 
improving access to markets and capital (128). 

Single Market 

Denmark  is  well  integrated  into  the  Single 
Market and global trade networks. Denmark is 
closely  integrated  into  the  Single  Market  and  its 
trade  integration  for  both  goods  and  services  is 
above  the  EU  average  (see  Graph  A5.1).  Around 
70%  of  Denmark’s  total  exports  go  to  the  Single 
Market, 
Sweden, 
underlining  the  importance  of  the  Single  Market 
for Denmark regarding growth and resilience. 

especially  Germany 

and 

overall 

transposition 

performs  well 

law  and  handling 

Denmark 
in 
transposing  EU  Single  Market  directives  into 
infringement 
national 
and 
proceedings.  Denmark’s 
(129) 
conformity  deficits 
for  Single  Market 
directives  are  better  than  the  EU  averages.  For 
these  criteria,  Denmark  ranks  first  and  tenth 
respectively,  out  of  27  Member  States.  The 
transposition  deficit 
the 
percentage  of  all  directives 
that  are  not 
transposed  into  national  law)  is  in  line  with  the 
target  proposed  in  the  Single  Market  Act  and  the 
conformity deficit (the percentage of directives not 
correctly transposed) is close to it (see Table A5.1). 
The  number  of  pending  infringement  cases  is 
considerably below the EU average (13 compared 
with the EU average of 25). However, the delay in 
transposing  Single  Market  directives  and  the 
length of infringement proceedings are both above 

(which  measures 

(128) Dansk  Erhverv,  2026,  Press  release  on  new  business 

registrations. 

the EU averages (see Table A5.1), indicating some 
room for improvement. In 2025, Denmark resolved 
80.6% of the SOLVIT cases it handled as the lead 
centre (the EU average was 84.6%) (130). 

a 

has 

competition-friendly 
Denmark 
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 
system is aligned with international best practices, 
making Denmark one of the top performers in this 
(131).  With  regard  to 
respect  within  the  EU 
regulated  professions,  regulatory  restrictiveness 
(132)  is  in  line  with  the  EU  average  except  for 
estate  agents,  for  whom  restrictiveness  is  above 
the  EU  average.  This  is  partly  because  estate 
agents manage the property transaction process in 
Denmark,  while  this  task  is  typically  handled  by 
notaries  or  lawyers  in  other  Member  States. 
Lawyers  are 
form  and 
shareholding  requirements,  incompatibility  rules 
and multidisciplinary restrictions.  

subject 

legal 

to 

Compliance  of  products circulating  in  the 
Single Market (133) is key to ensuring a level-
playing  field  for  law-abiding  companies  and 
the  safety  of  consumers. In  Denmark,  the 
number  of  market  surveillance  investigations  has 
increased  compared  with  2019.  In  2025,  national 
authorities  reported  in  the  EU  system  for  market 
surveillance  (ICSMS)  a  total  of 87.9 investigations 
per one million inhabitants, which is lower than the 
EU median  of  136.2.  The  number  of  notifications 
remains limited in absolute terms, which may also 
be 
IT  national 
the 
interoperability 
ICSMS  system.  The 
upcoming  revision  of  the  Market  Surveillance 
fully 
Regulation  will  upgrade 
interoperable EU digital platform.  

insufficient 

result  of 

ICSMS 

to  a 

the 

to 

(130) European 

Commission,  2026, 

Single  Market 

and 

Competitiveness Scoreboard. 

(131) OECD,  2025,  Product  Market  Regulation  (PMR)  indicators, 

Denmark_PMR country note. 

(132) Part of the barriers highlighted in the Single market strategy 
(‘Terrible  Ten’)  and  the  2026  Annual  Single  Market  and 
Competitiveness Report. 

(129) Part of the barriers highlighted in the Single market strategy 
(‘Terrible  Ten’)  and  the  2026  Annual  Single  Market  and 
Competitiveness Report. 

(133) Part of the barriers highlighted in the Single market 

strategy (‘Terrible Ten’) and the 2026 Annual Single Market 
and Competitiveness Report. 

49 

 
 
 
of 

the 

pace 

With 
technological 
transformation  accelerating,  the  European 
Standardisation  System  relies  on  National 
Standardisation Bodies being able to engage 
a  sufficiently  broad  and  skilled  expert  base. 
Denmark  should  enhance  the  capabilities  of 
Danish  Standards  Foundation 
its 
capacity and maintain the active participation of a 
the 
critical  mass 
standardisation  work.  For  Denmark,  such  efforts 
are essential to ensure a resilient and future-ready 
standardisation  system,  while  preserving 
its 
influence  within  the  European  and  international 
standardisation  system,  ensuring  that  businesses 
can  fully  benefit  from  the  opportunities  of  the 
Single Market. 

stakeholders 

to  sustain 

of 

in 

for 

systems, 

interoperable 

Denmark  performs  relatively  well  overall 
with  respect  to  public  procurement,  but  its  
e-procurement 
is  fragmented. 
landscape 
Procurement  is  conducted  primarily  at  the  local 
level. Each contracting authority is responsible for 
its  own  procurement  but  can  use  framework 
contracts managed by the main central purchasing 
body.  The  share  of  single  bid  procurements  is 
below  the  EU  median,  which  is  an  indicator  for 
effective  competition,  but  the  share  of  direct 
awards  exceeds  the  EU  median  (see  Table  A5.1). 
Moreover,  Denmark’s  fragmented  e-procurement 
landscape  and  data  quality  issues  highlight  the 
need 
common 
standards  and  stronger  data  governance. Given 
Denmark’s  decentralised  e-procurement  service, 
which  has  between  6  and  12 
separate 
procurement  services 
in  operation,  economic 
operators  must  use  several  systems  to  access  all 
public 
creating 
complexity and barriers to participation. The once-
only  principle  is  only  partially  implemented  at 
national  level  and  buyers  across  the  EU  still  lack 
digital access to relevant evidence. Denmark is not 
utilising 
the 
government’s  source  for  public  procurement  data 
system 
analytics. 
public 
would benefit from a 
procurement 
analysis 
data 
service within  the  government  to  support  data-
driven  oversight  of  the  procurement  lifecycle (see 
also Annex 7) (134). 

the  Danish 
dedicated 

e-procurement 

procurement 

procedures, 

tools  as 

Therefore, 

collection 

and 

its 

(134) European  Court  of  Auditors,  Public  Procurement  in  the  EU. 
Less competition for contracts awarded for works, goods and 
services 
2021, 
2023, https://www.eca.europa.eu/. 

years 

the 

10 

up 

to 

in 

in 

Businesses’  views  on  corruption  risks  in 
public  procurement  are  below  the  EU 
average.  In  Denmark,  44%  of  companies  (EU 
average: 58%)  consider tailor-made specifications 
for  particular  companies  in  public  procurement 
(EU  average:  51%) 
procedures,  and  36% 
involvement  of  bidders 
the  design  of 
specifications  to  be  a  ‘very’  or  ‘fairly  widespread’ 
practice.  Among  companies  that  have  experience 
of  and  have  participated  in  a  public  procurement 
procedure,  11% 
that  corruption  has 
prevented them from winning a public tender or a 
(EU 
public  procurement  contract 
average:  25%)  (135).  44%  of  businesses  perceive 
the 
the  public 
procurement  review  body  (the  Complaints  Board 
for Public Procurement) to be ‘very’ or ‘fairly good’ 
when it is reviewing public procurement cases (136). 

independence  of 

in  practice 

level  of 

think 

Industry and economic security 

is  a  front  runner 

in  net-zero 
Denmark 
technologies, notably in wind energy. Its wind 
technology  manufacturing  contributes  about  14-
19%  of  the  EU’s  total  wind  manufacturing 
capacity  (around  7.4  GW  of  total  wind  capacity 
and  over  50%  of electricity  generation  from  wind 
in  2024),  with  expansion  plans 
targeting 
significantly increased capacity by 2030. Denmark 
is  also  building  up  electrolyser  and  head  pump 
manufacturing  capacity.  Denmark’s  operational 
electrolysis  capacity  has  reached  key  milestones 
(around  100  MW  installed),  and  the  national 
power-to-X  strategy  reflects  ambitions  to  scale 
green hydrogen production (see Annex 9). 

Denmark  supports  the  development  of  net-
zero  technologies  manufacturing.  In  2024, 
Denmark  launched  a  DKK  1  billion  (approx.  EUR 
134 million) investment support scheme under the 
EU’s temporary crisis and transition framework to 
support  the  establishment  and  expansion  of 
production  capacity  for  wind  technologies  and 
electrolysers (137). This scheme has been continued 
in  2025  with  a  budget  of  about  DKK  650  million 
(approx.  EUR  87  million).  In  parallel,  Denmark  is 

(135) European Commission, Flash Eurobarometer 557, p. 133. 

(136) European Commission, 2025, Justice Scoreboard. 

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

https://www.em.dk/. 

50 

 
 
 
strengthening access to green risk capital through 
the  Danish  Export  and  Investment  Fund,  with  a 
DKK  1  billion  (approx.  EUR  134  million)  capital 
injection  in  2025,  rising  to  DKK  2  billion  (approx. 
EUR 268 million) annually from 2026 onwards, to 
support  green  start-ups  and  scale-ups  (138).  Other 
recent  support  measures  include  an  accelerated 
depreciation 
climate-friendly 
investments in 2025-2026 (139), special guarantee 
schemes  for green  SME  and  mid-cap  investments 
(140), the creation of a one-stop shop for Net-Zero 
Industry  Act  manufacturers 
the 
designation  of  industrial  parks  with  access to  key 
infrastructure (142). 

(141)  and 

scheme 

for 

capture 

storage 

Denmark  continues  to  be  a  key  player  in 
(CCS) 
and 
carbon 
technologies  and  has  actively  supported  the 
development of a European CCS value chain. 
The most advanced example is Project Greensand 
(143),  which  has  progressed  from  pilot  to  full 
commercial  development.  This  project  is  on  track 
to  become  the  first  operational  offshore  CO₂ 
storage  facility  in  the  EU.  The  project  facilitates 
neighbouring 
cooperation  with 
cross-border 
countries, reinforcing Denmark’s role as a regional 
CO₂  storage  hub.  Denmark  has  established  three 
separate  funds  for  the  capture,  storage  and 
utilisation of both fossil and biogenic CO2 (144) (see 
Annex 8). It features seven strategic projects under 
the  Net-Zero  Industry  Act,  mostly  related  to  CCS 
technologies and infrastructure (145) (see Annex 8). 

Danish  firms  are  actively  engaged 
in 
important  projects  of  common  European 
Interest.  Projects  focus  in  particular  on  the 
hydrogen value chain, leveraging European support 
large-scale 
frameworks 

innovation, 

for 

to 

boost 

electrolyser 

deployment  and  cross-border 
integration  of 
hydrogen  technologies.  This  includes  development 
frameworks 
uptake, 
integrated  hydrogen  production  and  PtX  facilities, 
and  supportive 
infrastructure  development  to 
strengthen  EU-wide  hydrogen  value  chains.  While 
these 
Denmark’s 
competitive  position  in  low-carbon  technology 
manufacturing, the industry continues to navigate 
challenges  related  to  scaling  production,  securing 
skilled  labour  and  investment,  and  managing 
complex project financing. 

developments 

reinforce 

for 

(146). 

further 

sources 

electrification, 

Although  Denmark  has  put  in  place  policies 
to  support  the  decarbonisation  of  industry, 
there  is  room  for  further  electrification.  The 
electrification  rate  in  Denmark  is  still  slightly 
below  the  EU  average.  Analysis  shows  that  up  to 
92%  of  the  national  industry’s  thermal  energy 
consumption  could  be  electrified,  underlining  the 
also 
potential 
considering  the  high  share  of  electricity  from 
renewable 
Energy-intensive 
industries  account  for  about  13%  of  gross  value 
added,  covering  areas  such  as  building  materials, 
food  and  beverages  as  well  as  mineral  products 
(see  Graph  A5.1).  Denmark  has  introduced  two 
support  schemes  for  energy-intensive  industries 
alongside a new CO₂ taxation system, with a total 
budget  of  approximately  DKK  2 billion  (approx. 
(147).  The 
EUR  268  million)  for  2026-2035 
investment  support  pool  provides  grants  up  to 
60% of eligible costs, while the operating support 
pool  allocates  subsidies 
through  competitive 
bidding based on the lowest cost per tonne of CO₂ 
reduced. Denmark’s industrial electricity prices are 
competitive but above the EU average (see Annex 
8 and Annex 9). 

(138) Ministry of Industry, Business and Financial Affairs, 2025, Nu 

ruller milliarderne til danske iværksættere. 

(139) Ministry of Taxation, 2025, https://skm.dk/. 

(140) Export and Investment Fund of Denmark (EIFO), 2025, 

eifo.dk/en/our-solutions/special-schemes. 

(141) Danish Business Authority, 2025, Establishing production 

facilities. 

(142) Ministry of Industry, Business and Financial Affairs, 2025, 

Danmark får 11 nye industriparker. 

(143) Greensand project, 2026, https://greensandfuture.com/. 

(144) Danish Energy Agency, 2026, CCS tenders and other funding 

for CCS development. 

(145) European Commission, 2026, Overview of strategic projects 

(146) Green Power Denmark, 2025, https://greenpowerdenmark.dk. 

under NZIA. 

(147) The Danish Energy Agency, 2025, https://ens.dk/. 

51 

 
 
 
Graph A5.1: Manufacturing industry production: 
total and selected sector, index (2021=100), 
2015-2024 

Source: Eurostat 

imports 

strengthen 

The  Danish  economy  continues  to  have  a 
higher  dependence  on  imported  materials 
than  the  EU  average.  With  42.8%  of  material 
inputs  stemming  from 
(EU  average: 
22.4%),  Denmark  is  particularly  vulnerable  to 
supply chain disruptions (see Table A5.1). Surveys 
indicate that Danish manufacturing companies are 
actively  taking  measures  to  reduce  strategic 
dependencies  and 
chain 
resilience,  e.g.  by  increasing  inventories  and  the 
number  of  suppliers 
improving 
circularity  would  also  contribute  to  reducing 
dependence  on  volatile  raw  materials  markets. 
Although  Denmark’s  import  concentration  for  a 
basket  of  critical  raw  materials  remains  slightly 
below the  EU  average, dependencies  persist  for  a 
broad  range  of  inputs  needed  for  the  green 
transition.  Further  progress  on  circular  economy 
performance could help reduce import reliance and 
supply risks (see Annex 8). 

(148).  Further 

supply 

(148) Danish Industry, 2025, Virksomhedspanel. 

52 

7080901001101201301402015201620172018201920202021202220232024ManufacturingManufacture of wood and of products of wood and cork, except furniture;manufacture of articles of straw and plaiting materialsManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of rubber and plastic productsManufacture of other non-metallic mineral productsManufacture of basic metals 
          
 
Table A5.1:  Single Market and Industry 

Source: (1) Eurostat, (2) EIB Investment Survey, (3) EIF SME Access to Finance Index, (4) Intrum Payment Report, (5) SAFE survey, 
(6) OECD, (7) data up to 2024: Single Market and Competitiveness Scoreboard, 2025: Commission calculation based on TED data, 
accessible at the Public Procurement Data Space (PPDS) (*) the value represented here under EU average is the median, (8) Single 
Market and Competitiveness Scoreboard, (9) European Commission calculations.  

53 

POLICY AREA20212022202320242025EU-27 average139.1139.8132.8134.7134.1100.015.015.315.916.214.712.63.23.13.23.23.43.9Business environment and simplification5.36.52.89.710.034.00.230.180.160.29-0.430.430.200.540.21-0.1912.111.315.718.115.017.49.713.915.213.214.513.6from private entities in the previous or current quarter---36.243.047.1from public entities in the previous or current quarter---12.012.015.927.831.832.431.231.840.70.0410.0410.0410.0400.0400.05017231623232765610160.40.50.90.50.511.110.90.70.81.195.4591.79192.780.684.61815161413250.09570.15630.09990.08870.09620.146231.532.132.8--32.741.541.443.746.5-25.239.239.542.642.8-22.48.49.19.39.4-12.2DenmarkINDICATOR NAMEBusiness environment and investmentProductivity and investmentLabour productivity (GDP per hour worked in PPP terms), % of EU271Business investment (share of GDP)1Public investment (share of GDP)1Impact of regulation on long-term investment, % of firms reporting business regulation as a major obstacle2SME liquidityEIF Access to Finance for SMEs index - loans3EIF Access to Finance for SMEs index - equity3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment4Payment gap - public sector, difference in days between offered and actual payment4Share of SMEs experiencing late payments, %5Industry and economic securitySingle Market IntegrationEU trade integration, average(intra-EU imports + intra EU exports)/GDP, %1EEA Services Trade Restrictiveness index6Public procurementSingle bids, % of total contractors7*Direct awards, % of negotiated procedures7*ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, resolution rate per country, %8Number of pending infringement proceedings8Energy-intensive industriesElectricity prices for non-household consumers1Electrification (electricity as a share of total energy consumption in industry)1Share of energy from renewable sources (renewable energy generation as a share of overall energy consumption)1Critical raw materialsMaterial import dependency, %1Circular material use rate1Operational cleantech manufacturing capacity in 20259 - Solar PV (c: cell, w: wafer, M:module), GW0.044 (m) - Electrolyzer, GW0.500 - Heat pump assembly - - Battery, GW- 
 
      
 
ANNEX 6: SAVINGS, INVESTMENT AND ACCESS TO FINANCE 

Table A6.1:  Savings and Investments Union summary diagnostic 

Source: OECD (pensions), Eurostat (households' financial wealth), FISMA CMU dashboard (VC and PE), national sources (capital 
taxation). 

is  supported  by 
schemes, 

Denmark  stands  out  as  one  of  the  most 
advanced countries along the main indicators 
of  progress  with  the  policy  goals  of  the 
Savings  and  Investments  Union  (see  Table 
A6.1).  Within  a  business  landscape  that  relies 
heavily  on  medium-sized  enterprises,  Danish 
companies,  despite  carrying  more  debt  as  a 
percentage  of  national  GDP  than  their  EU  peers, 
finance  a  relatively  smaller  part  of  their  balance 
sheets  with  debt.  The  domestic  listed  equity 
market  is  one  of  the  most  developed  in  the  EU, 
while  the  deep  debt  markets  channel  savings 
mostly  to  mortgage  institutions, 
in  particular 
through the very developed covered bonds market. 
The high level of household participation in equity 
large  asset-backed 
markets 
pension 
stocks 
preferential 
the 
investment account introduced in 2019, and a high 
degree of financial literacy. However, the standard 
tax  treatment  of  unrealised  capital  gains  may 
discourage 
investment.  Corporate 
lending  by  the  well  capitalised,  liquid  and  highly 
profitable banking sector withstood well the recent 
period  of  higher 
Insurance 
interest 
companies,  which  manage  the  well-endowed 
asset-backed  pension  schemes,  have  an  equity-
focused  investment  portfolio,  as  do  Denmark’s 
sizeable  investment  funds.  Despite  a  very  active 
venture 
business 
ecosystem, 
environment  in  Denmark  shows  a  low  retention 
capacity  for  growing  companies,  which  highlights 
in  the  tax  and 
the  need  for 
“The 
regulatory  environment. 
in 
Entrepreneurship 
been 
Package” 
implemented  in  2024-2026  and  are  expected  to 
have  a  positive  impact  in  terms  of  the  2025 
country-specific  recommendation  (CSR)  to  ‘boost 
innovative  businesses  by  improving  access  to 

improvements 

long-term 

Initiatives 

capital 

rates. 

have 

the 

venture  capital  and  private  equity  and  the 
framework conditions for initial public offerings.  

Business landscape and company 
funding 

the 

relative  significance  of 

In  comparison  with  the  EU  average,  the 
Danish  economy,  in  terms  of  structure  and 
size, relies more on medium-sized companies 
than  it  does  on  smaller  companies.  While  in 
Denmark 
large 
businesses is  about the  same  as  the  EU  average, 
medium-sized  companies  play  a  stronger  role  in 
the  structure  of  the  Danish  economy,  at  the 
expense of micro and small companies (see Annex 
5 and Annex 4 for more details). This has concrete 
implications for the corporate sector’s demand for 
funding. 

The debt of Danish companies – expressed as 
a share of national GDP – is greater than the 
equivalent metric for its EU peers, but strong 
balance  sheets mean  that Danish  companies 
rely  comparatively  less  on  debt  finance  to 
fund  their  activities.  Financial  borrowing  by 
non-financial  corporations 
in  Denmark 
amounted  to  112.4%  of  GDP  in  2024,  which  is 
significantly higher than the EU average of 71.6 % 
(see Graph A6.1). However, given the overall much 
larger  size  of  the  aggregate  balance  sheet  of 
Danish NFCs, which reached 390% of GDP at end-
2024  (versus  226% in the  EU), the  relative  share 
of  financial  borrowing  in  their  aggregate  funding 
structure  (28.8%)  was  slightly  lower  than  the  EU 
average  (31.7%).  Danish  NFCs’  funding  through 

(NFCs) 

54 

Main featuresRelative EU positioningAssets at 206.4% of GDP (32.3% in the EU)10-year real return of 1.8% (1.4% in the EU)Pension assets, which are very high in volume, yield a high real return.EUR 244 400 per capita  (EUR 85 100 in the EU)o/w 7.5% in listed shares and bonds (7.6% in the EU)o/w 7.3% in investment funds (11.1% in the EU)o/w 25.5% in life insurance (13.4% in the EU)o/w 14.6% in pension claims (13.6% in the EU)Households own a very high volume of financial assets, a very high share of which is invested in equity and in capital markets.VC at 0.121% of GDP (0.064% in the EU)PE at 0.647% of GDP (0.487% in the EU)Very high venture capital and high private equity investments.Realised capital gains tax of 42%, preferential regimes based on continuous yearly gains for pension assets (15.3%) and savings and investment accounts (17%). Special regime for investment companies.Very high rates on capital gains outside the widely used preferential regimes. The high degree of complexity in the tax system is an obstacle to investment planning. No anti-equity bias. 1-34-1011-1718-2425-27Colours indicate the country's relative ranking based on five groups, ranging from the three best to the three worst performers. The relative ranking as regards an SIU diagnostic topic derives from a consistent cross-country comparison, the starting point of which is the average of the underlying main features.TopicAsset-backed pension schemesHouseholds' financial assetsVenture capital (VC)Private equity (PE)Capital taxation 
 
 
 
 
 
 
 
  
 
 
listed and unlisted shares significantly exceeds the 
EU average, in part due to the persistence of some 
traditional  features,  i.e.  the  family  ownership  of 
many  large  Danish  companies.  In  2024,  Danish 
companies  reported  that  about  23%  of  their 
investment  was  funded  externally  (vs  25%  in  the 
EU),  with  the proportion  of  financially  constrained 
companies among the lowest in the EU, despite a 
high proportion of companies considering external 
finance as too costly (149). At the same time, 22% 
of  companies  in  Denmark  believe  they  invested 
too little in the last three years, as opposed to only 
12%  in  the  EU.  This  suggests  a  high  perceived 
investment gap in the country. 

Graph A6.1: Composition of non-financial 
companies' funding 

Source: Eurostat. End-2024. 

Size and structure of the financial 
sector 

The  Danish  economy  stands  out  as  having 
one of the deepest domestic capital markets 
in  Europe.  Based  on  ECB  data,  the  market 
capitalisation  of  listed  equity  issued  by  Danish 
companies  (150)  reached  155%  of  GDP  at  end-
2024, which is the second highest in the EU after 
Ireland (see Graph A6.2). NFCs accounted for 89% 
of  that  capitalisation,  which  reflects the extent  to 
which equity markets are geared towards funding 
the non-financial segment of the Danish economy. 

(149) See the 2025 EIB Investment Survey. 

Nasdaq  Copenhagen  (151)  is  Denmark’s  leading 
marketplace for equities, bonds and mutual funds. 
124  companies  are  listed  on  the  main  stock 
exchange,  and  39  on  the  First  North  growth 
market. Recent volatility in the equity market index 
has  been  driven  by  the  stock  price  of  Novo 
Nordisk,  the  capitalisation  of  which  was  as  large 
as the next nine companies in the index before its 
sizeable  decline  (152).  The  outstanding  volume  of 
debt  securities  on  Danish  markets  reached  177% 
of  GDP  at  end-2024,  which  is  one  of  the  highest 
national  scores  in  the  EU.  Bonds  issued  by  the 
banks accounted for 83% of the total. This reflects 
the  specificity  of  mortgage  lending  in  Denmark, 
where  most  mortgages  are  funded  through 
marketable  covered  bonds,  which  enjoy  very  high 
including  from 
liquidity  and  strong  demand, 
foreigners  (153).  As  the  Danish  government  has 
been running budgetary surpluses since 2016, the 
volume  of  general  government  bonds  declined 
from 40% of GDP at end-2020 to less than 20% 
at end-2024. Euronext Securities Copenhagen (154) 
is  the  only  central  securities  depository  (CSD)  in 
Denmark. There is no central clearing counterparty 
(CCP) in Denmark. 

Even though the financial sector in Denmark 
remains  dominated  by  banks,  non-bank 
financial intermediaries are also strong. After 
peaking at 402% of GDP in 2020, the size of the 
banking sector declined to 322% of GDP in 2024. 
Nevertheless, this still remains significantly above 
the  EU  average  of  251%  and  makes  the  Danish 
banking  sector  the  third  largest  (155)  in  the  EU, 
after  Luxembourg  (1 822%)  and  France  (416%). 
Foreign  presence in  the  banking  market  is limited 
and  accounts  for  about  7%  in  terms  of  assets. 
Banking  concentration  in  Denmark  appears  to  be 

(151) Nasdaq Copenhagen belongs to the Nasdaq group, which in 
the  EU  operates  other  trading  venues  in  Sweden,  Finland, 
Denmark, Lithuania, Estonia and Latvia. 

(152) As of mid-September 2025, Novo Nordisk represented 47% 

of the index market capitalisation. 

(153) In  the  Danish  model,  mortgage  banks  provide  exclusively 
market-funded  mortgages  for  up  to  80%  of  the  property 
value.  Commercial  banks  may  step  in  for  up  to  15%,  after 
5% of self-financing by the purchaser. 

(154) It  belongs  to  Euronext  Group,  which  operates  CSDs  also  in 
Italy, Portugal and Norway, and a network of exchanges and 
CSDs. 

(150) This  figure is  a  proxy  for  the  degree  of development  of  the 
Danish stock exchange, given that: (i) Danish companies can 
be listed abroad; and (ii) foreign companies can also be listed 
in Denmark. 

(155) However,  if  the  market-funded  mortgage  credit  institutions 
are excluded, the size of the remaining commercial banking 
sector 
is  estimated  at  about  125%  of  GDP,  after 
consolidation. 

55 

050100150200250300350400450DKEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
     
 
 
higher than on average in the EU, with the top five 
banks controlling 64% of the sector. The insurance 
sector,  with  total  assets  equivalent  to  almost 
160%  of  GDP  at  end-2024,  dominates  non-bank 
intermediation and is the second largest in the EU 
(after Luxembourg at 382% of GDP). Its very large 
size  is  due  to  the  size  of  asset-backed  pension 
schemes, which are set up by insurance companies 
under  the  Solvency  II  Directive,  instead  of  as 
IORP  Directive. 
pension 
Accordingly, the pension fund sector was reported 
to have total  assets of only 1.4% of GDP at end-
2024.  Investment  funds,  after  several  years  of 
contraction,  expanded  significantly  in  2024  to 
reach 96.2% of GDP. 

funds  under 

the 

average  each  Dane  holds  financial  assets  worth 
EUR 244 400, which is almost three times greater 
than the EU average of EUR 85 100. Nearly every 
second  Dane  owns  shares  directly,  which  is  also 
one  of  the  highest  rates  in  Europe,  while  most 
Danes  hold  shares  indirectly  through  either  the 
widespread – albeit not mandatory – asset-backed 
pension  schemes  or  their  private  holdings  in 
investment funds. 

Graph A6.3: Composition of households' financial 
assets 

Graph A6.2: Capital markets and financial 
intermediaries 

Source: Eurostat. End-2024. 

Source: ECB, EIOPA, AMECO. End-2024. 

Households’ participation in capital 
markets 

Danish  households  hold  the  highest  relative 
volume  of  financial  assets 
in  the  EU 
(excluding  cash,  deposits,  and  unlisted 
equities),  at  approximately  209%  of  GDP 
(156).  Danes’ 
reached 
366.3%  of  GDP  at  end-2024,  versus  an  EU 
average  of  212.2%.  As  of  end-2024,  87%  of 
Danish  households’  financial  wealth  was  invested 
in  non-cash  items  (see  Graph  A6.3),  against  68% 
on average in the EU (157). In per capita terms, on 

total  financial  wealth 

Retail  participation  in  the  equity  markets  is 
also  supported  by  the  preferential  stock 
savings  account,  introduced  in  2019.  The 
Aktiesparekonto  (ASK)  is  a  tax-efficient  savings 
account  introduced  in  2019  to  encourage  Danish 
residents  to  invest  in  publicly  traded  stocks, 
equity-based  investment  funds,  and  ETFs  (158). 
Private  equity,  unlisted  shares  and  bonds  are  not 
eligible.  The  ASK  offers  a  preferential  tax  rate  of 
17% on the overall return, which is lower than the 
usual  tax  rates  of  27%  or  42%  in  regular 
investment  accounts.  As  of  2025,  the  total 
contribution  limit  to  each  ASK,  limited  to  one  per 
person, 
(approx. 
EUR 22 000).  Since  its  inception,  the  ASK  has 
grown  in  popularity,  with  490 000  registered 
accounts  by  the  end  of  2024,  following  an 
increase  of  135 000,  or  38%,  in  comparison  to 
2023.  While 
the  availability  of  preferential 
investment  savings  accounts  has  contributed  to 
engaging retail investors in Denmark from a young 
age, the standard tax rate of 42% on capital gains 

DKK 166 200 

was 

of 

(156) See the AFME 2024 Capital Markets Union Key Performance 

Indicators. 

(157) See also the Overview of CMU Indicators. 

(158) For  a  comparative  review  of  the  various  features  of 
preferential  savings  and  investment  accounts  in  Member 
States,  see  the  dedicated  Commission  staff  working 
document SWD(2025) 6800. 

56 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300350   Listed equity               Bonds                        Assets by sector% of GDP02004000100200300DKEUDKEUper capita (000 EUR) (lhs)% of GDP (rhs)Other equityUnlisted sharesListed sharesBondsInvestment fundsInsurance and pension fundsCurrency and depositsHH Debt (liability) 
   
 
   
 
may discourage long-term investment and hamper 
the  international  and  regional  competitiveness  of 
the Danish economy. 

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  fundamentals  of  finance.  A  dedicated 
digital  platform  allows  every  person  to  run 
complete individualised simulations on their actual 
personal  asset-backed  pension  rights.  As  a  result 
of 
the  2023 
Eurobarometer  on  monitoring  financial  literacy  in 
the  EU  ranked  Denmark  third  in  the  EU  for 
financial knowledge. It showed that 40% of Danes 
have a high level  of financial  knowledge (vs 26% 
in  the  EU),  while  only  15%  have  a  low  level  of 
financial  knowledge  (24%  in  the  EU).  Moreover, 
only  8%  of  Danish  respondents  (23%  in  the  EU) 
declared that they felt some degree of discomfort 
with using digital financial services. 

educational 

efforts, 

these 

The banking sector: resilience and 
financing of the economy 

The  Danish  banking  sector  appears  strongly 
resilient  to  risks,  has  a  low  exposure  to 
vulnerabilities, and is thus not constrained in 
its  role  of  funding  the  economy.  As  of  Q3 
2025,  the  overall  capitalisation  of  Danish  banks 
stood  at  22.7%,  well  above  the  EU  average  of 
20.2%,  although  below  the  2023  peak  of  23.4% 
(see  Table  A6.2)  (159).  As  of  end-2024,  the 
aggregate  MREL  level  (minimum  requirement  for 
own  funds  and  eligible  liabilities)  stood  at  39.4%, 
which is 7.4 percentage points above the required 
level (160). With a return-on-equity of 11.8% as of 

(159) The  higher  capital  level  is  due  in  part  to  the  7%  sectoral 
systemic  risk  buffer  on  exposures  related  to  real  estate 
development companies, in place since mid-2024. 

(160) See  the  latest  MREL  Dashboard  published  by  the  EBA.  For 
further information on the bail-in mechanics in Denmark, see 
the  dedicated  publication  by  the  Danish  Financial  Stability 
Authority. 

57 

Q3  2025,  profitability  remains  persistently  high 
and  above  the  EU  average  of  9.6%,  partly 
supported  by  a  stable  and  low  ratio  of  non-
performing  loans  of  1.2%,  below  the  EU  average 
of  1.9%.  However,  banks’  asset  quality  outlook  is 
subject  to  increased  global  uncertainty  and  its 
likely  impact  on  energy  prices  and  economic 
growth.  Danish  banks  maintain  very  strong 
liquidity  positions.  As  of  end-2024,  at 
the 
aggregate  level,  the  net  stable  funding  ratio  of 
Danish banks stood at 124.2%, while the liquidity 
coverage 
to  200%.  When 
recalculated  only  for  commercial  banks  (which 
alone  are  exposed  to  a  liquidity  funding  risk  as 
mortgage  banks  do  not  owe  deposits),  the 
aggregate  loan-to-deposit  ratio  stood  at  63.7%, 
well below the EU average. 

ratio  was  close 

Although  demand  for  corporate  lending  had 
resisted  the  trend  of  rising  interest  rates 
better  than  households,  this  trend  now 
appears to be reversing. As of mid-2025, loans 
to  NFCs  were  equivalent  to  53.2%  of  GDP,  well 
above the EU average of 29.2%. Corporate lending 
is  driven  by  mortgages,  which 
in  Denmark 
accounted for more than two thirds of bank loans 
to  NFCs  in  2024.  In  the  context  of  rising  interest 
rates,  commercial  bank  loans  to  NFCs  have  been 
stagnating since  the  summer  of  2022.  The  short-
lived  rebound  in  2024,  notably  by  11.2%  on  a 
yearly  basis  in  the  last  quarter,  reversed  in  the 
first  half  of  2025.  However,  mortgage  loans  to 
companies  have  been  growing  more  steadily. 
Supported  by  the  fall  in  interest  rates,  the  2024 
rebound in corporate lending benefited all sectors, 
and  specially  manufacturing,  where  outstanding 
loans  increased  impressively  by  45.5%  during 
2024.  Despite  tighter  credit  standards  since  then, 
companies  do  not  report  significant  borrowing 
constraints.  Nevertheless,  bank  lending  to  NFCs 
contracted  slightly,  by  0.9%  on  a  yearly  basis,  as 
of Q3 2025 (see Table A6.2). But after contracting 
in  2022  and  2023, 
to  households 
expanded  by  0.8%  in  2024  and  accelerated  its 
growth to 3% on a yearly basis as of Q3 2025. 

lending 

Role of non-bank financial 
intermediaries 

Relative to the size of its economy, Denmark 
has  the  largest  occupational  assets-backed 
pension  system  in  the  EU.  Participation  in 

 
 
and 

wage-earners’ 

pillar 2  pensions  is  mandatory  for  most  wage-
earners  through  widespread  collective  bargaining 
agreements, 
average 
contribution  rate  is  12%  of  their  salaries  (rates 
typically  range  between  10%  and  17%).  Most 
pension  investment  vehicles  are  industry-wide, 
although  company-specific  pension  funds  also 
exist  (161).  Danish  pension  funds  were  set  up  as 
defined-benefits  pension  schemes  under 
the 
Solvency  II  Directive  and  offer  an  ETT  tax  profile 
(162).  A  reform  in  the  early  2000s  introduced  the 
defined-contribution  principle  and  strengthened 
both  ownership  rights  and  investment  flexibility. 
Rights  accumulated  in  defined-contribution  plans, 
which  as  of  end-2024  represented  about  half  of 
the asset-backed pension schemes, are inheritable 
(163). As of end-2024, total assets accumulated by 
the  Danish  asset-backed  pension 
schemes 
amounted  to  the  equivalent  of  EUR  754  billion, 
which  was  equivalent  to  190%  of  GDP  or  EUR 
126 205 per capita. 

The  Danish  insurance  sector, which manages 
the  asset-backed  pension  schemes, 
is 
(164)  from  EIOPA, 
thriving.  Based  on  data 
insurance companies’ total assets were equivalent 
to  almost  161.3%  of  GDP  as  of  end-2024,  which 
makes  Denmark  the  second 
largest  national 
insurance market in the EU after Luxembourg and 
more  than  three  times  larger  than  the  European 
average (see Table A6.2). The total assets of non-
life  insurers  represented  less  than  6%  of  the 
sector’s  total  assets.  Following  a  significant 
revaluation-driven  decline  in  total  assets-to-GDP 
of almost 20 percentage points in 2022, the sector 
has  managed  to  recover  half  of  that  contraction 
since then. In nominal terms, the rebound has even 
surpassed pre-2022 levels, and assets reached the 
equivalent  of  EUR  597  billion  in  2024  (165).  In 

(161) For further details on the assets-backed pension schemes in 
Denmark,  see  the  Country  profiles  published  by  the  OECD 
and  the  Country  fiches  of  the  latest  report  on  ageing 
published by the European Commission. 

