The Danish Government has announced a new Energy Plan 2020 that includes establishment of a range of initiatives for hydrogen infrastructure and FCEV’s with the overall aim to reach 100% fossil independence by 2050. The Government initiatives follow the recommendations from a recent Danish industry coalition analysis and roadmap on “Hydrogen for Transport in Denmark onwards 2050”.

The hydrogen initiatives in the Danish Energy Plan 2020 provide a strong basis for establishing the hydrogen infrastructure needed to enable market introduction of fuel cell electric vehicles (FCEV’s) beyond 2015.

A new Infrastructure Program is to be established providing support for roll-out of infrastructure for both FCEV’s and BEV’s during 2012-2015. The Program together with already initiated industrial initiatives can enable establishment of a country wide hydrogen refueling network by 2015. Already implemented tax exemptions on up to €0,08/kWh on electricity for hydrogen production provides a strong case for a renewable hydrogen supply for the infrastructure network.

The existing Danish tax exemption for FCEV’s is to be continued throughout 2015, ensuring a 180% tax reduction compared to conventional vehicles. With indicated FCEV’s vehicle pricing by 2015, this could enable a FCEV market introduction price competitive to that of comparable gasoline vehicles. In Denmark 180% tax and 25% VAT is applied on the base vehicle price meaning that a €17.000 gasoline vehicle reaches an end-price for the vehicle-user on €50.000. This provides an indirect support on more than €23.000 for each FCEV after payment of 25% VAT.

The Danish Energy Plan also outlines a set of Government analyses to be conducted to pave the way for continued efforts beyond 2020, with the aim to reach 100% fossil independence by 2050. The joint focus of the various analyses is to ensure an optimal linkage between the power/heat and transport sectors and ensure optimal utilization of the limited biomass potential. Further the analyses are to suggest solutions for energy storage of the increasing amount of fluctuating renewable electricity, which is to reach 50% share of power and heat consumption by 2020 and 100% by 2035.

Hydrogen plays a key role in both energy storage as well as connecting the power/heat and transport sector. Further hydrogen can act as a key component in the production of bio fuels and biogas from biomass, thus helping to boost the potential of the limited biomass. The various Danish Government analyses are therefore expected to provide strong basis for continued support mechanisms for hydrogen beyond 2015.

The new Danish hydrogen support initiatives follow years of continued and increasing public support for fuel cells and hydrogen (FCH) research, development and demonstration in Denmark. Since 2001 public R&D programs have provided €150 million in public support for FCH activities, reaching €29 million in 2010 alone, corresponding to one third of all public funding for energy R&D in Denmark that year. The public funding for FCH activities in Denmark are expected to reach more than €30 million in 2011 when fully summarized later this year.