Highly ambitious, an international advocate for climate policy and a leader in green energy and technology, Denmark’s next step on the path to Net Zero is to reduce its continued reliance on emission-intensive agricultural exports and imports.

Climate diplomacy

In June 2020, fourth-placed Denmark’s parliament approved legally binding CO2 emission reduction targets, including Net Zero by 2050 and a 70 percent reduction by 2030 compared with 1990s emissions, giving it the lowest emissions for 2030 based on declared national determined contributions. The legislation behind this, which requires the parliament to assess each year whether the government complies with the Climate Act or should be required to act further, was adopted following a widely signed national petition.1

Since hosting the Copenhagen climate change summit in 2009 the country has carried out ‘climate diplomacy’, including support for poorer countries to decarbonize.“Denmark is consistently known to punch well above its weight on climate action,” says Mads Fink-Jensen, Partner, ESG Lead, KPMG in Denmark.

Net zero readiness index Denmark

Market infrastructure

Denmark leads the electricity and heat sector in the NZRI, due to tradable renewable energy certificates, net metering, policy on adopting hydrogen and low use of coal. Most electricity is already produced from renewable sources and the government has set 2050 as a deadline for the country to end oil and gas extraction.

The country also benefits from exports linked to renewables, both wind power equipment and energy itself, with plans to generate more of the latter through offshore wind ‘energy islands’. As well as using existing islands, this includes plans for an artificial energy island 80 kilometers from the Danish coast in the North Sea, majority-owned by government but with significant use of private sector technology and expertise.2

More generally, the private sector is closely involved with Danish decarbonization work through climate partnerships covering 13 industries, which include the heads of some of the country’s largest companies. Financial services are increasingly focused on the issue, with a September 2019 pledge by the pension industry to invest 350 billion Danish krone (DKK) (USD55 billion) in green assets.3

Harder-to-decarbonize sectors

Denmark’s powerful shipping industry is also working to reduce its emissions. In August 2021, Maersk announced that Hyundai Heavy Industries will construct for it eight ocean-going container vessels that can run on carbon-neutral methanol, which will enter service from 2024 and allow it to offer carbon neutral transportation on the high seas.The company has also led a group establishing a non-profit research center for zero carbon shipping which has opened in Copenhagen.5

The country is a major exporter of pork and dairy products, and agriculture, land use and forestry is responsible for 23 percent of the country’s emissions, higher than any other European country in the NZRI. However, the government has unveiled plans to cut emissions from the sector. In April 2021 it announced spending on research into technologies that could reduce emissions from agriculture, including solutions such as biogas fuels, as well as plans for a partial ban on farming with peat soil.6

Fink-Jensen says that Denmark is increasingly considering the impact of emissions from imports, which she sees as the country’s next frontier in reducing and eliminating emissions. This includes agricultural produce and materials linked to deforestation such as soya, palm oil, coffee and cocoa, with the agriculture ministry considering the topic.

Sector emissions shares and performance Denmark


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Hungary has a Net Zero target in place and its financial sector is working to stimulate the flow of capital to decarbonization efforts. Much of its electricity is generated by nuclear power and it is developing solar capacity, energy efficiency and use of electric vehicles.

Political will

Hungary’s government has accelerated work on carbon reduction over the last two years, according to István Szabó, Senior Manager, KPMG in Hungary. It is ranked fifth on its contribution to global Net Zero, partly as a result of its June 2020 climate protection law that includes a 2050 Net Zero target.

For example, the government is trying to decarbonize transport through tax benefits and cash support for electric vehicles and encouraging intermodal freight junctions for cities, so containers can be transported mostly by rail with road used for the last few kilometers. Regarding industry, a number of multinational manufacturers have large Hungarian factories which are run to high environmental standards, and the country’s EU membership means all have to meet its standards. Domestically focused companies can potentially benefit from available EU funds and green lending products to make a smooth transition in the following years, says Szabó.

Hungary chart sector emissions and performance

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1 Jocelyn Timperley, ‘The law that could make climate change illegal’, BBC, 8 July 2020. https://www.bbc.com/future/article/20200706-the-law-that-could-make-climate-change-illegal
2 ‘Energy Islands’, Danish Ministry of Climate, Energy and Utilities, accessed July 2021. https://ens.dk/en/our-responsibilities/wind-power/energy-islands
3 Nikolaj Skydsgaard, ‘Danish pension funds back 'green transition' with $50 billion’, Reuters, 23 September 2019. https://www.reuters.com/article/us-climate-change-un-denmark-idUSKBN1W80NP
4 'Maersk accelerates fleet decarbonisation with 8 large ocean-going vessels to operate on carbon neutral methanol', Maersk, 24 August 2021. https://www.maersk.com/news/articles/2021/08/24/maersk-accelerates-fleet-decarbonisation
5 ‘New research center will lead the way for decarbonizing shipping’, Maersk, 25 June 2020. https://www.maersk.com/news/articles/2020/06/25/new-research-center-will-lead-the-way-for-decarbonizing-shipping
6 Morten Buttler, ‘Denmark targets green technology spending to cut farm emissions’, Bloomberg, 28 April 2021. https://www.bloomberg.com/news/articles/2021-04-28/denmark-targets-green-technology-spending-to-cut-farm-emissions