(162) The ETT feature means that: (i) contributions are tax-exempt; 
(ii) investment returns are taxed; and (iii) pay-outs are taxed. 

(163) For  further  historical  and  numerical  details  on  asset-backed 
pension schemes in Denmark, with useful take-aways for the 
reform of pension systems in other countries, see the recent 
DN  analysis,  The  road  to  more  risky  assets  in  the  Danish 
pension sector. 

(164) EIOPA  insurance  data,  as  described  in  the  paragraph, 
appears  to  underestimate  the  actual  size  of  asset-backed 
pension schemes in Denmark, by as much as 30% of GDP. 

terms of asset allocation, at the end of 2024, 35% 
were  held  in  collective  investment  undertakings, 
25.3%  in  equity,  22.4%  in  corporate  bonds  and 
10.1% 
in  government  bonds.  Property  and 
mortgages  together  represented  3.7%  of  pension 
investment 
fund  assets.  The  strong 
performance  was  due  to  the  sector’s  strategic 
investment  policy  shift  away  from  fixed-income 
securities  and  towards  a  greater  emphasis  on 
stocks and equity. 

recent 

Danish  insurance  companies  show  excellent 
solvency  and  profitability  indicators.  The 
sector's  solvency  ratio  (166)  remained  robust  at 
293.2%  as  of  end-2024,  significantly  above  its 
level  of  241.1%  in  2022  and  the  EU  average  of 
236.2%.  Non-life  insurance  is  expected  to  remain 
highly  profitable,  as  suggested  by  its  combined 
ratio  (167)  of  85%,  which  is  well  below  the  EU 
average of 96% and among the lowest in the EU. 
EIOPA’s  protection-gap  assessment  indicates  that 
Denmark  faces  a  low-to-medium  wildfire  risk, 
medium risks of flooding and coastal flooding, and 
a high risk of windstorms. However, with insurance 
penetration  rates  exceeding  75%  for  these  risks, 
EIOPA  deems  the  current  protection  gap 
in 
Denmark as not significant. 

In  addition  to  insurance  companies,  asset 
management  is  another  very  significant  and 
well-developed  segment  of 
the  Danish 
financial sector. Total assets under management 
expanded  by  an  impressive  17%  in  2024  and 
reached  EUR  548  billion  or  138%  of  GDP,  thus 
putting  Denmark  third 
in  the  EU,  after  the 
Netherlands  (187%)  and  France  (181%)  (168). 
Assets  under  management  were  distributed 
between  investment  funds  (EUR  382  billion)  and 
discretionary  mandates 
(EUR  167  billion). 
Investment  funds’  assets  were  primarily  invested 
in  equity  (39%),  bonds  (27%),  and  other  assets 
(33%),  with  cash  accounting  for  only  1%.  With 
38%  in  equity  and  46%  in  bonds,  discretionary 
mandates  appear  to  follow  a  more  conservative 

(166) For  insurance  companies,  the  solvency  ratio  indicates  the 
extent  to  which  the  eligible  own  funds  cover  the  solvency 
capital requirement. 

(167) The combined ratio indicates whether an insurance company 
earns  more  revenues  from  its  collected  premiums  than  it 
pays  out  claims  (loss  ratio)  and  business  expenditures 
(expense ratio). 

(168) See  the  2025  Asset  Management  Report  published  by  the 

(165) See EIOPA Insurance Statistics. 

EFAMA. 

58 

 
 
 
although  there  is  a  pressing  need  for  capital  to 
help companies scale up. 

The 

and 

creation. 

With  9  of  the  13  ‘unicorns’  founded  in 
Denmark  having  moved  their  headquarters 
out of the country, the business environment 
in  Denmark  shows  a  low  retention  capacity 
for innovative firms. It is estimated that 69% of 
Danish  ‘unicorns’  are  leaving  the  country  after 
certain  level  of  development  against  only  9%  in 
Sweden. Improved  access to foreign talent,  better 
conditions  for  successful  IPOs,  and  a  stronger 
framework  for  rewarding  risk-taking,  (especially 
through  more  opportunistic  use  of  stock-options 
and  reduced  tax,  regulatory  and  bureaucratic 
burden  on  entrepreneurs)  are  identified  as  the 
most  important  factors  for  improving  capital 
retention 
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;  (v)  plans  to  ease  access  to  a 
basic  bank  account  for  businesses;  (vi)  plans  to 
ease  access  to  financing  from  the  Export  and 
Investment  Fund  of  Denmark;  and  (vii)  plans  to 
broaden access to free government-provided data. 
The  initiatives  in  “The  Entrepreneurship  Package” 
implemented  in  2024-2026  are  expected  to  have 
a  positive  impact  in  terms  of  the  2025  country-
specific 
‘boost 
innovative  businesses  by  improving  access  to 
venture  capital  and  private  equity  and  the 
framework conditions for initial public offerings. 

recommendation 

framework 

(CSR) 

legal 

to 

investment approach. Retail investors held 56% of 
all assets under management, which illustrates the 
high  level  of  household  participation  in  capital 
markets. 

Venture capital ecosystem 

in 

to 

country, 

is  the  third 

Even  though  the  Danish  authorities  are 
committed 
the  business 
improving 
conditions  for  retaining  venture  capital 
recent 
the 
investments 
developments  show  signs  of  stagnation  in 
this  area.  Venture  capital  (VC)  investments  in 
Denmark averaged 0.121% of GDP in 2022-2024, 
significantly above the EU average of 0.064% (169). 
Private  equity  (PE)  investments  amounted  to 
0.647% of GDP in 2022-2024, also above the EU 
average  of  0.487%,  although  in  strong  decline  in 
comparison  with  previous  years.  Danish  asset-
backed  pension  schemes  raised  21%  of  all  funds 
committed  to  VC  and  PE  in  the  country  between 
largest 
2007  and  2023,  which 
presence  of  these  funds  in  VC  and  PE  after 
Sweden  (30%)  and  Finland  (28%)  and  above  the 
15% EU average (170). Even though Denmark stood 
out  as  the  sole  country  among  the  top  10  VC 
ecosystems  in  Europe  to  experience  growth  in 
2023,  total  investments  of  about  EUR  1.6  billion 
were still lower than in 2022 (EUR 1.9 billion) and 
well  below  the  2021  record  of  EUR  3.9  billion.  In 
comparison,  after  stagnating  in  2024,  with  deals 
(171),  activity 
totalling  only  EUR  1.3  billion 
rebounded marginally in 2025, with expected total 
deals  of  about  EUR  1.6  billion.  For  the  last  five 
years  prior  to  2023  the  main  sectors  of  VC 
investment were health (26%), company software 
(14.7%).  Denmark  has 
(15%),  and 
demonstrated  a  persistently  strong  capacity  for 
company  creation  to  the  point  of  gaining  the 
‘unicorn  factory’  (172), 
reputation  of  being  a 

fintech 

(169) See the updated Overview of CMU indicators. 

(170) See ECMI - Closing the gaping hole in the capital market for 

EU start-ups – the role of pension funds. 

(171) See data published by Dealroom. 

(172) See  the  dedicated  report  by  the  Danish  Chamber  of 
the  period  2000-2022.  While 
Commerce, 
comprehensive, the report is partially incomplete, as it does 
not include the older companies 3Shape and Netcompany or 
newer companies, e.g. Flatplay and Shine.  

covering 

59 

 
 
Table A6.2:  Financial sector indicators 

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

60 

20182019202020212022202320242025-Q3EUTotal assets of MFIs, % of GDP351.0385.8401.5363.5347.5346.0326.2307.0246.1Common equity Tier 1 ratio17.818.019.118.718.719.819.418.816.8Total capital adequacy ratio21.622.423.222.822.523.423.122.720.2Overall NPL ratio, % of all loans2.31.91.91.81.51.31.31.21.9NPL ratio, loans to NFCs3.83.03.22.51.91.81.71.63.5NPL ratio, loans to HHs2.01.81.81.91.71.51.51.42.1Return on equity ratio18.08.74.58.23.811.712.611.89.6Loans to NFCs, % of GDP53.454.455.654.353.356.056.853.729.3Loans to HHs, % of GDP107.4106.3106.999.889.690.486.585.243.6NFC credit growth rate, %4.13.21.96.58.33.25.7-0.92.5HH credit growth rate, %1.31.71.22.8-0.4-0.40.83.02.6Stock market capitalisation, % of GDP--161.4180.3150.4175.5156.9117.469.9Initial public offerings, % of GDP0.470.040.330.400.030.060.00-0.06Market funding ratio41.140.339.537.434.933.333.2-49.7Private equity, % of GDP0.7070.7760.7020.7630.7830.9280.647-0.487Venture capital, % of GDP0.0570.0790.0950.1440.1390.1610.121-0.064Financial literacy, composite index-----51.0--45.5Bonds, % of HHs' financial assets0.90.70.70.50.50.90.8-2.8Listed shares, % of HHs' financial assets4.85.56.57.06.97.26.7-4.8Investment funds, % of HHs' financial assets6.97.17.27.36.76.97.3-11.0Insurance/pension funds, % of HHs' financial assets47.547.746.742.340.841.441.4-27.8Total assets of insurers, % of GDP142.8163.0171.3170.0150.4159.5161.3-53.9Pension assets, bn EUR---785.1745.6745.7810.0-5813.8Pension assets, % of GDP---228.7195.9199.3206.4-32.310y real return average of pension assets, %-----2.51.8-1.4Pension funds assets, ECB (% of GDP)---------1-34-1011-1718-2425-27Colours indicate performance ranking among the 27 EU Member States.Banking sectorNon-banking sector 
 
 
 
      
 
ANNEX 7: EFFECTIVE INSTITUTIONAL FRAMEWORK 

institutional  framework 

An  effective 
is 
essential  for  competitiveness.  This  means 
integrity,  high-quality 
public 
trust  built  on 
legislation,  simplification  of 
regulation  and 
efficient services to business and people. 

Public trust 

Graph A7.1: Trust in the justice system, regional / 
local authorities and in government 

(1) EU-27 since 2019; EU-28 before 
Source: European Commission, Standard Eurobarometer 
surveys 

and 

legal 

system 

Denmark  enjoys  high  levels  of  trust  in  its 
government, 
local 
authorities, ranking among the highest in the 
EU  (Graph  A7.1).  Trust  in  government  (53%),  the 
legal  system 
local 
authorities  (73%)  is  among  the  highest  in  the  EU 
and  has  been  relatively  stable  since  2017. 
Additionally,  both  businesses  and  people  are 
confident  that  the  public  administration  handles 
their data securely and responsibly (173). 

(84%)  and  regional  and 

Quality of lawmaking and 
implementation 

Denmark’s  rules  on  lawmaking  show  limited 
alignment  with  selected  good  practices  to 
reduce  the  regulatory  burden  and  ensure 
(Table  A7.1).  For 
effective  implementation 

example,  a  number  of  shortcomings  hinder  the 
government's  ability  to  monitor  how  legislation  is 
implemented:  when developing  new primary laws, 
there  is  no  formal  requirement  either to  design  a 
methodology  for  measuring  progress  towards  the 
identify  enforcement 
to 
law's  objectives,  or 
mechanisms  and  assess  compliance 
levels. 
Oversight  of  better-regulation  tools  is  also  weak. 
There  are  no  publicly  available  assessments  of 
whether  regulatory  impact  assessments  lead  to 
changes 
in  proposals,  nor  whether  ex  post 
evaluations  improve  the  regulatory  stock.  Nor  is 
there an external body to review the quality of ex 
post evaluations 

Denmark's  regulatory  impact  assessments 
may  not  be  comprehensive  enough  to 
encompass  the  full  complexity  of  legislation 
for  businesses.  When  developing  legislation, 
regulators  are  required  to  assess  the  costs  on 
businesses and people (174).  Additionally, Denmark 
is  one  of  the  few  Member  States  that  requires 
systematic assessment of policy goals, though this 
is  mandatory  only  for  primary  laws.  Despite  the 
strong focus on assessing costs to businesses, and 
the  assessments  of  policy  goals,  an  increasing 
proportion  of  companies  think  that  administrative 
procedures are complex (39% in 2022 and 49% in 
2025),  and  that  legislation  and  policies  change 
fast  (30%  in  2022  and  42%  in  2025)  (175).  This 
might mean that current assessments, which focus 
on certain proposals and are not as developed for 
subordinate legislation, are not systematic enough 
to  be  able  to  encompass  all  the  complexity  of 
legislation and costs to businesses. 

The  legislative  process  is  inclusive,  with  a 
smooth-running public consultation system in 
place.  Overall,  the  legislative  process is  inclusive, 
and  the  rules  have  been  amended  to  give 
Parliament  more  time  to  consider 
legislative 
proposals.  Public  consultation  functions  well, 
a 
coordinated 
portal 
improves  participation 
(Høringsportalen),  which 

through 

central 

(174) OECD, 2025, Better Regulation Practices across the European 

Union 2025, https://doi.org/10.1787/6f007516-en.  

(173) European  Commission,  2026,  Flash  Eurobarometer  surveys 
567 and 568 on satisfaction with administrative services. 

(175) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

61 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringWinterSummerWinterSpringWinterSummerAutumnSpringAutumnSpringAutumnSpring202520242023202220212020201920182017Justice,  legal system EU-27Justice,  legal system DKRegional or local public authorities EU-27Regional or local public authorities DKGovernment  EU-27Government  DK 
 
       
 
 
 
 
Table A7.1:  Denmark. Selected indicators on better regulation practices for primary legislation 

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

rates. However, consultation times are sometimes 
shorter than the recommended period (176). 

pressure 

A  number  of  major  structural  reforms  are 
being implemented at the same time, putting 
on  municipalities’ 
significant 
capacity.  Municipalities  are  facing  a  number  of 
major  reforms  between  2025  and  2027  that 
significantly change the division of tasks between 
national,  regional  and local  authorities (177).  These 
reforms  are  placing  an  unprecedented  strain  on 
the municipalities’ capacity creating a more urgent 
need  for  multilevel  governance  and  cooperation 
between  levels  of  government.  For  example,  the 
Government,  the  Association  of  Danish  Regions 
and Local Government Denmark have published an 
agreement  concerning  the  health  reform  that 
provides 
coordinate 
implementation (178).  

for  a  partnership 

to 

The  2026  Agreement  on  the  Municipalities’ 
Finances attempts to address potential gaps 
in 
through  a 
temporary  financing  grant  for  municipalities 

implementation  capacity 

(176) European  Commission,  2025,  Rule  of  Law  Report, 
https://commission.europa.eu/publications/2025-rule-law-
report-communication-and-country-chapters_en. 

(177) Major  reforms  include  healthcare  reform,  transferring  care 
tasks  to  regions;  employment  reform  abolishing  mandatory 
job  centres  and  giving  municipalities  more  organisational 
freedom and reform of care for the elderly. 

(179). In the context of shifting responsibilities, and 
municipalities  being  granted  more  freedom  in  a 
range  of  sectors,  the  national  audit  office  found 
state  supervision  of  municipalities  and  regions  to 
be  ‘unsatisfactory’  (180),  a  challenge  that  may 
become harder to overcome with increasing tasks. 
(see Annex 18). 

Public service delivery and 
digitalisation 

services.  52% 

Despite  high  satisfaction  rates,  companies 
and  people  in  Denmark  still  face  challenges 
of 
with  administrative 
companies  and  70%  of  people  say  they  are 
satisfied  with  administrative  services,  higher  than 
the  EU  averages  of  42%  and  45%  respectively 
(181).  For  companies,  the  most  time-consuming 
aspects  of  interacting  with  public  administrations 
are  understanding  the  applicable  legislation  and 
processing  time.  In  the  case  of  people,  those 
aspects  are  processing  time  and  identifying  the 
correct  service  and  where  to  request  it  (Graph 
A7.2). Most people (58%) say that they need more 
correspondence  than  they  initially  expected  to 

(179) Ministry  of  Finance  &  Kommunernes  Landsforening,  2025, 

Aftale om kommunernes økonomi for 2026. 

(180) National  Audit  Office,  2025,  Beretning  om  Ankestyrelsens 

tilsyn og brug af reaktioner ved lovbrud. 

(178) Dansker 

Regioner, 

2025, 

Forårsaftale 

2025 

om 

implementering af sundhedsreformen. 

(181) European  Commission,  2026,  Flash  Eurobarometer  surveys 
567 and 568 on satisfaction with administrative services. 

62 

Tools for smart legislation: Share of possible impacts assessed for all primary laws when developing legislation 1Regulators are required to identify and quantify the benefits of a new primary law1Regulators are required to identify and assess the impacts of alternative non-regulatory options0Tools for effective implementation: when developing laws, regulators are required to:Assess the level of compliance0Identify and assess potential enforcement mechanisms0Specify the methodology of measuring progress in achieving the law's goals0Oversight of better regulation: There is an external  body responsible for reviewing the quality of RIAs and of ex post evacuations 1There are publicly available assessments of the effectiveness of RIA in modifying regulatory proposals 0There are reports on the level of compliance by government department with the requirements of RIA1There are indicators on the percentage of ex post evaluations that comply with guidelines0The effectiveness of ex post evaluations in improving the regulatory stock has been assessed in the last five years0 
 
 
 
      
 
Table A7.2:  Digital Decade key performance indicators: availability of digital public services 

(1) Digital Decade target by 2030: 100. (2) Publishing year, data was collected in the previous year 
Source: European Commission, State of the Digital Decade report 2025 

receive administrative services, which is below the 
EU average of 69%. 

lives;  38%  see 

Perceptions  of  service  delivery  have  not  changed 
significantly  since  2023  (182).  40%  still  describe 
public  administration  as  playing  a  central  role  in 
people’s 
it  as  complex  and 
burdensome,  2  percentage  points  lower  than  in 
2023;  27%  see  it  as  fast  and  effective,  16  pps 
higher;  and  18%  see  it  as  slow,  10  pps  lower. 
Administrative  challenges  have  a  detrimental 
impact  on  44%  of  companies  (EU:  51%),  mostly 
owing to delays and increased operational costs.  

Graph A7.2: Most time-consuming aspects of 
service delivery 

Source: European Commission. Flash Eurobarometer 567 / 
568 on satisfaction with administrative services (2026) 

Denmark  remains  a  digital  leader,  exceeding 
the EU average in key areas. The availability of 
digital public services to the public has decreased 
(Table A7.2), falling below the EU average (183). The 
drop  is  attributable  to  a  data  correction  (184). 

(182) European  Commission,  2023,  Flash  Eurobarometer  survey 
526 : Understanding Europeans’ views on reform needs. 

(183) European Commission, Digital Decade 2025: Country reports. 

(184) Some  websites  that  were  previously  counted  as  compliant 
were  later  found  not  to  have  a  cross-border  eID  system; 
more  details  in  Denmark’s  2025  Digital  Decade  Country 
Report,  European  Commission,  Directorate-General 
for 
Communications Networks, Content and Technology. 

63 

In 

terms  of 

Access to cross-border services now stands at 59 
(down  from  69  in  2023),  well  below  the  EU 
average  of  71. 
technical 
deployment  of  electronic  health  records  Denmark 
performs very strongly, with a score of 98 in 2024 
(unchanged form 2023), well above the EU’s score 
of  83.  To  reach  full  maturity  and  fulfil  the  2030 
target  of  100  by  2030,  Denmark  needs  to  make 
medical images digitally accessible to people.  

the 

Denmark  continues  to  progress  with  its 
digital  transformation;  the  vast  majority  of 
the  population  use  online  services,  though 
some  groups  still  face  digital  barriers.  The 
proportion  of  e-government  users  has  increased 
slightly to reach 98% of the population, well above 
the  EU  average  of  76%.  The  proportion  of  people 
using  electronic  identification  (eID)  rose  to  99% 
(EU: 52%) (185), accompanied by a steady increase 
in  monthly  transactions  (186).  Alongside  this  high 
uptake  is  one  of  the  EU’s  highest  proportions  of 
people with basic digital skills (DK: 81%; EU: 60%) 
(187). However, 16.5% of people aged 15-89 either 
do  not  use  or  experience  challenges  using  digital 
public services, with wide differences between age 
groups (188).  For example, most  people without an 
active eID are aged 75 and above. The Agency for 
Digital  Government  has  established  principles  for 
digital  inclusion  to  improve  accessibility  (189). 
Additionally,  33%  of  people  stated  that  digital 
services either increase or do not reduce the time 
to  obtain  administrative 
and  effort  needed 

(185) European Commission, Eurostat, 2025, Use of electronic 

identification (eID). 

(186) Danish Agency for Digital Government, 2025, MitID. 

(187) European Commission, Eurostat, 2025, Share of individuals 

having at least basic digital skills. 

(188) Ministry of Digital Affairs, 2026, Redegørelse om Danmarks 

Digitale Udvikling 2026. 

(189) Agency for Digital Government, 2025, Principles for Digital 

Inclusion in the Public Sector.  

0%10%20%30%40%50%Time forresponsesServiceidentificationLegislationandobligationsLegislationandobligationsTime forresponsesApplicationformsPeopleBusinessesEUEU-272023202420252025848479828989888696989883Access to electronic health records (0 to 100)Digital public services for citizens (0 to 100)Digital public services for businesses (0 to 100)Denmark 
 
   
 
 
 
  
 
services, which suggests that improvements could 
be made to their user-friendliness (190). 

Digital  public  services  for  companies  are 
widely  available  in  Denmark,  but  cross-
border  service  accessibility  for  companies  is 
around  the  EU  average  (Table  A7.2).  The 
availability of digital public services for companies 
also  fell  slightly  in  2024  (from  89  to  88)  (191), 
remaining  above  the  EU  average  (86).  This  drop 
mirrors  the  correction  made  for  services  for 
people,  adjusting  the  assessment  of  the  cross-
border online availability of certain services. Cross-
border  service  accessibility  now  stands  at  75 
(down  from  77  in  2023),  slightly  above  the  EU 
average of 74. This means that even key services 
such  as  starting  a  business  lack  sufficient  cross-
(192).  Despite  high  online 
border  accessibility 
availability,  only  60%  of  companies  report  that 
digital  services  either  significantly  or  somewhat 
reduce  the  time  and  effort  needed  to  access 
administrative services (193). 

and 

support 

A  new  digital  strategy has  been  launched to 
administrative 
improve 
efficiency for people. The new joint government 
digital  strategy  2026-2029  focuses  on  increasing 
the  consistency  and  user-centric  nature  of  digital 
solutions,  and  on  embracing  new  technologies 
such as AI (194). The objective is to i) ensure a user-
friendly  and  inclusive  digital  public  sector,  ii) 
increase  the  use  of  technology  to  support  the 
public  sector,  iii)  increase  the  interconnection 
between digital systems, creating a more coherent 
digital  public  sector  and 
increase  digital 
sovereignty. 

iv) 

data 

governance 

Streamlining 
across 
government  agencies  can  help  strengthen 
Denmark's  economic  competitiveness.  The 
first  ever  mapping  of  reporting  requirements, 

they 

received. 

submissions 

published 
in  May  2025,  found  that  Danish 
businesses have to navigate 1 874 separate state-
reporting  platforms  to  complete  over  200  million 
annual submissions (195). The study notes that this 
is a conservative estimate, as authorities handling 
one third of platforms were unable to report how 
many 
The 
Confederation  of  Danish  Industry’s  July  2025 
analysis  quantified  the  cost:  41 million hours  and 
DKK 23.5 billion (approx. EUR 3.1 billion) per year, 
with  64%  of  their  members  ranking  government 
reporting  as  their  heaviest  administrative  burden 
(196).  The  Danish  Business  Authority  is  actively 
working  on  automating  business  reporting  (197). 
However,  making  meaningful  progress  requires 
broader  reform  of  cross-agency  data  governance, 
which,  if  achieved,  would  be  a  major  boost  to 
Denmark’s competitiveness. 

in 

(Rød 

løber 

July  2025 

Denmark  took  steps  to  speed  up  industrial 
permitting,  but  the  initiative  has  limited 
‘red  carpet’  for 
scope.  Denmark  set  up  a 
for 
manufacturers 
produktionsvirksomheder) 
to 
standardise  and  simplify  the  permitting  process 
for  large-scale  industrial  facilities  (198).  The  red 
carpet  set  up  a  one-stop-shop  in  the  Danish 
Business Authority (199), which assigns each eligible 
company  a  dedicated  coordinator  to  draw  up  a 
consolidated  approval  plan  across  all  relevant 
state  and municipal  authorities.  It  also  set  legally 
binding  processing  deadlines  of  12–18  months. 
However, eligibility is restricted to i) manufacturers 
in sectors covered by the EU Net-Zero Industry Act 
or  the  Critical  Raw  Materials  Act,  ii)  projects 
requiring  permits  from  both  the  state  and  the 
municipality,  iii)  investments  above  DKK  100 
million  (approx.  EUR  13.4  million),  and  iv)  firms 
located 
in  one  of  the  11  state-designated 
industrial parks (200).  

(190) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(191) European Commission, 2025, Digital Decade 2025: Country 

reports. 

(192) European Commission, forthcoming, Simplification of key life 

events. 

(193) European  Commission,  2026,  Flash  Eurobarometer  surveys 
567 and 568 on satisfaction with administrative services. 

(194) Agency  for  Digital  Government,  2025,  Den  fællesoffentlige 
digitaliseringsstrategi.  The  strategy 
is  a  collaboration 
between  the  government,  the  National  Association  of 
Municipalities (KL) and Danish Regions. 

(195) Agency  for  Digital  Government,  2025,  MinVirksomhed  – 

lettere indberetning til det offentlige. 

(196) Dansk Industri, 2025, Bøvl og byrder bremser væksten i hver 

tredje virksomhed. 

(197) )Danish Business Authority, 2025,  Digital Administration and 

Reporting. 

(198) Retsinformation,  2025, 
produktionsvirksomheder 
industriparker. 

Lov 
og 

én 

om 
statslig 

indgang 
udpegning 

for 
af 

(199) Erhvervsstyrelsen,  2025,  One  stop  shop  for  etablering  af 

produktionsanlæg. 

(200) Regeringen, 2025, Danmark får 11 nye industriparker. 

64 

 
 
 
Additionally,  environmental  impact  assessments 
fall  outside  the  statutory  processing  deadlines 
(201),  which  means  that  the  reform  focuses  solely 
on  coordinating  administrative  permitting  rather 
than the environmental  review processes that are 
often responsible for extending project timelines. 

of 

data 

exchange 

Denmark  is  not  yet  ready  to  enable  the 
and 
cross-border 
documents  between  authorities  through  the 
EU once-only technical system (202). When the 
services  (203)  supported  by  this  system  become 
accessible,  people  and  businesses  will  no  longer 
have to search, download and upload information 
across  e-government  portals  in  different  Member 
States. Danish authorities still have to identify the 
types of documents and data to exchange through 
the  system  and  explore  ways  to  shift  from  the 
submission  of  documents 
to  exchange  of 
structured data. 

Civil service 

is 

Denmark’s  public  administration  boasts  a 
highly educated workforce, with a significant 
proportion  having  completed  post-secondary 
education and participating in adult learning. 
The ratio of staff aged 25-49 to staff aged 50-64 
has  increased,  indicating  that  the  civil-service 
younger.  Denmark’s 
workforce 
administration is significantly younger than the EU 
average  (Denmark  1.8;  EU  1.5)  (204).  Additionally, 
civil-service staff are younger than in the economy 
as  a  whole  (ratio  of  staff  aged  25-49  to  50-65: 
1.7).  The  proportion  of  civil  servants  with  post-
secondary  education  has  steadily  increased  since 
2021  and  is  well  above  both  the  EU  average 
(Denmark 67%; EU 55%) (205), and the economy as 

getting 

(201) Erhvervsministeriet, 

2024, 

Rød 

løber 

for 

produktionsvirksomheder. 

(202) European  Commission,  Once-Only  Technical  System 

Acceleratormeter, Ec.europa.eu. 

(203) Procedure 

types 

Annex 
directives 
SDGR (2018/1724/EU) and 
2006/123/EC, 2014/24/EU and 2014/25/EU 

under 

II 

of 

the 
2005/36/EC, 

(204) European  Commission,  Eurostat,  Employed  persons  by 

economic activity (NACE Rev. 2) (2008-2026).  

(205) European  Commission,  Eurostat,  2026,  European  Union 
Labour  Force  Survey,  Employees  by  educational  attainment 
level and NACE Rev. 2 activity (2008-2026). 

65 

a  whole  (51%).  The  proportion  of  civil  servants 
participating  in  adult  learning  has  dipped  slightly 
but  remains  16  points  above  the  EU  average 
(Denmark  35%;  EU  19%)  (206).  Denmark  made 
dramatic improvements in gender parity at senior-
management  level  for  the  second  year  in  a  row: 
the  proportion  of  women  in  senior-management 
positions  increased  from 30%  in  2023  to  44%  in 
2025 (207). 

Integrity  

The  perception  of  corruption  when  doing 
business  in  Denmark  and  the  reported  level 
of experienced corruption  are  both  very low. 
Only 18% of companies consider that corruption is 
widespread, significantly below the EU average of 
63%,  and  46%  consider  that  overly  close  links 
between  business  and  politics  lead  to  corruption 
(EU:  76%).  11%  of  businesses  consider  that 
corruption  is  a  problem  when  doing  business  (EU: 
35%)  (208).  Foreign  bribery,  the  pharmaceutical 
industry  and 
the  energy  sector  have  been 
identified  as  high-risk  areas  for  corruption  in 
Denmark  (209).  In  terms  of  actual  experience  of 
corruption,  fewer  companies  than  the  EU  average 
report  being  asked  or  expected  to  offer  gifts  or 
extra  payments 
services  or 
procurement (Denmark 3%; EU: 10%). Significantly 
more  believe  that  bribery  of  senior  officials  is 
appropriately  punished  (Denmark  44%  vs  EU 
33%). Overall, this suggests both limited pressure 
of 
strong 
enforcement (210). 

for  permits, 

perception 

corruption 

and 

of 

While measures are in place to facilitate the 
detection of corruption, no progress has been 
made regarding the prevention of corruption. 
Although  rules  on  whistleblowing  have  been 

(206) European  Commission,  Eurostat,  2026,  European  Union 
Labour  Force  Survey,  Participation  rate  of  employees  in 
education and training (last 4 weeks) by NACE Rev. 2 activity 
(2008-2026).  

(207) EIGE,  2025,  National  administrations:  top  two  tiers  of 

administrators by function of government. 

(208) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

(209) European Commission, 2025, Rule of Law Report. 

(210) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

 
 
 
arrangements  for  producing  machine-readable 
judicial decisions (217). 

implemented, 
the  number  of  whistleblowing 
reports  has  been  on  the  rise  since  2022  (211). 
Integrity  safeguards  for  Parliament  are  lacking. 
There is no code of conduct and no mechanism to 
register external activities and financial interest of 
Members of Parliament is available (212). 

Denmark has taken measures to report more 
effectively  on  the  prosecution  of  corruption. 
The  authorities  provided  data  from  all  13  police 
districts in 2024 on the number of reports, charges 
and 
judgments  regarding  corruption  offences. 
While  the  number  of  ongoing  investigations  into 
complex  or  cross-border  cases  remains  low,  the 
police recorded 42 reports of bribery in the public 
and  private  sectors  in  2024  (considerably  lower 
than the 2023 figure of 156) (213). There were 129 
judgments on bribery-related charges in 2024.  

Justice 

cases 

first-instance 

The  justice  system  is  performing  efficiently. 
The  time  taken  to  reach  a  decision  in  civil  and 
commercial 
courts 
in 
decreased slightly from 265 days in 2023 to 250 
days  in  2024  (214).  There  is  still  no  available 
overview of the efficiency of the judicial system in 
administrative  cases  due  to  a  persistent  lack  of 
disaggregated data on court proceedings. Denmark 
is  performing  well  in  terms  of  digitalising  its 
justice  system,  but  improvements  are  needed  to 
conduct  and  follow  criminal  and  administrative 
proceedings 
tools.  Denmark 
performs  well  in  digital  solutions  to  initiate  and 
follow  proceedings 
civil/commercial  and 
in 
administrative cases (215), and in online access for 
the  general  public  to  published  judgments  (216). 
lags  behind  regarding 
However,  the  country 

through  digital 

(211) European Commission, Directorate-General for Justice and 

Consumers, 2025, Rule of Law Report.  

(212) Ibid. 

(213) Ibid. 

(214) European  Commission,  Directorate-General  for  Justice  and 
Consumers, 2025, EU Justice Scoreboard, figure 5; European 
Commission, 2026, EU Justice Scoreboard (upcoming). 2024 
data  collected  in  cooperation  with  the  group  of  contact 
persons on national justice systems. 

(215) Ibid, figure 45. 

(216) Ibid, figure 47. 

(217) Ibid, figure 48. 

66 

 
 
 
SUSTAINABILITY 
ANNEX 8: INDUSTRY DECARBONISATION, CIRCULARITY AND CLIMATE MITIGATION 

is  advancing  with 

industry 
Denmark 
decarbonisation  and  reducing 
its  effort 
sharing  emissions,  but it faces  challenges  in 
the shift to a circular economy and in waste 
management.  Denmark  has  expanded  its  policy 
the  decarbonisation  of 
toolkit 
road 
manufacturing  and 
transport.  In  2025,  Denmark  received  a  country-
specific recommendation to strengthen the circular 
economy and waste management policies (218). 

leads  on  clean 

to  promote 

it 

Following  the  green  tax  reform  for  industry 
adopted  by  Parliament  in  2022,  Denmark  has 
applied  a  new  CO₂  tax  to  fossil  fuel  use  in 
industrial activities since 1 January 2025. The new 
emission tax and the restructured current CO2 tax 
mean  that  tax  on  CO2  emissions  will  reach  about 
EUR 49  per  tonne  of  CO2  emitted  for  companies 
covered  by  the  EU  emissions  trading  system  (EU 
ETS)  and  about  EUR 98  per  tonne  for  others  by 
2030. The reform also allows companies to claim 
a deduction for the CO2 they capture and store. 

Greenhouse gas emissions from 
industry 

Denmark’s  manufacturing  industry  is  among 
the least emission-intensive in the EU (219). In 
2024, manufacturing emitted just 53 g CO₂eq per 
euro  of  gross  value  added,  which  is  among  the 
lowest 
result, 
manufacturing generated only 4% of all emissions 
in  2024  against  the  EU  average  of  17%. 
Manufacturing  emissions  fell  by  22%  between 
2019 and 2024. 

the  EU (220).  As  a 

levels 

in 

Policies to promote industry decarbonisation 

Denmark’s  main  policy 
lever  to  drive 
industrial  decarbonisation  is  a  new  CO₂  tax. 

(218) Council of the EU. Council recommendation on the economic, 
social,  employment,  structural  and  budgetary  policies  of 
Denmark.  

(219) This  Annex  discusses 

the 

industry,  specifically 

transition  of  Denmark's 
manufacturing 
its  energy-intensive 
industries, to low-carbon and net-zero modes of production, 
which  is  key  to  preserving  competitiveness  on  the  path 
towards  climate  neutrality  as  mandated  by  the  European 
Climate  Law.  A  broader  perspective  on 
the  current 
competitiveness challenges facing Denmark's manufacturing 
industry  is  provided  in  Annex  5.  For  a  more  detailed 
description  of  greenhouse  gas  emissions  from  industry,  see 
European  Commission  (2025),  2025  Country  Report  - 
Denmark, Commission staff working document, SWD (2025) 
205  final,  Brussels,  4.6.2025,  Annex  A7.  Clean  industry  and 
climate mitigation. 

Alongside  the  new  CO₂  tax  regime,  Denmark 
has  put 
in  place  a  transition  support 
framework  (omstillingsstøtte)  for  the  most 
affected  companies.  The  framework  combines 
investment  funding  and  operational  support  for 
companies  facing  high  decarbonisation  costs  due 
to  structural  emissions  (221).  The  programme  is 
designed  to  roll  out  funding  over  2025–2035,  in 
line with criteria that focus on long-term emission 
reductions  and  competitiveness  safeguards  for 
Danish  industrial  firms.  This  mechanism  aims  to 
facilitate  the  shift  to  electrification,  fund  process 
efficiency  upgrades  and  adopt  breakthrough 
technologies  such  as  electrified  heat  processes 
the 
low-carbon 
and 
manufacturing industry. 

sectors  of 

fuels 

in 

for 

hard-to-abate 

In  parallel,  Denmark  uses  large-scale  public 
funding  to  accelerate  carbon  capture  and 
storage 
industrial 
emissions. The Danish Energy Agency implements 
Denmark’s  carbon  and  capture  fund,  with  about 
EUR 3.8  billion  available. 
In  May  2025,  10 
companies  were  selected  to  compete  for  funding. 
In  2026,  the  tender  process  advanced  with  two 
final bids submitted, and the authorities indicated 
that  contract  award  is  expected  in  April  2026 
(subject to the tender process and approvals). The 
expected emission savings will be confirmed after 
contract  award  but  expected  to  be  lower  than 
initially  anticipated.  The  Danish  Energy  Agency 
implements two additional support schemes in this 
sector (222). 

(220) Data on the manufacturing sector exclude the NACE division 
C19 – manufacture of coke and refined petroleum products, 
for  better  match  of  the  sectoral  data  from  Eurostat  (gross 
value  added)  with  those  from  the  UNFCCC  under  the 
Common  Reporting  Format.  Also  see  further  indicators  on 
industry  decarbonisation,  as  well  as  the  annotation  for 
further information, in table A8.1 at the end of this Annex. 

(221) Restructuring aid for industry. 

(222) CCS tenders and other support for the development of CCS. 

67 

 
 
 
 
 
 
 
Reduction of effort sharing emissions 

sharing emissions in Denmark, generating 37% of 
these emissions in 2024 (224). 

Compliance  with  effort  sharing  limits  with 
domestic measures 

Graph A8.1: Greenhouse gas emissions in the 
effort sharing sectors, 2005, 2023, and 2024 

Source: European Environment Agency.  

 Denmark  is  projected  to  overachieve  its 
2030  effort  sharing  target (223).  In  2024, 
greenhouse  gas  emissions  from  Denmark’s  effort 
sharing sectors are expected  to have been 28.8% 
below  2005  levels.  By  2030,  with  current  and 
planned  policies  and  measures,  these  emissions 
are expected to decrease by 50.9%, resulting in a 
surplus  of  0.9  percentage  points  relative  to  the 
2030  target,  a  50%  reduction.  Denmark 
is 
projected  to  exceed  its  effort  sharing  emission 
limits  temporarily  in  the  2021-2030  period  but 
could  cover  the  gap  with unused  annual  emission 
allocations from other years to achieve compliance 
with the Effort Sharing Regulation. Domestic road 
transport  is  the  second  largest  source  of  effort 

(223) The  national  GHG  emission  reduction  target  is  set  out  in 
Regulation (EU) 2018/842 (the Effort Sharing Regulation). It 
applies  jointly  to  buildings  (heating  and  cooling),  road 
transport,  agriculture,  waste  and  small  industry  (known  as 
the effort sharing sectors). The emissions from effort sharing 
sectors for 2024 are based on approximated inventory data. 
The  final  data  will  be  established 
in  2027  after  a 
comprehensive  review.  Projections  about  the  impact  of 
current  policies 
(‘with  existing  measures’,  WEM)  and 
additional  policies (‘with  additional  measures’,  WAM)  as  per 
Denmark’s  2025  reporting  under  Article  17  of  Regulation 
(EU)  2018/1999  (the  Governance  Regulation).  Also  see 
European  Commission  (2025),  Climate  Action  Progress 
Report  2025  –  Technical  Information,  Commission  staff 
working  document,  Brussels,  Chapter  9  (pp.  111ff.),  and  in 
particular Tables 25 and 26. 

Sustainable transport 

leads  the  EU  on  clean  road 
Denmark 
transport. In 2025, battery-electric vehicles made 
up 69% of new passenger cars, 31% of vans, 69% 
of  buses  and  12%  of  trucks (225).  The  number  of 
charging  points 
increasing  steadily. 
However,  further  growth  in  electric  vehicle  use  is 
slowed  by  delays  in  grid  upgrades  and  long 
waiting times to connect to the electricity network. 

is  also 

Rail  use  in  Denmark  remains  below  the  EU 
average,  especially  for  freight.  Only  8%  of 
freight  is  transported  by  rail  against  the  EU 
average  of  16% (226).  Denmark  has  a  relatively 
limited rail network and only 35% of railway lines 
are electrified, well below the EU average of 58%. 
Progress  on  rail  electrification  has  been  slow. 
However, the government has decided to electrify 
the  entire  railway  system,  and  major  works  are 
now underway. 

The  government  supports  measures 
to 
convert  the  ferry  fleet  to  electricity.  Under 
the  investment  aid  scheme  for  CO₂-intensive 
industries,  in  2025  the  ferry  operator  Molslinjen 
received  EUR 24 million  to  replace  three  diesel-
powered  fast  ferries  on  the  Aarhus–Odden  route 
with  three  battery-electric  catamarans.  From 
2028,  EUR  13.3  million  is  planned  for  a  subsidy 
scheme  to  co-finance  technical  investments  in 
local  ferry  routes,  such  as  engine  replacement, 
major renovations and vessel replacement. 

(224) See  Graph  A8.1  below  and  Table  A8.1  at  the  end  of  this 
Annex. The largest source of emissions in the effort sharing 
sectors  is  agriculture,  which  generated  39%  in  2024. 
Denmark  is  addressing  this  through  the  Green  Denmark 
Agreement,  which  includes  a  CO₂-equivalent  tax  on  cattle 
(see Annex 10). 

(225) European 

Alternative 

Fuels  Observatory, 

accessed 

08.4.2026. 

(226) Statistical pocketbook 2025. EU Transport in figures. 

68 

051015202530354045200520232024MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
  
 
 
Sustainable industry 

Circular economy industry 

for 

Denmark is implementing policies to support 
the  transition  to  a  more  circular  economy. 
The  national  action  plan 
the  circular 
economy of 2020-2032 (CEAP) focuses on making 
the  value  chains  for  biomass,  construction  and 
plastics more circular (227).  In total,  107 initiatives 
out  of  129  were  completed  and  5  are  still  to  be 
completed.  The  rest  were  dropped  or  will  be 
transferred  to  the  revised  action  plan  (228).  The 
initiatives  on  end-of-waste  criteria  and  future 
landfilling  practices  are  delayed  due  to  a  lack  of 
resources. The upcoming assessment of the CEAP 
is  an  opportunity  to  identify  the  specific  actions 
required to attain the ambitious goals such as the 
from 
2030 
incinerable  waste  in  the  agricultural  sector  (80%) 
and in the construction industry (75%). The Danish 
Council on Climate Change notes that it is unclear 
how and when these goals will be followed up (229). 

removing  plastics 

targets 

for 

Despite  almost  full  implementation  of  the 
action  plan,  further  measures  are  needed  to 
use  resources  efficiently.  The  Danish  economy 
depends  on  primary  resources  to  a  higher  degree 
than  the  EU  average.  Not  enough  secondary 
materials  are  used  to  replace  raw  materials,  as 
illustrated by the following indicators: 

• 

• 

raw material consumption is 23 tonnes per 
capita,  almost  double  the  EU  average  of 
14  tonnes  per  capita  in  2024  by  analogy 
to past years (230); 

the  circular  material  use  rate  is  9.4%, 
below  the  EU  average  of  12.2%  in  2024 

(227) Ministry  of  the  Environment,  Handlingsplan  for  cirkulær 
2021, 

økonomi, 
https://mim.dk/media/s0rpgnej/handlingsplan-for-cirkulaer-
oekonomi.pdf. 

July 

(228) European Semester mission, 15.1.2026. 

(229) The Danish Council on Climate Change,  Statusrapport 2026, 

https://klimaraadet.dk/en/node/674.  

(230) Eurostat, 

Material 
https://ec.europa.eu/eurostat/databrowser/view/env_ac_rme/
default/table?lang=en, accessed 2.2.2026.  

footprint, 

and  it  has  never  attained  the  EU  average 
(231); 

• 

the  municipal  waste  recycling  rate  is 
within the range of the EU average but the 
volume  of  municipal  waste  generated  is 
one  of  the  highest  per  capita  in  the  EU 
with  roughly  half  incinerated  for  district 
heating and electricity. Around one quarter 
of  all  waste  produced  was  converted  into 
energy through incineration (232). 

the  overall  material 

Raw material imports remain slightly below the EU 
average  but 
import 
dependency  rate  (42.8%)  was  almost  double  the 
EU  average  of  22.4%  in  2024.  It  has been  above 
the  EU  average  for  over  two  decades  and  still 
increasing  (233)  (see  Annex  5).  On  the  upside, 
resource  productivity  has  increased  and  is  within 
range  of  the  EU  average  at  EUR 2.38  generated 
per kg of material consumed in 2024 (234). 

Initiatives  to  stimulate  greater  use  of 
secondary  raw  materials  could  be  more 
impactful. In 2021, the country filed five patents 
related  to  secondary  raw  materials  and  recycling 
out of a total of 325 patents issued in the EU (235). 
The share of people employed in circular economy 
sectors  was  one  of  the  lowest  in  the  EU  in  2023 
(236).  Denmark  could  consider  the  need  for 
measures  to  promote  job  creation,  improve  the 
sector’s  attractiveness  to  workers,  and/or  adjust 
vocational and higher education curricula to better 
align with circular economy requirements. 

(231) Eurostat, 

Circular 

material 

use 

rate, 

https://ec.europa.eu/eurostat/databrowser/view/env_ac_cur/d
efault/table?lang=en, accessed 2.2.2026.  

(232) Environmental  Protection  Agency,  Affaldsstatistik  2023, 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023. 

(233) Eurostat, 

Material 

import 

dependency, 

https://ec.europa.eu/eurostat/databrowser/view/cei_gsr030/d
efault/table?lang=en, accessed 20.2.2026. 

(234) Eurostat, 

productivity, 
Resource 
https://ec.europa.eu/eurostat/databrowser/view/env_ac_rp/de
fault/table?lang=en, accessed 18.2.2026  

(235) Eurostat,  Patents  related  to  recycling  and  secondary  raw 

materials, 
https://ec.europa.eu/eurostat/databrowser/view/cei_cie020__
custom_20152252/default/table, accessed 17.2.2026.  

(236) Eurostat,  Persons  employed  in  circular  economy  sectors, 
https://ec.europa.eu/eurostat/databrowser/view/cei_cie011__
custom_20041825/default/table?lang=en, 
accessed 
9.2.2026. 

69 

 
 
 
sees 

procurement-focused 

The  Danish 
public 
government 
procurement as a major driver of the circular 
economy.  The  indicators  suggest  that  further 
action  is  needed  to  achieve  circularity.  The  CEAP 
a 
includes 
number  of  which  are  incentives  or  take  the  form 
of guidance. It also includes a measure to create a 
digital  tool  for  calculating  total  cost  of  ownership 
for procurement and an objective to have all public 
procurement eco-labelled by 2030 – both have yet 
to be completed. Nevertheless, Denmark is one of 
the  six  best  performing  countries  in  terms  of  EU 
Ecolabel awarded products and licences (237). 

initiatives, 

the 

Denmark  implements  the  extended  producer 
responsibility  (EPR)  schemes  designed  to 
improve circularity and reduce waste. Several 
collective  schemes 
country  ensure 
in 
compliance  with  the  EPR  rules  on  behalf  of 
businesses that have joined these schemes (238). In 
Denmark, EPR rules apply to electronics, batteries, 
vehicles,  fishing  gear,  single-use  plastics  and 
packaging waste (239). A mandatory deposit-return 
system is in place for certain beverage containers; 
it is very efficient with 93% disposable containers 
returned  and  99.7%  recycled  in  2024.  Collecting 
reusable containers is the obligation of businesses 
(240). In addition, businesses may choose to set up 
take-back schemes - an example is ReturnPen for 
used injection pens (241). 

The  EPR  scheme  for  packaging  in  Denmark 
was launched in October 2025. The volume of 
packaging  waste  in  Denmark  was  among  the 
highest  in  the  EU,  at  192 kg  per  capita  in  2023 
and  increasing  (242).  While  Denmark  had  the 

(237) European  Commission,  EU  Ecolabel  facts  and  figures, 
https://environment.ec.europa.eu/topics/circular-economy-
topics/eu-ecolabel/businesses/ecolabel-facts-and-
figures_en, accessed 15.4.2026.  

(238) Dansk  Producent  Ansvar,  Collective  schemes  in  Denmark 

https://producentansvar.dk/en/products-and-
responsibility/organising-your-producer-
responsibility/compliance-schemes/.  

(239) Environmental 

Protection 

Agency, 

Producentansvar, 

https://mst.dk/erhverv/groen-produktion-og-affald/affald-og-
genanvendelse/producentansvar.  

(240) Environmental  Protection  Agency,  Pant-  og  retursystem, 
https://mst.dk/erhverv/groen-produktion-og-affald/affald-og-
genanvendelse/producentansvar/pant-og-
retursystem?id=143250, accessed 11.2.2026.  

(241) Returpen TM, https://returpen.dk/.  

(242) Eurostat,  Packaging  waste  by  waste  management 

operations, 

second-best  recycling  rate  of  87%  of  wooden 
packaging  waste  in  the  EU  in  2023,  the  recycling 
rates  of  the  main  types  of  packaging  waste  – 
paper,  cardboard  and  plastics  –  were  among  the 
lowest at 72% and 28% respectively in the EU (243) 
(244) (245). The recycling rate of the third main type 
of packaging waste – glass – was 69%, below the 
EU  average  of  75%  (246).  For  metals,  although 
Denmark  recycled  more  aluminium  packaging  per 
capita  (78%)  than  the  EU  average,  the  recycling 
rate  for  ferrous  packaging  at  61.7%  was  among 
the  lowest  in  the  EU  in  2023  (247).  Denmark  is 
considered  at  risk  of  not  meeting  the  2025 
recycling  targets  for  ferrous  (70%)  and  plastic 
(55%) packaging (248). 

https://ec.europa.eu/eurostat/databrowser/view/ENV_WASPAC
__custom_20040890/default/table?lang=en, 
accessed 
9.2.2026.  

(243) Eurostat,  Wood 

rate, 
packaging  waste 
https://ec.europa.eu/eurostat/databrowser/view/env_waspac_
_custom_20117515/default/table?lang=en. Wood packaging 
waste generated, Link, accessed 13.2.2026. 

recycling 

(244) Eurostat,  Paper  and  cardboard  packaging  waste  recycling 

rate, 
https://ec.europa.eu/eurostat/databrowser/view/env_waspac_
and 
_custom_20105584/default/table?lang=en. 
cardboard 
generated, 
https://ec.europa.eu/eurostat/databrowser/view/ENV_WASPAC
accessed 
__custom_20117550/default/table?lang=en, 
13.2.2026.  

packaging 

waste 

Paper 

(245) Eurostat, 

Plastic 

packaging  waste 

rate, 
https://ec.europa.eu/eurostat/databrowser/view/env_waspac_
Plastic 
_custom_20041845/default/table?lang=en. 
packaging 
generated, 
waste 
https://ec.europa.eu/eurostat/databrowser/view/ENV_WASPAC
__custom_20117553/default/table, accessed 13.2.2026. 

recycling 

(246) Eurostat,  Glass 

recycling 

rate, 
packaging  waste 
https://ec.europa.eu/eurostat/databrowser/view/env_waspac_
_custom_20117583/default/table?lang=en. Glass packaging 
waste 
generated, 
https://ec.europa.eu/eurostat/databrowser/view/ENV_WASPAC
accessed 
__custom_20117577/default/table?lang=en, 
13.2.2026. 

recycling 

(247) Eurostat,  Aluminium  packaging  waste 

rate, 
https://ec.europa.eu/eurostat/databrowser/view/env_waspac_
Aluminium 
_custom_20291023/default/table?lang=en. 
packaging  waste  generated,  Link.  Ferrous  packaging  waste 
recycling  rate,  Link.  Ferrous  packaging  waste  generated, 
https://ec.europa.eu/eurostat/databrowser/view/ENV_WASPA
C__custom_20291063/default/table?lang=en, 
26.2.2026. 

accessed 

(248) European  Environmental  Agency,  Early  warning  assessment 
related  to  the  2025  targets  for  municipal  waste  and 
packaging  waste  –  Country  Reports  –  Denmark,  2022, 
https://www.eea.europa.eu/en/analysis/publications/many-
eu-member-states/early-warning-assessment-related-to-
the-2025-targets-for-municipal-waste-and-packaging-
waste. 

70 

 
 
 
 
Businesses,  however,  claim  that  the  EPR 
rules  for  packaging  imply  additional  costs 
and  tasks.  A  new  business  forum  was  set  up  to 
analyse  the  situation  and  in  February  2026,  the 
forum submitted recommendations to the Ministry 
of  Environment  to  simplify  compliance  with  the 
rules (249). Denmark intends to reduce the fees that 
producers  must  pay  for  waste  collection, 
in 
particular for glass packaging waste (250). The aim 
of  environmental  fee  modulation  is  to  encourage 
the  use  of  circular  materials  and  designs  over 
those that are difficult to recycle. 

Denmark  has  improved  waste  management, 
but  waste  generation  is  still  a  challenge. 
Denmark’s  per  capita  food  and  municipal  waste 
generation  is  among  the  highest  in  the  EU.  In 
2023,  at  261 kg  per  capita,  the  volume  of  food 
waste  was  more  than  double  the  EU  average  of 
129 kg  per  capita,  and  the  data  suggest  an 
upward trend (251). Denmark's Food Waste Strategy 
2024-2027  aims  to  reduce  food  waste  at  all 
stages  of  the  food  value  chain  (252).  The  country 
also  has  a  mandatory  separate  material-based 
collection  system  for  household  waste  and  a 
harmonised  pictogram  for  all  10  waste  streams. 
All waste fractions for all housing types were fully 
implemented  in  91  out  of  98  municipalities  by 
2025 (253). Despite the separate collection system, 

10. 

den 

(249) Environmental  Protection  Agency,  Miljøstyrelsen  afholder 
første  møde  i  Virksomhedsforum  for  producentansvar  på 
december, 
emballage 
https://mst.dk/nyheder/2025/december/miljoestyrelsen-
afholder-foerste-moede-i-virksomhedsforum-for-
producentansvar-paa-emballage-den-10-december, 
9.12.2025.  Virksomhedsforums  anbefalinger  til  justering  af 
afleveret, 
regler 
https://mst.dk/nyheder/2026/februar/virksomhedsforums-
anbefalinger-til-justering-af-regler-er-nu-afleveret, 
26.2.2026. 

nu 

er 

(250) Ministry of Environement and Gender Equality,  Nyt  lovforslag 
skal  skære  op  til  30  procent  af  gebyr  på  glasemballage, 
https://mim.dk/nyheder/pressemeddelelser/2026/februar/nyt-
lovforslag-skal-skaere-op-til-30-procent-af-gebyr-paa-
glasemballage. 

(251) Eurostat, 

Waste, 
https://ec.europa.eu/eurostat/databrowser/view/cei_pc035/de
fault/table?lang=en, accessed 20.2.2026.  

Food 

(252) Ministry  for  Food,  Agriculture  and  Fisheries,  Strategi  for 

madspild, 
https://fvm.dk/arbejdsomraader/foedevarer/madspild/strategi
-for-madspild-2024-2027.  

(253) 10  waste  streams:  food,  paper,  cardboard,  glass,  metal, 
plastics,  food  and  drink  cartons,  textiles,  hazardous  waste 
residual  waste.  Environmental  Protection  Agency, 
and 
Kortlægning 
for 
affaldsordninger 
https://mst.dk/borger/affald-og-
husholdningsaffald, 

kommunale 

af 

the  volume  of  municipal  waste  at  755 kg  per 
capita  remained  well  above  the  EU  average  of 
517 kg  per  capita  in  2024  (254).  The  volume  was 
similar  to  that  of  the  preceding  year  when  it 
accounted for 36% of all waste (255). At the same 
time,  the  municipal  waste  recycling  rate  has 
remained within the range of the EU average – in 
2024,  it  was  46%,  close  to  the  EU  average  of 
48% (256).  A  well  implemented  pay-as-you-throw 
(PAYT)  system  could  result  in  higher  recycling 
rates. Denmark’s municipal waste collection policy 
allows the system, but not all municipalities apply 
it.  The  economic  incentives  for  using  bins  for 
recyclables  instead  of  residual  waste  bins  are 
unclear  (257).  In  2023,  the  highest  share  (33%)  of 
all  municipal  waste  was  residual  waste,  followed 
(20%),  paper  and 
by  biodegradable  waste 
cardboard  packaging  (12%)  and  food  waste  (9%) 
(258). 

Denmark’s  district  heating  system  relies  on 
the incineration of (municipal) waste. In 2024, 
similarly to earlier years, Denmark incinerated the 
highest  volume  of  municipal  waste  in  the  EU, 
386 kg  per  capita,  more  than  double  the  EU 
(259).  A  slight 
average of  135 kg  per  capita 
decrease in domestic household waste suitable for 

forurening/sortering-af-affald/kortlaegning-af-kommunale-
affaldsordninger-for-husholdningsaffald,  accessed  9.2.2026. 
According  to  the  Danish  authorities  all  municipalities  have 
implemented  the  system,  European  Semester  mission, 
15.1.2026. This information is not available online. 

(254) Eurostat, 

Municipal 

generated, 
https://ec.europa.eu/eurostat/databrowser/view/env_wasmun/
default/table?lang=en, accessed 27.3.2026.  

waste 

(255) Environmental  Protection  Agency,  Affaldsstatistik  2023, 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023.  

(256) Eurostat, 

Recycling 

waste, 
https://ec.europa.eu/eurostat/databrowser/view/cei_wm011/d
efault/table?lang=en, accessed 27.3.2026.  

of  municipal 

rate 

(257) European  Environmental  Agency,  Early  warning  assessment 
related  to  the  2025  targets  for  municipal  waste  and 
packaging  waste  –  Country  Reports  –  Denmark,  2022, 
https://www.eea.europa.eu/en/analysis/publications/many-
eu-member-states/early-warning-assessment-related-to-
the-2025-targets-for-municipal-waste-and-packaging-
waste. 

(258) Environmental  Protection  Agency,  Affaldsstatistik  2023, 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023.  The  amount  of  residual  waste  has  declined  due  to 
improved  sorting  of  municipal  waste  and  resulted  in  an 
increase in recyclable waste such as food waste. 

(259) Eurostat,  Municipal waste incineration with energy recovery, 
https://ec.europa.eu/eurostat/databrowser/view/env_wasmun/
default/table?lang=en, accessed 27.3.2026. 

71 

 
 
 
 
incineration  resulted  in  increased  waste  imports, 
instead  of  less  incineration  capacity  in  2023  (260). 
Denmark  intends  to  reduce  its  waste  incineration 
capacity to match the volume of incinerable waste 
generated  domestically  from  2030  onwards.  The 
waste  incineration  sector  was  liberalised  in  2025 
to achieve this (261). Since January 2025, Denmark 
has strengthened waste inspections to prevent the 
incineration  of  recyclable  commercial  waste  (262). 
While  waste-to-energy  incineration  remains  at  a 
high  level,  the  share  of  landfilled  waste  1-2%  is 
very  low  (263).  Landfill  is  subject  to  a  high  tax, 
significantly above the EU average, and landfilling 
biodegradable  waste  is  prohibited  (264).  Denmark 
also applies taxes to waste-to-energy incineration, 
composed  of  incineration  and  CO2  taxes  (265).  The 
regulation of CO2 taxes in the incineration sector is 
handled  in  connection  with  the  Agreement  on 
Green  Tax  Reform.  This 
is  the  reason  for 
discontinuing  the  CEAP  initiative  on  analysing 
taxes that support the circular economy. 

(260) Environmental  Protection  Agency,  Affaldsstatistik  2023, 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023. 

i 

(261) The Danish Government,  Bred  politisk  aftale  sikrer  grøn 
2030, 

Monitorering 

affaldssektor 
https://regeringen.dk/aktuelt/nyheder/2020/bred-politisk-
aftale-sikrer-groen-affaldssektor-i-2030/,  16.6.2020.  The 
af 
Danish 
Agency, 
Energy 
2025, 
affaldsforbrændingskapaciteten 
https://ens.dk/forsyning-og-forbrug/monitorering-af-
affaldsforbraendingskapaciteten-i-danmark.  Ministry 
of 
Climate,  Energy  and  Utilities,  Planen  er  lagt:  Klimaprogram 
2025 
2030-målet, 
vejen 
https://www.kefm.dk/aktuelt/nyheder/2025/sep/planen-er-
lagt-klimaprogram-2025-viser-vejen-til-2030-maalet-, 
30.9.2025.   

viser 

til 

(262) European 

Environmental 

Agency, 

Affaldstilsyn, 

https://mst.dk/erhverv/groen-produktion-og-affald/affald-og-
genanvendelse/affaldstilsyn.  

(263) Eurostat, 

Municipal 

waste 

- 

landfill, 

https://ec.europa.eu/eurostat/databrowser/view/env_wasmun
__custom_20742000/default/table, accessed 27.3.2025.  

(264) European  Environment  Agency,  Economic  instruments  and 
separate  collection  systems  —  key  strategies  to  increase 
recycling, Link, 8.6.2023. EUR 64/tonne. Ministry of Taxation, 
Affalds- 
https://skm.dk/tal-og-
metode/satser/satser-og-beloebsgraenser-i-
lovgivningen/affalds-og-raastofafgiftsloven. 

råstofafgiftsloven, 

og 

(265) European  Environmental  Agency,  Early  warning  assessment 
related  to  the  2025  targets  for  municipal  waste  and 
packaging  waste  –  Country  Reports  –  Denmark,  2022, 
https://skm.dk/tal-og-metode/satser/satser-og-
beloebsgraenser-i-lovgivningen/affalds-og-
raastofafgiftsloven. 

The  volume  of  textile  waste  is  on  the  rise, 
and  it  is  partly  incinerated.  The  largest  share 
(59%) of all textiles purchased in 2021 waste was 
sent  to  incineration  plants  and  12%  for  recycling 
(266). In 2023, over 30% of textile waste generated 
by  industries  was  collected  for  incineration  and  a 
high  share  of 
textile  waste  was  exported. 
Households  generated  the  highest  volume  of 
textile  waste  (267).  Separate  collection  of  textiles 
has been mandatory since January 2025 in the EU 
(268).  The  2025  Finance  Law  earmarked  EUR 5.4 
million  for  a  national  action  plan  for  textiles  to 
promote  more  circular  production,  consumption 
and recycling in Denmark (269) (270). 

Electronic  waste  could  be  used  more 
efficiently  as  a  source  of  critical  raw 
materials.  Denmark  collected  59%  of  electronic 
waste in 2023, against the target of 85% (271). The 
country’s  reuse  and  recycling  rate  for  end-of-life 
vehicles  was  83.2%  in  2023  –  the  second  lowest 
in the EU and below the EU average of 88.3% (272). 
As  the  automotive  sector  transitions  to  battery-
electric  vehicles  and  the  renewable  energy  sector 
expands,  it  would  be  especially  important  to 
maximise the reuse of critical raw materials. 

Construction  and  demolition  waste  (CDW)  is 
the  largest  waste  category  in  Denmark.  It 
accounted  for  41%  of  all  waste  collected  in  the 

(266) Energy 

Agency, 

Global 
https://ens.dk/analyser-og-statistik/danmarks-globale-
klimapaavirkning-global-afrapportering.  

afrapportering 

2023, 

sorting. 

(267) The growth in textile waste may be due in part to improved 
Agency, 
Environmental 
2023, 

waste 
Affaldsstatistik 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023. 

Protection 

(268) Directive 

2008/98/EC, 

Article 

11(1), 

https://eur-

lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:02008L0098-20251016. 

(269) Ministry  of  Finance,  Finanslov 

for 

finansåret  2025, 

https://fm.dk/udgivelser/2025/februar/finanslov-for-
finansaaret-2025/, 27.2.2025. 

(270) Ministy  of  Environment  and  Gender  Equality,  Ny  milepæl: 
valgt, 
Sekretariat 
https://mim.dk/nyheder/pressemeddelelser/2025/september/n
y-milepael-sekretariat-for-tekstilhandlingsplan-valgt, 
30.9.2025.  

tekstilhandlingsplan 

for 

(271) Eurostat,  Waste  electrical  and  electronic  equipment, 
https://ec.europa.eu/eurostat/databrowser/view/env_waselee
os__custom_20202622/default/table, accessed 27.3.2026.  

(272) Eurostat, End-of-life vehicles, Link, accessed 20.2.2026. 

72 

 
 
 
this 

country  in  2023  (273).  The  rate  of  recycling  and 
preparation  for  reuse  of  the  CDW  was  relatively 
low (34%) compared with the backfilling rate, 62% 
in 2022 (274). One measure to increase the rate of 
recycling  and  preparation  for  CDW  reuse,  for 
example, is the selective demolition of buildings. In 
Denmark, 
for  buildings 
is  mandatory 
exceeding  250 m2  as  of  July  2025,  but  it  is  not 
fully  applied  by  industry  or  by  municipalities  (275). 
Since January 2025, the Environmental Protection 
Agency  is  responsible  for  waste  classification,  no 
longer  the  municipalities.  Centralising  this  task 
in  waste  management 
ensures  consistency 
practices and thereby improves waste sorting and 
recycling (276). Preparatory work is ongoing for the 
national  strategy  on  raw  materials  to  support 
sustainable  extraction  of  sand  and  gravel  and  to 
increase the rate of recycling of building materials. 

Bioeconomy industry 

and 

production 

Denmark  is  a  global  leader  in  bio-based 
chemicals and plastics, driven by world-class 
enzyme 
large-scale 
biorefineries  (277).  Bioeconomy  value  added  has 
grown  faster  than  domestic  GDP 
in  recent 
years (278).  At  the  same  time,  overall  employment 
in  the  bioeconomy  sector  has  shown  limited 
growth, with only bio-based chemicals and plastics 
registering higher growth in employment between 
2018  and  2023  (2.1%)  among  the  bioeconomy 

(273) Environmental  Protection  Agency,  Affaldsstatistik  2023, 
https://mst.dk/publikationer/2025/august/affaldsstatistik-
2023. 

(274) Eurostat,  Treatment  of  waste  by  waste  category, 
hazardousness  and  waste  management  operations, 
https://ec.europa.eu/eurostat/databrowser/view/ENV_WASTRT
__custom_20497420/default/table.  

(275) Environmental 

Protection 

Agency, 

Autorisation 

på 
nedrivning, 

for 

nedrivningsområdet 
https://mst.dk/erhverv/groen-produktion-og-affald/affald-og-
genanvendelse/affaldshaandtering/affaldsfraktioner/bygge-
og-anlaegsaffald/selektiv-nedrivning/autorisationsordning-
for-selektiv-nedrivning. 

selektiv 

(276) Environmental  Protection  Agency,  Klassificering  af  affald, 

Link.  

(277) European  Commission,  Denmark  |  Knowledge  for  policy, 
https://knowledge4policy.ec.europa.eu/bioeconomy/country/d
enmark_en. 

(278) Joint  Research  Centre,  Developments  of  Economic  Growth 
and  Employment  in  Bioeconomy  Sectors  across  the  EU, 
https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMIC
S/. 

in 

sub-sectors (279).  Labour  productivity 
the 
bioeconomy  –  measured  as  value  added  per 
person  employed  –  was  118.1%  of  the  national 
average, up from 98.3% in 2018 (280). In addition, 
(R&D)  business 
research  and  development 
sub-
expenditure 
sectors 
to  have  grown  at  a 
significantly faster pace than overall R&D business 
expenditure  in  Denmark  (by  7.2%  compared  with 
3.9% on average between 2018 and 2023) (281). 

from  bioeconomy-relevant 

is  estimated 

Zero-pollution industry 

Denmark  has  made  considerable  progress  in 
reducing  air  pollution,  which 
is  now 
decoupled from GDP growth. Denmark has met 
its  emission  reduction  commitments  for  2020-
2029 for air pollutants and also aims to meet the 
commitments for 2030 onwards (282). Emissions of 
several air pollutants have decreased significantly 
since 2005 (283) and the overall air quality is good. 
Industrial emissions to air are among the lowest in 
the  EU.  The  main  contributors  are  the  energy 
sector  (including  refineries  and  gasification)  and 
the mineral sector (284). Nonetheless, 1 299 deaths 
in Denmark could be attributed to air pollutants in 
2023 (285). Recent research finds that in Denmark, 

(279) Bioeconomy  subsectors:  food  and  beverages;  bio-based 
textiles;  wood  products  and  furniture;  bio-based  chemicals 
and plastics. 

(280) Joint  Research  Centre,  Developments  of  Economic  Growth 
and  Employment  in  Bioeconomy  Sectors  across  the  EU, 
https://datam.jrc.ec.europa.eu/datam/mashup/BIOECONOMIC
S/. 

(281) Joint Research Centre, Business expenditure in Research and 
bioeconomy, 
in 
Development 
https://datam.jrc.ec.europa.eu/datam/mashup/BERD_BIOECO
NOMY/. 

(R&D) 

the 

EU 

(282) Five air pollutants (NOx, SO2, NMVOC, NH3 and PM2.5) set by 
the  National  Emission  Reduction  Commitments  Directive. 
European  Environment  Agency,  National  air  pollutant 
emissions 
2005-2023, 
https://www.eea.europa.eu/en/topics/in-depth/air-
pollution/national-air-pollutant-emissions-data-viewer-
2005-2022. 

viewer 

data 

(283) Directive 2008/50/EC of the European Parliament and of the 
Council  of  21 May 2008  on  ambient  air  quality  and  cleaner 
air for Europe, Link. 

(284) European  Commission,  2025  Environmental  Implementation 
-  Denmark,  SWD(2025)306, 

Review,  Country  Report 
7.7.2025. 

(285) 703  deaths  to  fine  particulate  matter  (PM2.5);  32  deaths  to 
nitrogen  dioxide  (NO2);  and  564  deaths  to  ozone.  European 
Environment  Agency,  Harm  to  human  health  from  air 
pollution 
in  Europe:  burden  of  disease  status,  2025, 
https://www.eea.europa.eu/en/analysis/publications/harm-to-

73 

 
 
 
 
the health-related social costs of air pollution from 
foreign  and  domestic  sources  are  estimated  to 
reach DKK 94 billion (EUR 12.6 billion) (286). 

Denmark had 2 470 industrial installations in 
2022.  Most  were  in  the  intensive poultry  and pig 
rearing  (73%)  sector,  with  others  in  the  waste 
management (14%), food, drink and milk (4%) and 
the  energy  (3%)  sectors  (287).  The  municipalities 
are  responsible  for  granting  permits  for  most 
industrial 
Environmental 
Protection  Agency  manages  permits  for  over  400 
complex 
environmentally  most 
of 
companies (288).  A  recent  audit  identified  several 
shortcomings  in  permit  management  of  these 
companies (289). 

installations. 

The 

the 

The  Danish  authorities  are  taking  measures 
to  improve  the  efficiency  of  permitting.  A 
dedicated  task  force  reviewed  the  outdated 
environmental  permits  of  34  companies  by  the 
end  of  2025,  with  EUR 3.35  million  allocated for 
this  task  (290).  The  task  force  will  be  expanded  to 
develop the work on environmental permits in line 
the  key 
to 
with  a  new  plan 
recommendations  on  permitting.  As  of  2026,  an 
increased  fee  covers  100%  (up  from  58%)  of 

implement 

human-health-from-air-pollution-burden-of-disease-status-
2025.  

(286) Edited  by  Peter  Birch  Sørensen,  2025,  Green  National 
Accounting in Theory and Practice, From GDP to Green GDP. 
Estimates  of  the  pollution  costs  are  for  the  year  2020  in 
2023 prices and an underestimate partly due to lack of data 
and the precaution against double counting. 

(287) European  Commission,  2025  Environmental  Implementation 
-  Denmark,  SWD(2025)306, 

Review,  Country  Report 
7.7.2025. 

(288) Ministry  of  Environment  and  Gender  Equality,  Ny  taskforce 
skal  sætte  tempo  på  revurderinger  af  miljøgodkendelser, 
https://mim.dk/nyheder/pressemeddelelser/2024/juni/ny-
taskforce-skal-saette-tempo-paa-revurderinger-af-
miljoegodkendelser. 

(289) Investigation  results  (long  approval  time  of  permits,  non-
compliance  with  rules  for  inspections  and  permit  reviews) 
cover  the  period  2020-2024.  The  Auditors  of  Public 
Accounts,  Beretning  6/2025  om  særligt 
forurenende 
virksomheder, 
https://www.ft.dk/statsrevisor/20251/beretning/sb6/index.htm
, 8.12.2025. 

for 

(290) Environmental  Protection  Agency,  Status  for  Miljøstyrelsens 
af  miljøgodkendelser, 

revurdering 

taskforce 
https://mst.dk/erhverv/groen-produktion-og-
affald/industri/miljoestyrelsen-virksomheder/status-for-
miljoestyrelsens-taskforce-for-revurdering-af-
miljoegodkendelser, accessed 9.2.2026.  

permitting  costs  (291).  Among  other  aims,  permits 
are  designed  to  limit  industrial  discharges  to 
surface  waters.  In  Denmark,  most  surface  waters 
are not in a good status (see Annex 10). 

the  main  contributor 

to 
In  Denmark, 
industrial  emissions  to  water  is  incineration 
with  energy  recovery.  Other  major  sources  are 
the  chemicals,  food  and  drink  sectors,  which 
generate  a  considerably  smaller  share  of 
emissions  than  waste-to-energy  incineration  (292). 
Based on reporting under the Industrial  Emissions 
Directive,  in  Denmark,  emissions  of  industrial 
heavy metals (cadmium, mercury, nickel and lead) 
into water have increased significantly (by 101%) 
since  2010.  Industrial  emissions  of  total  organic 
carbon and nitrogen have seen less of an increase 
(up  11%  and  9%  respectively).  By  contrast, 
industrial  releases  of  phosphorus  emissions  have 
decreased by 23% (293). In terms of pollution from 
per-  and  polyfluoroalkyl  substances  (PFAS),  there 
are  2 161  contaminated  sites  in  Denmark  (294).  A 
national action plan for PFAS aims to (1) ban these 
substances  in  clothing  and  shoes,  (2)  clean  up 
point  source  pollution  in  soils  and  (3)  establish  a 
grant  fund  for  public  water  suppliers  to  protect 
citizens’ drinking water from PFAS (295). 

Denmark  takes  measures  to  remove  legacy 
pollution caused by past industrial activities. 
In  2020,  Danish  regions  identified  10  large  soil 
restore.  Seven  sites 
to 
contamination  sites 

(291) Ministry of Environment and Gender Equality, Miljøminister er 
klar med plan for rettidige miljøgodkendelser efter kritik fra 
Rigsrevisionen, Link, 8.12.2025. Miljøstyrelsen, Miljøstyrelsen 
vil  med  ny  plan  sikre 
rettidige  miljøgodkendelser, 
https://mst.dk/nyheder/2025/november/miljoestyrelsen-vil-
med-ny-plan-sikre-rettidige-miljoegodkendelser, 
27.11.2025. 

(292) European  Commission,  2025  Environmental  Implementation 
-  Denmark,  SWD(2025)306, 

Review,  Country  Report 
7.7.2025. 

(293) European  Environment  Agency,  Water  pollutant  releases 
changes  from  2010  to  2022  for  the  EU  Member  States, 
https://www.eea.europa.eu/en/analysis/maps-and-
charts/water-pollutant-releases-3. 

(294) European  Commission:  The  cost  of  PFAS  pollution  for  our 
society,  Link.  The  Forever  Pollution  Project,  The  Map  of 
Forever Pollution, https://foreverpollution.eu/.  

(295) Government,  Aftale  om  en  national  handlingsplan for  PFAS, 

https://regeringen.dk/aktuelt/nyheder/2024/et-samlet-
folketing-bag-national-handlingsplan-mod-pfas/.  Ministry  of 
Environment  and  Gender 
PFAS-forurening, 
https://mim.dk/kampagner/pfas:  includes  English  version  of 
the national action plan for PFAS. 

Equality, 

74 

 
 
 
endanger surface waters and three sites endanger 
groundwater. The first site expected to be cleaned 
by  end  2027 
in 
Syddanmark.  The 
for  studies  and 
funding 
remediation measures for all 10 sites amounts to 
EUR 187 million. Additional financing is needed to 
carry out all the activities scheduled by 2033 (296). 

is  Kærgård  Klitplantage 

(296) Environmental  Protection  Agency,  Generationsforureninger, 

https://mst.dk/erhverv/rent-miljoe-og-sikker-
forsyning/jord/generationsforureninger.  

75 

 
 
Table A8.1:  Key clean industry and climate mitigation indicators: Denmark 

Source:  Industry  decarbonisation:  All  data  are  from  Eurostat;  data  following the  UNFCCC  Common  Reporting Format  (CRF)  are 
from  the  European  Environment  Agency  (EEA),  republished  by  Eurostat.  (1)  Sectors  covered:  all  divisions  of  section  C  - 
Manufacturing - of the NACE Rev. 2 statistical classification of economic activities, except C19 (manufacture of coke and refined 
petroleum products). (2) GHG emissions as per UNFCCC Common Reporting Framework (CRF) categories 1.A.2 - fuel combustion in 
manufacturing  in  industries  and  construction  (that  broadly  correspond  to  the  broadly  correspond  to  the  NACE  sections  C  - 
Manufacturing  and  E  -  Construction,  excluding  C-19),  and  CRF2  -  industrial  processes  and  product  use.  The  figures  shows  the 
emissions  in  the  1.A.2  category  as  a  share  of  the  sum  of  CRF1.A.2.  and  CRF2  emissions.  (3)  Sectors  covered:  CRF  1.A.2  as 
described  above.  Gross  value  added  (GVA)  data  in  the  denominator  aligned  in  sectoral  coverage,  in  2020  prices.  (4)  Sectors 
covered:  NACE  section  C  excluding C19.  (5)  Nominator:  NACE  divisions  C17, 20, 23, 24;  denominator:  NACE  section  C  excluding 
C19 (see above). (6) GVA (denominator) in 2020 prices. Reduction of effort sharing emissions: Data source: European Environment 
Agency, greenhouse gas data viewer; European Commission, Climate Action Progress Report, 2025. For details, see the footnote in 
the  "Reduction  of  effort  sharing  emissions"  section.  Sustainable  road  transport:  (7)  Source:  Eurostat;  (8)  Source:  European 
Alternative  Fuels  Observatory;  (9)  Source:  Eurostat.  For  all  climate  mitigation  indicators,  the  trend  arrows  compare  the  latest 
available  data  (year  t)  with  the  data  four  years  earlier  (t-4).  Sustainable  industry:  Bioeconomy  value  added,  employment  and 
productivity:  JRC,  Developments  of  Economic  Growth  and  Employment  in  Bioeconomy  Sectors  across  the  EU.  Bioeconomy  R&D 
business  expenditure:  JRC,  Business  expenditure  in  Research  and  Development  (R&D)  in  the  EU  bioeconomy.  Damage  cost  for 
industrial pollution: EEA, The costs to health and the environment from industrial air pollution in Europe, 2024. Water industrial 
pollutants  releases:  EEA,  Industrial  releases  of  pollutants  to  water  and  economic  activity  in  the  EU-27,  2024.  Water  chemical 
status: WISE, Surface water bodies: Chemical status, 2024 and WISE Groundwater bodies: chemical status, 2024. Other indicators: 
Eurostat.  For  circular  economy  indicators,  the  trend  arrows  compare  the  latest  available  data  (year  t)  with  the  data  two  years 
earlier (t-2). 

76 

Climate mitigationTrendIndustry decarbonisation201820192020202120222023202420182023GHG emissions intensity of manufacturing production, g/€ (1)122110120107866653330-Share of energy-related emissions in industrial GHG emissions (2)67.468.466.567.767.966.1-55.557.9Energy-related GHG emissions intensity of manufacturing and construction, g/€ (3)100.289.293.282.666.550.9-203.9163.0Share of electricity and renewables in final energy consumption in manufacturing, % (4)41.542.141.940.940.442.143.342.843.9Energy intensity of manufacturing, GWh/€ (4)0.600.550.600.550.440.360.311.271.05Share of energy-intensive industries in manufacturing production, % in GVA (5)12.2512.6213.3412.9612.2510.318.90--GHG emissions intensity of production in sector [...], g/€ (6)- paper and paper products (NACE C17) 160          126          93                   136            139                  149           142             722             619            - chemicals and chemical products (NACE C20) 86            76            83                   81              74                    82             77               --- other non-metallic mineral products (NACE C23) 1,897        1,880       2,029              1,853         1,695                2,000         1,897          2,495           2,352          - basic metals (NACE C24) 257          231          235                 243            199                  298           297             2,842           3,099          Reduction of effort sharing emissions201820192020202120222023202420182023GHG emission reductions relative to base year, % -19.0-22.1-25.9-28.8- domestic road transport-2.0-3.5-11.1-9.6-11.1-12.1-21.0-1.4-5.6- buildings-41.4-45.3-48.7-48.4-54.6-56.1-56.1-20.3-33.520052021202220232024TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %40.432.731.429.928.8-50.0%-50.9%-50.9%Sustainable road transport2018201920202021202220232024202520182021New zero-emission vehicles, electricity motor, % (7)0.712.447.1513.3320.6336.1051.341.038.96Number of publicly accessible AC/DC charging points (8)--3547584310818230713586950338446956n/aShare of electrified railways, % of total (9)29.4228.7931.2332.3132.7633.9535.3855.4756.49Sustainable industryTrendEU-27Circular economy transition20182019202020212022202320242018latest dataMaterial footprint, tonnes per person23.224.223.424.326.522.223.214.813.7Circular material use rate, %8.0            7.6           7.5                  8.4             9.1                    9.3             9.411.612.2Resource productivity, €/kg2.1            2.2           2.2                  2.4             2.5                    2.8             2.82.13.0Employees in circular economy1.5            1.51.5                  1.6             1.3                    1.3             -2.12.0Patents in circular economy5.567.8           5.2                  4.6             12.312.0Recycling rate            49.9           51.5                  45.0             49.0                   50.3            46.6 46.4            46.4048.1Plastic recyling 31%37%23%21%26%28%-41%42%Construction and demolition waste (CDW) recovery 97-978889Bioeconomy industry 2018201920202021202220232024CAGR 2018-202320182023Value added, million EUR14,60216,68917,29816,55318,66821,165-6.4%642,438863,436Employment, total number of people employed168,480165,091166,911167,860171,992172,780-0.4%17,649,04017,085,642ProductivityValued added per worker, thousand EUR86.7101.1103.698.6108.5122.5-5.9%36.450.5Valued added per worker, % of national average98.3113.1113.5100.2102.3118.1--62.270.7R&D business expenditureTotal bioeconomy (biomass producing and converting sectors)1,1091,1161,1521,4791,5171,6847.2%15,67223,335Total R&D business expenditure5,6605,6985,7015,8856,7267,140-3.9%196,587259,525Zero pollution industry201820192020202120222023202420182021Damage cost for industrial pollution2.32.01.92.1---414.9352.7Water industrial pollutants releases 2021change (2010)2021change (2010)2021change (2010)2021change (2010)1,539        101%2,586,484        81%1,451,800         21%159,644      5% Water chemical statusGood138                 Good (%)0.0                    Poor445.0Poor (%)6%EUTOCPhosporusDenmarkDenmarkCd, Hg, Ni, Pbnitrogen 
 
  
 
ANNEX 9: AFFORDABLE ENERGY TRANSITION 

2025 

(CSRs) 

Denmark’s 
country-specific 
highlighted 
recommendations 
challenges in electrification and in electricity 
market  demand  and  flexibility,  alongside  a 
need to expand and upgrade the grid at both 
transmission  and  distribution 
levels.  The 
recommendations  also  emphasised  the  need  to 
encourage  clean  and  efficient  energy  production 
and  use,  to  support  the deployment  of  renewable 
energy  and  energy  efficiency,  and  to  promote 
demand response, energy storage and other clean 
flexibility  solutions  through  appropriate  incentives 
and network modernisation. 

average  despite  increasing  in  recent  years. 
retail  prices 
industrial  electricity 
Conversely, 
remain  well  below  the  EU  average  despite 
increasing  in  recent  times,  as  compared  to  gas 
prices which are close to the EU average.  

Graph A9.1: Electricity and gas prices for 
household and non-household consumers, first 
half of 2025 

Overall,  Denmark  has  made  substantial 
progress towards achieving the priorities set 
out  in  the  2025  CSRs.  Production  of  electricity 
from renewables reached 92.4% in 2025, and new 
tenders  for  offshore  wind  were  launched.  Cross-
border  interconnectivity  remains  very  high,  and 
progress  has been made through  the  work  of  the 
National Energy Crisis Team 
(NEKST).  Measures 
are  planned  or  underway  to  ensure  timely  grid 
expansion  and  to  further strengthen  demand-side 
response  and  storage  capacity,  to  meet  growing 
electrification and flexibility needs.  

Energy prices and costs 

Despite  government  intervention  to  lower 
energy  bills 
for  households,  gas  and 
electricity  prices  remain  very  high  and  well 
levies 
above  the  EU  average.  Taxes  and 
continue  to  account  for  a  substantial  share  of 
household  energy  bills.  During  the  first  half  of 
2025,  household  gas  and  electricity  prices  in 
Denmark  remained  above  the  EU  average  at 
EUR 0.1306/kWh 
EUR 0.3485/kWh 
and 
respectively, with electricity prices the third highest 
in  the  EU.  In  the  first  half  of  2025,  the  share  of 
household electricity retail prices accounted for by 
taxes and levies was 47.7%, the highest in the EU, 
whereas practically all  such taxes are recoverable 
for non-household consumers (297). 

Denmark’s  high  household  energy  prices 
contrast  with  its  industrial  energy  prices, 
which  remain  below  or  in  line  with  the  EU 

(i) For household consumers, the consumption band is DC for 
electricity and D2 for gas.  
(ii) For non-household consumers, the consumption band is ID 
for electricity and I4 for gas. VAT and recoverable charges are 
not displayed for non-household consumers as these are 
typically recovered by businesses. This also applies to the ‘% 
of taxes and levies’, which is shown excluding VAT and 
recoverable charges for non-household consumers.  
(iii) ‘Without taxes and levies’ indicates the retail price 
excluding all taxes and levies. It always includes the 
energy/supply and network cost components, which are not 
disaggregated in Eurostat’s six-monthly price dataset. 
Source: Eurostat   

imbalanced.  For 

in  Denmark  remain 
Final  energy  prices 
large  businesses, 
slightly 
electricity was 2.2 times more expensive than gas 
in  the  first  half  of  2025,  with  taxes  and  levies 
(excluding  VAT)  accounting  on  average  for  1%  of 
electricity bills as compared to nearly 18% of gas 
bills.  When  VAT  is  included,  taxes  and  levies 
accounted  for  55%  of  the  total  cost  for  both 
energy sources, highlighting their strong impact on 
levies,  the 
final  prices.  Excluding  taxes  and 
electricity-to-gas  price  ratio  would  have  risen  to 
2.6,  indicating  that  Danish  fiscal  measures  help 
narrow  the  gap  between  the  two.  For  households, 
taxes  and levies  (excluding  VAT)  represented  over 
56%  of  electricity  bills  and  53%  of  gas  bills,  a 
major reason why prices are above the EU average 
(298).  In  this  regard,  tax  on  electricity  is  due  to  be 

(297) Electricity price statistics - Statistics Explained - Eurostat. 

(298) It  should  be  noted  that  the  fiscal  component  of  household 
electricity  bills  may  change  from  2026  due  to  legislation 

77 

 
 
 
 
 
 
 
 
cut  to  the  EU  minimum  in  early  2026  in  order  to 
lower  household  bills,  which  will,  in  turn,  slightly 
narrow  the  gap  with  the  EU  average.  Taxes  and 
levies have a negligible effect on the electricity-to-
gas price ratio (299).  

Despite  higher  price  spreads  due  to  the 
intermittency  of  renewables  and  rising 
natural  gas  costs  (300),  the  large  share  of 
in  Denmark’s 
renewable  energy  (92.4%) 
electricity  mix  meant 
that  wholesale 
electricity  prices  averaged  EUR 83/MWh  in 
(301),  below  the  EU  average  of 
2025 
EUR 85/MWh.  Nevertheless,  average  day-ahead 
prices in Denmark and the surrounding region rose 
17%  over  the  course  of  the  year.  Short  run 
marginal  costs  (302)  for  gas  in  the  EU  increased 
from  EUR  96/MWh  to  nearly  EUR  103/MWh  in 
2025.  Although  daytime  prices  have  fallen  in 
recent years owing to the growing incorporation of 
cheap  solar  power,  Denmark  remains  exposed  to 
price  spikes  during  peak-demand  hours.  This  is 
because  falling  solar  output  in  the  evening  and 
early  morning,  combined  with  limited  non-fossil 
flexibility,  requires  thermal  plants  to  ramp  up 
generation  to  cover  supply–demand  gaps.  As  a 
result,  price  spreads  (303)  in  Denmark  averaged 
EUR 109/MWh in 2025, an 8% increase compared 
to 2024. 

Progress  has  been  made  towards  fully 
promoting 
smart  metering, 
deploying 
dynamic  pricing  and  building  further  energy 
communities.  Denmark  has  put 
in  place  a 
framework and tools to facilitate dynamic pricing. 
Household deployment of smart electricity meters 

adopted  by  the  Danish  government  lowering  excise  duty 
rates to the EU minimum.  

(299) Analysis based on Eurostat data, Statistics | Eurostat.  

(300) Fossil fuels accounted for over 7% of electricity generation in 
Demark  throughout  the  year,  maintaining  a  certain  role  as 
marginal price-setting technologies. 

(301)Ember. 

(302) Short run marginal costs (SRMC) are the sum of the variable 
costs  associated  with  producing  electricity  using  hard  coal 
and  fossil  gas.  These  are  fuel  costs,  carbon  costs  and 
variable  operating  and  maintenance  costs.  Estimates  are 
provided by Ember. 

(303) Spread  refers  to  the  difference  between  the  highest  and 
lowest hourly day-ahead electricity prices in a single day. 

has  reached  100%,  with  some  estimates  (304)(305) 
indicating  that  60-70%  of  households  have 
selected  a  contract  that  involves  a  time-of-use 
component.  Prices  are  not  regulated  in  Denmark 
and  consumers  have  access  to  a  wide  range  of 
market-based  contracts.  According  to  recent  data 
(306),  in  2024  the  number  of  energy  suppliers 
increased by 24, to a total of 64. Furthermore, the 
share  of  consumers  that  switch  supplier  has 
increased from 9.45% in 2020 to 13% in 2024. In 
addition,  Denmark  has  set  up  a  framework  that 
allows  citizens  to  actively  engage  in  energy 
communities. There are now 432 registered energy 
communities in Denmark. 

Graph A9.2: Low-carbon electricity generation vs. 
electricity wholesale prices, 2025 

Unavailable  data  for  Cyprus  and  Malta.  Wholesale  price  is 
given  as  average  of  day-ahead  electricity  prices  over  2025. 
EU-27  average  is  calculated  as  consumption-weighted.  EU 
low-carbon  share  is  calculated  out  of  total  EU  electricity 
generation. Low-carbon share by country is calculated out of 
total  public  electricity  generation.  Low-carbon 
includes 
renewables and nuclear. 
Source: Eurostat 

Flexibility and electricity grids 

By  taking  measures  at  transmission  and 
level,  Denmark  has  made 
distribution 

(304) The  crisis  that  normalised  time-shifting:  Energy  flexibility, 
price awareness and care during the energy crisis in Denmark 
| Energy Efficiency | Springer Nature Link 

(305) Real 

time  pricing  of  electricity 

for  households:  An 
international survey, https://energyregulationquarterly.ca/artic
les/real-time-pricing-of-electricity-for-households-an-
international-surv 

(306) ACER Electricity  Country  Sheets 

(2025), How  electricity 
contract  choices  can  unlock  consumer  flexibility  and  lower 
bills | www.acer.europa.eu 

78 

 
 
 
 
 
 
 
 
towards  achieving 

progress 
the  2025 
recommendation  on  addressing  increasing 
demand and flexibility needs, which will also 
help  reinforce  the  grid.  Denmark  is  highly 
interconnected  with  the  EU  energy  market  and 
neighbouring  countries,  and  plans  to  further 
strengthen  its  interconnection  capacity.  Member 
States  should  ensure  that  a  minimum  of  70%  of 
technical  cross-border  capacity  is  available  for 
trading.  Denmark  is  part  of  the  Hansa (307)  and 
Nordic (308)  capacity  calculation  regions  (CCRs). 
Both  CCRs  are  designed  to  provide  high  cross-
border capacity to the market. Moreover, Denmark 
meets  the  70%  target  for  cross-zonal  electricity 
in  ensuring  smooth 
trading.  A  key  aspect 
coordination  within 
region  and  with 
the 
neighbouring countries is to establish and put into 
(309). 
operation 
Denmark has plans to set up projects with a cross-
border  and  connectivity  focus  (e.g.  Bornholm 
is  a  hybrid  offshore 
Energy 
interconnector  with  Germany  (310).  However,  the 
North  Sea  Energy 
Island  project  has  been 
postponed by the government. 

regional  coordination  centres 

Island,  which 

Denmark’s  interconnection  level  surpassed 
the  EU  target  and  is  set  to  remain  high. 
According  to  the  final  version  of  Denmark’s 
updated  national  energy  and  climate  plan, 
Denmark’s  interconnection  level  is  expected  to 
reach  31.7%  by  2030,  well  in  excess  of  the  EU’s 
2030  target  of  15%.  While  interconnectivity  was 
at  36.5%  in  2025,  this  is  expected  to  fall  due  to 
the rapid expansion of solar and wind energy, both 
of  which  are  expected  to  grow  at  a  faster  rate 
interconnectors. 
than 
Denmark  is  analysing  the  potential  for  further 
interconnections  and  reinvestment  in  cooperation 
with  other  countries  and  transmission  system 
operators.  It  plans  to  become  a  net  exporter  of 
green  energy  (e.g.  hydrogen  and  Power-to-X)  and 
electricity by 2030. 

the  build-out  pace  of 

(307) 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. 

(308) Denmark, Finland, Norway and Sweden are part of the Nordic 

CCR. 

(309) Nordic RCC and TSCNET. 

(310)This project will receive EUR 645 million grant under CEF. CEF 
Energy 
Island 
interconnector  between  Denmark  and  Germany  -  European 
Climate, Infrastructure and Environment Executive Agency. 

landmark  Bornholm  Energy 

supports 

storage 

capacity 

Denmark  has  made  progress  in  promoting 
flexibility  sources  and  energy  storage.  In 
terms  of  energy  storage,  Denmark  has  a  total  of 
15  operational  projects  offering  0.11  GW  of 
storage  power,  and  10  projects  in  the  pipeline 
which  will  offer  0.45  GW  of  storage.  Denmark’s 
operational  electricity 
(as 
reported in the final version of its updated national 
energy and climate plan) is around 3.9 MW (mainly 
chemical  and  electrochemical).  The  Danish 
authorities are preparing to roll out major policies 
and  measures  to 
incentivise  the  uptake  of 
flexibility  services,  aggregators  and  demand 
response,  such  as  financial 
rewards,  faster 
connection  permits,  and  use  of  electric  vehicles 
and  heat  pumps.  These  measures  will  lessen  grid 
expansion  needs  and  form  part  of  the  ‘Market 
Model  3.0’  initiative,  intended  to  develop  flexible 
markets  through  specific  recommendations  and 
actions,  including  a  potential  roadmap  for  the 
development  of  local  flexibility  markets  and  the 
development  of  geographical  tagging  of  bids  in 
the balancing market.  

While  Denmark  has  made  progress  in  areas 
like  district  heating, 
renewable  energy 
integration,  and  energy  efficiency  -including 
its 
limited  reliance  on  air  conditioning- 
current  rate  of  electrification  in  the  energy 
system  remains  below  the  EU  average  and 
the  2030  benchmark  of  32%  (311).  Electricity 
still  accounts  for  a  relatively  low  share  of  final 
energy  consumption  (FEC).  In  2024,  electricity 
accounted for 21.6% of Denmark’s FEC (below the 
EU  average  of  23.4%),  a  share  which  has 
last 
largely  unchanged  over 
remained 
decade (312).  Electricity  accounted  for  21.4%  and 
34.8%  of  household  and 
FEC 
respectively (see Annex 8). In the transport sector, 
the  share  of  FEC  accounted  for  by  electricity 
remained  negligible  at  3.0%.  Further  progress  in 
electrification  across  sectors  would  help  to  cost-
effectively decarbonise the economy and bring the 
benefits  of  affordable  renewable  generation  to 
consumers.  To  address 
is 
considering  initiatives to  accelerate  the  expansion 
of the grid, including measures to make permitting 
faster.  Denmark  has  also  taken  steps  to  reduce 

this,  Denmark 

industrial 

the 

(311) Introduced  by  the  Clean  Industrial  Deal  and  the  Affordable 

Energy Action Plan. 

(312) The  CAGR  (compound  annual  growth  rate)  was  1.14% 
between  2015  and  2024.  The  minimum/maximum  shares 
were 18.9% and 21.6% respectively (Source: Eurostat). 

79 

 
 
 
the electricity-to-gas price ratio, which is expected 
to help increase the rate of electrification. 

system 

operator, 

Efforts  continued 
in  2025  to  promote 
flexibility  in  Denmark’s  energy  system.  The 
Danish Energy Agency and Energinet, the national 
transmission 
promote 
stakeholder engagement to boost  flexibility in the 
Danish  energy  system.  Denmark  has  a  project  of 
common  interest  in  the  pipeline  for  delivering 
advanced hydrogen-fuelled compressed air energy 
storage with a capacity of up to 19 GWh per cycle. 
for 
in  demand-side 
Participation 
providing balancing services saw an increase after 
the  aggregator  entry  threshold  was  lowered  to 
1 MW,  and  legislation  was  adopted  in  2024 
enabling  aggregators  to  participate  in  wholesale 
markets.  A  continuous  monitoring  framework  and 
stakeholder  engagement  will  ensure  that  uptake 
of  flexibility  resources  matches  the  flexibility 
needs assessment up to 2027 (Market Model 3.0). 

response 

Investments  in  grid  expansion  and  cross-
border  energy  projects  are  underway  to 
accommodate  increased  electricity  demand. 
Denmark  has  achieved  the  2030  interconnection 
target of 15% (approx. 35%). Energinet is planning 
to  build  approximately  2 700 kilometres  of 
electricity  grid  by  2030  in  anticipation  of  greater 
demand on the national grid. Denmark has several 
electricity  projects  of  common  interest  underway, 
such as the Bornholm Energy Island interconnector 
between Denmark and Germany. An agreement on 
the project between both countries was reached at 
the  North  Sea  Summit  in  Hamburg  in  January 
2026  regarding  joint  financing  of  the  generation 
component.  A  Connecting  Europe  Facility  grant  of 
EUR 645 million has been received for the works. 

The second Union list of projects of common 
interest  and  projects  of  mutual  interest 
adopted 
included 
in  December  2025 
additional  electricity  projects  in  Denmark.  In 
terms  of  hydrogen  projects  of  common  interest, 
Denmark  has  a  project  on  a  single  hydrogen 
interconnector (known as the DHBI)  which links to 
Germany  (known  as  the 
III’)  and 
potential hydrogen storage projects. Moreover, the 
second  Union  list  of  projects  of  common  interest 
and  projects  of  mutual  interest  includes  new 
electrolyser facilities. 

‘HyperLink 

Implementing  the  recommendations  of  the 
National  Energy  Crisis  Team  (NEKST)  is  key 
to making further progress on infrastructure. 

on 

energy 

(including 

NEKST  is  partially  funded  by  the  EU  through  the 
Recovery and Resilience Facility (RRF). It published 
34 recommendations in December 2024 on faster 
and  more  efficient  expansion  of  energy 
infrastructure 
16 
in  Denmark 
infrastructure 
recommendations 
permitting).  On  20 December 2024,  a  political 
agreement on faster and more efficient expansion 
of  the  electricity  grid  was  signed (313).  The  parties 
to  the  agreement  committed  to  designating three 
acceleration  areas  to  ensure  simpler  and  faster 
permitting  for  electricity  infrastructure,  including 
by  exempting  electricity  infrastructure  projects  in 
acceleration  areas  from  an  environmental  impact 
assessment. They also committed to implementing 
some  of  NEKST’s  recommendations,  including  on 
new expropriation procedures. 

Denmark  would  benefit  from  prioritising 
coordination of electricity grid expansion and 
mapping  bottlenecks,  as  challenges  remain. 
Further  electrification  and  greater  deployment  of 
renewables,  including  Power-to-X  projects,  could 
be  achieved  by  addressing  bottlenecks  and  long 
queues for grid connection. Since 1 February 2026, 
Energinet  has  moved  away  from  its  ‘first  come, 
first  served’  grid  connection  screening model  to  a 
project  maturity-based  model,  which  is  a  positive 
development (314). The new model prioritises more 
mature  renewable  energy  projects,  thus  speeding 
up the green transition and contributing to a more 
efficient  use  of  existing  electricity  grid  capacity. 
Similarly,  new  rules  have  been  adopted  to 
streamline 
grid 
expansion,  such  as  rules  for  expropriation  (315). 
Curtailment  of  renewable  energy  is  not  currently 
monitored. 
the 
Cooperation  of  Energy  Regulators  observed  323 
instances  of  negative  prices,  a  4%  increase  on 
2024. Despite the measures adopted to accelerate 
the electricity network expansion and grid capacity, 
Energinet  had  to  temporarily  suspend  the  new 
connections  to  the  grid  and  extend  processing 
times due an unprecedent demand. 

the  Agency 

In  2025, 

permitting 

processes 

for 

for 

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

(314) Away  with  "first  come,  first  served":  Prioritization  to  ensure 

faster green transition.  

(315) Lov om ændring af lov om elforsyning og elsikkerhedsloven 
(Øget  hastighed  og  styrkede  borgerrettigheder  i  form  af 
mulighed  for  tidligere overtagelse  m.v. ved  arealerhvervelse 
til det kollektive elnet).  

80 

 
 
internal  grid 

Several  grid  reinforcements  and  buildouts 
are planned or under development, which will 
ensure  sufficient  grid  capacity  for  new 
installations  to  connect  to the grid.  Examples 
in 
of  planned 
Denmark  include  the  construction  of  a  400  kV 
west  coast  connection  in  bidding  zone  DK1,  an 
upgrade to the Northern Jutland grid consisting of 
a  new  100  km  150  kV  cable,  an  upgrade  to  the 
current 200 km 400/150 kV east coast connection 
in  bidding  zone  DK1  and  a  transmission  grid 
buildout with three new lines in bidding zone DK2. 

reinforcements 

Renewables and long-term contracts 

the 

towards 
Denmark  has  made  progress 
achieving 
country-specific 
2025 
recommendation  on  supporting  clean  energy 
production,  with 
renewables  dominating 
electricity  generation.  2025  was  a  record  year 
for  Denmark  in  terms  of  renewables,  generating 
92%  of  its  domestic  electricity  from  renewables 
(wind,  solar  and  bioenergy).  Denmark 
thus 
continues to have the highest share of renewables 
in  its  electricity  mix  in  the  European  Union. 
Installed  capacity  for  renewables  represented  14 
561  MW  in  2025.  The  installed  capacity  for  wind 
energy stalled to 7.5 GW in 2025 (compared to the 
same 7.5 GW in 2024) whilst installed capacity for 
solar 
to  2024), 
reaching 5 GW (316).  

(+28%  compared 

increased 

Graph A9.3: Denmark’s installed renewable 
capacity vs electricity generation mix 

Electricity  mix  is  given  as  net  electricity  generation  (gross 
electricity  production  minus  consumption  of  power  stations’ 
auxiliary  services).  Electricity  produced  in  pumped  hydro 
plants  is  excluded  from  total  net  electricity  production,  as  it 
was  previously  counted  as  electricity  produced  from  another 
source. 
“Other”  includes  renewable  municipal  waste,  solid  biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Eurostat 

Denmark  plans  to  significantly  increase  its 
renewable energy share by focusing on solar 
and wind power generation. The final version of 
Denmark’s  updated  national  energy  and  climate 
plan includes projections showing that renewables 
will  account 
final  energy 
for  73.8%  of 
consumption by 2030 and will exceed 100% in the 
electricity  sector  by  as  early  as  2028  under 
existing  policies.  A  broad  political  majority  in 
Denmark  has  agreed  on  an  ambition  to  establish 
framework conditions that enable a market-driven 
quadrupling of the electricity production from solar 
power  and  onshore  wind  by  2030.  This  ambition 
was  first  stated  in  the  political  agreement  on  the 
deployment  of  renewable  energy  from  2022  and 
has  subsequently  been  reaffirmed,  most  recently 
in the agreement on the deployment of solar and 
onshore  wind  from  October  2025.  Renewables 
deployment  in  Denmark  is  market-based.  In  this 
regard,  new  tenders  (317)  to  establish  at  least  2.8 
GW  of  offshore  wind  power  in  three  offshore 
locations  were  announced  in  2025  and  include  a 
support  scheme  (318)  to  mitigate  risks  for  project 
developers.  

(316) International Renewable Energy Agency (IRENA) - Renewable 

(317) Announcement  of  the  tenders:  The  Danish  Energy  Agency 
opens tenders for three new Danish offshore wind farms. 

Capacity Statistics 2026. 

(318)2-sided capability-based contract for difference. 

81 

 
 
 
 
 
 
Denmark continued to make good progress in 
2025  on  accelerating  planning  and  permit-
granting processes with a particular focus on 
wind  and  solar  energy.  In  October  2025,  the 
Danish  government  agreed  further  measures  to 
facilitate the deployment of wind and solar energy 
projects,  including  the  possibility  to  set  up  such 
projects  on  new  types  of  land,  new  measures  to 
gain  public  acceptance,  or  shorter  time  limits  for 
judicial appeals (319).  

Denmark has no unjustified barriers to power 
purchase  agreements  (PPAs)  and  is  one  of 
the  top  Member  States  for  concluding  PPAs. 
According  to  the  final  version  of  its  updated 
national energy and climate plan, Denmark has no 
unjustified barriers to PPAs. In 2023, Denmark was 
one of the top 10 Member States in terms of the 
number  of  PPAs  concluded (320).  The  ‘pooling’  of 
companies to finance single projects emerged as a 
significant trend in 2025. 

Energy efficiency 

Denmark  made  some  progress  on  the  2025 
country-specific  recommendation  to  support 
efficient  energy  production  and  use.  In  2024 
final energy consumption (FEC) decreased by 1.6% 
to 13.19 Mtoe, as compared with 2023, continuing 
the  downward 
trend  observed  since  2019. 
Denmark’s  FEC  in  2024  was  in  line  with  the 
trajectory for meeting its expected contribution by 
2030. While FEC since 2019 has decreased slightly 
in  industry  (-3.6%)  and  services  (-2.3%),  it  has 
decrease substantially in transport (-12.9%) and in 
the residential sector (-9.6%). 

2020 

under 

Denmark  did  not  set  an  energy  saving 
objective 
long-term 
its 
renovation  strategy.  However,  part  two  of  the 
from  2022 
long-term 
contained  indicative  energy  saving  objectives  for 
2030,  2040  and  2050.  The  observed  decrease  in 
residential  FEC  was  mostly  driven  by  household 
in  the 
energy  savings  although  an 

renovation 

increase 

strategy 

(319)https://www.kefm.dk/aktuelt/nyheder/2025/okt/bred-politisk-
aftale-om-mere-sol-og-vind-paa-land-og-stoerre-hensyn-
lokalt-. 

(320) Pexapark, 2024, European PPA Market Outlook 2024.   

82 

number  of  dwellings  significantly  offset  this 
decrease. 

Denmark  has  submitted  its  draft  national 
building  renovation  plan  pursuant  to  the 
recast  Energy  Performance  of  Buildings 
Directive. Given that buildings are responsible for 
around  40%  of  energy  use  in  Denmark  and  thus 
improving  energy 
play  an 
efficiency, this plan is key to providing a clear and 
predictable  pathway  towards  an  energy  efficient 
and decarbonised building stock. 

important  role 

in 

final 

residential 

Heating  and  cooling  accounted  for  82%  of 
Denmark’s 
energy 
consumption  in  2025,  56%  of  which  was 
covered  by  renewables.  Almost  40 000  heat 
pumps  were  sold  in  2024,  a  decrease  of  30% 
compared  to  the  previous  year  but  heat  pumps 
continue  to  grow  and  Denmark’s  total  stock  of 
heat pumps is of around 675 000. 

Denmark  did  not  report  any  ecodesign  or 
energy  labelling  checks  in  2025.  Such  checks 
would  be  advisable  to  guarantee  a  level  playing 
field, 
EU's 
benefits 
environmental and energy goals. 

consumer 

and 

the 

Security of supply and diversification   

Denmark made further progress in increasing 
the  security  of  its  gas  supply.  Gas  production 
in Denmark increased by 20% between 2023 and 
2024  (321).  Denmark  does  not  import  gas  from 
Russia. 

in 
By  self-producing  more  natural  gas, 
particular by ramping up production from the 
Tyra gas field in 2025, Denmark is positively 
contributing  to  the  security  of  supply  of  the 
Union..  Progress  in  developing  and  expanding 
biogas  and  biomethane  production  could  support 
the  phase  out  of  natural  gas  consumption  in 
Denmark  and  consequently 
increase  supply 
security.  In  regard  to  European  energy  autonomy, 
renewable  hydrogen  from  Denmark 
is  also 
expected  to  play  a  role.  In  August  2025,  the 
Minister for Climate, Energy and Utilities approved 

(321) Yearly  production,  injection,  flare,  fuel  and  export.  Danish 

Energy Agency, Monthly and yearly production. 

 
 
 
the  construction  of  a  hydrogen  pipeline  from 
Esbjerg  to  Germany.  It  will  be  financed  by  a 
government  loan  facility,  subject  to  minimum 
capacity being booked in 2026 (322). The pipeline is 
planned  to  be  commissioned  by  2030  and  will 
enable  renewable  hydrogen  to  be  exported  to 
Germany 

Denmark’s  increasing  reliance  on  renewable 
energy  sources  is  contributing  to  supply 
security  and  diversification.  The  share  of 
renewables  in  Denmark’s  energy  mix  increased 
further  in  2025.  Renewables,  including  biofuels, 
accounted  for  46.3%  of  Denmark’s  energy 
consumption (323).  Other  sources  making  up 
Denmark’s  energy  mix  include  oil  and  petroleum 
products  (38.3%)  and  natural  gas  (9%),  with  the 
remainder being supplied by solid fossil fuels  and 
non-renewable  waste.  Denmark  would  benefit 
from  continuing  this  trend  to  counter  the  effects 
of  its  oil  and  petroleum  products  consumption 
which in 2024 remained higher than in 2021. 

In  response to  rising  energy prices  following 
in  the  Middle  East, 
the  regional  crisis 
Denmark  has  not  introduced  any  national 
measures  beyond  complying  with  the  IEA 
decision  to  release  part  of  its  oil  stocks, 
beginning  with  an  initial  release  of  252  thousand 
barrels.  Denmark  contributed  to  the  IEA  collective 
action to release 400 million barrels of emergency 
oil reserves. 

Fossil fuel subsidies 

In  2024,  environmentally  harmful  (324)  fossil 
fuel  subsidies  without  a  planned  phase-out 
before  2030  represented  0.07%  (325)  of 

(322) https://www.kefm.dk/aktuelt/nyheder/2025/sep/brintroeret-
%e2%80%9dsyvtallet%e2%80%9d-kan-nu-overgaa-til-
anlaegsfasen.  

(323) Gross inland consumption (Eurostat). 

(324) Explicit fossil fuel subsidies (e.g. direct transfers) and implicit 
fossil  fuel  subsidies  (i.e.  tax  expenditures  linked  to  forgone 
tax  revenues  that  have  an  identifiable  fiscal  impact  for  the 
central  budget)  that  support  fossil  fuel  energy  production, 
transmission and/or consumption.  

(325) European  Commission  calculation  based  on  underlying  data 
from  the  Study  on  energy  subsidies  and  other  government 
interventions in the EU – 2025 edition, Enerdata. 

Denmark’s  GDP  (326).  Additionally,  Denmark’s 
2023  Effective  Carbon  Rate  (327)  averaged  EUR 
101.68  per  tonne  of  CO₂,  above  the  EU  weighted 
mean of EUR 84.80 (328). 

(326) 2024 Gross Domestic Product at market prices, Eurostat.  

(327) 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. 

(328) OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

83 

 
 
 
 
 
 
ANNEX 10: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

Ecosystem  degradation  (mainly  caused  by 
agriculture)  and  extreme  weather  are 
ongoing  challenges  in  Denmark. 
In  2025, 
Denmark received a CSR to reduce the intensity of 
agricultural  and  farming  activities,  in  line  with 
measures  planned  by  Denmark (329).  Denmark 
addresses pollution from agriculture but also from 
fisheries,  aquaculture  and  wastewater  plants.  The 
results  of  the  respective  measures  will  take  time 
to  appear.  Flooding  is  one  of  Denmark’s  main 
climate  risks,  but  it  has  strong  institutions  and 
sufficient  resources  (especially  coastal  and  port 
protection) to address them. 

wildfires (334).  This  corresponds  to  9 displaced 
persons  per  100 000  inhabitants  (around  five 
times  lower than  the  EU average).  A  recent  study 
estimates (335)  that  Denmark  will  need  to  invest 
almost  EUR 1.9 billion  per  year  until  2050  (0.4% 
of GDP). This is below the EU average of 0.5% of 
GDP.  Most  investment  is  needed  in  ecosystems 
(50%  of  the  total),  followed  by  infrastructure 
(27%) and food production (19%) (336). The Danish 
government  has  proposed  to  allocate  around 
EUR 170 million  in  2024-2027  to  implement  the 
climate  adaptation  plan  and  EUR 1.9 billion  in 
2029-2040  for  coastal  protection  based  on  the 
proposed new adaptation plan. 

Climate adaptation and preparedness 

Denmark  is  particularly  exposed  to  coastal 
flooding  as  a  result  of  rising  sea  levels.  The 
rate of sea level  rise differs across Denmark. The 
lowest  observed  increase  is  in  North  Jutland  and 
the  highest  in  South-West  Jutland.  Sea  levels  are 
projected to rise by between 30 cm and 60 cm by 
the end of the century (330). This will lead to higher 
water levels during storm surges, allowing them to 
reach further inland. 

Around  half  of  Denmark’s  population  is 
exposed  to  storms  and  most  cropland  is 
to  heavy  precipitation (331).  By 
exposed 
contrast,  drought  affects  only  a  limited  part  of 
Denmark.  In  2023,  drought  conditions  covered 
1.7%  of  Denmark’s  land  area  (well  below  the  EU 
average of 3.6%) (332). 

The  human  impacts  of  extreme  weather 
events remain limited. The number of fatalities 
is  well  below  the  EU  average (333)  and  levels  of 
displacement  are  low.  In  2023,  storms  internally 
displaced  523  people.  No  one  was  displaced  by 
floods  and  only  two  people  were  displaced  by 

(329) Council of the EU. Council recommendation on the economic, 
social,  employment,  structural  and  budgetary  policies  of 
Denmark. 

(330) Danmarks  Meteorologiske  Institut,  Ændringer  i  havniveau  - 

Klimatilpasning. 

(331) OECD, 2024, OECD Economic Surveys Denmark, p. 54. 

(332) Eurostat, Drought impact area on ecosystems [sdg_15_42]. 

(333) EEA,  Economic  losses  from  weather-  and  climate-related 

extremes in Europe. 

84 

and 

planning 

approving 

In  Denmark,  municipalities  are  responsible 
climate 
for 
adaptation actions. Landowners are responsible 
for  protecting  their  own  property.  As  a  result, 
climate  adaptation  mainly  happens  at  the  local 
level  and  involves  municipalities,  water  supply 
companies  and  landowners.  These  actors  know 
local conditions best and are therefore best placed 
to take the right  decisions. All municipalities have 
their  own  climate  adaptation  plans.  The  national 
government  also  presented  a  proposal  for  a  new 
national climate adaptation plan in February 2026 
to  support  coastal  protection.  The  fact  that 
Denmark  already  has  a  well-developed  national 
framework means that Danish municipalities make 
only limited use of the EU Covenant of Mayors. In 
2024,  only  14%  of  the  population  was  covered 
(one of the lowest shares in the EU). 

implications 

Denmark  has  been  active  in  assessing  and 
integrating long-term climate-related macro-
fiscal 
into  macroeconomic 
analysis and policy projections. The Ministry of 
Finance has supported and used the GreenREFORM 
climate and energy-economic model, developed by 
Institute  for  Economic 
the  Danish  Research 

(334) Internal  displacement  due  to  extreme  weather  |  Maps  and 
charts  |  European  Climate  and  Health  Observatory  Climate-
ADAPT. 

(335) European  Commission,  2026,  Assessment  of  adaptation 
investment needs, Table 25. The study estimates adaptation 
investment needs for the EU and Member States by type of 
measure,  using  a  common  methodology 
to  ensure 
comparability.  Detailed  methods  are  described  in  four 
accompanying reports for transparency. 

(336) Typical  ecosystem 

investments 

include  soil  restoration, 
wildfire  prevention,  biodiversity  protection  and  coastal 
restoration. Typical health investments focus on occupational 
safety, wastewater upgrades and wildfire response. 

 
 
 
 
 
to 

assess 

and  Modelling, 

Analysis 
the 
environmental  and  climate  effects  of  economic 
policies, as well as the macroeconomic impacts of 
environmental,  energy  and  climate  policies.  The 
Ministry  of  Finance  used  GreenREFORM  as  a 
central  analytical  tool  to assess combined  effects 
of green taxes and government support schemes.  

losses. 

Climate  risks  currently  have  a  relatively 
limited  impact  on  the  Danish  economy  and 
insurance  coverage  remains  the  highest  in 
the EU. Between 1980 and 2024, weather-related 
and  climate-related  extreme  events  caused  an 
estimated  EUR 9.3 billion  in  economic  losses  in 
Denmark (337).  Both  the  frequency  and  severity  of 
these  events  are  increasing  (particularly  floods) 
and  this  in  turn  increases  the  likelihood  of  future 
economic 
Insurance  against  weather-
related  and  climate-related  risks  is  not  legally 
required,  but  Denmark  has  the  highest  coverage 
rate  in  the  EU.  Around  61%  of  losses  from  such 
events  are  insured  (EU  average: 19%) (338).  To 
maintain  high 
to 
compensate  damages  not  covered  by  commercial 
insurance,  Denmark  operates  a  national  storm 
surge insurance scheme (stormflodsordningen). All 
homeowners  contribute  a  fixed  annual  fee  of 
around  EUR 5,  which  is  pooled  to  cover  eligible 
losses.  The  scheme  is  administered  by  insurers 
and the Natural Hazards Council. 

insurance  coverage  and 

(including 

Protection  measures 
climate 
adaptation of energy infrastructure) are part 
of contingency planning in the energy sector. 
Electricity  and  gas  companies  that  are  critical  for 
energy  supply  must  regularly  assess  risks  and 
vulnerabilities  in  their  systems  (typically  every 
three  years).  Based  on  these  assessments,  they 
must  prepare  contingency  plans  that  explain  how 
they  would  respond  to  different  emergency 
situations.  The  government 
is  strengthening 
preparedness  in  the  energy  sector  and  requires 
critical  energy  companies 
take  climate 
adaptation measures. 

to 

The  transport  vulnerability  index  of  the 
TEN-T  network  to  climate  change  has  been 
assessed as one of the lowest in the EU.  The 
national  adaptation  plan  does  not 
identify 
transport  infrastructure  as  a  priority  action  in 
2024-2027.  The  cost  of  adapting 
transport 
infrastructure is expected to increase to a total of 
EUR 4.9 billion  by  mid-century.  Most  risks  stem 
from  rising  sea  level  and  storms,  so  the  largest 
share  of  costs  is  allocated  to  adapting  ports 
(EUR 3.2 billion) (339). 

Water resilience 

fisheries  and  aquaculture  are 
Coastal 
economic  sectors  that  will  face  significant 
challenges.  Climate  change  is  reshaping  coastal 
fisheries  by  shifting  fish  distributions,  reducing 
stocks  of  some  cold-water  species  and increasing 
environmental  stress  like  low  oxygen  events.  This 
will make catches and incomes less predictable for 
small-scale  fleets.  Coastal  aquaculture  faces 
additional  challenges  from more  frequent  storms, 
which  can  damage  installations,  as  well  as  from 
warmer  waters  that  promote  diseases;  harmful 
algal  blooms;  and,  potentially,  invasive  species 
that threaten production and food safety.  

Substantial  effort  is  needed  to  restore  a 
in 
good  ecological  and  chemical  status 
Denmark’s  surface  water  bodies.  All  coastal 
water bodies (100%), almost all rivers (96%)  and 
a  majority  of  lakes  (63%)  have  not  attained  a 
good  ecological  status.  While  most  rivers  (89%) 
have  a  good  chemical  status,  almost  all  coastal 
water  bodies  (98%)  and  about  one-third  of  lakes 
(27%) do not have it. The chemical status of most 
lakes (71%) is unknown (340). 

Agriculture 
is  the  main  reason  for  the 
deterioration in ecological status.  Nutrients in 

(337) EEA,  2024,  Economic  losses  from  weather-  and  climate-
Europe, 

related 
https://www.eea.europa.eu/en/analysis/indicators/economic-
losses-from-climate-related. 

extremes 

in 

(338)EEA,  2024,  Economic  losses  from  weather-  and  climate-
Europe, 

related 
https://www.eea.europa.eu/en/analysis/indicators/economic-
losses-from-climate-related. 

extremes 

in 

(339) European  Commission,  2024.  Support  study  on  the  climate 
adaptation and cross-border investment needs to realise the 
TEN-T network. 

(340) Rivers  are  quantified  by  their  length  in  kilometres.  Coastal 
water  bodies  and  lakes  are  quantified  by  their  number. 
Ministry  of  Green  Transition,  Vandområdeplanerne  2021-
genbesøget, 
2027 
https://sgavmst.dk/vandmiljoe/vandomraadeplaner/overblik-
vandomraadeplanerne-2021-2027/vandomraadeplanerne-
2021-2027-efter-genbesoeget, revised in April 2026. 

efter 

85 

 
 
 
plants, 

industries, 

manure  and  fertilisers  lead  to  eutrophication, 
causing oxygen depletion in surface water bodies. 
Wastewater 
unsewered 
properties  in  scattered  settlements,  fisheries  and 
aquaculture  are  other  sources  of  nutrients. 
Eutrophication  is  caused  by  excess  phosphorus  in 
lakes  and  nitrates  in  coastal  waters.  Data  on  the 
source  and  volume  of  metals  and  chemicals  are 
limited in a large share of Danish water bodies. 

(NNRM) (344).  The  emission  quotas  to  be 
distributed  among  farms  from  2027 
onwards  will  be  based  on  the  volume  of 
nitrogen  the  aquatic  environment  can 
withstand (345). The aim is to reduce 9 600 
tonnes  of  nitrogen  annually  (346).  This  is  a 
temporary  measure  that  will  be  phased 
out  as  agricultural  land  is  converted  back 
to nature. 

The  2024  broad  political  agreement  on 
implementing Green Denmark (GD) addresses 
from 
the  strain  on 
agriculture (341). The aim is to: 

the  environment 

• 

reduce  emissions  from  agriculture  by 
introducing  a  tax  on  emissions  from 
livestock, 
and 
peatlands 
drained 
agricultural lime (see Annex 3); and 

(RBMPs). 

•  The  revision  of  the  third  river  basin 
management  plans 
The 
revised  plans  are  the  basis  for  local  land 
conversion.  They  implement,  among  other 
things,  the  agreed  nitrogen  reduction 
target  and  include  measures  for  reducing 
phosphorus  emissions  (i.e. planting  trees 
along watercourses, creating wetlands and 
restoring lakes) (347). 

•  benefit 

by 

the  aquatic  environment  and 
biodiversity 
nutrient 
reducing 
discharges  into  water  by  14  800  (342) 
tonnes  annually,  protecting  20%  of  land 
area  and  converting  15%  of  farmland  to 
nature. 

Several measures were decided under GD in 2025. 

•  The local land conversion plans. All 23 
local  tripartites (343)  agreed  on  plans  with 
agricultural  areas  to  be  converted  to 
nature.  The  municipalities  have  approved 
these plans in principle. This is a voluntary 
measure, so farmers can agree to remove 
or  not  remove  the  area  specified  on  the 
maps from agricultural production. 

•  The  new  nitrogen  regulation  model 

(341)The Danish Government,   Aftale  om  Implementering  af  et 
Grønt  Danmark,  https://regeringen.dk/aktuelt/publikationer-
og-aftaletekster/aftale-om-implementering-af-et-groent-
danmark/,  18.11.2024.  This  was  preceded  by  Aftale  om  et 
Grønt  Danmark,  https://regeringen.dk/aktuelt/publikationer-
og-aftaletekster/aftale-om-et-groent-danmark/, 24.6.2024.  

(342) The  GD  sets  the  annual  target  for  reducing  nitrogen 
discharges  to  meet  the  Water  Framework  Directive’s 
objectives.  The  target  of  13  780  tonnes  was  technically 
adjusted 
tonnes  because  some  baseline 
reductions  were  included  in  the  new  nitrogen  regulation 
model. The change applies from 2027. 

to  14 800 

(343)The  

local 

tripartites  consist  of 

representatives  from 
municipalities, agricultural and nature organisations and the 
Nature Agency. 

•  The  third  amendment  of  the  common 
(CAP)  strategic 
agricultural  policy 
plan 
two  new 
(CSP). 
interventions  compensating  farmers  for 
complying  with  the  NNRM  and  for  setting 
aside agricultural land. 

includes 

It 

Only  a  small  area  of  farmland  has  been 
removed  from  agricultural  production.  This 
comprises  604 ha  of  carbon-rich  low-lying  land 

(344) Ministry  of  Green  Transition,  Historisk 

reduktion  af 
kvælstof, 

af 

landbrugets 
udledninger 
https://mgtp.dk/nyheder/2025/dec/ny-aftale-historisk-
reduktion-af-landbrugets-udledninger-af-kvaelstof-, 
3.12.2025.  Øget 
regulering 
https://mgtp.dk/nyheder/2025/jun/oeget-regulering-af-
kvaelstofudledning, 19.6.2025. 

af 

kvælstofudledning, 

(345) This  regulatory  pressure  is  limited  to  a  catchment-specific 
fallow-point  threshold,  equivalent  to  a  nitrogen  emission 
reduction  that  would  result  from  using  all  fields  in  the 
catchment  area  only  for  spring  barley  with  catch  crops.  In 
2026,  it  will  be  decided  on  how  to  meet  the  target  in  the 
catchments where the combination of nitrogen regulation up 
to  the  fallow-point  and  changes  in  land  use  are  not 
sufficient. 

(346) This  includes  emission  quotas  (7  900  tonnes)  and  other 
measures  (1  700  tonnes)  and  applies  from  2027.  In 2026, 
the  existing  field-based  nitrogen  regulation  with  a  lower 
nitrogen reduction target continues to apply. 

(347)Ministry of Green Transition, Vandområdeplanerne 2021  -

2027 efter genbesøget, 
https://sgavmst.dk/vandmiljoe/vandomraadeplaner/overblik-
vandomraadeplanerne-2021-2027/vandomraadeplanerne-
2021-2027-efter-genbesoeget, revised in April 2026.  

86 

 
 
 
and 527 ha of forests (348). Land withdrawal takes 
4-7 years.  The  goal  is  to  remove  140 000 ha  of 
low-lying  carbon-rich  soils  by  2030  and  create 
250 000 ha of new forests by 2045. The changes 
in land use are funded from the Green Area Fund 
(EUR 5.8 billion),  private  contributions  and  the 
CAP (349). 

fished  with  bottom-contacting  gear (352).  The 
initiatives in the 2025 agreement on the fisheries 
sector include banning bottom trawling in an area 
covering  19%  of  Danish  waters  and  a  possible 
analysis  on  voluntary  relocation  of  the  existing 
aquaculture  production  away  from  coastal  areas 
to reduce nitrogen discharge (353). 

is 

treated 
it 

Collection  and  treatment  of  wastewater  in 
almost all urban areas is legally compliant in 
in 
Denmark.  Urban  wastewater 
330 plants  throughout  Denmark  before 
is 
discharged,  but  wastewater  is  still  a  substantial 
source  of  pollution (350).  Wastewater  emitters  are 
expected to be liable to pay a tax on the discharge 
of  untreated  wastewater  from  storm  water 
legal 
overflows  from  2027,  pending  on  the 
implementation  of  a  recent  political  agreement. 
20 wastewater treatment companies must initiate 
treatment 
measures 
improve  wastewater 
is  to  cut 
capacity  by  end  2027.  The  aim 
572 tonnes of nitrogen discharges per year (351). 

to 

trawling 

exacerbates 

Bottom 
oxygen 
depletion  and  impacts  marine  biodiversity. 
About 42% of the Danish marine area and about a 
third  of  the  marine  protected  area  is  actively 

(348) Styrelsen  for  Grøn  Arealomlægning  og  Vandmiljø,  MARS, 

accessed 5.5.2026  

(349) The  Danish  Ministry  of  Green  Transition,  About 

the 
agreements  on  a  Green  Denmark,  https://mgtp.dk/groent-
danmark/english-a-greener-denmark/about-the-agreements-
on-a-green-denmark, 
fonde, 
https://mgtp.dk/arbejdsomraader/samarbejde-med-fonde, 
accessed on 9.2.2026.  

Samarbejde 

med 

(350)WISE | Freshwater Information System for Europe, Denmark, 
https://water.europa.eu/freshwater/countries/uwwt/denmark, 
2020,  accessed  on  4.2.2026.  330  urban  wastewater 
treatment  plants  with  2000  PE  (population  equivalents)  as 
reported  in  2022  for  the  year  2020  under  the  Urban 
Wastewater Treatment Directive of 1991. With the inclusion 
of smaller wastewater treatment plants with at least 30 PE, 
the overall number amounts to 679 as stated in the revised 
third RBMPs. 

(351) Ministry  of  Taxation,  Ny  afgift  på  urenset  spildevand  skal 
renere  vandmiljø,  https://skm.dk/aktuelt/presse-

sikre  et 
nyheder/pressemeddelelser/ny-afgift-paa-urenset-
spildevand-skal-sikre-et-renere-vandmiljoe, 
19.12.2025. 
Ministry  of  Environment  and  Gender  Equality,  Ny  aftale  for 
spildevand:  Markant  reduktion  i  kvælstofudledningen  skal 
forbedre 
kystvande, 
16 
https://mim.dk/nyheder/pressemeddelelser/2025/april/ny-
aftale-for-spildevand-markant-reduktion-i-
kvaelstofudledningen-skal-forbedre-vandet-i-16-fjorde-og-
kystvande, 2.4.2025.  

vandet 

fjorde 

og 

i 

87 

if  used, 

Sensitive  groundwater-recharge  areas  are 
being  mapped  to  improve  protection.  Only  a 
very  small  area  is  currently  protected  against 
nitrogen  agricultural  fertiliser  and  pesticide  use, 
which  is  one  of  the  main  pressures.  Groundwater 
(GW)  reservoirs  are  the  source  of  drinking  water 
(DW) in Denmark, and the country has a policy of 
using GW without advanced purification. Such GW 
implies  additional  costs, 
treatment, 
including  the  added  expense  of  waste  handling, 
which  is  complicated  for  example  for  per-  and 
polyfluoroalkyl  substances  (PFAS)  (see  Annex 8). 
Screening more pesticides during GW monitoring is 
one  of  the  goals  of  the  action  plan  on  pesticides. 
The  number  of  wells  with  detected  pesticide 
residues has been rising. Over half (55.7%) of the 
sampled DW  wells contained pesticide residues in 
2024 (354).  Nitrate  concentration 
in  most  GW 
monitoring  stations  remains  well  below 
the 
permitted  50 mg/l,  but  a  debate  about  lowering 
the  limit  for  DW  is  ongoing  in  Denmark.  This 
debate is partly based on a recommendation of an 
international  expert  group 
introduce  a 
significantly  stricter  nitrate  limit  value  in  DW  to 
reduce the risk of colorectal cancer (355).  

to 

(352)Biodiversitetsrådet,  
fiskeredskaber 
23.10.2024.  

bundslæbende 
i  beskyttede  havområder  –  Notat,  Link, 

Anvendelse 

af 

(353) Ministry  of  Food,  Agriculture  and  Fisheries,  Aftale  om 

fremtidens fiskeri er på plads, Link, 2.7.2025. 

(354)Ministry  of  Environment  and  Gender  Equality,  Analyse  af 
Reguleringsmuligheder  for  Beskyttelse  af  Drikkevandet, 
https://mim.dk/publikationer/2026/analyse-af-
reguleringsmuligheder-for-beskyttelse-af-af-drikkevandet, 
29.1.2026.  Ministry  of  Environment  and  Gender  Equality, 
Sprøjtemidler, 
https://mim.dk/miljoe/drikkevand-og-
kemi/sproejtemidler. Sprøjtemiddelstrategi 2022-2026. 

in 

Nitrate 

Groundwater 

(355) EU legislation allows up to 50 mg/l for nitrate concentration. 
The  2016-2019  reporting  period:  European  Environmental 
Agency, 
Europe, 
https://www.eea.europa.eu/en/analysis/indicators/nitrate-in-
groundwater-8th-eap.  The  data  for  the  reporting  period 
2020-2023  will  be  available 
in  2026.  Ministry  of 
Equality,  Miljøministeren 
and 
Environment 
igangsætter 
af 
indsats 
ekspertvurdering 
grænseværdien 
i  drikkevandet,  9.12.2025, 
https://mim.dk/nyheder/pressemeddelelser/2025/december/m

for  nitrat 

Gender 

efter 

in 

 
 
 
 
Denmark  does  not  suffer  from  water 
scarcity.  Water  productivity (356)  is  more  than 
double  the  EU  average,  reflecting  efficient  water 
management  practices  in  Denmark.  The  national 
water exploitation index  plus (WEI+) (357)  indicates 
low overall water stress, but a (seasonal) scarcity 
problem  is  emerging.  Water  availability  can  vary. 
This  was  illustrated  by  drought  spells  in  spring 
in  some  regions 
2023,  when  water  scarcity 
impacted  agricultural  production  and  public  water 
supply  (the  two  most  water-dependent  sectors  in 
Denmark) (358). 

Nature restoration 

Declining  biodiversity  remains  a  serious 
concern  in  Denmark.  Agriculture  and  mixed-
source  pollution  (including  nutrient  leaching)  are 
the  main  pressures  on  most  protected  habitats 
and 
caused  by 
atmospheric  nitrogen  deposition  has  barely 
improved  since  2005 (360).  Only  5%  of  habitats 

species (359).  Eutrophication 

iljoeministeren-igangsaetter-indsats-efter-ekspertvurdering-
of 
af-graensevaerdien-for-nitrat-i-drikkevandet.  Ministry 
the 
Environment  and  Gender  Equality,  Evaluation  of 
parametric  value  for  Nitrate  in  drinking  water  –  revised 
version, 
https://mim.dk/publikationer/2025/december/evaluation-of-
the-parametric-value-for-nitrate-in-drinking-water, 7.1.2026 

(356) At  EUR 312  per  million m³  of  abstracted  water  in  2022 
(EU-27  average of  EUR 151  per  million m³).  It  indicates  the 
average  economic  value  (GDP)  a  Member  State  creates  for 
each unit of water it takes from nature. 

(357)Total  water  consumption  of  the  total  renewable  freshwater 
resources  available  for  a  given  territory  and  period. 
plus. 
https://ec.europa.eu/eurostat/databrowser/view/sdg_06_60/d
efault/table?lang=en. 

Eurostat,  Water 

Exploitation 

Index, 

(358) EEA,  2025,  Water  abstraction  by  economic  sector,  2000-

2023, 
https://www.eea.europa.eu/en/analysis/indicators/water-
abstraction-by-source-and/water-abstraction-by-economic-
sector. 

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

https://tableau-

species,  
public.discomap.eea.europa.eu/views/sonpressuresandthreat
s/Pressuresandthreats?%3Adisplay_count=n&%3Aembed=y
&%3AisGuestRedirectFromVizportal=y&%3Aorigin=viz_share
_link&%3AshowAppBanner=false&%3AshowVizHome=n. 

(360)EEA,   2024,  Eutrophication  caused  by  atmospheric  nitrogen 
Europe, 
deposition 
https://www.eea.europa.eu/en/analysis/indicators/eutrophicati
on-caused-by-atmospheric-
nitrogen?utm_source=chatgpt.com&activeAccordion=. 

in 

(the  second  lowest  proportion  in  the  EU)  were 
reported  as  having  a  good  conservation  status 
(CS).  All  grassland,  wetland/peatland  and  forest 
habitats  protected  under  the  Habitats  Directive 
have  unfavourable-bad/inadequate  CS (361).  The 
share  of  protected  species  in  a  good  CS  dropped 
from  32%  to  20% (362).  The  common  farmland 
birds  index,  which  has  been  declining  over  two 
decades, 
in 
Denmark (363).  The  share  of  Danish  forests  has 
been increasing, but it is still among the lowest in 
the EU (364). 

biodiversity 

confirms 

loss 

than 

is  higher 

Further  effort  is  needed  to  protect  nature 
effectively in Denmark. The 8.9% share of land 
area  covered  by  the  Natura  2000  network  in 
Denmark is the lowest in the EU (the EU average is 
18.6%).  The  share  of  Denmark’s  entire  protected 
land  area  of  15.4% 
the 
Natura 2000  share  but  is  still  below  the  EU 
average  of  26.4% (365).  By  contrast,  the  23.4% 
share  of  Denmark’s  marine  Natura  2000  sites  is 
the  fifth  highest in  the  EU  and  more  than  double 
the  EU  average  of  10.5% (366).  Further  action  is 
needed  to  improve  the  quality  of  conservation 
objectives  for  Natura  2000  areas  due  to  the 
pending  development  of  a  condition  assessment 
system  for  certain  habitat  types  (including  all 
forest types) (367).  

Denmark 

is  addressing  the  biodiversity 

(361) The  2013-2018  reporting  period:  European  Commission, 
2025, Environmental Implementation Review, Country Report 
– Denmark. 

(362) The  assessments  of  the  2013-2018 

reporting  period 

compared with the 2007-2012 reporting period. 

(363) European Commission, Agri Sustainability Compass. 

(364) FISE 

| 

Forest 

System 

Information 

for 
https://forest.eea.europa.eu/countries/eea-member-
countries/denmark?activeTab=e3cb5041-a03c-49e8-9eb8-
66c3ab9e36c8, 2020. Styrelsen for Grøn Arealomlægning og 
Vandmiljø,  Skovovervågning 
skovstatistik,  2023, 
https://sgavmst.dk/skovbrug-og-
landbrug/skovbrug/skovovervaagning-og-skovstatistik  

Europe, 

og 

(365) Eurostat, 

Protected 

areas, 

https://ec.europa.eu/eurostat/databrowser/view/env_bio4/def
ault/table?lang=en, accessed 22.1.2026. 

(366) European  Environmental  Agency,  Natura  2000  Barometer, 
Link.  Natura  2000  land,  2024.  European  Commission,  EU 
Biodiversity 
Dashboard, 
Strategy 
https://dopa.jrc.ec.europa.eu/kcbd/EUBDS2030-
dashboard/?version=1. Natura 2000 sea, 2025. 

(367) 12 land  habitats  including  all  forest  types,  2 freshwater 

habitats and 8 marine habitats. 

88 

 
 
 
 
decline. The GD target of protecting 20% of land 
area  includes  creating  21 national  nature  parks. 
One  has  already  been  officially  inaugurated (368). 
New  forest  to  be  created  includes  100 000 ha  of 
protected  forests 
in  addition  to  the  existing 
75 000 ha (369).  10 large  interconnected  natural 
areas will be established by 2035 to reduce nature 
fragmentation. 6 areas have been identified based 
on the local land conversion plans. The selection of 
the  precise  project  locations  is  ongoing (370).  The 
national  authorities  are  analysing  the  extent  to 
which  the  GD  measures  cover  the  existing 
biodiversity  challenges  and  what  has  to  be 
addressed by other means. Synergies between the 
GD  and  the  nature  restoration  plans  required 
under the Nature Restoration Regulation are being 
identified (371).  Parties  to  the  GD  have  agreed  to 
introduce  a  national  Nature  and  Biodiversity  Act. 
The Danish Biodiversity Council (DBC) has prepared 
recommendations on this act (372). 

Pollution is costly. Recent research (373) indicates 
that  the  largest  environmental  cost  item  is  the 
biodiversity  crisis,  which  costs  an  estimated 
DKK 124  billion  (EUR 16.7 billion)  annually  (374). 
It is  DKK  13  billion  (EUR  1.7  billion)  for  water 
pollution in Denmark. Green net national income is 
about  10%  lower  than  conventional  net  national 
income. The absolute gap has fluctuated around a 

(368) The  Danish  Government,  Aftale  om  Implementering  af  et 
Grønt  Danmark,  https://regeringen.dk/aktuelt/publikationer-
og-aftaletekster/aftale-om-implementering-af-et-groent-
danmark/,  18.11.2024.  Ministry  of  Environment  and  Gender 
Equality, Naturnationalparker, https://mim.dk/miljoe/natur-og-
biodiversitet/naturnationalparker. 

(369) Ministry  of  Green  Transition,  Milepæl  nået:  75.000  hektar 
Danmark, 

urørt 
https://mgtp.dk/nyheder/2025/jan/milepael-naaet-75000-
hektar-uroert-skov-i-danmark. 

skov 

i 

(370) Ministry of Green Transition, Nu skal arbejdet med seks store 
naturområder  i  gang,  https://mgtp.dk/nyheder/2026/feb/nu-
skal-arbejdet-med-seks-store-naturomraader-i-gang-
#https://mgtp.dk/nyheder/2026/feb/nu-skal-arbejdet-med-
seks-store-naturomraader-i-gang-, 19.2.2026. 

(371) European Semester mission, 15.1.2026. 

(372) Biodiversitetsrådet, 

https://www.biodiversitetsraadet.dk/biodiversitetslov, 
2025. 

Biodiversitetslov, 
May 

(373) Edited  by  Peter  Birch  Sørensen,  2025,  Green  National 
Accounting in Theory and Practice, From GDP to Green GDP. 
Estimates  of  the  pollution  costs  are  for  the  year  2020  in 
2023 prices and an underestimate partly due to lack of data 
and the precaution against double-counting. 

costs (375).  Denmark’s  economy 

high  but  relatively  stable  level  since  1990.  This 
shows  the  importance  of  adjusting  conventional 
net  national  income  to  reflect  environmental 
damage 
is 
structurally  exposed  to  nature  loss  through  its 
dependency on ecosystem services. About 44% of 
gross value added (GVA) (376) relies directly on the 
ecosystem.  Investing  in  local  and  nature-based 
measures could potentially have a higher benefit-
cost  ratio  in  reducing  damages  from  extreme 
weather 
grey 
infrastructure (377).  Denmark  does  not  have  a 
national strategy for using nature-based solutions 
to  mitigate  flood  risks.  Municipalities  have  full 
discretion over the measures they implement. The 
agreed farmland conversion targets have not been 
integrated  into  the  climate  change  adaptation 
policy  measures 
the  new  coastal 
(including 
adaptation plan). 

investing 

events 

than 

in 

Sustainable agriculture and land use 

Denmark’s  carbon  removals  are  in  line  with 
the  level  of  ambition  needed  to  meet  its 
2030  target  for  land  use,  land-use  change 
and  forestry  (LULUCF).  Denmark  reported  net 
removals both in 2022 and 2023, contrary to the 
long-term trend of the LULUCF-sector being a net 
source  of  emissions.  This  positive  trend  is  mainly 
due  to  the  increasing  carbon  sink  of  forests.  The 
latest  available  LULUCF  projections (378)  indicate 
that Denmark is on track to reach its 2030 target, 
with  a  projected  surplus  of  around  0.57 MtCO2-
eq (379).  Further investment  in  healthy  forests  and 
soils  is  key  to  building  resilient  biobased  product 
value  chains  and  enabling  a  growing  and 
competitive 
Continuing 
improvements  in  the  system  for  monitoring  net 
removal data and projections would play a key role 
in  supporting  timely  and  effective  action  in  the 

bioeconomy. 

EU 

(375) Rising  costs  of  climate  change  and  biodiversity  offset  the 

falling costs of air pollution. 

(376) This equals to the EU average of 44%. 

(377) Organisation  for  Economic  Co-operation  and  Development, 
2026, 

OECD 
https://www.oecd.org/en/publications/oecd-economic-
surveys-denmark-2026_3d6cb4b8-en/full-report.html.  

Economic 

Denmark 

Surveys: 

(378) European Commission. Climate action progress report 2025. 

(374) Threat to biodiversity DKK 66 billion (EUR 8.9 billion) + loss 

(379) National  LULUCF  target 

in 

line  with  Regulation 

(EU) 

of biodiversity DKK 58 billion (EUR 7.8 billion). 

2023/839. 

89 

 
 
 
sector. 

Intensive agriculture is degrading soil health. 
Denmark  had  the  fifth  highest  livestock  density 
index (1.4) in the EU in 2023 (380) and agricultural 
land covering about 60% of the surface is mainly 
used to grow feed for livestock (381). 11.4% of the 
utilised  agricultural  area  was  fully  converted  to 
organic  farming  in  2020-2023 (382).  The  national 
goal  is  to  reach  20%  by  2030.  Denmark’s  soils 
contain  excess  levels  of  nitrogen  and  phosphorus 
and are being eroded by wind and tillage. Erosion 
by water and harvest has a smaller impact on land 
area with soil degradation (383). Most of Denmark’s 
peatlands  have  been  drained,  mainly 
for 
agricultural  use (384).  The  Danish  CSP  has 
implemented  good  agricultural  and  environmental 
condition  (GAEC)  standard 2,  which  covers  the 
protection of wetlands and peatlands, since 2023. 
Converting  agricultural 
support 
ecosystem  services.  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 (385). The DBC reports that the GD 
is  important  for  biodiversity  in  the  sea,  but  with 
the  current  financing  and  implementation,  it  can 
only  contribute  to  a  limited  extent  to  providing 
more natural areas on land, and it lacks financing 
to improve nature quality (386). 

land  would 

(380) Eurostat, Livestock density index, accessed 5.5.2026. 

(381) Statistics  Denmark,  Cropland,  Landbrugsarealet  skrumper  år 

for år, 27.1.2026. 

(382)Eurostat,  

Area  under  organic 
5.5.2026. The 2024 data is not available for Denmark. 

farming,  accessed 

(383) European Commission, Soil Degradation Dashboard. 

(384) UNEP, 2022, Global Peatlands Assessment. 

(385)Danish  Council  on  Climate  Change,  2024,  Danmarks 
arealanvendelse, 

fremtidige 
https://klimaraadet.dk/da/analyse/danmarks-fremtidige-
arealanvendelse. 

(386)Biodiversitetsrådet,  Ny 

fra  Biodiversitetsrådet: 
rapport 
Danmark mangler mindst 162 mia. kr. frem mod 2050 til at 
beskytte og genoprette biodiversiteten 
https://www.biodiversitetsraadet.dk/viden/mere-og-bedre-
finansiering, 6.11.2025.  

, 

90 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A10.1:Key Adaptation Indicators 

(1) EFFIS (European Forest Fire Information System). https://forest-fire.emergency.copernicus.eu/apps/effis.statistics/estimates. 
(2) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters, based on 
modelling of the risk from floods, wildfires and windstorms and on the insurance penetration rate. Scale: 0 (no protection gap) – 4 
(very high gap). EIOPA, 2025, Dashboard on insurance protection gap for natural catastrophes. 
(3) This 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 to or greater than 40% 
indicate severe water scarcity. 
(4) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2025 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Source: Eurostat, EEA and JRC 

91 

Climate adaptation and preparedness:EU-27201920202021202220232024latest dataDrought impact on ecosystems3.190.81.218.651.73-2.76[area impacted by drought as % of total]Forest fires burned area (1)80             -         230           341        134        -           354,510   [burned area in ha. per year]Economic losses from extreme events-           62           -           4            169        -           40,452     [EUR million at constant 2022 prices]Insurance protection gap (2)---1            1            1               -[composite score between 0 and 4]Sub-national climate adaptation action2               4             13             14          14          14             34            [% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:EU-27201920202021202220232024latest dataWater Exploitation Index Plus, WEI+ (3)4.34          4.00        4.91          5.21       3.85       -4.53         [total water consumption as % of renewable freshwater resources]Water productivity301           295         309           312        305        -151[EUR per m3]Water abstractionWater abstraction by source (% from surface water)23.59%26.33%25.27%23.76%23.49%-Water abstraction by sectorAgricultureElectricity coolingManufactu-ringPublic water supplyMining and QuarryingConstru- ction 56.13%0.13%1.90%40.69%1.15%0.00%Nature restoration:EU-27201920202021202220232024latest dataEcosystem dependency---44%--44%[% of direct dependency]Protected area15.315.315.315.315.426.4[% of terrestrial protected areas]Invasive alien species (IAS)-----3929.2[number of IAS of Union concern]Damage cost of IAS----0.131.69[EUR billion]Eutrophication 609609295[AAE of area at risk of euthrophication]Sustainable agriculture and land use:EU-272012-20182018-2021latest dataYearly net land taken by Member State647           775        670          [ppm of total urban surface per Member State]Land conversion in functional urban area [% of total land taken from 2018-2021]Arable land70%Complex and mixed cultivation0%Forests3%Herbaceous vegetation associations2%Open spaces with little or no vegetation0%Pastures24%Permanent crops0%Water1%Wetlands0%201920202021202220232024latest dataLivestock density1.59:0.75(number of livestock units per hectare of utilised agricultural area)Ammonia emissions 96%96%96%96%95%-94%[% of total utilsed agricultural areas]Pesticide contamination on rivers and lakes water bodiesrivers12%27%[% of monitoring sites with pesticides exceeding thresholds, 2018-2023]lakesn.d.18%Pesticide contamination in soil 92%57%[% of samples with a concentration over 0.5 mg/Kg⁻¹]Net greenhouse gas removals from LULUCF (4)1475.41227.1150.8-418.3-500.4--198,421 [ktCO₂-eq] 
 
  
 
FAIRNESS 
ANNEX 11: LABOUR MARKET 

The 

2025 

country 

Denmark’s labour market continues to adapt 
effectively  to  changing  conditions  while 
maintaining  a  high  level  of  employment. 
Labour  market  outcomes  have  remained 
robust  in  recent  years,  and  Denmark  has 
surpassed  its  employment  rate  target  for 
specific 
2030. 
recommendations  for  Denmark  highlighted  the 
need  to  address  the  skills  shortages  to  meet 
labour  market  needs,  including  by  stepping  up 
in 
action 
education and training and to ensure the provision 
and  acquisition  of  the  skills  needed  for  the  green 
and  digital  transitions.  Further  unlocking  of  the 
untapped  labour  potential  of  certain  groups  could 
help 
shortages  and  boost 
competitiveness. 

tackle  attainment 

inequalities 

labour 

tackle 

to 

Graph A11.1: Key labour market indicators 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, lfsi_neet_a, 
une_ltu_a] 
Break in time series in 2023 for Eurostat tesem120, 
unemployment rate 

While  labour  market  participation  is  robust, 
high  unemployment  rates  in  cities  remain  a 
challenge.  The  employment  rate  reached  80.2% 
in 2024, well above the EU average of 75.8% and 
the  national  2030  employment  target  of  80%. 
However,  it  decreased  slightly  and  settled  at 
79.8%  in  2025,  still  above  the  EU  average  of 
76.1%.  Many  jobs  are  located  in  the  capital  area 
of  Copenhagen  (Annex 18).  The  activity  rate  of 
82.3%  was  well  above  the  EU  average  of  75.7%. 

92 

is  substantially  higher 

The  unemployment  rate  rose  by  1.3  pps  from 
2023,  but  according  to  the  national  registered 
data  it  remained  stable (387).  The  unemployment 
in  urban  areas 
rate 
compared  to  rural  areas  (8%  vs  5.3%)  The  long-
term unemployment rate rose from 0.5% in 2023 
to 0.9% in 2025, remaining below the EU average 
of 1.9%. The gender employment gap widened by 
1.1 pps between 2022 and 2024, but narrowed by 
0.3 pps and settled at 6.2 pps in 2025, well below 
EU  average  of  9.6  pps.  The  share  of  part-time 
workers  (23.1%  in  2025)  is  higher  than  the  EU 
average  (17.1%)  and  represents  untapped  labour 
potential.  

Unemployment  and 
labour  market  slack 
increased  in  2025.  In  2025,  the  unemployment 
rate  (6.4%)  increased  compared  to  2024  (6.2%) 
and its pre-pandemic level (4.7%), standing above 
the  EU  average  of  6%.  Labour  market  slack (388) 
reached 10.9% in 2025 (EU: 11%), up from 10.5% 
in  2024.  Denmark  has 
implemented  several 
reforms  in  recent  years  to  increase  the  supply  of 
labour  to  combat  labour  shortages  in  selected 
sectors  (see  Annex 13).  The  cash  benefit  reform, 
which  was  fully  implemented  in  2025,  seeks  to 
simplify  the  existing  complex  system  by  reducing 
the number of benefit types and by allowing cash 
benefit  recipients  to  retain  more  of  their  income 
from work, thus increasing the incentives to enter 
employment. 

Despite  extensive  policy  support,  there  is 
scope  for  improving  youth  labour  market 
outcomes,  particularly  in  rural  areas.  The 
share  of  young  people  (aged  15-29)  neither  in 
employment nor in education and training (NEETs) 
has fluctuated between 8-10% for many years. In 
2024,  it  stood  at  8%  (EU:  11.1%).  However,  it 
increased quite considerably to 8.9% in 2025 (EU: 
10.9%).  NEET  rates  are  markedly  higher  in  rural 
areas than in urban areas (11.5% vs 7% in 2025). 
NEETs  constitute  a  heterogeneous  group  facing 
diverse  barriers  to  education  and  employment. 

(387) Danmarks Statistik indicates significantly lower rates of 
unemployment (2.8% in 2023 and 2.9% in 2024). 

(388) Labour market slack refers to all unmet employment needs, 
namely  the  extent  to  which  labour  supply  exceeds  labour 
demand in the short term. It encompasses four components: 
underemployed  people  working  part-time,  unemployed 
people,  people  seeking  work  but  not  immediately  available, 
and people available for work but not seeking a job.  

78798081828384858602468101214162016201720182019202020212022202320242025%%DK% Activity rate 20-64 (rhs)% Unemployment rate 15-74 (lhs)% Long-term unemployment rate 15-74 (lhs)% Youth unemployment rate 15-24 (lhs)% NEET rate 15-29 (lhs) 
 
 
   
 
 
Youth  unemployment  has  been  on  the  rise, 
increasing from 10.6% in 2022 to 13.8% in 2025. 
Although  this  was  partly  driven  by  a  break  in  the 
statistical  series (389)  and  is  not  fully  mirrored  in 
data  on 
registered  unemployment,  Denmark 
closely  monitors  both  the  NEET  and  the  youth 
unemployment  rates  at  municipal  and  national 
level.  Several  measures  have  been  introduced  to 
support  participation  of  NEETs 
in  education, 
including  the  new 
training  and  employment, 
initiative  Ungeløftet  (‘The  Youth  Commitment’). 
This  initiative  was  launched  in  2025  by  creating 
between 
national 
municipalities, companies and civil  society to help 
young  people  continue  education  or  enter  the 
labour  market.  As  it  is  very  recent,  it  is  still  too 
In  2023,  the 
early  to  evaluate 
preparatory  basic  education  and  training  (FGU) 
received 
permanent 
enhancement  of  its  financial  framework.  The 
duration  of  the  education  is  up  to  two  years  and 
enables  young  people  below  25  years  of  age  to 
improve  professionally,  personally  and  socially 
with the aim to proceed into the labour market or 
upper  secondary  and  vocational  education  and 
training  

partnerships 

its  effects. 

significant 

local 

and 

and 

a 

Several  measures  have  been  introduced  to 
tackle  the  challenges  faced  by  persons  with 
disabilities,  although  their  effectiveness  has 
not  yet  been  assessed. 
The  disability 
employment gap reached 26 pps in 2024 (390) (EU: 
24  pps),  up  from  20.4  pps  in  2023  (EU:  21.4%) 
and stood at 23.5% in 2025 (24.2%). In November 
2025,  Denmark  adopted  an  action  plan (391)  for 
increasing  the  employment  of  persons  with 
disabilities,  setting  a  target  of  an  additional 
15 000 persons with disabilities in employment by 
2030.  Among  other  things,  the  new  measures 
include  enhanced  support  for  pupils  and  students 
with  disabilities  throughout  the  education  system 
and  targeted  guidance  for  their  transition  from 
education into the labour market. 

to 

and 

support 

transition, 

the  green 

occupations, 

sheet  metal  worker  and 

Labour  shortages  remain  high  in  specific 
especially 
sectors 
construction and services. Persistent shortages 
have  been  reported  since  2022  in  occupations 
including 
critical 
construction  and  the  related  occupations  of 
electrician, 
civil 
engineering  labourer.  Despite  gaps in  data  on  the 
overall  job  vacancy  rate (392),  sectoral  indicators 
point  to  continued  tightness  in  parts  of  the 
economy: in Q2-2025, vacancy rates were high in 
electricity,  gas,  steam  and  air  conditioning  supply 
service 
(3.9%),  administrative  and 
activities  (3.8%),  as  well  as  accommodation  and 
food service activities (3.5%). In October 2025, the 
share  of  employers 
labour 
shortages were limiting their production was lower 
than  the  EU  average  for  all  sectors:  20%  of 
companies  in  services  (vs  23.1%  in  the  EU),  20% 
in  construction  (vs  EU:  27.5%)  and  7.8%  in 
industry  (vs  EU:  17.5%) (393).  These  figures  were 
nevertheless higher than their pre-pandemic levels 
in  services  and 
(16%  and  6%, 
industry 
respectively, 
in  Q4-2019).  Occupational  data 
indicate  particularly  severe  shortages  among 
building frame workers, cooks and domestic, hotel 
and  office  cleaners  and  workers (394).  While  some 
regional  differences  persist,  particularly  for  IT 
specialists,  the  demand  for  both  skilled  and 
unskilled  workers,  remains  more  or  less  equally 
distributed across the country (see Annex 18). The 
inflow of foreign workers  is helping fill  vacancies, 
including in the long-term care sector, also in less 
densely populated areas.  

reporting 

that 

The growing participation of foreign workers 
in  the 
labour  market  has  significantly 
boosted  employment  rates  and,  in  view  of 
the  increasing  number of workers  above  the 
retirement age, it has helped to boost labour 
supply (395).  The  inflow  of  foreign  workers  is 
helping  fill  vacancies,  including  in  the  long-term 
care  sector,  also  in  less  densely  populated  areas. 
Foreign  workers  and  older  workers  who  remain  in 

(389) In Q4-2023, the sampling period was extended from two to 
four  weeks,  thus  including  more  people,  more  of  whom  are 
also  students  looking  for  a  student  job.  While  they  are 
considered  as  unemployed  according  to  the  Labour  Force 
Survey,  they  are  not  categorised  as  unemployed  in  the 
registered data. 

(390) Break in series in 2024. 

(392)No  data  available  for  Denmark’s  job  vacancy  rate  for  all 
NACE  activities  together  and  for  nine  NACE  activities 
separately. 

(393)Source: European Business and Consumer Surveys. 

(394)EURES  -  Demand  for  occupations 
1 July 2024 to 30 June 2025). 

|  CEDEFOP 

(from 

(391) Ny  handicappolitisk  handlingsplan:  Flere  med  handicap  i 
uddannelse og beskæftigelse - Social- og Boligministeriet. 

(395) Danish Ministry of Employment, October 2025, Status on the 

Labour Market: Status på arbejdsmarkedet. 

93 

 
 
 
(higher  than  the  EU  average  of  5%).  Despite  this 
ICT 
relatively  high  share,  a  shortage  of 
professionals  remains  a  significant  challenge  for 
Danish  companies,  with  10%  reporting  difficulties 
in filling ICT vacancies in 2022. Digital competence 
among  the  population  remains  high:  in  2025, 
81.45%  of  Danes  aged  16-74  possessed  at  least 
basic  digital  skills,  well  above  the  EU  average  of 
60.39%. 

Real  wage  growth  is  relatively  robust,  while 
contained  unit  labour  costs  help  preserve 
competitiveness.  After  a  3.4%  rise  in  2023  and 
4.4% in 2024, wage growth slowed down to 3.3% 
in  2025  and  is  projected  to  remain  at  the  same 
level in 2026. In turn, after a marked drop in 2022 
(5.3%) and a modest rebound in 2023 (0.3%), real 
wages  grew  by  3.2%  in  2024,  1.4%  in  2025  and 
are  projected  to  go  up  1.5%  in  2026.  This  trend 
reflects  a  decline 
inflation  and  sustained 
nominal  wage  growth.  Over  the  past  decade,  the 
relatively  low  wage  growth  has  generated  cost-
competitiveness  gains,  and  unit 
labour  costs 
increased less than in most other Member States.  

in 

employment  after  reaching  the  retirement  age 
account  for  9%  of  the  total  labour  force.  The 
number  of  foreign  workers  increased  by  17 000 
full-time  equivalents  between  2024  and  2025, 
following  a  rise  of  20 000  between  2023  and 
2024.  Approximately  19 000  more  people 
continue  working  after  turning  67  (which  is  the 
statutory 
they  are 
retirement  age),  and 
incentivised to remain professionally active by the 
new  rules  that  allow  them  to  keep  their  pension 
without  benefit  deductions,  making  work  beyond 
retirement age financially more attractive. 

jobs 

quality 

adaptability, 

Denmark’s labour market model is among the 
strongest  in  the  EU,  characterised  by  well-
established  social  dialogue.  Social  dialogue 
forms the foundation of the Danish labour market 
model  and  is  the  cornerstone  of  its  functioning, 
supporting 
and 
competitiveness.  Collective  agreements  cover 
100% of employees in the public sector and 73% 
of  those  in  the  private  sector  (396).  Trade  union 
density  stood  at  60.4%  in  2024,  while  employer 
organisation  density  was  68.5%  in  2023 (397). 
Social  partners work closely with the government, 
providing  input  on  labour  market  legislation  and 
offering  intelligence  on  skills  needs  and  labour 
supply as well as contributing organisationally and 
financially  to  adult  learning  in  close  collaboration 
with  public  employment  services  and  training 
providers. In 2025, social partners have agreed to 
develop an action plan to help further increase the 
level of collective bargaining coverage. 

Denmark is also making good progress in the 
transition  towards  climate  neutrality,  but 
there are still gaps in the ICT labour market, 
limiting  the  growth  of  the  digital  sector.  In 
2024,  employment  in  energy-intensive  industries 
represented 1.3% of total employment, well below 
the  EU  average  of  3.5%.  At  the  same  time, 
employment in mining and quarrying has grown by 
17%  since  2015  (to  around  4 400  workers  in 
the 
2023  and  6 200 
environmental 
sector 
represented  2.8%  of  total  employment  in  2022 
(EU:  3.1%).  In  the  digital  sector,  ICT  specialists 
accounted  for  5.8%  of total  employment  in  2024 

in  2024).  Jobs 
services 

goods 

and 

in 

(396) Danish  Ministry  of  Employment,  Confederation  of  Danish 
Employers  and  Danish  Trade  Union  Confederation,  The 
the-labour-market-in-
Labour  Market 
denmark.pdf. 

in  Denmark: 

(397) OECD/AIAS ICTWSS v2.0. 

94 

 
 
ANNEX 12: SOCIAL POLICIES 

system, 

disparities 

Denmark  has  a  well-functioning  social 
are 
but 
security 
increasing,  particularly  affecting  vulnerable 
groups.  Poverty  and  social  exclusion  risks  in 
Denmark  remain  relatively  low,  but  the  rate  is 
considerably  higher  in  cities  compared  to  rural 
areas,  towns  and  suburbs,  and  certain  vulnerable 
groups,  such  as  persons  with  disabilities,  are 
is  significantly 
particularly  affected.  Denmark 
behind 
target, 
underscoring the scope for further policy measures 
aimed  at  preventing  inequalities  and  alleviating 
poverty or social exclusion. 

its  2030  poverty 

reduction 

income 

Furthermore, 

The share of people living in households with 
very low work intensity is higher than the EU 
average  and  is  far  from  the  2030  poverty 
reduction  target.  The  share  of  people  living  at 
risk  of  poverty  and  social  exclusion  fluctuated 
between  17.1%  in  2022  and  18%  in  2024  and 
stood  at  17.9%  in  2025.  In  contrast,  the  EU 
average  has  been  continuously  declining  over  the 
same  period,  from  21.6%  in  2022  to  20.9%  in 
inequality,  as 
2025. 
measured  by  the  income  quintile  ratio  (S80/S20) 
rose  from  4.03  in  2022  to  4.16  in  2024,  and 
decreased  to  4.12  in  2025,  while  the  EU  average 
fell from 4.74 in 2022 to 4.62 in 2025. Denmark 
does  not  express  the  national  2030  target  in 
terms  of  the  number  of  people  at  risk  of  poverty 
of  social  exclusion,  but  it  aims  to  reduce  the 
number of people living in very low work intensity 
households  by  30 000  compared  to  2019  values. 
Although the proportion of people living in very low 
work  intensity  households  decreased  from  10.6% 
in 2024 (EU: 7.9%), to 9.7% in 2025 (EU: 7.9%), it 
was still one of the highest in the EU. The amount 
corresponds  to  approximately  432 400  people 
living  in  very  low  work  intensity  households, 
around  48 000  more  than  the  2030  target. 
Denmark  has  one  of  the  highest  proportions  of 
women  living  in  households  with  very  low  work 
intensity,  and  although  the  share  has  decreased 
from 11.1% in 2023 to 10.6% in 2025, it remains 
above the EU average of 8.4%. While the number 
of  people  in  very  low  work  intensity  households 
represents  the  main  driver  of  the  rising  AROPE 
rate,  the  percentage  of  people  at  risk  of  poverty 
(AROP) has remained stable since 2023 and stood 
at 11.8% in 2025 (EU: 16.3%). The percentage of 
in  severe  material  and  social 
people 
deprivation  dropped  from  4.9%  in  2023  to  4%  in 
2024,  followed  by  a  rise  to  4.5%  in  2025, 
although staying below the EU average of 6.8%. 

living 

Graph A12.1: AROPE rate and its components 

Source: Eurostat, EU-SILC [ilc_peps01n, ilc_li02, ilc_mdsd11, 
ilc_lvhl11n] 

the 

Poverty  and  social  exclusion  rates  vary 
significantly  across  regions  and  household 
types.  Certain  groups  are  more  likely  to  live  in 
quasi-jobless  households,  with 
level  of 
urbanisation  and  household  composition  being 
important  factors.  The  AROPE  rate  in  2025  was 
significantly  higher  for  people  living  in  cities 
(22.2%)  compared  to  towns  and  suburbs  (14.8%) 
and  rural  areas  (16%).  In  cities,  the  AROPE  rate 
increased  by  1.3 pps  between  2022  and  2025, 
surpassing  the  EU  average  of  21%.  This  was 
mainly driven by the percentage of people living in 
very low work intensity households, which in cities 
grew  by  1.2 pps  in  the  same  period.  The  increase 
in the AROPE rate in cities can also be linked to the 
fact  that  the  housing  cost  overburden  (Annex  16) 
and  unemployment  rates  (Annex  11)  are  also 
higher for people living in cities than in rural areas. 
In  addition,  the  percentage  of  persons  with 
disabilities  living  in  quasi-jobless  households  and 
their AROPE rate rose considerably between 2022 
and  2025  (by  6.7 pps  and  3.8 pps  respectively). 
The  AROPE  rate  of  this  group  stood  at  28.5%  in 
2025 (EU: 28.8%), with 24% of them living in very 
low  work  intensity  households,  well  above  the  EU 
average of 18.9% in 2025. Furthermore, the work 
intensity  of  households  is  closely  related  to 
household 
single-parent 
households  and  households  without  dependent 
children  more  likely  to  be  very  low  work  intensity 
households.  Such  households  surpassed  the  EU 
average  in  2025  (24.5%  vs  22.4%  for  single 
parents  and  15.8%  vs  10.3%  for  households 

composition,  with 

95 

024681012141618202016201720182019202020212022202320242025At-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households% 
 
  
 
 
without  dependent  children).  A  comprehensive 
approach,  as  set  out  in  the  EU  anti-poverty 
strategy, 
the  multiple 
could  help  address 
dimensions of poverty and eradicate poverty. 

More than one out of ten children in Denmark 
are  affected  by  poverty.  Denmark  experienced 
its  highest  percentage  of  children  at  risk  of 
poverty or social exclusion since 2020 in 2024 at 
15.9%,  however  it  decreased  to  14.8%  in  2025, 
well  below  the  EU  average  of  24.3%.  The  severe 
material  and  social  deprivation  rate  for  children 
have  fluctuated  from  2.8%  in  2022  to  5.3%  in 
2025, also below the EU average at 7.9% in 2025. 
The  share  of  children  living  in  very  low  work 
intensity  households  decreased  from  6.6%%  in 
2023  to  5.6%  in  2025  (EU:  7.5%)  Denmark  has 
made  progress  with  the  implementation  of  the 
European  Child  Guarantee (398), 
including  by 
putting  in  place  policies  on  improving  the  quality 
of  education.  The  2025  Finance  Act  introduced  a 
pilot  project  on  school  meals  to  examine  how 
school  meals  affect  children’s  health,  learning 
performance  and  wellbeing.  The  government 
carried  out  a  draw  which  took  into  consideration 
factors  such  as  socioeconomic  background  and 
location.  Some  schools  were  selected  for  free 
meals,  whereas  for  others  a  parental  contribution 
was  requested.  The  project (399)  is  running  from 
2025-2028 and DKK 854 million (approx. EUR 114 
million) has been allocated. The 2026 Finance Act 
introduced, among other measures, allocations for 
improving  the  financial  situation  of  families  with 
children  in  childcare  by  lowering  the  parental 
contribution  by  DKK 400  million  yearly  (approx. 
EUR 53.5 million), as well as allocating funding for 
more employees in childcare facilities (Annex 13). 

Denmark  has  a  very  comprehensive  social 
improve  the  social 
security  system  to 
situation  of  vulnerable  groups.  The  impact  of 
social  benefits  on  poverty  reduction  rose  slightly 
from 51.4% in 2023 to 51.8% in 2025, remaining 
well  above  the  EU  average  of  33.2%.  Overall 
government  expenditure  for  social  protection 
amounted to 19.6% in 2024, at the level of the EU 
average. In July 2025, a reform was introduced to 
simplify  and  restructure  the  cash  benefit  system 
payments 
by  merging 
(e.g. 
uddannelseshjælp, 
overgangsydelse, 
selvforsørgelses-  og  hjemrejseydelse).  The  new 

former 

all 

(398) Biannual report for the European Child Guarantee from 2024. 

(399) Børne- og Undervisningsministeriet. 

96 

the 

system includes three main rates (minimum, basic 
and increased) as well as a special rate for young 
people  who  are  unemployed  living  with  their 
parents.  Families  with  children  and  single-parent 
households receive an additional allowance to help 
with the cost of after-school activities for children. 
Additionally,  the  reform  introduces  a  new  income 
deduction  system  that  allows  social  assistance 
recipients who take up employment to retain more 
of  their  income,  thus  positively incentivising  entry 
into 
recent 
labour  market.  Given 
implementation, the impact of the reform is still to 
be  assessed.  The  healthcare  and  long-term  care 
(LTC) system provides universal access to services. 
Access  to  healthcare  can  vary  across  Denmark 
(Annex  15).  LTC  is  managed  at  municipal  level, 
with  differences  in  the  quality  of  LTC  mainly 
related  to  labour  shortages  (Annex  11  and  Annex 
18).  The  eldercare  reform  was  introduced  in  April 
2024  to  improve  the  quality  of  LTC  by  creating 
permanent  care  teams  and  giving  more  freedom 
to  nursing  homes.  The  reform  will  be  fully 
implemented as of 2027.  

its 

Transport  affordability  poses  challenges  for 
vulnerable  groups  while  heating  costs  are 
projected  to  rise  at  a  slower  pace  than 
across  the  EU.  In  2025,  8.3%  of  households 
reported  in  a  survey  that  they  were  not  able  to 
afford a car; this is above the EU average of 5.5%. 
This percentage has risen in recent years, to reach 
28.2%  among  households  at  risk  of  poverty 
compared with the EU average of 16.5% in 2025. 
In addition, transport fuel expenditure is projected 
to  increase  due  to  the  EU  emissions  trading 
system  for  buildings  and  road  transport  (ETS2), 
although  at  a  rate  slightly  lower  than  the  EU 
average.  According  to  the  2024  EU-SILC  ad  hoc 
module  on  access  to  services,  33%  of  the 
population  reported  using  public  transport  less 
than once a month compared with an EU average 
of  17.1%.  Public  transport  appears  to  be  less 
available  in  the  region  of  Midtjylland.  There  is 
scope  to  further  strengthen  the  affordability  and 
availability  of  public  transport  and,  in  areas  with 
limited  access,  to  support  zero-emission  vehicle 
options such as social leasing schemes. Regarding 
energy  poverty,  4.5%  of  the  population  was  not 
able  to  keep  their  homes  adequately  warm  in 
2025,  4.3 pps  below  EU  average.  Heating 
expenditure  is  projected  to  grow  much  less  than 
the EU average, consistent with very low exposure 
to ETS2 covered fuels. 

 
 
ANNEX 13: EDUCATION AND SKILLS 

in 

basic 

strong 

overall 

attaining 

challenges 

challenges 

strengthening 

Despite 
performance, 
Denmark’s  education  and  training  system 
faces 
its 
in 
inclusiveness  and  labour-market  relevance. 
Since  the  COVID-19  pandemic,  school  absences 
and  early  school  leaving  have  been  on  the  rise, 
and 
skills 
disproportionately  affect  students  with  a  migrant 
background.  Shortages  of  fully  qualified  teachers 
impact  the  system’s  capacity  to  provide  quality 
education  for  all.  At  the  same  time,  Denmark  is 
implementing  a  broad  reform  agenda  across 
education  levels,  with  the  aim  of  strengthening 
quality, 
improving 
transitions  to  employment.  Further  efforts  to 
improve  participation  in  vocational  education  and 
learning  could  help 
training  (VET)  and  adult 
address  persistent  skills  shortages  and  support 
competitiveness.  For  Denmark,  the  2025  country-
specific recommendations highlighted  the need to 
‘address  the  skills  shortages  to  meet  labour 
market  needs,  including  by  stepping  up  action  to 
tackle  attainment  inequalities  in  education  and 
training  and 
the  provision  and 
acquisition  of  the  skills  needed  for  the green  and 
digital transition’. 

inequalities  and 

to  ensure 

reducing 

Early  childhood  education  and  care  (ECEC) 
participation rates are among the  highest in 
the  EU,  but  quality  gaps  remain.  In  2025, 
participation in formal childcare for children under 
three  years  old  was  particularly  high  at  67.2%, 
compared  to  the  EU  average  of  40.5%,  despite  a 
decline  from  74.7%  in  2022.  For  children  aged 
three to the starting age of compulsory education, 
participation  is  near  universal  (96.3%  in  2024). 
However,  a  recent  national  study (400)  points  to 
significant  variation 
in  the  quality  of  ECEC 
provision,  as  only  a  small  share  of  ECEC  settings 
for  3–5-year-olds  provide  learning  environments 
assessed as high quality. The report also highlights 
that,  due  to  quality  gaps,  few  ECEC  settings  are 
expected 
for 
children from less advantaged backgrounds. At the 
same  time,  a  considerable  share  of  ECEC  leaders 
in  Denmark  report  that  staff  absences  and 
insufficient  staffing  levels  hinder  their  ability  to 
(56.6%  and  37.8%, 
provide  quality  ECEC 

to generate a positive difference 

(400) EVA & VIVE, 2025. Kvalitet i dagtilbud for 3-5-årige: National 
undersøgelse  af 
i  pædagogiske 
rammer  og  kvalitet 
læringsmiljøer  i  kommunale  daginstitutioner  for  3-5-årige 
børn. 

97 

respectively)(401).  The  2026  budget  allocates 
funding  for  hiring  additional  ECEC  staff  (ECEC-
teachers  and  ECEC-assistants),  lowering  the  costs 
for  families,  and  strengthening  quality  monitoring 
through  more  survey  exercises.  In  early  2026,  a 
preparatory  expert  group  was  appointed  to  issue 
recommendations  for  a  revision  of  the  Daycare 
Act, in view of improving quality of ECEC provision.  

inequalities 

is  declining,  and 

Despite  comparatively  good  performance  in 
basic  skills,  proficiency  in  mathematics  and 
reading 
in 
education  outcomes  persist.  According  to  PISA 
2022,  the  share  of  low-achieving  15-year-olds 
remains  below  the  EU  average  in  mathematics 
(20.4% vs 29.5%), science (19.5% vs 24.2%), and 
reading (19% vs 26.2%). However, there has been 
a notable increase in the share of underachievers 
since  2018,  particularly 
in  mathematics  (5.9 
percentage  points  (pps))  and  reading  (3  pps) (402). 
At  the  same  time,  the  proportion  of  top-
performing  students  has  declined  markedly  in 
mathematics  (-3.9  pps)  and  reading  (-2.1  pps), 
now  below  the  EU  average  in  these  domains. 
Gender  gaps  are  observed:  boys  are  over-
represented  among  low  performers  in  reading 
(22.5%  vs  15.3%  for  girls),  yet  they  are  more 
likely  to  be  top  performers  in  mathematics (9.9% 
vs  5.4%)  and  science  (8.5%  vs  5.4%).  Among 
students  with  a  migrant  background,  42.1%  are 
low achievers in mathematics, compared to 17.3% 
among non-migrants. Challenges in basic skills are 
also  visible  in  the  latest  national  ninth-grade 
exams  (2024/2025),  where  around  1 
in  10 
students  fail  to  achieve  minimum  passing  grades 
(at  least  a  2)  in  both  Danish  and  mathematics. 
There  are  particularly  large  gaps  for  children  of 
parents with low educational attainment (ISCED 2), 
with  about  a  quarter  of  them  not  reaching  the 
basic  proficiency  threshold,  while  rural-urban 
disparities are also witnessed (403). 

Denmark  is  implementing  a  broad  reform 
agenda  across  the  education  system.  Under 
the  common  framework  Forberedt  på  fremtiden 
(Prepared  for  the  Future) (404),  the  reform  brings 

(401) OECD, 2025. Results from TALIS Starting Strong 2024. 

(402) OECD, 2022 PISA. 

(403) Danish  Ministry  of  Children  and  Education,  2025.  Nye 
grundskolekarakterer  viser,  at  elever  af  ufaglærte  forældre 
klarer sig markant dårligere end andre (19 September 2025). 

(404) Uddannelses- 

og 
https://ufm.dk/aktuelt/temaer/forberedt-paa-fremtiden/. 

Forskningsministeriet 

 
 
 
 
 
green 

(v) upper 

initiatives 

transition; 

for  primary  and 

together  six  parallel  reform  tracks  covering: 
(i) universities;  (ii) primary  and  lower  secondary 
education;  (iii) vocational  programmes  in  health 
and eldercare; (iv) vocational education supporting 
the 
secondary 
education;  and  (vi) professional  and  vocational 
higher education. The reforms have been launched 
in  stages  since  2023  and  are  being  implemented 
gradually  across  sectors  until  2030.  Under  the 
lower 
quality  programme 
secondary  education  (the  second  reform  track), 
several 
launched 
to strengthen basic skills and reduce inequalities in 
education outcomes, in particular the allocation of 
DKK 500 million (approx. EUR 67 million)  annually 
to support students facing the greatest difficulties 
in  Danish  and  mathematics  at  each  school.  The 
impact of these reforms is yet to be assessed, as 
implementation  progresses.  In  addition,  the  2025 
final  report of  the Commission for the Well-Being 
of  Children  and  Young  People(405)  sets  out  35 
recommendations that aim to further improve the 
overall  well-being  of  children  and  young  people, 
including  students,  which  could  complement 
ongoing measures.  

been 

have 

Denmark  faces  growing  teacher  shortages 
and increasingly relies on non-fully qualified 
staff.  Results  from  the  2024  TALIS  survey (406) 
confirm  that  Danish  teachers  are  comparatively 
satisfied with their career, working conditions and 
professional  development  opportunities.  However, 
teacher  shortages  are  increasing  due  to  declining 
enrolment  in  teacher  education  and,  especially, 
difficulties 
the 
profession,  with  only  around  52.5%  of  qualified 
teachers  working  in  the  folkeskole  (primary  and 
lower secondary level) (407). As a result, reliance on 
non-fully  qualified  staff  has  risen  steadily  and 
exceeded 15% of teachers in 2021/2022 (408), one 
of  the  highest  shares  in  the  EU.  Early-career 
attrition is a concern, with 18% of teachers under 
30  considering  leaving  the  profession  within  five 

in  attracting  graduates 

to 

(405) Trivselskommissionen  (2025).  Et  dansk  svar  på  en  vestlig 
udfordring.  Trivselskommissionens  afrapportering  (A  Danish 
Answer 
to  a  Western  Challenge.  The  Well-being 
Commission’s  Report).  https://www.trivselskommissionen.dk/-
/media/filer/trivselskommissionen/250224-
trivselskommissionens-afrapportering.pdf. 

(406) OECD, 2025. Results from the TALIS 2024 survey. 

(407) Arbejderbevægelsens  Erhvervsråd,  2025,  Fremskrivning  af 

arbejdsmarkedet for folkeskolelærere. 

years  (EU  average:  15.2%) (409).  Looking  ahead, 
retirements are projected to outpace new entrants, 
leading to an estimated shortfall of around 8 500 
teachers  by  2035,  if  all  posts  are  to  be  occupied 
by  fully  qualified  teachers (410),  which  may  place 
additional  strain  on  schools’  capacity  to  ensure 
consistent  teaching  quality  and  adequate  support 
for pupils.  

School  absenteeism  has  been  on  the  rise  in 
recent  years,  and  early  school  leaving  is  a 
persistent  challenge.  Denmark  has  experienced 
a  sustained  increase  in  school  absenteeism  since 
the COVID-19 pandemic. In the 2024/2025 school 
year,  around  1  in  5  pupils  in  primary  and  lower 
secondary  education  recorded  absence  exceeding 
10%  of  school  days.  Absenteeism  is  particularly 
acute  among  pupils  enrolled  in  special  schools 
(specialskoler,  serving  students  with  complex 
learning,  behavioural  or  health-related  needs), 
where  the  same  rate  reached  37.5%,  and  in  the 
Zealand region (411). In response, in October 2025, 
the  Ministry  of  Children  and  Education  issued  the 
first  part  of  a  new  national  strategy  to  reduce 
long-term school absenteeism, with a second part 
to follow in 2026 (412). This has been followed by a 
political  agreement  reached  in  January  2026 
between  the  government  and  the  folkeskole 
conciliation  circle (413),  which  seeks  to  ensure 
faster  and  more  coordinated  support  for  pupils 
experiencing 
learning  difficulties  or  prolonged 
absence. This is particularly  important as rates of 
students with special educational needs have been 
increasing,  reaching  6.7%  at  primary  level  and 
9.5%  in  lower  secondary  education  (vs  5.9%  and 
8.9%  in  2019/2020,  respectively)(414).  In  parallel, 
the  rate  of  early  leavers  from  education  and 
training  stood  at  10.0%  in  2025,  slightly  lower 

(409) OECD, 2025. TALIS 2024. 

(410) Arbejderbevægelsens  Erhvervsråd,  2025,  Fremskrivning  af 
arbejdsmarkedet  for  folkeskolelærere 
(Forecast  of  the 
Labour  Market  for  Primary  and  Lower  Secondary  School 
Teachers). 

(411) Danish  Ministry  of  Children  and  Education,  2025.  Nye  tal: 
Hver  femte  elev  har  over  ti  procent  fravær  (17  December 
2025). 

(412) Danish  Ministry  of  Children  and  Education,  2025.  National 
handlingsplan  for  børn  og  unge  i  langvarig  bekymrende 
fravær er klar (6 October 2025). 

(413) Danish  Ministry  of  Children  and  Education,  2026.  Ny  aftale 
sikrer  elever  hurtigere  hjælp  ved  mistrivsel  og  fravær  (15 
January 2026). 

(414) EASNIE Cross-Country Reports, based on the 2019/2020 and 

(408) OECD, 2025. Education at a Glance 2025. 

2022/2023 school years. 

98 

 
 
 
than 10.4% in 2024, but exceeding the EU average 
of  9.3%;  it  has  been  on  the  rise  since  the 
pandemic.  Early 
leaving  from  education  and 
training  is  especially  pronounced  in  rural  areas, 
where rates exceed the EU average by more than 
7 pps  (16.7%  vs  9.6%),  while  it  is  comparatively 
less  prevalent  in  cities  (5.7%  vs  8.0%).  Regional 
differences  are  also  observed,  with  higher  rates 
reported 
(15.3%)  and 
Zealand  (13.9%)  compared  to  the  Capital  Region 
(6.9%) (see Annex 18). 

in  Southern  Denmark 

Graph A13.1: Early leavers from education and 
training (% among 18-24-year-olds), DK vs EU 
2015-2025 

Source: Eurostat, Labour Force Survey , edat_lfse_16 

to 

efforts 

increase 

Despite 
the 
attractiveness of VET, insufficient enrolment 
is  likely  to  intensify  labour  shortages  in 
sectors where VET skills are most in demand. 
A combination of low enrolment and high dropout 
rates  in  VET  programmes  contribute  to  labour 
shortages in specific sectors. Only around 20% of 
young  people  choose  to  pursue  VET  directly 
following lower secondary school, and around half 
of  those  who  begin  VET  are  not  following  the 
course after 15 months. The share of VET students 
enrolled  among  all  upper  secondary  students 
decreased from 40.2% in 2022 to 39.3% in 2024 
(EU-wide,  the  share  of  VET  pupils  in  upper 
secondary or post-secondary education was 52.9% 
in  2024).  Enrolment 
technology, 
engineering and mathematics (STEM) fields in VET 
is higher than the EU  average (45.9% in 2024 vs 
36.6%),  while  the  share  of  female  students  lags 
behind  (11.6%;  EU  average:  15.9%).  Within  the 
wider  reform  framework  of  the  education  sector 
(Prepared  for  the  Future),  a  reform  aims  to 
transform  youth  education  by  creating  campuses 
that  combine  practical  and  theoretical  learning. 
The  reform  seeks  to  tackle  future  unequal 
to  an  estimated 
institutional  coverage  due 
decrease  in  the  Danish  youth  population  by 
establishing multi-institution campuses across the 
country, thus promoting equal access to education. 

in  science, 

(ICT) 

tertiary 

Denmark’s 

increasingly 

Strengthening the supply of STEM graduates 
important  for  Denmark’s 
is 
competitiveness against the background of a 
innovation-driven 
highly  digitalised  and 
educational 
economy. 
attainment rate has continuously  increased in the 
past  decade,  reaching  52.5% 
in  2025  and 
surpassing  the  EU-level  target  of  45%  by  2030. 
STEM  enrolments  rose  from  19.6%  in  2015  to 
24.9%  in  2024,  with  most  students  choosing 
engineering  (53.7%),  followed  by  natural  sciences 
and  mathematics  (23.7%),  and  information  and 
(22.5%). 
technology 
communications 
However,  this  remains  below  the  EU  average  of 
26.6%  and  the  proposed  EU  target  for  2030  of 
32%. Gender disparities in STEM remain, as 35.4% 
of  higher  education  students  enrolled  in  STEM 
courses  were  female,  above  the  EU  average  of 
32.4%, but below the 40% proposed EU target for 
2030.  On  a  positive  note,  Denmark  produces  a 
comparatively  high  proportion  of  ICT  graduates 
(6.1% of total graduates in 2023), surpassing the 
EU  average  of  4.7%.  Moreover,  81.5%  of  the 
population  aged  16-74  was  reported  to  have  at 
least basic digital skills in 2025. Given Denmark’s 
highly 
innovation-oriented 
and 
economy, demand for STEM and ICT skills remains 
reporting  persistent 
strong,  with  employers 
shortages  in  areas  such  as  engineering,  ICT,  and 
sectors tied to the green transition (see Annex 11).  

digitalised 

reforms 

education 

labour-market 

prioritise 
Higher 
flexibility, 
relevance  and 
faster  transitions  to  employment.  Following 
the  2023  political  agreement  that  introduced 
shorter  master’s  degree  programmes  and  new 
master’s  degree  programmes 
for  working 
professionals  (part-time  students  who  combine 
their  studies  with  employment),  a  national 
committee  was established to 
implementation 
design  the  new  master’s  landscape.  The  first  18 
new programmes (3 of which are 1¼-year master 
degrees  and  14  of  which  are  master’s  degree 
programmes  for  working  professionals),  will  be 
implemented  at 
the 
2026/2027  school  year(415).  These  shorter  and 
more  flexible  programmes  are  expected  to  help 
students  transition  faster  and  more  efficiently  to 
the  labour  market.  The  reform  also  includes  an  8 

the  universities 

from 

(415) Danish  Ministry  of  Higher  Education  and  Research,  2025. 
godkender 
(19 

Uddannelses- 
universitetsreformens  første  18  nye  uddannelser 
December 2025). 

forskningsministeren 

og 

99 

7.07.58.08.59.09.510.010.511.011.520152016201720182019202020212022202320242025%DKEUEU 2030 target 
  
 
%  reduction  in  academic  university  places  (10  % 
from  2025-2029).  Another  reform  package  put 
forward in 2025 includes a strategic expansion of 
priority  fields  such  as  welfare  (incl.  teaching), 
STEM, 
vocational 
and 
pathways (416). 

qualified 

highly 

pronounced 

overqualification 
in 
is  most 
accommodation  and  food  services  (82.5%)  and 
agriculture, forestry and fishing (71.5%). However, 
there  is  also  a  mismatch  in  terms  of  both 
overqualification 
in 
and 
agriculture (45%)(418)().  

underqualification 

labour-market 

Stakeholders  broadly  recognise  the  qualities 
of  Denmark’s  higher  education  reforms  –  to 
strengthen 
improve 
flexibility  and  respond  to  demographic  change  – 
but  also  caution  that  these  reforms’  design  and 
implementation must ensure academic quality and 
sufficient time for practical experience.  

relevance, 

Graph A13.2: Labour shortages 

Labour shortages are presented as the share of employers 
that declared that labour shortages were limiting their 
production. 
Source: European Business and Consumer Surveys 

The macroeconomic skills mismatch indicator 
has decreased, and the overqualification rate 
has increased, while both were below the EU 
average  in  2024.  Skills  shortages  reflect  labour 
shortages,  which  remain  high  in  specific  sectors 
and  occupations,  especially  construction  and 
services (see Annex 11). The macroeconomic skills 
mismatch  indicator (417)  edged  down  to  13.6%  in 
2024  (from  14.3%  in  2023).  At  the  same  time, 
overqualification  rose to  15.3%  in  2024  (up  from 
13.4%  in  2023),  reversing  the  downward  trend 
in  2021.  Nevertheless,  both 
observed  since 
indicators  remain  well  below  the  EU  average  of 
19.2%  and  21.5%,  respectively.  At  sectoral  level, 

(416) Danish  Ministry  of  Higher  Education  and  Research,  2025. 
Årlig prioritering på næsten 2 mia. kr. skal gøre det attraktivt 
for  flere  at  uddanne  sig  til  f.eks.  pædagog,  socialrådgiver 
eller datamatiker (26 March 2025). 

(417) 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: Commission’s own calculations. 

The  Ministry  of  Employment,  together  with 
social  partners,  other  ministries  and 
knowledge  centres,  monitors  labour  market 
developments  and  produces  analyses  and 
forecasts on current and future skills needs. 
Denmark  makes  use  of  several  skills  intelligence 
tools.  The  Danish  Agency  for  Labour  Market  and 
Recruitment  collects  data  for  an  overview  of  job 
opportunities  (Arbejdsmarkedsbalancen)  that  is 
published  twice  a  year,  covering  around  1 000 
different  jobs.  It indicates  areas  where  employers 
face  staff  shortages  and  where  jobseekers  are 
likely 
for 
employment. In addition, the agency monitors the 
labour market on regional level, where the demand 
and  supply  of  labour  is  being  analysed  quarterly 
through 
survey. 
Furthermore,  Statistics  Denmark  and  independent 
think tanks conduct analysis on labour market and 
educational needs. 

favourable  opportunities 

Recruitment 

to  have 

Labour 

the 

its  success 

Denmark  has  a  well-established  adult 
learning  system.  The  system  is  built  on  strong 
cooperation  between  the  government  and  social 
partners  and  offers  upskilling  and  reskilling 
opportunities  to  both  employed  and  unemployed 
people.  In  2024,  the  ‘Right  to  Educational  Boost 
with  110  pct.  unemployment  benefits’  (Ret  til 
uddannelsesløft  med  110  pct.  dagpenge)  was 
made  permanent 
in 
following 
activating adults aged 30 or above with a limited 
educational  background  to  reskill  in  VET  sectors 
facing  skills  shortages.  By  providing  a  financial 
incentive  to  pursue  training,  the  measure  fosters 
adult  learning  while  helping  ease  shortages  in 
sectors such as long-term care. At 47.1% in 2022 
the 
based  on 
participation  of  adults  in  learning  is  higher  than 
the  EU  average  (39.5%),  although  it  is  still  below 
the  2030  national  target  of  60%.  Participation 
varies by location, with higher engagement among 
people  living  in  cities  (56.3%)  and  urban  areas 
(44.2%)  than  in  rural  areas  (38.8%).  More  recent 
data,  from  the  labour  force  survey,  suggest  a 
possible  increase  in  participation  between  2022 

the  adult  education  survey, 

(418) OECD (2022), Skills for Jobs database. 

100 

01020304050602019-Q42020-Q12020-Q22020-Q32020-Q42021-Q12021-Q22021-Q32021-Q42022-Q12022-Q22022-Q32022-Q42023-Q12023-Q22023-Q32023-Q42024-Q12024-Q22024-Q32024-Q42025-Q12025-Q22025-Q32025-Q4IndustryConstructionServices 
   
 
 
and  2024.  23.8%  of  workers  in  energy  intensive 
industries  participated  in  learning  in  2024,  well 
above the EU average of 9.4%.  

101 

 
ANNEX 14: SOCIAL SCOREBOARD 

Table A14.1:Social Scoreboard for Denmark 

Update of 4 May 2026. 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 2026 for details on the methodology 
(https://employment-social-affairs.ec.europa.eu/joint-employment-report-2026_en). 
Source: Eurostat 

102 

47.110.081.58.96.24.1279.86.40.9125.017.914.851.823.523.467.22.9Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2025)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2025)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2025)Self-reported unmet need for medical care (% of the population aged 16+, 2025)Disability employment gap (percentage points, population aged 20-64, 2025)Housing cost overburden (% of the total population, 2025)Adult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2025)Young people not in employment, education or training(% of the population aged 15-29, 2025)Gender employment gap(percentage points, population aged 20-64, 2025)Income quintile ratio (S80/S20, 2025)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2025)Employment rate(% of the population aged 20-64, 2025)Unemployment rate(% of the active population aged 15-74, 2025)Long term unemployment(% of the active population aged 15-74, 2025)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2025) 
 
 
 
  
 
 
ANNEX 15: HEALTH AND HEALTH SYSTEMS 

health 

system 

However, 

Denmark’s 
performs 
comparatively well, with high life expectancy 
at birth linked to low levels of treatable and 
preventable  mortality. 
cancer 
mortality  remains  high.  Although  behavioural  and 
environmental  risk  factors  are  strongly  linked  to 
deaths in the country, the share of health spending 
on prevention is slightly below the EU average. At 
the  same  time,  the  Danish  health  system  is 
increasingly  emphasising  community  based-  and 
outpatient  care,  with  a  major  healthcare  reform 
also  seeking  to  address  workforce  shortages  in 
primary  care.  Nevertheless,  some  challenges  in 
access 
reflecting 
geographical  and 
income-related  disparities, 
particularly  in  relation  to  unmet  needs  for  dental 
care.  Addressing  these  issues  is  essential  to 
further 
improve  health,  social  fairness  and 
productivity. 

healthcare 

persist, 

to 

Graph A15.1: Life expectancy at birth, in years 

Source: Eurostat (indicator: demo_mlexpec) 

Life  expectancy  at  birth  in  Denmark  is 
slightly above the EU average. Compared with 
other  EU  countries,  Denmark  had  lower  rates  of 
mortality from preventable and treatable diseases 
in 2023. It performed especially well on treatable 
causes  of  mortality,  showing  strong  effectiveness 
in  managing  acute  conditions.  However,  mortality 
due  to  cancer  is  high,  in  particular  lung  cancer, 
followed by colorectal cancer. In 2023, the leading 
causes  of  death,  morbidity  and  disability 
in 
Denmark  were  cancer  and  diseases  of  the 
circulatory  system 
(cardiovascular  diseases  – 
CVDs).  Rising  life  expectancy  has  led  to  an 
increase in chronic conditions. More than one third 
(35%)  of  people  aged  65 years  and  over  have 
multiple  chronic  conditions,  with  women  more 
likely  than  men  to  report  limitations  in  daily 
activities  (26%  vs  20%),  mirroring  patterns  seen 

across  other  EU  countries  (419).  Since  2000, 
Denmark’s  National  Cancer  Plan  has  progressed 
through  four  phases,  guiding  national  efforts  to 
improve  cancer  care,  prevention,  access  and 
quality.  A  fifth  phase  was  initiated  in  2025,  with 
an  annual  budget  of  DKK 600 million  (approx. 
EUR 80.4 million). Featuring 36 initiatives, it covers 
early  detection,  treatment  and  life  after  cancer, 
with  a  strong  focus  on  the  quality  of  life  of 
patients  and  survivors.  This  includes  addressing 
side 
of 
treatment,  rehabilitation  and  palliative  care  (420). 
Denmark  participates  in  EU4Health-funded  joint 
actions 
other 
non-communicable  diseases,  such  as  eCan  Plus, 
EUnetCCC and JANE-2 (421). 

consequences 

long-term 

effects, 

cancer 

aimed 

and 

at 

Graph A15.2: Treatable mortality 

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

lung  cancer 

(primarily  due 

Preventable mortality was just below the EU 
average  in  2023.  The  share  of  total  health 
expenditure  allocated  to  prevention  decreased  in 
2023  and  was  below  the  EU  average  (2.5%  vs 
3.7%).  The  main  causes  of  preventable  mortality 
are 
tobacco 
smoking),  chronic  obstructive  pulmonary  disease 
and  alcohol-related  diseases.  To  address  this,  the 
2024 health reform announced  plans for a public 
law  to  strengthen  prevention  efforts. 
health 
Screening  rates  for  cancer  are  relatively  high  in 
Denmark.  The  country  offers 
free-of-charge 
national  screening 
for  breast,  cervical  and 
colorectal cancers.  

to 

(419) OECD/European Observatory on Health Systems and Policies 
(2025), Country Health Profile 2025: Denmark. State of 
Health in the EU. 

(420) Danish Health Authority (2025), Cancer Plan V. 

(421) eCAN – Joint Action; EUnetCCC; Home - Jane 2;  

103 

81.681.581.381.882.0808080.681.481.520202021202220232024DenmarkEU78.066.263.564.364.066.194.889.291.793.389.786.8201420192020202120222023per 100 000 populationDenmarkEU 
 
        
       
 
 
 
Table A15.1: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 2023 data (or latest available). 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 
Portugal (licensed to practice) and Slovakia (professionally active). Latest data update on nurses for Belgium and Sweden: 2022; for France: 2021; 
for Luxembourg: 2017. 
** latest available 10-year trend: ratio 2023/2014 or 2024/2013; a factor of 2.00 means that it has doubled in 10 years. 
***‘Available hospital beds’ covers somatic care, not psychiatric care. 
Source: Eurostat 

(tobacco  smoking,  dietary 

Preventable  mortality  is  largely  driven  by 
lifestyle  behavioural  risk  factors,  with  a 
pronounced  gap  between  socio-economic 
groups. According to estimates from Institute for 
Health  metrics  and  evaluation,  taken  together, 
behavioural 
risks, 
alcohol consumption and low physical activity) and 
environmental  risk  factors 
(attributed  to  air 
pollution  –  see  Annex 8)  accounted  for  about  one 
third of all deaths in Denmark in 2021, which was 
slightly  higher  than  the  EU  average  rate  of  30% 
(422).  The  proportion  of  Danish  adults  who  smoke 
tobacco on a daily basis has declined sharply over 
the past two decades and was one of the lowest in 
the  EU  in  2022.  This  reduction  could  in  part  be 
linked  to  increases  in  tobacco  prices  and  the 
introduction of a smoking ban in public spaces as 
part  of  tobacco  control  policies.  Smoking  rates 
among adolescents are also now lower in Denmark 
than  in  most  other  EU  countries.  However,  vaping 
has  risen  and  is  almost  as  high  as  the  use  of 
regular cigarettes. In November 2023, the Ministry 
of the Interior and Health unveiled a new political 
agreement on a prevention plan. The 30 initiatives 
outlined  aim  to  reduce  alcohol,  nicotine  and 
tobacco  use  among  children  and  young  people. 
Several  of  these  initiatives  required  legislative 
changes, with some passed by Parliament between 
2024  and  2025,  while  others  are  still  under 
discussion.  Furthermore,  19%  of  people  were 
obese  in  2022,  higher  than  the  EU  average  of 

(422) Country Health Profile 2025: Denmark 2025 – see earlier 

footnote. 

15%. Unhealthy nutrition is the primary reason for 
overweight and obesity. In Denmark a higher share 
than the EU average reported not consuming fruit 
and  vegetables  on  a  daily  basis.  On  the  other 
hand, in 2022, 60% of Danes over 15 years of age 
engaged  in  physical  activity  at  least  three  times 
per  week,  which  is  twice  the  EU  average  of  34%. 
As  in  other  EU  countries,  many  behavioural  risk 
factors  are  more  common  among  people  with 
lower  education  levels.  Smoking,  obesity  and 
insufficient physical activity are all more prevalent 
in  this  group,  with  disparities  that  are  wider  than 
the  EU  average.  Finally,  alcohol  consumption  is 
below the EU average. However, in 2022 Denmark 
had one of the highest proportions of 15-year-olds 
reporting  that  they  had  been  drunk  more  than 
once  in  their  life.  No  recent  progress  has  been 
achieved in tackling excessive alcohol consumption 
among adolescents.   

is  placing 
The  Danish  health  system 
increased emphasis on community-based and 
outpatient  care.  In  2023,  health  spending  per 
inhabitant  was  higher  than  the  EU  average.  The 
largest  share  of  health  expenditure  was  on 
outpatient  care  (almost  40%),  higher  than  the  EU 
average. Spending on inpatient care was below the 
EU average. The number of hospital beds was also 
below the EU average and fell further following a 
major  hospital  reform  launched  in  2007.  A  major 
long-term  investment  programme  to  build  new 
hospitals and renovate existing ones is expected to 

104 

2020202120222023202410-year change**EU average* (latest year) Cancer mortality per 100 000 population271.0270.6259.6262.7n.a.0.87233.1 (2023)Mortality due to circulatory diseases per 100 000 population 207.4 211.8 210.8 208.2n.a.0.81313.0 (2023)Current expenditure on health, purchasing power standards, per capita3 9984 4354 1814 1734 3671.263834.9 (2023)Public share of health expenditure, % of current health expenditure 84.3 84.5 84.4 83.3 83.40.9980.6 (2023)Spending on prevention, % of current health expenditure 3.28.85.02.52.41.093.7 (2023)Available hospital beds per 100 000 population*** 196 189 185 180 171n.a.440 (2023)Doctors per 1 000 population*4.44.54.54.5n.a.1.204.3 (2023)*Nurses per 1 000 population* 10.2 10.3 10.4 10.5n.a.1.097.6 (2023)*Mortality at working age (20-64 years), % of total mortality13.512.912.312.311.80.7514.3 (2023)Consumption of antibiotics in the community and hospital sectors,      defined daily doses per 1 000 inhabitants 14.3 14.4 15.2 16.2 16.10.9220.3 (2024) 
 
 
        
 
two 

rise,  with 

funds  will 

be  completed  in  2026  (423).  Denmark’s  health 
regional  and 
system  operates  across  state, 
municipal  levels,  working  collaboratively  rather 
than hierarchically. A major reform adopted in late 
2024  will  reshape  governance  to  strengthen 
community  and  primary  care  nationwide,  with 
implementation  expected  by  2027.  By  2030, 
operating 
thirds 
earmarked  for  local  services.  The  reform  will 
merge  the  five  regions  into  four  and  create 
17 local  health  councils  to  support  joint  planning 
and  budgeting  with  municipalities.  Denmark  has 
relatively  low  rates  of  antibiotic  consumption 
compared  with  most  other  EU  countries.  Yet 
antibiotic  use  in  Denmark  has  rebounded  and  is 
higher 
the  pandemic,  posing 
challenges  for  meeting  its  2030  reduction  target 
(424). Denmark also participates in the Joint Action 
on 
and 
Antimicrobial 
Healthcare-Associated 
Infections  EU-JAMRAI2, 
funded by the EU4Health Programme (425). 

than  before 

Resistance 

and 

geographical 

Challenges  in  accessing  healthcare  persist, 
with 
income-related 
disparities,  in  particular  higher  unmet  needs 
for  dental  care.  Unmet  medical  needs  due  to 
distance  are  higher  in  Denmark  than  the  EU 
average.  Some  areas  are  less  well  served  than 
others  in  the  country,  in  particular  due  to  staff 
shortages.  In  2024,  the  Zealand  region  took 
positive  steps  to  improve  access  to  care  by 
merging  two  hospitals  and  introducing  a  system 
under  which  around  100 doctors  are  required  to 
rotate through one hospital  for several  days each 
month,  helping  to  address  service  gaps.  Public 
financing  of  health  spending  is  above  the  EU 
average,  but  coverage  for  pharmaceuticals  is 
lower  than  average.  Patients  spend  the  largest 
share 
on 
pharmaceuticals and dental care. Similarly, unmet 
needs  are  higher  for  services  that  are  less 
comprehensively  covered,  such  as  dental  care, 
hearing  aids  and  vision  aids.  Over  9%  of  Danes 
reported  unmet  needs  for  dental  care  in  2025, 
rising to 21% among those at risk of poverty, with 
costs cited as the main reason. In 2025, Denmark 
adopted  an  agreement  on  adult  dental  care  with 

out-of-pocket 

payments 

of 

(423) Ministry  of  the  Interior  and  Health  (2024),  Agreement  on  a 

health reform 2024. Copenhagen. 

(424) National target set by the Council Recommendation on 

stepping up EU actions to combat antimicrobial resistance in 
a One Health approach, 2023/C 220/01. 

an annual  allowance for  all people  aged 21+ and 
free dental care for selected groups, including cash 
benefit recipients. 

of 

Shortages 
professionals 
healthcare 
persist  in  some  regions,  in  particular  in 
hospital  settings,  while  healthcare  reforms 
aim  to  increase  access  to  primary  care.  The 
number  of  practising  doctors  per  head  of 
population  is  slightly  higher  in  Denmark  than  the 
EU average but varies between and within regions 
(see Annex 18). The 2024 healthcare reform aims 
to  increase  the  number  of  general  practitioners 
(GPs)  from  3 500  in  2024  to  at  least  5 000  by 
2035 and improve their geographic distribution to 
reduce  inequalities  in  access  to  primary  care.  An 
increasing  number  of  nurses  have  left  hospitals 
and  moved  to  community  care,  contributing  to 
persistent 
settings. 
Furthermore,  in  Denmark,  task  sharing  between 
doctors  and  other  health  professionals  has 
expanded in recent decades, particularly in primary 
care.  It  is  common  for  GP  practices  to  employ 
nurses  or  midwives,  who  may  carry  out  various 
tasks,  such  as  gynaecological  and 
clinical 
paediatric  care, 
including  vaccinations,  when 
authorised  by  doctors.  By  2021,  around  8%  of 
midwives  were  employed  in  GP  practices  (426). 
Denmark has also formalised the role of advanced 
practice  nurses  (APNs),  creating  a  competency 
framework  across  seven  specialisations,  including 
community care.   

shortages 

hospital 

in 

Denmark  has  advanced  significantly  in  the 
digitalisation  of  its  healthcare  system.  The 
proportions  of  Danes  accessing  their  personal 
health  records  online  or  using  online  health 
services  (excluding  phone)  instead  of  in-person 
consultations 
increased  significantly  between 
2020 and 2024 and are among the highest in the 
EU.  However,  as  in  other  countries,  Danes  with 
lower levels of education are less likely to use the 
internet  for  these  health  purposes.  The  shared 
medication  record  ensures  real-time  access  to 
prescriptions  for  both  the  general  public  and 
professionals  and  supports  secure  communication 
across all healthcare providers. A nearly complete 
improving 
national  appointment 
coordination  and  patient  access.  Denmark’s 
progress  builds  on  a  long  tradition  of  eHealth 
strategies,  with  the  most  recent  (2018-2024) 

system 

is 

(425) EU-JAMRAI. 

(426) Country Health Profile 2025: Denmark – see earlier footnote. 

105 

 
 
 
collaboration;  enhancing  clinical  research,  AI  and 
data  use;  scaling  innovations  via  faster  access  to 
advanced  therapies  and  a  national  innovation 
centre; improving investment conditions and talent 
access; 
international 
cooperation,  EU  engagement  and  exports  through 
Healthcare Denmark (432). 

strengthening 

and 

regional 

being  the  fifth  iteration  (427).  Denmark  is  also 
advancing  the  safe  and  effective  integration  of 
artificial  intelligence  (AI)  in  healthcare.  Its  2019 
national  AI  strategy  prioritised  applications  like 
cancer  detection,  quality  management  and 
diagnostics, with projects focusing on early cancer 
detection,  patient  record  prediction  models,  acute 
care  diagnosis  and  rare  disease  decision  support. 
Implementation  occurs  through  research  projects 
initiatives. 
In  2025,  Denmark 
and 
allocated 
(approx. 
DKK 40.6 million 
EUR 5.4 million)  to  three  AI  healthcare  projects 
related  to  fracture  analysis,  home  visit  logistics 
and  speech-to-text  for  municipal  healthcare. 
Denmark  also  participates  in  joint  actions  funded 
by  the  EU4Health  programme  supporting  the 
implementation  of  the  European  Health  Data 
Space Regulation (TEHDAS 2 (428) and EHDS2 Pilot 
–  Pilot  for  a  European  Health  Data  Space  on 
secondary use of health data). 

significance. 

Employment 
is  among 

Denmark’s  pharmaceutical  sector  is  of  high 
in 
economic 
pharmaceutical  manufacturing 
the 
highest  in  the  EU.  The  country  stands  out  as  a 
leading hub for clinical research and innovation. In 
2024,  Denmark  reported  one  of  the  highest 
numbers of clinical  trials per million population in 
the  EU  (78)  (429),  more  than  four  times  the  EU 
average  of  18.3.  Research  and  development  in 
Denmark’s  pharmaceutical 
industry  has  been 
consistently  among  the  most  intensive  in  the  EU 
over  the  years;  the  annual  amount  spent  per 
capita  has  been  well  above  the  EU  average  (430). 
Furthermore,  the  number  of  patents  granted  for 
pharmaceuticals per million population (8.9) (431) in 
2024  was  five  times  the  EU  average  (1.8). 
Regarding trade and commercialisation, Denmark’s 
pharmaceutical industry maintains a high share of 
extra-EU exports (27.4% in 2025 vs an EU average 
of  13.8%).  Moreover,  in  2024,  Denmark  launched 
a  new  strategy  to  become  Europe’s  leading  life 
science nation by 2030 and to double exports. The 
strategy  focuses  on  boosting  research-industry 

(427) Danish Health Data Authority (2024), Final status of the 

Digital Health Strategy 2018-2024. 

(428) Second Joint Action Towards the European Health Data 

Space – TEHDAS2 - Tehdas. 

(429) US National Library of Medicine, https://clinicaltrials.gov. 

(430) The Pharmaceutical Industry in Figures, EFPIA (European 

Federation of Pharmaceutical Industries and Associations). 

(432) Danish Government (2024), Strategy for life science towards 

(431) European Patent Office: Statistics & Trends Centre | epo.org. 

2030. 

106 

 
 
 
 
 
 
 
 
 
ANNEX 16: HOUSING 

faces 

challenges 

Denmark 
in  housing 
affordability,  particularly  in  its  major  cities, 
Copenhagen  and,  to  a  lesser  extent,  Aarhus. 
The  growing  demand  for  housing  in  these  areas 
has  driven  prices  upwards,  making  affordability 
issues  worse,  which  was  highlighted  in  the  2025 
country-specific  recommendations  for  Denmark. 
Contributing  factors 
include  high  construction 
costs  and  labour  shortages  in  the  construction 
sector. 

In 

A  number  of  recent  policy  initiatives  have 
been  targeted  at  housing  and  improving 
affordability. 
the  2025  country-specific 
recommendations, Denmark was encouraged to do 
more  for  housing  affordability,  with  raising  the 
ceiling  for  the  construction  costs  of  non-profit 
cost-based  housing  being  specifically  suggested 
as  a  measure.  Since 
then,  Denmark  has 
temporarily  raised  this  ceiling  alongside  several 
other  housing-related  initiatives  such  as  easing 
access to mortgages for young first-time buyers. 

The  housing  market  in  Denmark  has  a  big 
share of affordable rentals, but access often 
relies  on  waiting  lists.  About  a  fifth  of  the 
overall housing stock is cost-based non-profit (433), 
also  referred  to  as  social  housing.  At  the  same 
time,  private  rentals  built  before  1992,  which 
account for three out of four of private rentals, are 
subject to strict rules on how the rental prices can 
be set and must be based on cost or value. 

Housing market developments 

House  prices  have  increased  broadly  in  line 
with  income  growth,  leaving  the  price-to-
income  ratio  relatively  stable  over  the  past 
two  decades.  Since  the  mid-2000s,  nominal 
house  prices  have  increased  by  close  to  50%, 
which is very similar to developments in the EU-27 
(Graph  A16.1). Following a sharp correction in the 
years  after  the  financial  crisis,  house  prices  have 
grown 
from  2013  onwards,  supported  by 
improving  labour  market  conditions  and  falling 
interest  rates,  with  a  further  acceleration  during 
the  pandemic  fuelled  by  low  borrowing  costs  and 
high  demand.  In  2022–23,  higher  interest  rates 
temporarily  moderated  price  growth,  but  as 

(433) 

Statistics Denmark: BOL101. 

Aarhus) 

interest  rates  eased  again  with  falling  inflation, 
nominal  house prices resumed growth from 2024 
onwards  (growing  7.5%  year-on-year  in  2025), 
with  particularly  strong  increases  in  Copenhagen. 
Indeed,  the  national  average  figures  mask  a  dual 
market with strong price increases in Copenhagen 
and  much  more  modest 
(and 
developments  elsewhere.  By  contrast, 
rents 
(including  existing  and  new  rental  contracts)  have 
increased  at  a  slower  and  steadier  pace  than 
house  prices,  resulting  in  a  rising  price-to-rent 
ratio.  In  real  terms,  house  price  growth  has  been 
more muted, with a cumulative increase of around 
20% since 2015. 

Graph A16.1: House prices, rents and price-to-
income evolution in DK and EU27 since 2005 

Source: Eurostat 

Housing  supply  has  lagged  behind  demand, 
leading to persistent shortages, in particular 
in  the  Copenhagen  area.  Demand  has  been 
supported  by  sustained  population  growth,  with 
Denmark’s  population  having 
increased  from 
5.5 million  in  2010  to  6 million  in  2025,  and  an 
increase  in  the  number  of  households  from 
2.6 million to 2.9 million over the same period. On 
the supply side, construction activity has adjusted 
only  gradually to  increased  demand  following  the 
sharp  contraction  after  the  financial  crisis.  In 
addition,  despite  higher  residential  investment 
during  the  prolonged  low-interest-rate  period  of 
the late 2010s, construction activity has remained 
insufficient to offset the demand pressures around 
the  largest  cities  (Graph  A16.2).  This  is  also  the 
rentals.  Looking  ahead,  housing 
case 
investment  needs  are  expected 
remain 
substantial,  with  the  Commission  estimating  a 
cumulative  housing  construction  gap  of  around 
57 000  dwellings  over  2025-2035,  reflecting 
accumulated demographic-driven shortfalls net of 

for 

to 

107 

751001251501752000507091113151719212325Index (2005 = 100)Nominal prices DKNominal prices EU27Rental prices DKRental prices EU27Price-to-income ratio DKPrice-to-income ratio EU27 
 
 
 
      
 
 
projected  construction,  and  largely  concentrated 
(434).  Together  with  rising  household  purchasing 
power,  this  is  expected  to  further  underpin  house 
price increases in the coming years. 

Graph A16.2: House supply indicators in DK since 
2005 

Source: Eurostat 

Transaction 

conditions. 

remained 
Housing  market  activity  has 
volatile  and  sensitive  to  changes  in  macro-
financial 
volumes 
increased  strongly  during  the  pandemic  but 
declined in 2022–23 in response to rising inflation, 
higher interest rates and rising construction costs. 
Although  activity  has  partially  recovered  since 
then,  turnover  remains  short  of  previous  peak 
levels. 

The  construction  sector  continues  to  face 
that 
structural  and  cyclical  challenges 
constrain housing supply. Rising material prices, 
shortages  of  skilled  labour  and  higher  interest 
rates  have  weighed  on  profitability  and  reduced 
is 
residential 
compounded  by  a  negative  trend  in  real  labour 
productivity in the construction sector since 2018. 
Construction 
investment  prices  for  residential 
buildings  remain  among  the  highest  in  the  EU,  at 
128% of the EU average in 2024 (435). 

construction 

activity. 

This 

Structural policies 

Housing  policy 
is  shaped  by  national 
implementation  and  a 
regulation,  with 
degree  of  autonomy  at  municipal  level. 
Municipalities  are  responsible  for  local  housing 
planning. This includes assigning to those residents 
with  the  most  urgent  needs  a  share  of  allocated 
dwellings. 
housing 
associations  own  and  manage  these  dwellings 
under  cost-rent  principles,  with  oversight  from 
local and national authorities. 

cost-based 

Non-profit 

In  recent  years,  a  number  of  new  political 
agreements  have  been  concluded  to  support 
more  affordable  and  sustainable  housing.  In 
2021, the ‘fund for mixed cities’ was set up to help 
create  mixed  cities  through  the  promotion  of 
affordable  social  housing  by  funding  a  range  of 
new  housing 
initiatives.  A  2023  political 
agreement  on  housing  policy,  aiming  to  ensure 
more  affordable  housing,  includes  tools  for  land-
use  planning  and  a  requirement  for  affordable 
housing  in  larger  developments.  In  2025  it  was 
politically  agreed  to  temporarily  increase  the 
ceiling  for  construction  of  non-profit  cost-based 
housing  to  stimulate  demand  and  to  adjust  the 
Fund  for  Mixed  Cities.  In  early  2026,  it  was 
politically  agreed  to  change  the  Planning  Act  to 
allow local authorities to require that up to 25% of 
new  developments  be  owner-occupied  housing.  A 
new national architectural policy became a reality, 
giving  municipalities  new  guidelines  for  circular 
and sustainable construction and ensuring support 
affordable 
The 
government  has  also  proposed  measures  to  help 
first-time  buyers:  extending  the  maturity  of 
mortgages  to  up  to  40  years,  giving  a  longer 
repayment  period  for  student  loans,  and  letting 
banks  be  more  flexible  when  considering  the 
borrowers’  economy  by  assuming  higher  future 
earnings.  Further  to  this,  the  formation  of  a 
working group is proposed to look into if and how 
the mortgage system can be simplified and made 
easier to navigate. 

sustainable 

housing. 

and 

(434) Balouktsi et al. (2026), Housing investment needs in the EU, 

JRC Technical Report 144419.  

(435) See Eurostat [prc_ppp_ind_1] dataset. 

A fund set up to help housing affordability is 
being  adjusted  after  a  lower  uptake  than 
expected. The fund for mixed cities has not seen 
the uptake that was expected, with 15% allocated 
by  April  2026.  New  rules  will  make  it  possible  to 
obtain up larger share of land acquisition costs in 
high-cost areas, and the grants for construction of 

108 

012345678204060801001201401601800507091113151719212325% of GDPIndex (2005 = 100)Residential building permits in m2, indexResidential buildings producer prices, indexInvestment in dwellings (right-hand side axis) 
      
 
very affordable housing have been increased. The 
fund  also  provides  for  grants  to  lower  rents  for 
vulnerable  persons,  but  this  is  only  used  to  a 
limited extent. 

Obtaining  a  permit  for  new  residential 
construction  is  relatively  fast  and  regulated 
nationally,  but  differences  in  local  rules  can 
It  takes  on 
complicate  fast  construction. 
average  around  60  days  to  obtain  a  building 
permit  for  residential  construction  projects,  with 
big  differences  across  the  country.  This  is  partly 
local 
to  municipal  autonomy,  where 
due 
circumstances  and  local  planning  differ  across 
municipalities. Some permit procedures average as 
little  as  8  days,  while  others  take more  than  200 
days. This is partly explained by the reality of each 
municipality  being  vastly  different.  In  already 
densely  populated  areas,  such  as  the  capital 
region,  obtaining  a  building  permit  is  a  more 
complex  process  than  in  areas  with  undeveloped 
land  that  is  allocated  to  residential  buildings 
before  the  permit  is  given.  The  difference  in  the 
reality  between  municipalities  can  complicate  the 
such  as  modular  or 
use  of 
prefabricated 
the 
potential  to  lower  housing  costs  and  shorten 
construction periods. 

construction,  which  have 

innovations 

Obtaining  a  mortgage  for  a  home  in  rural 
areas  has  been  challenging  since  the 
financial  crisis  of  2008.  With  stricter  macro-
prudential  rules  in  the  mortgage  sector,  people 
wishing to  buy  homes  in  rural  areas  have,  on  the 
whole,  not  found  it  as  easy  to  access  loans  as 
people in more urban areas with similar incomes.  

Until  recently,  homeowners  in  the  biggest 
cities  have  had  a  significant  tax  advantage, 
while also being able to sell their properties 
with  no  tax  on  the  gains.  Capital  gains  on 
residential property are not taxed if the seller has 
used  the  property  for  their  own  residential 
purposes. Combined with a property value tax base 
that was frozen from 2002 until 2024, this means 
that  homeowners,  especially  in  Copenhagen  and 
other  bigger  cities,  enjoyed  relatively  low  ongoing 
tax rates while being able to benefit untaxed from 
rising  property  prices.  The  relatively  new  property 
tax 
force  on 
1 January 2024  aims to  be  revenue  neutral  while 
ensuring that the property tax reflects the current 
prices of a property. It is not yet clear whether the 
new tax system will have an effect on the housing 
market and, if so, what kind of impact. Across the 

that  entered 

system 

into 

housing  market,  owners  can  also  benefit  from 
mortgage interest  tax  relief,  as  explored  in  Annex 
3. 

significant 

Denmark’s  private  rental  market  is  highly 
regulated.  Tenants  can  only  be  evicted  in  very 
specific  circumstances,  e.g.  if  the  owner  plans  to 
occupy the dwelling themselves, if the building has 
renovations  or  be 
to  undergo 
demolished,  or  if  the  tenant  is  not  fulfilling  their 
obligations  –  this  includes  not  paying  the  rent  on 
time,  mistreatment  of  the  building  and  causing  a 
nuisance  to  the  neighbours.  Rents  must  be  based 
on the value of the unit or cost of running it on for 
buildings  built  up  until  and  including  1991,  which 
make  up  around  three  quarters  of  private  rental 
housing. This has created a dual market with rent-
controlled  apartments  at  lower  prices,  and  new, 
market-priced  apartments  with  higher  prices.  This 
is especially the case in Copenhagen, leading to a 
risk of ‘lock-in’ effects and low mobility. 

in 

the 

the  2025 

is  owner-occupied,  while 

The  housing  market  is  vastly  different  in 
Copenhagen  compared  with  the  rest  of 
Denmark,  and  faces  affordability  issues,  as 
outlined 
country-specific 
recommendations.  On  average  48%  of  housing 
in 
in  Denmark 
Copenhagen  and 
enclave  municipality 
Frederiksberg  that  number  is  19%  and  23% 
respectively. Cooperative housing makes up 7% of 
the  Danish  housing  stock,  but  in  Copenhagen  and 
reaches  29%  and  26% 
Frederiksberg 
it 
is  generally 
respectively.  Cooperative  housing 
cheaper 
owner-occupied 
comparable 
dwellings  and  is  therefore  highly  sought  after. 
Since  the  financial  crisis  of  2008,  however,  the 
number  of  new  cooperative  housing  units  has 
stagnated,  meaning  that  supply  does  not  follow 
demand. The previous government’s intention was 
to  ease  the  creation  of  cooperative  housing  in 
existing and new buildings. 

than 

The  construction  of  non-profit  cost-based 
housing has been slow in the biggest cities in 
recent  years  due  to  high  construction  costs. 
Cost-based  non-profit  housing  is  supported  by  a 
revolving  fund  to  ensure  that  buildings  can  be 
renovated  and  modernised  without  sudden  price 
surges or sub-standard living conditions. This stock 
is  mostly  distributed  through  waiting  lists  with 
universal  access.  While  never  coming 
to  a 
complete  stop,  low  activity  in  the  construction  of 
new non-profit housing has been attributed to the 
fact that, the ceiling for construction costs made it 

109 

 
homes  warm.  15%  of  the  population  in  2023 
lived  in  dwellings  with  issues  such  as  leaking 
roofs,  dampness  or  window  and  floor  rot,  closely 
aligning with the EU average of 15.6%. There has 
been  a  notable  drop  in  the  number  of  people 
unable  to  keep  their  homes  adequately  warm, 
from  6.9%  in  2023  (EU:  10.6%)  to  4.4%  in  2024 
(EU:  9.2%).  The  situation  improved  particularly  in 
the  capital  region,  from  7.9%  in  2023  to  4.8%  in 
2024. Similarly, in Central Jutland, the difficulty in 
maintaining  warmth  in  homes  fell  from  6.2%  in 
2023 to 4.1% in 2024. 

Despite  Denmark  having  a  relatively  low 
number of homeless people, there has been a 
recent  increase.  There  were  around  6 000 
individuals  who  were  homeless  in  2024,  which  is 
200 persons more than the 2022 levels. The figure 
covers people who stay overnight on the street, in 
night-heating  rooms,  in  shelters  and  care  homes, 
people  who  stay  overnight  with  family,  friends  or 
acquaintances  due  to  homelessness,  as  well  as 
various  other  homelessness  situations  (437).  The 
national  mapping  of  homelessness  takes  place 
every  second  year,  with  latest  available  report 
being  from  2024  strategy(438),  also  underlined  in 
the 
In 
Copenhagen and Aarhus, however, it is a challenge 
to  find  housing  due  to  the  limited  supply  of 
affordable housing.  

homelessness 

strategy(439). 

2023 

difficult  to  build  units  of  this  type,  especially  in 
Copenhagen  and  Aarhus.  The  government  has 
temporarily raised the construction cost ceiling for 
this sector to stimulate more construction, which is 
in 
country-specific 
recommendations. The raised ceiling will apply for 
10 years and is expected to help construct around 
10 000-15 000 units.  

line  with 

2025 

the 

Vulnerable groups 

Despite  existing  housing  benefits, 
the 
overburden  rate remains  high. Denmark  has a 
high rate of housing cost overburden at 14.6% in 
2024, significantly higher than the EU  average of 
8.2% (436). It is more prominent in cities (22.7% vs 
9.8% in the EU) than in rural areas (8.6% vs 6.3% 
in the EU). In the capital region, 18% of individuals 
were  overburdened  and  14.9%  in  the  second 
largest  region.  38%  of  single-person  households 
are overburdened by housing costs, compared with 
the  EU  average  of  21.1%,  while  only  4.7%  of 
households  with  two  adults  and  two  dependent 
children  are  overburdened,  under  the  EU  average 
of  5%  in  2024.  Denmark  provides  a  broad  range 
including  housing 
of  support  to  households, 
benefits  for  renters.  In  2024,  the  share  of  rent-
related  expenses  in  disposable  household  income 
was 28.2%, exceeding the EU average of 22.3%. 

The 

the  EU  average  of  5.8%. 

People  looking  for  housing  in  Denmark  face 
low  levels  of  discrimination  and  financial 
support  is  available  for  those  in  need.  The 
percentage of people feeling discriminated against 
when looking for housing is relatively low at 4.2%, 
below 
(Eurostat: 
ilc_atsd01). 
rate  of  persons  having 
experienced  renting  difficulties  in  the  last  12 
months was 7.7% compared with the EU  average 
of  13%.  Social  transfers  like  Boligstøtte  (housing 
benefit)  can  help  renters  pay  their  rent  monthly. 
While  this  is  true,  many  of  the  most  affordable 
housing  units  require  a  waiting  list  or  are  private 
units  from  before  1992,  which  people  generally 
tend to stay in for longer. 

Housing  quality 
is  decent  overall,  with 
relatively few people struggling to keep their 

(436)The overburden rate should be read together with the tenure 
structure  (homeowner,  tenants),  that  may  differ  across 
country and regions.   

(438)  5.989 people homeless in week 6 - vive.dk. 

(439)  Social and Housing Ministry. 

(437)  Vive 2024. 

110 

 
 
 
Graph A16.3: Housing affordability selected indicators 

Source: Eurostat and European Commission calculations. The overburden rate should be read together with the tenure structure 
(homeowner, tenants), that may differ across country and regions. 

111 

 
 
HORIZONTAL 
ANNEX 17: 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  (SDGs 4,  8,  9).  On  SDG  9 
(Industry, 
the 
percentage  of  households  with  a  high-speed 

innovation  and 

infrastructure), 

internet  connection  increased  from  93%  in  2019 
to  96.8%  in  2024,  well  above  the  EU  average  of 
82.5% 
in  2024.  Denmark’s  gross  domestic 
expenditure  on  R&D  slightly  increased  by  0.06 
percentage  points  between  2019  and  2024, 
reaching 3.01% of GDP, and remains above the EU 
average  (2.24%  in  2024).  The  number  of  patent 
applications  to  the  European  Patent  Office  per 
million  inhabitants  reached  484  in  2025,  well 
above the EU average (156 in 2025). 

(Quality  education),  Denmark 
On  SDG 4 
performs  above  the  EU  average  on  most 
indicators. The only exception is the proportion of 
early  leavers  from  education  and  training  among 
18–24-year-olds, which slightly increased between 
2019 and 2025 to reach 10%, compared with the 
EU  average  of  9.1% 
in  2025.  The  tertiary 
educational attainment remains well above the EU 
average, reaching around 52.5% of the population 
aged 25–34 in 2025, compared  with the EU level 
of  44.8%.  On  SDG 8  (Decent  work  and  economic 

Graph A17.1: Progress towards the SDGs in Denmark 

For a detailed progress assessment towards the various SDGs, see the annual Eurostat  report ‘Sustainable development in the 
European Union’; for extensive data on the short-term SDG progress of EU countries, see Key findings – Sustainable development 
indicators;  for  an  interactive  visualization  of  SDG  progress  of  EU  countries,  see  SDG  country  overview.  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  or  six  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 29 April 2026. Data refer mainly to the period 2019-2024 or 2019-2025. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

112 

 
 
 
 
 
 
growth),  Denmark’s  investment  share  of  GDP 
increased  slightly  between  2019  and  2025, 
standing at around 21.9% in 2025, compared with 
an  EU  average  of  21.7%.  The  recovery  and 
resilience  plan  (RRP)  includes  measures  to  help 
tackle  the  remaining  digitalisation  challenges  and 
to promote green upskilling. 

Denmark  is  performing  well  on  nearly  all 
SDGs  related  to  sustainability  (SDGs 2,  6,  7, 
9,  11,  12,  13,  14).  On  SDG 7  (Affordable  and 
clean energy), the percentage of renewable energy 
increased 
in  gross  final  energy  consumption 
considerably,  from  37%  in  2019  to  46.5%  in 
2024, well above the EU average (25.2% in 2024). 
On  SDG 13  (Climate  action),  net  greenhouse  gas 
emissions  further  decreased,  from  8.1 tonnes  per 
capita  in  2019  to  6.1  in  2024,  slightly  below  the 
EU  average  of  6.5 tonnes  per  capita  in  2024.  On 
SDG 12 (Responsible consumption and production), 
the circular material use rate increased from 7.6% 
to 9.4% between 2019 and 2024 and is below the 
EU  average  (12.2%  in  2024).  Moreover,  after  a 
period  of 
footprint 
decreased  to  23.2 tonnes  per  inhabitant  in  2024, 
while  remaining  well  above  the  EU  average  of 
13.7 tonnes per inhabitant in 2024. 

the  material 

increase, 

However,  it  needs  to  catch  up  with  the  EU 
average on SDGs 11 and 15, where it scores 
slightly  below  EU  average 
for  some 
indicators.  On  SDG 11  (Sustainable  cities  and 
communities),  the  recycling  rate  of  municipal 
waste  on  the  total  municipal  waste  generated 
decreased  between  2018  (49.9%)  and  2023 
(46.6%)  and  is  slightly  below  the  EU  average 
(47.9%  in  2023).  On  SDG 15  (Life  on  land),  the 
percentage  of 
in 
Denmark  is  significantly  below  the  EU  average 
(15.4% of total area, vs 26.4% in 2023). Measures 
included  in  Denmark’s  RRP  support  the  green 
transition  and  decarbonisation  priorities  by 
incentivising  the  phase-out  of  fossil  fuels  in 
district  heating,  accelerating  the  deployment  of 
renewable  energy  sources,  promoting  sustainable 
transport, fostering green research and innovation 
and taxing greenhouse gas emissions. 

terrestrial  protected  areas 

Denmark performs well on and is progressing 
towards most SDGs related to social fairness 
(SDGs 3, 4, 5, 7, 8, 10). On reduced inequalities 
(SDG 10),  it  has  made  progress  in  all  indicators 
related 
to  education  and  employment  gaps 
between EU and non-EU citizens. In particular, the 
narrowed 
EU/non-EU 

citizenship 

gap 

has 

for 

the 

young 

people 

neither 

difference 

decreased 

particularly 
in 
employment  nor in education  and training  (NEET), 
where 
from 
5.9 percentage  points  (pps)  in  2015  to  2.3 pps  in 
2020.  Similarly,  the  gap  for  early  leavers  from 
education  and  training  declined  from  8.6  pps  in 
2017  to  6.3  pps  in  2020.  In  2024,  both  gaps 
remained  considerably  below  the  EU  average, 
which stood at 10.2 pps for NEET and 16.8 pps for 
early leavers. 

At  the  same  time,  Denmark  is  moving  away 
from SDG 1, although most indicators remain 
above  EU  average.  On  SDG 1  (No  poverty), 
Denmark’s  performance  on  several 
indicators 
deteriorated,  as  evidenced  by  an  increase  in  the 
percentage  of  the  population  experiencing  severe 
material  and  social  deprivation  (from  3.8%  in 
2019 to 4% in 2024). Moreover, the percentage of 
people  living  in  households  with  very  low  work 
intensity increased from 9.5% in 2019 to 10.6% in 
2024,  along  with  the  percentage  of  people 
reporting  unmet  medical  needs  (from  1.8%  in 
2019  to  3.1%  in  2024).  Moreover,  the  housing 
cost  overburden  rate,  although  declining  slightly 
from  15.6%  in  2019  to  14.6%  in  2024,  remains 
considerably higher than the EU  average (8.2% in 
2024). On SD 7 (Affordable and clean energy), the 
percentage of the population unable to keep their 
homes  warm  enough  increased  further  between 
2019 and 2024 but is still significantly below the 
EU average (4.4% vs 9.2% in 2024). 

Denmark  performs  well  and  is  progressing 
towards  on  almost  all  SDGs  related  to 
macroeconomic  stability  (SDGs 8  and  16). 
However,  it  is  moving  away  from  SDG  17, 
although  most  indicators  remain  above  EU 
average.  For  SDG 16  (Peace,  justice  and  strong 
institutions),  the  country  performs  very  well  on 
peace  and  justice  indicators,  with  a  high  level  of 
trust  in its  institutions.  In 2025,  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 (0.9% vs 
1.9% in 2025). Real GDP per capita (EUR 59 550 in 
2025)  is  almost  double  the  EU  average  (EUR 34 
110 in 2025). 

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

113 

 
ANNEX 18: COMPETITIVE REGIONS 

Regional development trends 

Graph A18.1: GDP (PPS) per head (2024) and GDP 
per head growth (2014-2024), Denmark (NUTS 2 
regions). 

in  GDP  per  head 

Long-term  growth 
in 
Denmark  generally  mirrors  the  EU  average, 
but  this  overall  stability  masks  growing 
regional  disparities.  In  particular,  Hovedstaden, 
the  capital  region,  is  the  only  area  that  has 
improved  its  standing  relative  to  the  EU  average 
since  2004,  primarily  due  to  higher  per  head 
growth  since  2009.  By  contrast,  the  country’s 
other  regions  have  seen  their  lead  over  the  EU 
average  fall,  such  as  in  Nordjylland,  where  GDP 
per head (in purchasing power standard, PPS) has 
even  fallen  below  the  EU  average  (from  109% in 
2004 to 99% in 2024). These regional differences 
in  economic 
highlight  a  growing 
development, 
increasingly 
with 
concentrated  in  the  capital  region.  Despite  these 
differences,  all  Danish  regions  are  classified  as 
more  developed,  except  Sjælland.  As  of 
1 January 2027,  Sjælland  will  be  merged  with 
Hovedstaden. 

imbalance 
growth 

Map A18.1:  GDP per head compared with the EU 
average 

2021-2023 average GDP per head in purchasing power 
standard compared with the EU average. 
Source: Commission calculations based on Eurostat 16 July 
2025 data 

Bubble size: population in 2024. 
Source: Calculations by the Directorate-General for Regional 
and Urban Policy (REGIO) based on Joint Research Centre 
(JRC) (ARDECO) data 

in 

Widening  regional  disparities  in  GDP  appear 
to  be  driven  by  differences 
labour 
productivity growth. The capital  region was the 
only  region  where  labour  productivity  growth  far 
exceeded 
particular, 
Syddanmark  and  Midtjylland  saw  negligible 
productivity  growth  per  hour  worked  between 
2012  and  2024,  and  there  was  even  negative 
growth (-0.2%) in Nordjylland (Table A18.2). 

the  EU  average. 

In 

is 

population 

heavily 
Denmark’s 
concentrated  around  Copenhagen  and  other 
major cities, revealing challenges in securing 
the  right  to  stay 
in  certain  territories. 
Population  growth  patterns  since  2014  have 
shown  a  clear  concentration  around  major  cities, 
including  the  capital  and  Aarhus,  and  population 
loss in peripheral areas, particularly in Lolland and 
Northwest/Southwest Jutland. Population growth is 
heavily 
in  Hovedstaden  and 
Syddanmark  (Map  A18.2),  and  this  is  strongly 
impacted  by  migration  patterns.  Net  migration  is 
well  above  the  EU  average  in  all  Danish  NUTS  2 
regions,  except  Nordjylland 
(2.9  per  1  000 
residents, EU:  3.1).  The highest net migration rate 
is in Sjælland (6.8) followed by Hovedstaden (5.4). 
The  territorial  patterns  of  demographic  change 
(including  demographic  decline)  in  Denmark  are 
some of the drivers behind widening disparities. 

concentrated 

114 

HovedstadenSjællandSyddanmarkMidtjyllandNordjyllandHovedstaden00.511.522.5050100150200Average annual growth 2014–2024 (%)GDP per head in 2024 (EU27=100)Other regionsCapital regionNational averageEU 27 
 
 
 
 
 
     
 
Table A18.1:Main development trends, challenges and the concentration of resources 

Source: European Commission based on Eurostat data; categories of regions based on Map A18.1 

Map A18.2:  Population growth in Danish 
municipalities 2014-2025 

Source: REGIO calculations based on Statistics Denmark data 

Key challenges for regional 
competitiveness 

Subnational  labour  productivity  in  Denmark 
is linked to a small number of municipalities 
with  large  companies.  Productivity  gaps  have 
been 
large 
identified  between  SMEs  and 
companies  (see  Annex  5).  A  study  by  the  Danish 
Organisation  of  Local  Governments(440)  shows  a 
great  variation  between  municipalities  in  GDP 
growth,  ranging  from  −12.45  %  in  Fredericia  to 
+26.88 % in Kalundborg between 2021 and 2022. 
The  study  also  shows  that  the  combined  value 
creation in four municipalities (Gladsaxe, Ballerup, 
Kalundborg  and  Hillerød)  accounted  for  62.5%  of 
Denmark’s  total  GNP  growth 
in  2022.  This 
progress  is  mainly  driven  by  successful  large 

(440) Kommunernes Landsforening, 2024. 

115 

Main development trends Transition regions (population 853 000)Denmark has only one NUTS 2 transition region, Sjælland, which is made up of two NUTS 3 regions: Østsjælland and Vest- and Sydsjælland. The Østsjælland region is located near the capital region of Copenhagen and is considered to be an intermediate region, whereas the Vest- and Sydsjælland region is predominantly rural. The GDP per capita of Sjælland has improved in recent years, mainly due to the proximity effect of the capital region. The most southern parts of Sjælland, particularly the island of Lolland, are struggling in terms of access to services, education and jobs.Sjælland will be merged with Hovedstaden as of 1 January  2027.More developed regions (population 5.1 million)Four of the five Danish regions are more developed regions, although differences between them are pronounced, particularly in socio-economic terms. While Hovedstaden is the frontrunner in most socio-economic indicators, such as GDP growth, innovation and access to services, the other regions are more diverse in their strengths. Additionally, intra-regional differences are noticeable, the most pronounced being the rural-urban divide within  individual NUTS 2 regions. Specific territories Just transition regions: under the territorial just transition plan, Denmark has identified two regions with industrial transition challenges (i) Nordjylland with its carbon-intensive industry, mainly related to one individual point source; and (ii) Sydjylland, where 30% of employment is related to the oil and gas industry in the North Sea, which is expected to be closed by 2050. Islands: Denmark consists of 409 islands, of which 70 are populated. The islands are very diverse, from the island of Sjaelland, where Copenhagen is located, to the small islands with less than 1 200 inhabitants without bridge connections, which results in accessibility challenges related to services, education and jobs. 
 
 
 
 
 
 
   
 
Table A18.2:Key regional indicators (at NUTS 2 level) for Denmark 

Dark green – the indicator is at least 120% of the EU average. Light green – the indicator is at least 100% but less than 120% of 
the EU average. 
Yellow – the indicator is at least 90% but less than 100% of the EU average. 
Light red – the indicator is at least 75% but less than 90% of the EU average. 
Dark red – the indicator is less than 75% of the EU average.  
This colour scale applies to ‘positive’ indicators where higher values are favourable. For ‘negative’ indicators (where higher values 
are unfavourable), the colours are reversed. 
Source: Eurostat data 

companies  and/or  large  construction  projects  that 
have created jobs and directly contributed to these 
municipalities’ economic growth (Map A18.3).  

Map A18.3:  Percentage growth in number of jobs 
at municipal level, 2018-2023 

uneven 

Although  Danish  R&D  expenditure  is  well 
above the EU average, it is characterised by 
territorially 
concentration. 
Hovedstaden and Midtjylland, with the two largest 
universities,  receive  most  R&D  expenditure  in 
Denmark.  R&D  expenditure 
the  business 
enterprise  sector  is  even  more  unbalanced:  all 
regions  except  Hovedstaden  are  below  the  EU 
innovation  remains 
average.  Danish  business 
concentrated 
large 
companies  despite  the  government's  efforts  to 
expand  the  innovation  base  to  SMEs (441)  (see 
Table A18.2 and Annex 4). 

limited  number  of 

in  a 

in 

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

‘Stronger business community’. 

Source: VIVE (2025) 

One  of  the  main  challenges  for  SMEs’ 
in 
competitiveness 
availability  of  skilled  labour  across  the 
regions. Hovedstaden, Midtjylland and Nordjylland 
in  matching  suitable 
have  the  best  success 

difference 

the 

is 

116 

GDP per head (PPS, index)Real GDP per head growthReal productivity growth (per hour worked)Population aged 25-34 with high educational attainmentEmployed with high educational attainmentNEET 15-29: Neither in employment nor in education or trainingEarly leavers from education and trainingR&D expenditureR&D expenditure in business enterprise sector (BERD)Greenhouse Gas EmissionsEU27=100Average annual % changeAverage annual % change% of population aged 25-34% of employed aged 25-64% of population aged 15-29% of population aged 18-24% of GDP% of GDPtCO2 equivalent per head20242014-20242014-20242025202520252025202320232024EU1001.40.744.841.5119.12.241.517.0Denmark1271.50.952.549.88.910.03.011.906.3Hovedstaden1752.31.664.762.36.96.54.613.122.2Sjælland901.91.435.338.11012.71.010.406.7Syddanmark1070.90.244.242.910.412.12.011.278.4Midtjylland1081.00.649.547.59.811.12.361.306.8Nordjylland1000.90.646.639.89.311.11.740.4212.9  
 
 
 
 
 
 
 
     
 
candidates  to  job  listings,  whereas  Sjælland  is 
challenged the most (442) (see Annex 11). 

30km in metropolitan municipalities (not including 
the capital) to 60km in rural municipalities(444) . 

Graph A18.2: Share of population with a hospital 
within 10 minutes by car in rural areas, (NUTS 2), 
2023 

Source: REGIO calculation based on Eurostat data 

There  is  also  a  territorial  divide related 
to education  and  training  outcomes,  linked 
with  disparities  in  connectivity.  The  share 
of 15–29-year-olds neither  in  employment  nor  in 
education  and  training  (NEET)  varies  between 
regions  and  is the  highest  in  rural  municipalities 
(11.5%)  and lowest in metropolitan areas (7%).  A 
similar  disparity  can  be  seen  in  rates  of  early 
leavers  from  education  and  the  share  of  the 
population aged 25-64 having completed, at most, 
lower  secondary  education  (443)  (see  Annex  13). 
Additionally, 
in  adult 
participation  in  education  and  training  is  more 
pronounced  in  Denmark  than  the  EU  average. 
Transport distance has an impact on the education 
choice  for  young  people,  and  in  areas  with  less 
public  transport,  the  number  of  NEETs  is  higher 
(Table  A18.2).  The  average  distance  to  vocational 
education  and  training  (VET)  courses  varies  from 

the  urban–rural  divide 

There  are  regional  imbalances  in  access  to 
healthcare  in  Denmark,  especially  related  to 
age  dependency  ratios  and  access  in  rural 
areas. While  all  Danish NUTS 2 regions are at or 
above  the  EU  average  in  terms  of  access  to 
healthcare, rural areas in some regions (especially 
Hovedstaden  and  Syddanmark)  lag  behind  (Graph 
A18.2).  This 
is  compounded  by  an  ageing 
population  with  greater  healthcare  needs:  18 
municipalities  have  an  old-age  dependency  ratio 
greater  than  50%  (compared  with  an  EU  average 
of 37%), including Læsø, which has a ratio of 95% 
(Map A18.4) (see Annex 15). 

Map A18.4:  Age dependency ratio in Danish 
municipalities 

Source: REGIO calculations based on Statistics Denmark data 

for 

The 
lack  of  affordable  housing  poses 
large  cities, 
significant  challenges 
particularly  Copenhagen.  In  these  large  cities, 
22.7% of the urban population faced housing-cost 
overburden in 2024. Housing prices in Copenhagen 
are  exceptionally  high,  whereas  costs  are  less 
pronounced in towns, suburbs and rural areas. The 
difference  in  housing  affordability  between  the 
capital  region  and  the  rest  of  the  country  is  the 
highest  in  the  EU  (see  Annex  16).  However,  rates 
of  affordability  vary  across  the  country,  beyond 
the  divide  between  the  capital  and  the  rest.  For 
house  purchasing  capacity  relative  to  income, 
there 
territorial 
variation  both  between  and  within  regions.  For 

is  a  particularly  significant 

(442) Danish Agency for Employment and Recruitment, 2025. 

(444) Statistics Denmark, 2021, 

(443) JRC, 2025, ‘Social indicators by degree of urbanisation’. 

https://www.statbank.dk/statbank5a/default.asp?w=1536. 

117 

30371747204426EUDenmarkHovedstadenSjællandSyddanmarkMidtjyllandNordjyllandAccess to healthcare% of population 
   
 
 
 
 
 
example,  Østjylland  has  a  significantly 
purchase capacity than Vestjylland (Map A18.5). 

lower 

to 

the 

related 

Nordjylland  and  Sydjylland  have  distinct 
territorial  needs 
just 
transition.  Nordjylland’s  business  sector  has  a 
high  concentration  of  companies  in  the  cement 
sector, while one of Sydjylland’s challenges comes 
from the planned closure of North Sea gas and oil 
production.  High  energy  consumption  and  CO2 
emissions in these regions are primarily driven by 
these  value  chains.  The  transition  of  these  value 
chains will imply a corresponding transition of the 
local  workforce  to  green  jobs,  which  will  involve 
reskilling. 
innovation 
(especially  brown  biorefining  and  carbon  capture 
and  storage)  have  shown  promising  results  in 
reducing  Denmark’s  CO2  emissions,  but  a  full  just 
transition  is  still  to  be  achieved.  Greenhouse  gas 
emissions  are  slightly  above  the  EU  average  in 
three other Danish regions, while Hovedstaden has 
much lower emissions than the rest of the country 
(Table A18.2). 

Investments 

in  green 

Map A18.5:  House purchase capacity relative to 
income in Denmark (NUTS 3) 

Square metres that can be purchased via mortgage using a 
third of disposable income in 2024. 
Source: ESPON-H4ALL 

in 

Denmark, 

Renewable  energy  production  varies  across 
green 
territories 
employment  is  concentrated  in  the  capital 
region. The production capacity of solar energy is 
relatively  similar  across  all  municipalities,  and 
wind  capacity  is  concentrated  more  on  the  west 

but 

coast of Jylland (Table A18.3) (see Annex 9). While 
Hovedstaden (38.7%)  far exceeds the EU  average 
of  15%  of  the  working  population  in  green 
employment, other regions are at or below the EU 
average,  with  Nordjylland  (13.5%)  and  Sjælland 
(11.5%) lagging behind (Table A18.2). 

Table A18.3:Production of wind and solar energy in 
Denmark (MWh per capita, 2023) 

Source: Rural Observatory 

Denmark’s  blue  economy  faces  regional 
challenges 
in  boosting  competitiveness. 
Coastal tourism accounts for nearly 16% of gross 
value added (GVA) and 50% of blue jobs in coastal 
(445).  However,  aquaculture,  primarily 
regions 
marine-based, is impacted by climate change and 
the  deteriorating  state  of  coastal  waters, 
particularly around the Baltic Sea (446). 

(445)  European 

Commission, 

https://blue-economy-

observatory.ec.europa.eu/country-profiles/denmark_en. 

(446) HELCOM, 

2023, 

https://helcom.fi/wp-

content/uploads/2023/06/HELCOM-Thematic-assessment-
of-eutrophication-2016-2021.pdf. 

118 

Renewable energyCitiesTowns/suburbsRural areasTotalDK0.111.012.761.27EU-270.050.382.380.77DK0.292.348.073.50EU-270.121.4110.593.29DK0.010.230.900.37EU-270.140.581.170.56DK1.285.5016.487.61EU-272.4413.1874.2024.84Onshore wind technical potential per capitaOnshore wind production per capitaSolar PV technical potential per capitaSolar PV production per capita 
 
 
 
 
   
 
 
  
 
ANNEX 19: TRANSPORT 

This  Transport  Annex  presents  the  state  of  play 
and  the  challenges  Denmark  faces  with  the 
implementation  of  the  trans-European  transport 
network  (TEN-T),  the  European  Railway  Traffic 
Management  System  (ERTMS)  and  the  roll-out  of 
Sustainable Aviation Fuels (SAF). 

Denmark  is  crossed  by  the  Scandinavian  – 
Mediterranean  European  transport  corridor 
connecting  it  to  Norway  and  Sweden  in  the 
north and to Germany in the south. The Danish 
TEN-T rail network is 1 076 km long (945 of which 
are on the core network). The TEN-T road network 
is  1 664 km  long  (812  of  which  on  the  core 
inland 
network).  Denmark  has  no  TEN-T 
waterways, four TEN-T airports (including one core 
airport), 17 TEN-T ports (including two core ports) 
and four urban nodes (447).  Denmark has invested 
heavily in its railway network in recent years, and 
many  projects  are  planned  for  completion  by 
2030.  

The  ERTMS  is  essential  to  digitalising  the 
railways and to modernising and harmonising 
railway  operations  across  Europe.  The  ERTMS 
ensures the safety of rail networks by providing a 
unified signalling system that significantly reduces 
the 
It  also  provides 
interoperability  between  national  rail  systems, 
improving  cross-border  train  movements.  Finally, 
the  ERTMS  enhances  network  capacity  and 
operational 
the 
competitiveness of the rail sector. 

risk  of  accidents. 

efficiency, 

increasing 

ERTMS was in operation on 36% of the TEN-T 
rail  network  in  Denmark  at  the  end  of 
2024 (448).  Based  on  its  national  plan,  Denmark 
aims  to  nearly  fully  roll-out  ERTMS  on  its  TEN-T 
network by 2035, meaning ERTMS deployment on 
an additional length of 656 km. Above and beyond 
the  ERTMS,  only  selective 
improvements  are 
needed  in  the  railway  network,  particularly  to 
address  capacity  bottlenecks  in  the  surroundings 
of major urban nodes, such as Copenhagen. 

The  Danish  model  of  deciding  on  major 
transport  infrastructure  projects  at  national 

(447)  TENtec Information System, according to Reg. 2024/1679. 

(448) Based on ERTMS – Third work plan of the European 

coordinator Matthias Ruete. 

level through the national parliament by way 
of  construction  acts  generally  leads  to  such 
projects  being  implemented  efficiently.  As  a 
result,  rail  infrastructure  projects  in  Denmark  are 
usually delivered on cost and on time.  

is 

infrastructure  especially 

However,  the  national  rail  network  suffers 
from  ageing 
in 
signalling,  making  it  expensive  to  develop 
facing  major 
and  maintain.  Denmark 
its  network 
investment  needs 
performance,  address  maintenance  obligations 
and  deploy  the  ERTMS  signalling  system.  This 
requires  specialised  personnel  with  expertise  in 
project 
engineering 
digitalisation, 
management to oversee the modernisation of the 
rail network. 

to  upgrade 

and 

As yet there is no joint Danish-German model 
on how to efficiently operate railway traffic 
on  the  Fehmarnbelt  cross-border  section  to 
cover  traffic  management,  maintenance  and 
operations in line with the rules of the single 
European  railway  area.  For  Denmark,  as  a  key 
transit 
technical  and 
operational  rules  and  minimising  national  rules  in 
line  with  the  EU  directives  on  rail  interoperability 
and  safety  remains  critical  to  ensure  seamless 
cross-border rail transport. 

country,  harmonising 

the  Final 

Denmark has a strong industrial base for the 
production  and  deployment  of  sustainable 
aviation  fuels  (SAF),  given  the  national  energy 
mix  as  well  as  four  active  initiatives  aiming  to 
commercialise  production,  however  some  projects 
intended to start production in 2029 have still not 
Investment  Decision (449). 
reached 
Denmark  has  allocated  more  than  DKK  3  billion 
(approx.  EUR  401  million)  to  green  aviation 
initiatives (including projects  relating  to  producing 
eSAF),  notably  through  funding  a  national  tender 
for  a  'green'  domestic  route  from  2026  to  2027. 
But  targeted  investments  that  will  enable  SAF 
commercialisation  can  be  made  through  pilot 
(such  as  double-sided 
investment  structures 
auctions).  Denmark  could  take  part  in  the  EU’s 
eSAF  Early  Movers  Coalition,  as  well  as  make 
effective use of existing EU  revenue opportunities 
related to aviation transition (e.g. EU ETS), and all 

(449) EASA ReFuelEU Aviation Technical Report (2025). 

119 

 
 
 
 
 
Map A19.1:  TEN-T Cross-Border & National Priority Sections in Denmark. 

penalties revenue generated by ReFuelEU Aviation 
to finance the deployment of SAF. 

Table A19.1:ERTMS deployment in Denmark. 

Source: Based on ERTMS – Third work plan of the European Coordinator Matthias Ruete.  

120